ConvaTec, Acal and Low & Bonar

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“The FTSE100 opened on front foot as UK Prime Minister Theresa May headed to Brussels for emergency talks in an attempt to end the current deadlock on Brexit,” says AJ Bell Investment Director Russ Mould.

“Medical products group ConvaTec was the biggest blue-chip faller after it lowered its full-year revenue growth forecasts. The group continues to be plagued by supply issues which have been exacerbated by regulatory delays on the move of its advanced wound care manufacturing lines from the US to the Dominican Republic. Progress is being made in reducing backorders and the group is working towards adjusted operating costs of around 35% of full year revenue, compared to 37% in the first half. ConvaTec’s shares were down by more than 14.1% in early trading.

Acal topped the FTSE All-Share Index following a bullish update. Acal’s second quarter trading was strong with growth driven by new project wins, mostly in its target markets, and product cross-selling. Gross margin stabilised during the first half and the group is on track to deliver full-year earnings slightly ahead of its previous forecasts. Acal’s shares were up by over 6.7%.

Low & Bonar was a double-digit faller after it warned that market conditions for its civil engineering business remained challenging and that raw material prices remained higher than anticipated. The group had expected prices to fall in the second half but these hopes were dashed by a number of factors including the impact of the hurricanes in the US. Low & Bonar has reduced the impact on margins through price increases and cost-saving initiatives. Low & Bonar’s shares were down by more than 15% in early trading.”

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