Shares slide as investors check out of Burberry
SHARES in Burberry suffered after the luxury clothing company fell out of fashion with Goldman Sachs analysts.
They downgraded the FTSE 100listed trenchcoat maker from ‘neutral’ to ‘sell’ and slashed its target price from 2148p to 1855p.
The US investment bank liked the long-term story at Burberry, but thinks it will need to spend more on things like marketing to reinvigorate sales.
Products from Burberry’s new creative director, Riccardo Tisci, began arriving in stores last month – around the same time that Tisci generated headlines for including a top that included a noose – blasted as a ‘ suicide’ hoodie – in one of its fashion shows. Burberry shares closed down 3.58pc, or 70p, at 1883.5p.
The FTSE 100 closed up 0.17pc, or 12.57 points, at 7196, while the
FTSE 250 was down 0.43pc, or 83.83 points, to 19,359.31. Defence contractor Ultra Electronics was the FTSE 350’s top riser after it boosted its order book and hiked its dividend, despite its profit falling.
Its order book was 10pc higher at the end of 2018 than it had been the previous year, at £984m, and even though revenue fell 1.1pc at £767m, it beat estimates of £756m. The company, which makes torpedo defence systems for submarines, raised its final dividend by 5.7pc to 37p per share, meaning the total payout for the year will be 51.6p.
It will be welcome news for investors as it is London’s second most-shorted stock, with 11.4pc of shares on loan to firms that believe its price will dip. Shares rose 12.2pc, or 157p, to 1441p.
British American Tobacco and
Imperial Brands rose after the commissioner of US federal body the Food and Drug Administration, Scott Gottlieb, announced he was resigning.
It’s rare for a resignation outside a company to so affect share prices, but as a strident antitobacco and anti-vaping commissioner who tried to curb the use of flavoured e-cigarettes in the US, the industry will be breathing a sigh of relief.
Big tobacco companies have been using the burgeoning market in e-cigarettes to bolster their earnings. BAT rose 5.2pc, or 149.5p, to 3050p, while Imperial climbed 1.4pc, or 36p, to 2612.5p.
Meanwhile, the world’s biggest serviced office space provider,
IWG, gained more than 3pc after it said it would close or refurbish some locations in the UK and worldwide to boost its books after a lower annual profit.
Revenue rose nearly 10pc to £2.5bn, but profit before tax fell 7pc to £139m. Shares rose 3.2pc, or 7.4p, to 239p. Recruiter Page
Group clocked a 20pc rise in fullyear profits as its overseas arms offset a less impressive performance in the UK. Profit before tax shot up 20pc to £142m on a 14pc revenue rise to £1.5bn in what the firm called ‘a record year’.
Brexit uncertainty hit the UK arm, which was the only division to post a decline, but there were double-digit rises in Europe, the Americas and Asia-Pacific. Shares fell 0.8pc, or 3.6p, to 445.4p. Apple supplier Dialog Semiconductor gained after it said it was targeting new sectors following a £456m deal last year to cut its exposure to the US tech behemoth. Dialog estimates revenue will decline in 2019 by a ‘singledigit percentage’, which is better than analysts have forecast.
Dialog shares, which are in euros, rose 2pc, or 0.54 cents, to €26.77. Finally, temporary power generator supplier Aggreko said 2018 exceeded its guidance as its North American rental business boomed due to hurricane-related orders. Revenue rose 4pc to £1.8bn but shares dipped slightly, by 0.7pc, or 5.2p, to 726p.