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Market Wrap - Midday

Investors cautious over Unilever review

02 March 2017 11:55

The FTSE 100 was flat as weakness in Marmite owner Unilever (ULVR) dragged on the index.

Media speculation about job cuts and bonus cuts as part of a strategic review left investors concerned about future dividends.

West Texas Intermediate and Brent crude oil fell 0.9% to $53.35 and $55.86 per barrel, respectively.

Gold nudged lower to $1,245 per ounce and copper declined 0.4% to $5,974 per tonne.

OVERSEAS MARKETS

On Wall Street, US stocks traded the most overnight since 16 December according to Reuters, as investors were encouraged by US President Donald Trump's spending plans.

In Japan, the Nikkei 225 followed US stocks higher on Thursday, which was further supported by a weaker yen as it boosts the country's exports.

However, the Hang Seng and SSE Composite indexes remained subdued.

FTSE 100 RISERS AND FALLERS

Chief executive of outsourcing group Capita (CPI), Andy Parker, said he will resign from his post as the company posted a 19% slump in pre-tax profit for 2016 and missed forecasts again.

Capita was forced to downgrade 2016 profit guidance in early December as spending by clients in its IT Enterprise Services division weakened further, a move that prompted Parker to plough nearly £100,00 of his own cash into the shares to support the stock.

Robust maiden full year results since its IPO last Halloween sparked an encouraging response from ConvaTec (CTEC) investors. The figures revealed underlying and adjusted operating profits increasing 8% to $472m.

Legoland operator Merlin Entertainments (MERL) reported a modest 3.4% rise in 2016 pre-tax profit and remained confident it could deliver a good year ahead. However, investors were unconvinced as they believe growth only reflects currency tailwinds. Underlying operating profit was down 6.2% when the impact of currencies were stripped out.

FTSE 250 RISERS AND FALLERS

Troubled engineer Cobham (COB) announced it will raise £500m in a rights issue to strengthen its balance sheet. This emerged following a 'deeply disappointing' performance in 2016 as underlying and adjusted pre-tax profits slumped by more than a third to £175.2m.

Britain's biggest supplier of building materials, Travis Perkins (TPK), suffered a 1% fall in full-year core earnings, as it was hit by a weak performance in its plumbing and heating business. Management said it will review the division's future.

Challenger bank Aldermore (ALD) downplayed capital strength concerns and posted a 34% jump in full-year profit in 2016. The bank issued more mortgages and loans to homeowners as well as small and medium enterprises.

SMALL CAP RISERS AND FALLERS

Price comparison website Gocompare.com (GOCO) unveiled a 30% jump in full-year operating profit, adjusting for the costs of listing and share-based payment charges.

A third of AIM-listed power firm Plutus PowerGen (PPG) market valuation was wiped off as it said OFGEM's proposals to cut TRIAD payments to local embedded generators will be 'potentially damaging to the UK industry'.

Engineering turnaround specialist Melrose (MRO) gained 11.5% after full year revenue more than tripled, which was helped partly by its acquisition on US home security products maker Nortek Industries.

Metal flow engineer Vesuvius (VSVS) reassured the market as it highlights 'encouraging early signs of improvement'. It also said pre-tax profit was up 2.6% to £19.4m in the year to 31 December, prompting the stock to rise 18.3%.

Story provided by StockMarketWire.com

Related Company: CPI

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