Train firm knocked off track as shares fall 10pc
A stronger than expected set of results couldn’t stop bus and rail operator FirstGroup from suffering its worst day in a year yesterday.
the firm, which runs great Western railway and transPennine express, said profits were up more than a third to £152.6m in the year ended March 31, while full-year sales rose 8.3pc to £5.7bn.
But shares sank as much as 10pc in early trading after the firm, which also operates 6,400 buses outside London, warned of challenging market conditions.
It also chose not to recommend a dividend payout for the year.
Like most public transport operators, it has been hit by political and economic uncertainty and declining motoring costs, which has led more people to use cars.
Chief executive tim o’toole also said he was ‘profoundly sorry’ for a crash which killed seven people on the Croydon tramlink in november. the decline in Firstgroup’s shares despite a relatively strong set of results led Canadian activist investor West Face Capital to buy a 5pc stake in the firm.
shares closed down 5pc, or 7.5p, to 142.3p, making Firstgroup the Ftse 350’s biggest loser.
takeover speculation fuelled satellite communication firm
Inmarsat’s rise to the top of the mid-cap index.
After an £11bn deal between Japanese tech firm softbank and Intelsat – which broadcast neil Armstrong’s 1969 moon walk – fell through, rumours circulated that softbank may look to buy Inmarsat. With softbank purchasing British software firm ARM Holdings for £24bn last year, it wouldn’t be the first time founder Masayoshi son has set his sights on UK soil. shares finished up 5.6pc, or 44.5p, to 844.5p.
the FTSE 100 spent another day hovering around record highs as election-related pound weakness continued to benefit the index’s internationally-focused firms. It rose 0.3pc, or 23.82 points, to 7543.77.
Broadcaster ITV was knocked by a wave of selling after being downgraded to ‘Hold’ from ‘Buy’ by analysts at UBs.
the broker said ITV is ‘cheap for a reason’, noting a lack of positive catalysts and a lack of advertising momentum. shares fell 2.1pc, or 4.1p, to 191.6p.
A sunnier outlook from Barclays placed investment firm 3i Group among the index’s biggest winners as analysts praised ‘reassuring’ growth momentum, and increased its price target for the stock by 31pc, to 980p. shares rose 3.6pc, or 32p, to 927p.
Barclays also helped put shares in car dealer Auto Trader in the fast lane. they rose 4.5pc, or 18.9p, to 435p – an 18-month high – after the bank upgraded the stock to ‘overweight’ from ‘equal weight’. But tanzania-focused miner
Acacia Mining was downgraded by UBs, who cut it to ‘ neutral’ from ‘buy’ and reduced its target price to 300p from 500p.
Acacia has been accused of lying to tanzanian authorities, who argue minerals in the firm’s gold and copper concentrates are worth more than ten times the amount being declared.
the government has also introduced a nationwide ban on the export of gold. As a result, UBs does not think a resolution to the firm’s glut of stock is likely to occur any time soon, and shares fell 1.4pc, or 3.9p, to 283.5p.
In the junior market, online video company Forbidden Tech
nologies jumped 6.4pc, or 0.38p, to 6.38p, after signing a £100,000 distribution contract with sports broadcaster Deltatre, which will use Forbidden’s cloud video platform to show live and on-demand content from July.