MARKET REPORT: Carillion soars 26% on hopes of debt deal

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Fresh hopes that a rescue deal could be around the corner sent shares in Carillion rocketing.

The embattled construction service firm saw more than £21.4million added to its value as punters placed bets on a potential government bailout.

Carillion, one of the builders of HS2, is holding crunch talks with banks including Barclays, HSBC and Santander about a potential refinancing deal.

Bosses are also allegedly considering a rescue plan that would see it hand back loss-making contracts, revise others and potentially take financial support from the Government.

Carillion has struggled since reporting half-year losses of £1.15billion.

 Its share price plummeted 90 per cent after announcing its first profit warning last July.

Rumours: Carillion saw more than £21.4m added to its value as punters placed bets on a potential government bailout

Rumours: Carillion saw more than £21.4m added to its value as punters placed bets on a potential government bailout

It’s also the most shorted stock – a process in which people make money when a firm’s share price falls – on the London Stock Exchange. As much as 15.4 per cent of its stock is short sold, according to Financial Conduct Authority figures.

Yesterday short sellers lost out, with its shares booming 26.4 per cent, or 4.98p, to 23.87p.

The FTSE 100 finished down 0.36 per cent, or 27.71 points, to 7696.51 while the FTSE 250 also fell 0.36 per cent, or 76 points, to 20,856.56.

A contract win with Netflix failed to stop shares in mobile payments company Bango falling. The company said the contract will enable Netflix customers in Mexico to pay for their monthly subscriptions via mobile by charging the cost to their phone bill. 

STOCK WATCH – XEROS TECHNOLOGY 

Cleaning pioneer Xeros Technology jumped higher after inking an agreement with a leading washing machine manufacturer.

The company, spun out of a university upstart in Sheffield, has signed an agreement with an unnamed partner to make washing machines with its leading cleaning technology.

It produces pea-sized plastic spheres which absorb dirt from clothing, replacing the need to use excessive water.

Shares soared 6.1 per cent, or 14p, to 243p as a result.

 

It follows a similar agreement with Amazon customers in Japan. Bango’s technology is popular in countries where credit cards are less widespread, as it offers an alternative method of paying for items.

It said the value of sales made on its platform was up 105 per cent to £271million in 2017, up from £132million in 2016 as it capitalised on the growing market for digital goods and services. 

But Bango did not update on profits, sending shares down 7 per cent, or 18p, to 240.5p as investors braced themselves for its full-year results in March.

G4S jumped 4 per cent or 11.1p to 286.3p after UBS upgraded its rating to ‘buy’ from ‘neutral.’ The security firm also raised its target price to 310p from 300p.

Engineer Babcock fell 0.7 per cent, or 5.2p to 710.2p despite announcing a £1.3billion Ministry of Defence contract. It has joined with Thales, BMT, Harland & Wolff and Ferguson Marine to form Team 31 to bid for the MoD’s light frigate programme.

Berenberg’s bankers think upmarket pubs are going to make a killing this year, as they pass on cost pressures like national living wage and business rate changes on to customers. 

It said: ‘Premium operators Fuller, Smith & Turner and The City Pub Company are likely to continue outperforming, with well-invested, differentiated offerings that tap into the consumer trends towards premium alcohol consumption.

‘Wetherspoons should also remain solid, due to its focus on price leadership and support from its mobile app.

‘However, for the ‘squeezed middle’ brands within Greene King, Mitchells & Butlers and, to some extent, Marston’s, earnings growth is likely to remain subdued at best and negative at worst, weighed down by under-invested estates, some poorly located assets and continued growth in casual dining supplier.’

Greene King finished up 0.3 per cent, or 2p, to 580p, Fuller, Smith & Turner was up 0.3 per cent or 3p to 954p, Mitchells & Butlers was flat at 281.6p while The City Pub Company fell 0.6 per cent or 1p to 169p, as did Marston’s (0.4 per cent or 0.5p to 116.5) and Wetherspoons (0.2 per cent or 2p to 1274p).

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