Pension problems push down Royal Mail by 4pc

ROYAL Mail shares took a hit after it announced alternative proposals for its pension scheme following threats of strike action. The company saw £164m wiped off its value after putting forward an alternative to its final salary pension scheme, which it claims has become unaffordable and wants to close.

It has proposed a watered-down ‘defined benefit cash balance scheme’ – essentially this gives workers cash for every year they work. This would see members receive a fixed sum at retirement plus payments linked to the pension fund’s performance.

It comes after the Communication Workers Union opposed shutting the scheme because many of the 90,000 staff enrolled would lose up to a third of their pensions.

Shares fell 3.9pc, or 16.4p, to 402.5p, putting it among the FTSE 100’s top losers.

Drax Group took a strong step towards recovering from a twomonth losing streak after receiving a positive outlook from analysts at Barclays.

The energy firm, which operates the Drax power station in North Yorkshire, has been hit since announcing in February that it would review its dividend policy, with shares down 14.3pc so far this year. But a note from Barclays said the review was a ‘genuine attempt’ to balance growth and shareholder returns, calling the drop in the firm’s value unjustified.

Shares rose 6.3pc, or 19.1p, to 323p, making it the FTSE 250’s biggest winner.

The FTSE 100 edged down 0.5pc, or 33.23 points, to 7203.94, capping off the index’s biggest monthly loss since last November, at 1.5pc.

Despite this, miners put in a strong performance, with BHP

Billiton up 1.9pc, Glencore up 1.3pc, and Rio Tinto up 1.1pc. Anglo American had a particularly strong day as it announced plans to restart production at its El Soldado copper mine in Chile after receiving approval from regulators. Share rose 1.7pc, or 18.5p, to 1106.5p.

Boohoo’s chief financial officer, Neil Catto, took advantage of the online fashion retailer’s strong results this week, cashing in more than £2m worth of shares.

Shares inched up 0.8pc, or 1.5p, to 188.5p.

Jim McCarthy, non- executive director at Crawshaw, took a different approach, upping his stake in the butcher after disappointing results earlier this week.

Shares advanced 2.5pc, or 0.8p, to 30.25p.

In the junior market, gold miner

Keras Resources jumped after securing an exploration licence and applications for two more in Australia.

The applications cover 73.6 square kilometres near its flagship Warrawoona Gold Project in the west of the country. Shares jumped 15.4pc, or 0.05p, to 0.38p.

Amur Minerals was less fortunate. It lost 15pc from its share price after issuing 15.9m shares at 7.65p each to an investor who held warrants with the company.

Someone who buys a warrant from a company has the right to convert it into a share at a fixed price. Investment firm Crede CG chose to convert all 14.5m of its warrants into shares, bringing its total holdings to 2.6pc.

Amur Minerals is chiefly based in the far east of Russia, exploring and developing nickel and copper resources. In February its shares rocketed after it revealed it has more than one million tons of nickel classified at its Kun-Manie project. Shares yesterday fell 15pc, or 1.1p, to 6.25p.