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“Blue-chips slipped in early trading amid continued uncertainty around Spain and Catalonia and ongoing unpredictability over the direction of Brexit negotiations,” says AJ Bell Investment Director Russ Mould.
“Interserve’s shares plunged after the support services and construction group warned of a 50% drop in second half operating profits and that it might breach its banking covenants. The group’s support services and construction businesses are both facing pressures which have been exacerbated by an inflexible cost base. Interserve is now launching a group-wide performance improvement plan to bring margin performance into line with industry norms. Interserve’s shares were down by more than 25.8% in early trading.
“Unilever was the biggest blue-chip faller after its third quarter growth was hampered by poor weather in Europe and natural disasters in the Americas. Conditions in developed markets remain challenging but Unilever is starting to see signs of improvement in some of its biggest emerging markets, including India and China. Unilever’s shares were down by just over 3%.
“Nearly a third was wiped off the value of serviced office group IWG after it warned that operating profits would be materially below market forecasts as an anticipated improvement in sales in the third quarter was weaker than expected. IWG continues to invest in growing its national networks and in its development capabilities to establish a strong pipeline of growth in future years. But in the short-term this will lead to additional overhead costs. IWG’s problems have been compounded by some weakness in London and disruption to other parts of its business globally from recent natural disasters. IWG’s shares were down by more than 32.6% in early trading.”
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