Worries over army cuts put a dent in BAE’s stock
FEARS over deeper cuts to Britain’s armed forces spooked investors in defence company BAE Systems, hitting the company’s share price.
In an interview with the BBC, Lieutenant General Ben Hodges, who is commander of the US Army in Europe, warned the UK’s position as a leading member of Nato would be at risk if Britain’s armed forces are cut further.
Most recently the British Army’s regular troops were slashed from 120,000 to 82,000 but, as it struggles to recruit, its current figures stand at just over 78,000.
General Hodges’ comments come after new defence secretary Gavin Williamson warned of ‘rising threats’ facing the UK.
Williamson, who has no military experience and replaces Sir Michael Fallon who stood down last week, faces pressure as his department is forced to make savings in the Army, Navy and RAF. One area facing the axe is the Royal Navy’s amphibious assault ships HMS Albion and HMS Bulwark. The warnings were enough to send jitters through investors of BAE, which also yesterday appointed a new non- executive director to its board.
Revathi Advaithi, who is chief operating officer at power management company Eaton, will join the board from January 1. BAE closed down 1.6pc, or 9p, at 570p.
Shares in budget airline Wizz Air lost altitude yesterday, after flying to record highs on Tuesday. They nosedived 9.3pc, or 311p, to 3024p, after it raised its profit guidance for 2018 to a range between £234m and £246m. It had previously said that net profit would be at the upper end of a range of between £221m and £239m. Panmure Gordon has changed its position on Wizz Air from a ‘Buy’ to a ‘Hold’.
EasyJet was also down 3.3pc, or 43p, to 1262p.
Among those leading the charge in the FTSE Small Cap index was equipment rental firm VP. News of its acquisition of fellow industry peer Brandon Hire Group sent its share price surging by 4.7pc, or 37.5p, to 830p.
VP said the acquisition of Brandon Hire would bring economies of scale and create a leading specialist tool hire business.
Rising oil prices, improved production and falling debt have set the stage for recovery at Tullow
Oil, which saw its stock price surge on opening to finish up 0.9pc, or 1.7p, at 201.5p.
The group is now expecting free cash flow of £0.3bn for the year, though development activity is expected to slow Tullow down at it tries to reduce its debt, which stands at £2.8bn.
Higher demand for electric and hybrid vehicles in the three months to the end of September has been a big benefit for engineering and environmental consultancy Ricardo.
A £33m boost to intake sent the firm’s orders to £106m at the end of September, with a quarter of the total orders attributed to electric or hybrid vehicles, compared to 17pc a year before. Ricardo ended the day up 2.7pc, or 23p, at 860p. Trendy office provider Work
space Group welcomed strong half-year results, demonstrating a growing appetite among companies for flexible working environments. Its half- year results revealed growth of 21pc in rental income to £46.1m, leading to 25pc growth in profit to £29.4m.
The figures bumped up Workspace’s share price by a healthy 5.9pc, or 53.5p, seeing it close the day at 959.5p.
Analysts Peel Hunt showed confidence in the group labelling it ‘one of the few London-based companies still benefiting from rental growth’.