Card Factory drops over fears sales won’t deliver
INVESTORS with shares in
Card Factory have been told not to expect a special delivery when it reveals its preliminary results next week.
Broker Peel Hunt took the unusual step of previewing the FTSE 250 firm’s results, to be published on Tuesday, as the struggling card and wrapping paper retailer looks to turn the corner.
A profit warning in January, its second in four months, wiped £193m off the value of Britain’s largest greeting card seller. Tuesday gives Card Factory a chance to redeem itself with momentum from Valentine’s Day, Mother’s Day and Easter behind it.
But analysts at Peel Hunt are concerned amid flagging sales, tough retail conditions and question marks hanging over the dividend. In a note to investors, Peel Hunt warned Card Factory the market will have ‘zero tolerance’ if it fails to deliver again.
It added: ‘Tuesday is a great opportunity for Card Factory to regain momentum but we are not convinced that the answers to the burning questions will be to the market’s taste.’ Shares slid nearly 2.1pc, or 4.1p, to 194.2p.
The FTSE 100 held strong in the face of escalating tensions between the US and China, ending the day down just 0.22pc, or 15.86 points, at 7183.64. The FTSE
250 finished down 0.23pc, or 46 points, at 19,530.17.
Among the big caps, analysts at German investment bank Berenberg gave their backing to
Tesco and rival Morrisons, upgrading them to ‘ Buy’ and ‘Hold’ respectively.
Shares in Tesco ticked up 0.9pc, or 1.8p, to 204.7p, although Morrisons ended the day down 0.3pc, or 0.7p, at 224.1p. Elsewhere on the FTSE 250, the tug- of-war over
Fidessa took a new twist as the software firm pushed the shareholder vote on Temenos’s £1.4bn offer to April 27, the last possible day of the takeover window.
Presumably it wants to buy itself time to see if new interest from Ion Investment Group and tech firm SS&C Technologies turn into concrete bids.
The latter said: ‘SS&C confirms that it has had preliminary discussions with Fidessa. No terms of any offer have been discussed.’ Fidessa’s shares edged down 0.5pc, or 20p, to 4055p. In the small caps, shares in
Motorpoint revved as the used car dealer forecast profits ‘at the upper end of market expectations’, despite falling car sales.
The dealer said it was ‘ well placed to continue to grow market share’. Its shares jumped 10.1pc, or 22p, to 239p.
The aviation division of Scottish logistics firm John Menzies has bought Airline Services for £34.9m. Airline de-ices aircraft for more than 60 airlines at 12 UK airports, including London Gatwick, Birmingham and Exeter. John Menzies shares trotted up 1.6pc, or 10p, to 645p.
On Aim, pharmaceutical company Shield Therapeutics will press ahead for regulatory approval from US drugs regulator for an iron deficiency drug.
Shield has had early stage discussions with the US Food and Drug Administration, which has provided guidance.
While it is not guaranteed success, Shield’s shares rocketed 25.8pc, or 4p, to 19.5p.
Ideagen has snapped up US healthcare software firm Medforce Technologies for £6.1m. It is the first US acquisition for Aim-listed Ideagen, which makes information management software for the likes of defence giant BAE Systems and oil company Shell.
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