Spreadex Market Update
Rolls-Royce ruins FTSE’s morning as company issues 5th profit warning since February ‘14
Torn between the good, the bad and the ugly the FTSE ended up fairly flat soon after the bell, desperately fighting the heart-stopping drop by Rolls-Royce Holdings. Plunging a whopping 19% to a 4 year low of £5.40, the engines manufacturer and defence contractor issued its fifth profit warning since February 2014. Looking at the figures it’s not hard to see why investors fled the stock in droves this Thursday; Rolls-Royce is now forecasting its 2016 profits at 30% lower than the current consensus, already itself a reduced figure following the company’s last warning in July.
Joining Rolls-Royce atop the rubbish heap were Spire Healthcare and Halfords. The former tumbled over 10% to a 2 and a half month low of £3.22 as it slashed its full-year revenue forecasts; the latter, meanwhile, shed 9% of its valuation following like-for-like sales growth of only 1.7%, nearly half of the expected amount. There was some good news, however; Burberry rose by just over a percent this morning after it posted an investor-reassuring rise in third quarter sales, whilst BAE Systems, in a stark contrast to Rolls-Royce, rose by 4% despite cutting its earnings outlook for the year.
The Eurozone quickly recovered from its early losing this Thursday, the CAC (whilst has been one of the more resilient indices recently) flat at 4950 and the DAX jumping 20 points to edge further into the 10900s. These gains came despite brewing trouble in Greece (never!), with 24 hours of protests and union-walkouts to look forward to.
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