Smiths shares wounded after red tape dents sales
FTSE 100- listed engineer Smiths Group was wounded as its medical devices arm fell foul of new European rules.
Smiths’ share price bled out 7pc, or 122.5p, to end at 1627p after warning that revenue for the medical branch would slip 2pc over the full year.
It said Smiths Medical, which makes catheters and machines that monitors vital signs, had to temporarily suspend selling cer - tain products on the continent as one of the external companies which approves its equipment for sale was decertified.
Smiths brushed off these prob - lems, and the loss of two US con - tracts, as ‘one-off disruptions’.
But Artjom Hatsaturjants, an analyst at Accendo Markets, said: ‘With the post-Brexit landscape still unclear for UK businesses, the company’s certainty that it can avoid similar disruptions in the future should be taken with a pinch of salt.’
Six months ago, at its half -year point, Smiths Medical was 29.1pc of the full group ’s revenues and 33.2pc of operating profits.
Its troubles failed to drag down the FTSE100, which ended the day up 0.7pc, or 49.95 points, at 7676.28.
Mining giant BHP Billiton released a strong operational review, saying it met or exceeded full-year production guidance for petroleum, copper, iron ore and coal used in energy generation.
Boss Andrew Mackenzie said that ‘good prices and our culture of continuous improvement give us positive momentum ’. BHP ended the day up 2.8pc, or 44.6p, at 1668.6p, while a little of its positivity rubbed off on to the rest of the FTSE’s mining sector.
Investors were less impressed with Ladbrokes Coral owner GVC, despite reporting the effects of a World Cup boost.
Group gaming revenue was up 8pc, while online revenue was up a hefty 18pc – most attributable to the football.
In the period leading up to the World Cup, GVC said online gaming revenue climbed 15pc.
Brokers were generally positive on GVC’s prospects, but investors seemed unsure as to how the group would fare once major sporting events were over. Shares fell 1.5pc, or 17p, to 1090p. An increase in profit guidance at
EasyJet went down a bit easier . After a flying third quarter , the budget airline said full-year profit should now be between £550m and £590m, above the analyst consensus of £536m.
It did also reveal it had suffered a £25m hit from air traffic control strikes, and chief executive Johan Lundgren said it would join rivals in launching a legal complaint to the European Commission.
The strikes, mainly in France, may breach Europeans’ freedom of movement, Lundgren believes. Easyjet’s shared climbed by 2.2pc, or 35.5p, to 1688.5p. Meanwhile packaging group
RPC ran into difficulties, as shares folded 3.6pc, or 27.6p, to 747.4p.
Chairman Jamie Pike said he was ‘working to resolve’ a dispute between the company and certain investors over how much debt it took on to fund acquisitions.
RPC’s headline sales grew by 5.8pc year - on-year in the first quarter, boosted by the acquisi - tion last year. But underlying sales growth was actually only 2pc – a concern for shareholders.
It was a grey day for the sector all round, as AIM-listed speedpackaging company Mpac Group plummeted by 35.5pc, or 77.5p, to 141p.
The company, which wraps up products such as tablets and drinks, said its ‘ business climate has softened considerably’, which it blamed on general economic and Brexit-related uncertainty.
It added that profits would be £1.2m lower than expected.