VW scandal hits AIM-firm hard
DEALERS nervously await further fallout from the Volkswagen emissions scandal.
With German regulators apparently running tests on ‘unusual pollutants emissions’ on 50 other models, including BMW, Mercedes, Ford, Volvo, Nissan and Jaguar Land Rover, quoted companies in the motor industry fear they could soon be slammed into reverse should the scandal worsen.
AIM-listed Ubisense skidded 22.5p or 27pc lower to 60.5p on a profits warning. The board blamed it all on the emissions-cheating scandal. Car manufacturers such as BMW, Daimler and VW all use Ubisense’s location intelligence software.
Ubisense yesterday said the software has been materially affected by the emissions scandal, resulting in downscaling, delays or cancellations to major orders and longer decision-making cycles. As a result, it expects its revenue and profit for the full-year to miss its previous guidance and will make an adjusted earnings before interest, taxation and amortisation loss for the full year.
Another earnings alert featured Spire Healthcare. It warned the market that due to pressures in its NHS local contract business, which contributes 7pc of revenues, it has cut its full-year 2015 guidance for earnings growth to 0-2pc against 4-6pc previously. Shares plummeted 46.5p or 13pc to 313p.
Support services company Communisis slumped 7.63p or 15pc to 44.25p after revealing that Life, the shopper marketing agency acquired in January, has seen some reduction or deferral in spend by clients, and 2015 earnings are expected to be slightly below previous expectations.
Morgan Advanced Materials slumped 34.2p or 13pc to a 20-month low of 233p after warning that reported second-half revenues would be 7pc lower than the first-half with earnings coming in at the lower end of analysts’ expec- tations. Its outstanding order book at end-October was down 5.3pc on the year.
Those disappointing updates from smaller to mid-cap companies paled into insignificance as dealers were shell-shocked by yet another mother of all profit warnings from Footsie constituent Rolls-Royce.
Its fifth earnings alert since February 2014 sparked an avalanche of selling which saw the shares close 130.5p down at 536.5p, wiping a further £2.39bn off its market value.
With beleaguered miners coming under further pressure as the copper price collapsed again to a six-year low, the Footsie fell 118.52 points to 6178.68, while the FTSE 250 lost 232.27 points to 16,869.5. Wall Street slipped more than 250 points as lower commodity prices took their toll and investors kept their powder dry as they studied comments from Fed policy-makers for any clues on when US interest rates will be increased.
Friendless Anglo American dropped 42.85p to 449.9p following the resignation of Paulo Castellari, head of its iron ore unit in Brazil, to pursue other interests. Ivan Glasenberg’s Glencore shed 7.93p to 95.92p and BHP Billiton 46.4p more to 877.3p.
Wm Morrison Supermarkets eased 2p to 154.9p, with investors seemingly unimpressed with the appointment of Paula Vennells, the boss of the Post Office, to the board as nonexecutive director.
Buying on the back of pleasing interims lifted Norcros 15.5p to 195p. The supplier of innovative bathroom equipment and adhesives, reported an 11pc rise in pre-tax profits to £7m and a 19pc dividend increase to 2.2p.
Currently in receipt of an agreed 160p per share offer from Capita, support services group Xchanging jumped 11.75p to 171p after Computer Sciences Corporation confirmed a letter to the Xchanging board outlining its interest in making an offer of 170p a share.
Starcom advanced 0.62p or 25pc to 3.12p after announcing a joint venture partnership with Florida-based SATO Global Solutions, a provider of data management technology, including the ability to tag, track and link objects to IT systems.
Strong full-year results helped AB Dynamics climb 32p to 314.5p. Revenues and pretax profits advanced 19.5pc to £16.5m and 41pc to £3.8m respectively. All product areas recorded growth. Cantor Fitzgerald lifted its target price to 340p from 265p.
XLMedia, the digital performance marketing services provider, put on 6.25p to 72p. Buyers responded to the board’s forecast it expects to exceed market expectations delivering annual revenues of at least £58m and adjusted earnings of at least £18.1m.
XLM works with all the leading quoted European gaming operators – Betsson, Unibet, 888, William Hill and Ladbrokes.
Frankie & Benny’s-to- Garfunkels owner The Restaurant Group shed 28p to 672.5p despite saying it is confident it can meet its full-year earnings expectations as it remained upbeat on the outlook for the rest of 2015.
It has opened 25 restaurants so far this year and expects to open 45 by the end of 2015. ÷ REAL Estate investment trust Derwent London fell 33p to 3645p on profit-taking after hailing 2015 as the best year for lettings. It has rented 501,500 sq ft of space this year, for a total return of £26.1m, with overall lettings 10.8pc ahead of estimated rental value as recorded last December. Pricing momentum continues with latest deals 12.5pc ahead of the June appraisal. Panmure Gordon’s target price is 4233p. Read the market latest updated
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