LONDON (Alliance News) - Stock prices in London opened flat to lower on Monday, with bookie Paddy Power Betfair among the worst FTSE 100 performers after saying betting on US President Donald Trump's election cost it almost GBP5 million.
Enjoying a different fortune were gold miners, benefiting from a rise in the precious metal's price, while housebuilders Berkeley Group Holdings and Bovis Homes were both up on speculation of an all-share merger between the two.
The FTSE 100 index was down 0.9%, or 65.16 points, at 7,133.28. The FTSE 250 was flat at 18,144.31, and the AIM All-Share was flat at 873.69.
The BATS UK 100 was down 0.8% at 12,060.51, the BATS 250 index was flat at 16,508.12, and the BATS Small Companies was also flat at 10,942.73.
Paddy Power Betfair was 2.0% lower after the bookmaker said it expects to report underlying earnings at around the mid-point of its previously guided range, notwithstanding worse-than-expected gross win margins in November and December. It said revenue rose by 18% in 2016 to GBP1.55 billion from GBP1.32 billion in 2015, or by 11% at constant exchange rates.
As a result, Paddy Power Betfair now expects group underlying earnings before interest, tax, depreciation and amortisation to be at the mid-point of its previously guided range of GBP390 million to GBP405 million.
Paddy Power Betfair said that, since its third quarter update in November, it had continued to see good sportsbook staking growth, but "results favoured customers", pointing to the unexpected victory of Donald Trump in the US election, which it said had cost it almost GBP5 million.
A top investor in FTSE 250-listed Bovis Homes Group is pushing for a GBP5 billion merger with fellow London-listed rival Berkeley Group Holdings after Bovis's chief executive resigned following a profit warning, the Sunday Times reported.
Schroders Investment Management, which holds a 6.4% stake in Bovis, making it the second largest shareholder, is understood to have written to Berkeley, a bigger competitor, pushing it to consider an all-share merger. This could result in the company being put up for sale and igniting over takeover interest in Bovis.
Shares in Berkeley were up 0.6%, while Bovis Homes was 3.3% higher. FTSE 100-listed Schroders PLC was down 0,7%.
FTSE 100-listed gold miners Fresnillo and Randgold Resources were up 2.0% and 1.1%, respectively, while mid-cap Hochschild Mining was up 4.4%.
Gold was quoted at USD1,213.10 an ounce after the London equities open on Monday, higher than USD1,202.88 an ounce at the close on Friday.
Hochschild said operations at its Pallancata mine in Peru will restart by Wednesday, after an agreement was reached with a local community. The gold and silver miner in December announced production at Pallancata was stopped due to a road blockade by members of the local community "demanding the renegotiation of existing agreements for land easements".
However, on Monday, Hochschild said the dispute has been resolved and confirmed that, despite the stoppage, its production forecast for 2017 of 6.0 million silver equivalent ounces and associated all-in sustaining cost guidance has not been affected.
In the FTSE 250 index, Computacenter was up 1.8%. The IT infrastructure provider said it expects to reported adjusted pretax results in line with its expectations for 2016, with revenue up 6%, helped by the weak pound. At constant currency, group revenue was flat, the company said.
On the downside was Essentra, off 10%. The components manufacturer said it expects its adjusted operating profit for 2016 to be at, or "modestly below", the lower end of its previous guidance. The firm said its Health & Personal Care Packaging unit saw a significant decline in revenue and profitability in the last two months of 2016.
In mainland Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were both down 1.0%.
In Asia on Monday, the Japanese Nikkei 225 index closed down 1.3%. Japan's supermarket sales declined in December after rising in the previous two months, data from the Japan Chain Stores Association showed.
In China, the Shanghai Composite finished up 0.4%, while the Hang Seng index in Hong Kong ended up 0.1%.
The economic calendar on Monday is thin, with eurozone's consumer confidence data at 1500 GMT.
By Daniel Ruiz; danielruiz@alliancenews.com
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