Car dealers shares go in to reverse over sales fall
IT WAS a bad day for the automotive industry as latest data showed UK car sales fell for the seventh consecutive month.
Figures released by the Society of Motor Manufacturers and Traders revealed that overall vehicle sales fell by more than 12pc from September to October, with sales of diesel cars dropping by more than a third.
Car dealer Inchcape, which last month warned of a ‘slowing’ market, saw shares decline by 2.1pc, or 16.5p, to 768p off the back of the poor sales results from the industry, while Lookers also felt the impact of the poor figures, closing the day 1.5pc lower, or 1.5p, at 98.5p per share.
Some car dealership companies were more resilient, with Pen
dragon closing up 1pc, or 0.25p, at 25p. Shares in Pendragon have failed to recover since they were pummelled in October after a fullyear profit warning sent its stock price plunging by 18.9pc.
Vertu Motors and Marshall Motor Holdings also rode out the storm closing flat at 45p and 154p, respec- tively. One of the more dramatic fallers on Monday was managed IT services and cloud hosting provider
SysGroup, which saw its share price plunge 12.2pc, or 5p, to 36p after it issued a profit warning.
SysGroup blamed the downgrade on a change in strategy to focus on managed services. It said that the shift has impacted revenue as contracts are now recognised over the duration of the contract, rather than upfront.
Though unwelcome news for drivers, investors in mining companies benefited on Monday as the price of oil hit a two-year high following an anti-corruption drive in Saudi Arabia. Kenmare Resources, SOCO
International and Premier Oil were among the biggest risers in the FTSE small cap index as the higher price of Brent crude lifted the companies. Kenmare closed up 5.5pc, or 16.5p, at 315p. SOCO was 3.6pc higher, or 4p, to 116.5p, while Premier Oil finished at 75p, a rise of 3.5pc, or 2.5p.
City Index market analyst Ken Odeluga said: ‘I would put most of this move amongst the miners today (down) to partly the dollar and also a bit of a correction upwards after a few weeks of trading lower.’
On the other side of the coin miners Aminex and Solo Oil closed down 12.7pc, or 0.52p at 3.62p, and 9.5pc, or 0.5p at 4.75p respectively.
The companies, which are working together at the Kiliwani North gas field in Tanzania, saw shares dive after it released a statement noting that gas flow at the project was being restricted.
Shares in Mitie Group were buoyed 1.5pc, or 3.5p, to 214.7p after a double upgrade from broker Jefferies to ‘buy’ from ‘underperform’. Mitie’s target price was also raised by the broker from 220p to 290p, as it expected a sale of its property management division to make the firm profitable and de-risk its balance sheet.
Jefferies noted that a profit warning released by the group in September served as a reminder that Mitie’s ‘path to rehabilitation will not be smooth’. The group is due to report its third- quarter results on November 20.
A major success story yesterday was freight forwarder Xpediator, which saw its stock price soar after news that it had snapped up Regional Express for £ 1.2m. Hampshire- based freight- forwarder Regional is an approved service provider to Amazon, something which Xpediator hopes to capitalise on with the new acquisition. Shares rose 15.3pc, or 5p, to 37.62p.
Undeterred by sterling’s recovery on Monday, the FTSE 100 carried through Friday’s success and ended the day on a record high of 7562.28 points. The pound was up 0.3pc to $1.31 after falling for three consecutive weeks.