Market Report: Premier Farnell slumps as it dumps Akron BrassComments Off on Market Report: Premier Farnell slumps as it dumps Akron Brass
The decision by troubled Premier Farnell to dump its Akron Brass business came as no real surprise but it disappointed investors hoping for a merger.
Shares in the electronic parts distributor slumped 19.5p or 15% to 113.8p as it warned on profits yet again as growth has ground to a halt.
It now expects full-year underlying profits to be between £73 million and £77 million, almost £10 million lower than some City scribblers were predicting.
The company, still without a permanent chief executive after Laurence Bain was ousted last month, has been looking at ways to put the spark back into the business.
Activist investor GO Investment Partners has been building its stake in Premier Farnell to 5.5%, fuelling hopes of a tie-up with rival Electro- components, 5p cheaper at 182.7p.
A profit warning hauled valve-maker Rotork to a four-year low as its shares plunged 34.6p or 16% to 181.4p.
It told investors the trading environment so far in the second half of the year has been “challenging” and full-year revenues will now be in the region of £530 million-£555 million, with adjusted operating profits of £120 million-£130 million.
To hike or to hold? That was the question for investors ahead of the decision from the Federal Reserve’s rate-setters — due at 7pm London time — on whether to raise US interest rates this month.
An overall improvement in the health of the world’s largest economy had Janet Yellen and Co set on hiking rates in September, but the recent slowdown in China has made them think twice about doing so while stock markets are still volatile.
Defensive stocks were therefore the order of the day with trades thin on the ground as the FTSE 100 retreated 21.97 to 6207.24.
Imperial Tobacco, 40p higher at 3392p, and British American Tobacco, 42.5p richer at 3617.5p, were the top risers, with Cillit Bang maker Reckitt Benckiser, on hopes of more dealmaking in the consumer goods sector after the AB InBev and SABMiller mega-merger talks.
A target price cut from broker Exane BNP Paribas meant security firm G4S bucked the trend as it fell 0.4p to 242.8p. Old habits die hard for beleaguered oil services firm Weir Group, which dropped 60p to 1258p to the bottom of the blue-chip index ahead of its relegation to the FTSE 250 at the end of this week.
While many fear for the future of Ocado as Amazon readies to launch Amazon Fresh in the UK, brokers predicted it would be a winner in the online grocery market and the shares soared 31.3p or 10% to 350.8p.
Meanwhile, investors banked profits after half-year results from window maker Safestyle, which was down 4p to 242p.