Healthcare sale breathes life back into Carillion
SHARES in Carillion rallied after the troubled builder and outsourcer revealed it was selling its UK healthcare arm as part of turnaround plans.
The deal will see rival Serco snap up the division for £50m, as crisishit Carillion continues a drive to raise £300m by 2018.
In an update to the market, bosses also confirmed they had secured more headroom for the business with two debt agreements making it between £170m and £190m better off.
And new contracts have been won, including a £200m deal to build broadband networks for Gigaclear and another worth £71m to build student flats for Manchester University.
The company, which was laid low by a £845m writedown and profit warning in July, said it was still considering whether it would sell parts of its Canadian business.
It helped lift the company by more than 20pc in early trading, with shares closing 6.3pc, or 2.75pc, higher at 46.5p yesterday, while Serco rose 1.4pc or 1.6p to 117.8p. Keith Cochrane, interim chief executive, said: ‘Today we are announcing progress on a number of fronts and whilst our customers and creditors continue to be supportive, much remains to be done.’
But while investors bet Carillion was on the road to recovery, they were less positive about doorstep lender Provident Financial.
The company sunk 4.2pc, or 39p, to 890p after analysts at Berenberg warned of uncertainty around an ongoing probe by regulators.
The Financial Conduct Authority has been investigating concerns about Provident’s credit card arm. A note from Berenberg
kept the stock on ‘hold’, adding: ‘We do not think it is possible to usefully forecast the conclusion of the FCA investigation, and it is this variable that will be the key driver of the stock price over the medium term.’
The FTSE 100 edged up 0.03pc, or 2.09, to 7526.54. Among the biggest fallers were WPP (down 3pc or 42p to 1324p) and Paddy Power
Betfair (down 2.7pc or 210p to 7505p), while on the other end of the scale an update from St James’s Place Wealth Management pushed the stock almost 2pc higher.
Shares in the company rose 23p to 1193p after bosses revealed investors had ploughed almost £2.4bn into the fund in the three months to the end of September.
It was an increase of 42pc on the same period last year, with the fund now managing £85.7bn.
Over on the FTSE250, the biggest riser was energy services group Hunting.
It was up 8.8pc, or 40.1p, to 496.8p after revealing a sales surge in its third quarter trading. Bosses said they now expected full-year sales to be more than £533m, well above the previous year’s £347m, and a ‘modest profit’.
It comes after a sales slump last year of more than 40pc, which was blamed on oil prices being stuck in the doldrums. Meanwhile, London-listed Keywords Studios, a provider of technical services to video game companies, was up 7.8pc, or 108p, to 1495p after announcing plans for an acquisition.
Bosses want to raise £75m through a placing to buy North American rival VMC for about £51m, with remaining cash used to fund further takeovers.
And there was an added sparkle to shares in Stellar Diamonds, after the miner revealed it had been awarded an environmental licence in Sierra Leone.
It means the company’s plans to further develop a kimberlite deposit near Tongo are a step closer to being realised.
Shares in Stellar Diamonds rose 8.7pc, or 0.25p, to 3.12p after the announcement.