Love lost for Petra as a diamond crisis brews
EVEN if mining firms want us to believe that diamonds are forever, it seems demand for them is a little more fleeting.
Petra Diamonds spooked investors by admitting it is struggling with a weak market, adding fuel to concerns that an industry crisis is brewing.
Full-year revenue fell 6pc to £372m in the year to June 30, missing analysts’ expectations.
And South Africa-focused Petra trimmed its production guidance from 3.8m carats in the 2019 financial year to 3.7m in 2020. It follows Anglo American-owned De Beers’ announcement last week that it is cutting its 2019 output forecast in line with lower demand.
Dwindling sales have been put down to everything from falling marriage rates to a backlash against blood diamonds and the decline of bricks-and-mortar retail, though Petra said the US-China trade spat had hit sales and prices.
The crucial test will be what happens to demand in the run-up to Christmas, which accounts for as much as a quarter of annual industry sales. Petra shares plunged 8.8pc, or 1.58p, to 16.42p.
Tui shares rallied after Stifel analysts resumed their coverage of the package holiday provider with a ‘ buy’ rating and target price of 940p.
Tui warned in March that the ongoing crisis with Boeing’s 737 Max planes could shave as much as 26pc off its annual profits if the jets were not allowed to fly again by July.
The 737 Max aircraft, which were grounded following two crashes that killed 346 people, are still not back in the air and may not be until December.
But Stifel analysts believe Tui’s shares have been oversold, and urge that it is well placed to adapt to any changes in the industry. Stifel’s optimism sent Tui shares 4.6pc higher, up 37p, to 841p, making it the FTSE 100’s biggest riser.
The Footsie was subdued ahead of what is expected to be a more frenzied trading session today, when the winner of the Conservative leadership race is revealed just before lunchtime, anointing the new prime minister.
The Footsie edged into the black by 0.1pc, or 6.23 points, to 7514.93, while the FTSE 250 index rose 0.1pc, or 26.35 points, to 19648.01.
Investors in mid-cap media and events group Ascential approved the company snapping up a 35pc stake in US marketing analytics firm Jumpshot for £49m.
Jumpshot, owned by the cybersecurity group Avast, monitors the clicks that web users make while they are browsing the internet to track how they shop online, including on sites such as Amazon and Google.
The deal was accompanied by jumps in both profits and revenue – by 25pc and a third respectively – between January and June. Ascential’s stock rose by 4.4pc, or 16.8p, to 396.2p.
Recruitment firm SThree reported a 9pc slump in revenue in Britain, echoing similar falls at its rivals Hays and Robert Walters.
But sharp rises in its US and continental Europe arms lifted pre-tax profit by 18pc to £24m in the six months to May 31, and SThree’s immunity to difficulties in its home market, sent shares 2.6pc higher, up 7p, to 278p.
ITV started the week on a low after analysts at Morgan Stanley cut the target price on its stock from 115p to 100p.
It came days after ITV signed an agreement with the BBC to launch streaming service Britbox, which many hope will give the broadcasting giants extra ammunition with which to battle US streaming group Netflix. ITV shares slid 2.9pc, down 3.2p, to 107p.
Shares in Capital & Regional fell 5pc, or 0.82p, to 15.68p after its shopping centre in Walthamstow, east London, was damaged by a fire. No one is believed to have been hurt in the incident.