LONDON (Alliance News) - UK equities were trading lower just after the open on Wednesday, with Travis Perkins leading the early blue-chip fallers after it unveiled plans to close stores, citing uncertainty over UK customer demand.
The builders' merchant noted the combination of weak demand, changing customer buying behaviour, and the impact of previous government boiler replacement incentive schemes had meant the plumbing, heating and bathroom markets had "been challenging". The operations of its Plumbing & Heating division will be fully reviewed and the outcome of the review and any associated costs will be communicated in 2017, Travis Perkins said.
Given that "levels of future demand remain difficult to predict", the company has chosen to implement "a number of efficiency programmes and branch closures", resulting in exceptional charges of between GBP40.0 million and GBP50.0 million in 2016. Around two thirds of these exceptional charges will be non-cash write-offs.
The stock traded down 5.5%, the worst performer in the FTSE 100.
The blue-chip index as a whole was down 0.2%, or 13.36 points, at 6,986.70. The FTSE 250 was down 0.4% at 17,918.16, but the AIM All-Share was up 0.3% at 825.54.
The BATS UK 100 was 0.2% lower at 11,808.79, the BATS 250 index was down 0.3% at 16,300.88, and the BATS Small Companies was up 0.1% at 11,063.67
In mainland Europe, the French CAC 40 was flat and the German DAX 30 was down 0.2%.
In Asia, the Nikkei 225 in Tokyo closed up 0.2%, the Shanghai Composite ended flat and the Hang Seng index in Hong Kong is down 0.4%.
Elsewhere on the London stock market, shares in Laird almost halved after it said an anticipated improvement in trading in the second half of 2016 has not materialised, and its underlying pretax profit for the full year is set to fall as a result.
Laird designs, develops and supplies components for the wireless connectivity space and that protect electronic devices from electromagnetic interference and heat.
The company said that, following a disappointing first half of 2016, it had expected a better second half, particularly in its Performance Materials unit. However, it said the acceleration of mobile devices production has come much later in the cycle than previously and visibility on volumes for the business "remains poor".
The stock was down 45% early Wednesday, by far the biggest faller in the FTSE 250 index.
Reckitt Benckiser Group traded down 2.6% even though it reported growth in revenue in the third quarter of 2016 and said it is confident in its strategy for the medium and long term.
The FTSE 100-listed consumer goods firm, which makes brands including Air Wick air freshener and Nurofen painkillers, said net revenue in the third quarter grew by 17% year-on-year to GBP2.56 billion, as like-for-like sales rose by 2%. In the year to date, net revenue grew by 9% to GBP7.13 billion, with 4% like-for-like growth.
Reckitt said its results were boosted by favourable movements in foreign exchange rates, with a "resilient" performance in Europe, North America, Australia and New Zealand, and strong growth in the developing markets excluding Korea.
At the other end of the blue-chip index, Burberry Group was bouncing after its 7.2% fall on Tuesday, when the company reported lacklustre underlying sales for its first half. Early Wednesday it traded up 1.5%, making it one of the best performers in the FTSE 100.
Rentokil Initial, up 2.3%, said it got a big boost to revenue in the third quarter from the weak pound, but underlying growth was also strong thanks to an "excellent" performance for its pest control business.
The pest control and hygiene services company said total revenue for the quarter to the end of September was GBP578.3 million, up 32% year-on-year thanks to the weakness of the pound against the dollar. Rentokil has a big exposure to the US market.
In constant currencies, revenue still increased 16%, with 3.1% organic growth and the rest driven by acquisitions the company has made. Rentokil bought 13 companies in the quarter, including ten in pest control.
In the economic calendar, UK employment reports are the main event at 0930 BST. Eurozone construction output is at 1000 BST, US mortgage applications are at 1200 BST, and US housing starts and building permits are at 1330 BST. Later in the day is the US Energy Information Administration's crude oil stocks are at 1530 BST.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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