(Alliance News) - Stock prices in London opened lower on Tuesday with Ashtead weighing on the FTSE 100, while Ted Baker's woes continued after suspending its dividend and parting ways with its chief executive and executive chair.
The UK's flagship equities index was 18.39 points, or 0.3%, lower at 7,215.51. The mid-cap FTSE 250 was down 12.81 points, or 0.1%, at 20,909.83 and the AIM All-Share was flat at 904.80.
The Cboe UK 100 index was down 0.2% at 12,226.20. The Cboe UK 250 was down 0.1% at 18,817.66 and the Cboe UK Small Companies was flat at 11,406.40.
In Paris the CAC 40 was down 0.2%, while the DAX 30 in Frankfurt was down 0.5%.
On the London Stock Exchange, Ocado Group was the best blue-chip performer, up 1.4% after Berenberg raised the online grocer to Buy from Hold.
Just Eat was marginally higher after the online takeaway platform rejected an increased takeover bid from Prosus, saying the offer still "significantly undervalues" the company.
On Monday, Prosus increased its offer for London-listed Just Eat to 740 pence per share in cash, giving Just Eat a value of GBP5.1 billion. Just Eat shares were trading at 781.60p early Tuesday.
Just Eat has since the reviewed the offer and its board is unanimously recommending shareholders reject the bid, instead favouring the all-share merger with Dutch firm Takeaway.com.
At the other end of the large cap index, Ashtead Group was the worst performer, down 4.8%.
The equipment rental firm said its UK business is suffering from challenging market conditions, while the US business is going from strength to strength.
For the half year ended October 31, revenue rose 19% to GBP2.68 billion from GBP2.25 billion last year, and pretax profit was up 8.2% to GBP675 million from GBP610 million the year before. In the US, where the company generates the bulk of its earnings from its Sunbelt unit, revenue came in at USD2.89 billion, up from USD2.50 billion last year.
The company's UK A-Plant unit posted revenue of GBP187 million, down 2.0% from GBP191 million last year.
"There are wider worries overhanging the stock, not least of which is the company's reliance on the US part of its business, which accounts for 86% of revenues. In addition, the company's aim to expand by both organic growth but also by acquisitions carries the ongoing possibility of execution risk, even though this is something in which the group is well-versed. The other strategic question mark hangs over the net debt figure which has risen due to these further acquisitions and which currently stands at GBP5.2 billion, versus a previous figure of GBP3.6 billion," Interactive Investor's Richard Hunter noted.
"Given Ashtead's ability to generate cash and a favourable economic backdrop, the debt is comfortably serviceable but any decline in either the economy or the rental market, particularly in its major geography, would filter through hard and fast," Hunter added.
SEGRO was down 1.0% after Goldman Sachs cut the warehouse property investor to Neutral from Buy.
In the FTSE 250, Tullow Oil was the best performer, up 8.6%, staging a very partial rebound after shares slumped a massive 72% on Monday, hitting a record low of 38.05 pence. Tullow on Monday suspended its dividend, cut its future production guidance, and said Chief Executive Officer Paul McDade had resigned.
At the other end of the midcaps, Shaftesbury was down 3.0% after Barclays cut the central London-focused property company to Underweight from Equal Weight.
Elsewhere, Ted Baker was down 16% after the once high-flying retailer suspended its dividend and announced the departure of its CEO and chair. The stock had dropped 30% at the open but is staging a partial rebound in early trade Tuesday.
Ted Baker downgraded its annual pretax profit guidance to a minimum GBP5 million and a maximum of GBP10 million. For the year ended this past January 26, the company had posted pretax profit of GBP50.9 million.
Ted Baker is conducting a cost review in a bid to improve its efficiency and has temporarily suspended its dividend. The company said it will look to resume payment as soon as it is "appropriate to do so".
Ted Baker said CEO Lindsay Page has resigned with immediate effect, and Chief Financial Officer Rachel Osborne has become acting CEO. In addition, David Bernstein has stepped down as executive chair and Non-Executive Director Sharon Baylay has become acting chair. The company said it already is looking for a replacement for Bernstein.
Last week the retailer said it had overstated the value of its stock by GBP25 million but reassured that any adjustment to inventory would have "no cash impact and will relate to prior years".
The pound was quoted at USD1.3140 early Tuesday, lower than USD1.3154 late Monday, ahead of the UK general election on Thursday.
The euro was quoted at USD1.1067, flat from USD1.1070 at the European equities close Monday.
Against the yen, the dollar was trading at JPY108.60, flat from JPY108.59 late Monday.
Brent oil was quoted USD64.18 early Tuesday, flat against USD64.20 a barrel late Monday.
Gold was quoted at USD1,462.18 an ounce early Tuesday, firm from USD1,460.80 late Monday.
The Japanese Nikkei 225 index closed down 0.1%. In China, the Shanghai Composite closed up 0.1%, while the Hang Seng index in Hong Kong ended down 0.2%.
Consumer prices in China accelerated at their fastest pace for almost eight years in November as the African swine fever epidemic caused pork prices to more than double, data showed.
The consumer price index - a key gauge of retail inflation - came in at 4.5% for November, the National Bureau of Statistics said, up from 3.8% in October and the highest rate since January 2012. Analysts surveyed by Bloomberg News had forecast an increase of 4.3% on-year.
The widespread outbreak of swine fever since August 2018 has disrupted the pork supply in China, sending the prices of the staple meat up more than double in November.
The economic events calendar on Tuesday has UK GDP and industrial production data at 0930 GMT.
By Arvind Bhunjun; arvindbhunjun@alliancenews.com
Copyright 2019 Alliance News Limited. All Rights Reserved.
