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“The FTSE100 surrendered yesterday's gains as Brexit negotiations and next week's Budget continued to weigh on sentiment,” says AJ Bell Investment Director Russ Mould.
“Beleaguered contractor Carillion’s shares plummeted after another profit warning and it said it needed to defer the testing of its financial covenants or be in breach of them at the end of the year. Carillion has been focusing on reducing costs, collecting cash and implementing a new operating model since the summer. But these self-help measures are not enough and it will need some form of recapitalisation. Its problems have been exacerbated by delay in the start of a major project in the Middle East and lower than expected margin improvements on some UK support services contracts. Carillion’s shares were down by more than 56.6%.
“Construction and property development group Kier was among the biggest FTSE250 risers after it confirmed that it was on course to achieve double-digit profit growth. Its property division is delivering a return on capital in excess of 20% while the mixed tenure and private housebuilding businesses continue to make good progress buoyed by recent Government initiatives including the extension of the Help to Buy scheme. Kier’s shares were up by over 2.7%.
“Currency manager Record’s shares were down in early trading despite an increase in first half profits as global political instability stoked volatility in foreign exchange markets. Profits were up 6% and the group increased its interim dividend. Record’s shares were down by more than 1.8%.”
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