Watchstone slumps after it flags a £50m letdown

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Watchstone Group has been keeping a low profile in recent months, but the scandal-stricken company, formerly known as Quindell, found itself back in the spotlight today for all the wrong reasons.

Shares in the AIM-listed firm, which remains under investigation by the Serious Fraud Office, slumped 14.5p, or 7.6%, to 175.75p as it warned investors they may not get the extra £50 million payout promised from the sale of its ambulance-chasing business to Slater & Gordon.

The Aussie law firm, which is claiming against the £50 million of cash held in escrow from the botched takeover, said an independent barrister decided its claim “has on balance a prospect of success and that, if successful, such claim would be likely to have a value of £53 million”.

Slater & Gordon, which was forced to write down the value of the acquisition by £450 million, triggering a share price collapse, said it would be holding on to the £50 million until the claim is resolved.

Watchstone said it “remains satisfied” that the claim has no merit and will defend it “robustly”, adding that it will not dish out the outstanding chunk of the payout until it is resolved.

The FTSE 100 rose 21.52 points to 6793.52, receiving a boost from a bounce in the oil price ahead of the Opec meeting, with Brent crude up $2.74 a barrel to $49.12, a rise of nearly 6%.

The surge propelled Royal Dutch Shell, the LSE’s biggest company by market value, up 62.08p, or 3%, to 2093.58p.

Tool hire firm Ashtead was lifted 55p, or 3.6%, to 1566p by a target-price upgrade from Canadian bank RBC ahead of next week’s second-quarter results. 

RBC said the period is typically Ashtead’s strongest and reckons it can lift its full-year guidance at the half-year mark for the seventh year in a row.

Unilever charmed shareholders at its annual investor day, which helped the consumer goods giant’s shares rise 97.5p, or 3.1%, to 3227.5p.

BCA Marketplace, the owner of the WeBuyAnyCar site, revved up 4.8p to 186.55p after strong first-half results, with revenues soaring 66% to £910 million and underlying earnings up almost a third at £64.5 million. 

Solid first-half results from RPC caused the packaging firm to race to an all-time high, up 88p, or 9%, at 1090p.

Warpaint, which owns the W7 make-up brand fronted by model Amy Willerton (pictured), jumped 12% on its AIM debut to 109p after raising  £23 million.

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December 1, 2016 |
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