Market Report: Pittards is handbagged by Ethiopian troubles

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Brexit and Donald Trump’s election as President will define the year for most investors, but AIM-listed Pittards had punters cursing turbulence in another part of the world.

The leather goods company, which specialises in handbags and gloves, said the unrest in troubled Ethiopia hit production after its tannery was affected by the disruption.

It has mitigated the impact by shifting production to the UK, but added “there will nevertheless be an impact on the results for the second half of the year”.

Ethiopia has been rocked by year-long protests by the Oromo people, who have been calling for an end to systemic exclusion and subordination. The government declared a state of emergency in October. 

To compound matters for Pittards, the demand for leather has been weak and has caused sales to suffer in the last few months of the year.

The profit warning spooked investors and sent the shares down 12p, or 14%, to 76p.

December 21 is officially Winter Solstice, the shortest day of the year, although on trading floors it felt like the longest day given the lack of news and deals in the works before Christmas.

Big trades were thin on the ground, but shares continued to edge higher, with the FTSE 100 up 1.23 points at 7045.19, even if the so-called Santa Rally is yet to fully kick in.

BP enjoyed a 3.75p boost to 498.85p as broker UBS upgraded the shares from neutral to buy.

UBS was heartened by a field trip to Azerbaijan, which it said “helped emphasise a new sense of direction and helped dispel concerns that it needs to make material acquisitions”.

The rise was modest but trumped Royal Dutch Shell, whose B shares were down 3.5p at 2326p.

Worldpay fell 2.1p to 264.5p although vague takeover speculation surrounded the payments giant, with rumours the company has some interested foreign suitors.

Investors piled into photo booths operator Photo-Me after its chief executive bought another big chunk of shares.

Serge Crasnianski spent £4.6 million on shares, taking his stake to above 22%, just four days after he splashed out £3 million on the AIM-listed company’s shares.

London developer Telford Homes improved 3.51p to 312.76p after selling its third “build-to-rent” property to M&G for £49 million.

Aurum Mining was off 1.25p at 4.5p as it unveiled a discounted share placing to raise £6 million and changed its name to Shearwater Group as part of its planned shift into cybersecurity. 

The AIM-quoted company, which has several big-hitters on the board, plans to sell its mining assets.

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December 22, 2016 |
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