Funding Circle, Woodford and more of the week's big news
Crowd funding business Funding Circle (FCH) spooked investors after halving revenue growth guidance on 2 July. Its shares tanked 20% to 132p as it warned that demand for small business loans had weakened. Because we still don’t know whether the Government will strike a deal with the EU, it is likely that entrepreneurs are nervous about borrowing to grow start-ups.
Stockbroker Numis thinks Funding Circle’s prospects will be better after Brexit, as it provides more lending to SMEs than the entire UK banking system.
Elsewhere, it could be a long time before investors in LF Woodford Equity Income (BLRZQ73) get their money back. Woodford Investment Management confirmed the widely expected news that the dealing suspension would not be lifted following a 28-day review period.
Investors will now have to wait at least another month before they can get their money back, and realistically it could be a lot longer as manager Neil Woodford tries to rebalance the portfolio to more liquid stocks.
CONTRACT WOES FOR PAYPOINT
It has been an unhappy time for payment technology firm PayPoint (PAY), whose share price was hit after losing a big contract with British Gas to provide payment services for top-up gas and electricity meters.
PayPoint said the direct revenue hit would be £1.4m in the year to March 2020, and £3.5m the following year, but the market was also be concerned by the fact the British Gas contract had been picked up by rivals Payzone and Post Office in a joint venture.
BRIGHTER SPOTS IN THE MARKET
Aberdeen-based oil and gas engineer John Wood Group (WG.) surged after the company told the market it had improved its profitability.
In a trading update for the six months to 30 June, John Wood said its revenue was in line with the first half of last year, but its adjusted pre-tax profit would be up 7% on last year and its operating profit 25% higher.
Multinational retailer Kingfisher (KGF) finally saw its share price move upwards after it appointed a new chief executive. Thierry Garnier joins from French supermarket Carrefour. He replaces Véronique Laury, who leaves having failed to turn the business around and having overseen a 52.8% drop in pre-tax profit in the past year.