Coporate earnings concerns hit markets
IT was another relatively quiet day as far as corporate news was concerned on the FTSE 100.
The top flight index of shares opened lower with low trading volumes following a lacklustre performance from both the US and Asia overnight. Taking direction from Wall Street in the afternoon the FTSE 100 finally ended the day 31 points lower at 4127 as concerns over corporate earnings persisted.
In the wider market, FTSE 250 company BBA Aviation, which serves two markets, flight support and aftermarket services and systems, said that trading has been solid since its interim management statement in April. BBA shares ended the day 2.75p higher at 117.5p.
Following updates from both Barratt Developments and Persimmon earlier in the week, housebuilder Bovis Homes also issued a trading update for the six months ended June 30. The number of homes completed during the period was 754 versus 851 for the same period a year earlier. Bovis also saw a large reduction in contribution from social housing with only 16 completions compared to 227 social homes for the first half of 2008.
Bovis said: “The short term outlook for the housing market is a continuation of low levels of activity constrained by ongoing illiquidity in the mortgage market.” Bovis shares ended the day 6p lower at 388.5p.
In the regional portfolio, vehicle rental firm Northgate announced unaudited results for the year ended April 30, 2009. The main feature was the announcement of a fully underwritten placing and rights issue to raise net proceeds of £108m and the group has agreed new lending facilities.
Despite recording an increase in revenue of 5% to £609m, Northgate posted a pre-tax loss for the year of £195.6m after exceptional items. The company’s shares closed down 1.8% at 67.25p.
fionae@brewin.co.uk
