Primark owner shares weigh on FTSE 100 after bitter results from sugar division
It was the fourth straight session in the red for the blue chip index.
London’s blue chip index was weighed down by a drop in the share price of Associated British Foods (ABF) after the firm reported bitter results from its sugar division.
The FTSE 100 ended the day down 0.3% or 24.47 points at 7,700.96 points, marking the fourth straight session in the red for the index.
It was dragged lower in part due to a near 3.6% drop in the ABF share price, which closed lower by 102p at 2,755p after warning that sugar revenues would suffer from plunging prices over the full year.
ABF said it already observed tougher trading at its sugar business in the 16 weeks to January 6, when revenues dropped 12% at constant currency.
David Madden, a market analyst at CMC Markets UK, said: “Associated British Foods come under a bit of pressure today after sugar division weighed on the performance of the clothing department.
“Total third-quarter revenue rose by 16%, and Primark registered a 9% jump in sales, but the sugar business saw a 13% fall in revenue.
“It’s the same old story at Associated British Foods, as Primark is the star performer, while the food division lags.”
In currency markets, sterling jumped to yet another fresh post-Brexit vote high against the US dollar overnight to hit 1.39, as investors fretted about political uncertainty in the US, with politicians grappling over the terms of further funding that would avert a government shut down.
The pound was trading up 0.5% versus the greenback in afternoon trading at 1.389, but was flat against the euro at 1.134.
Across Europe, the French Cac 40 closed flat, while the German Dax climbed 0.7%.
Brent crude was down 0.2% at 69.26 US dollars per barrel after a double whammy of bad news for those hoping for a shrinking energy stocks.
Not only did the American Petroleum Institute reported a rise in gasoline and diesel inventories, but Opec said it expected higher output from non-member producers in a move that threatens to counter its own members’ production cap.
In UK stocks, Whitbread jumped 133p to 3,988p as total UK sales its Costa and Premier Inn brands rose 7.2% and and 5%, respectively in the third quarter.
The company also said it was on track to hit its annual targets as it reaps the rewards of a group-wide efficiency drive.
Chemring climbed 9.8p to 188p despite the launch of a criminal investigation by the Serious Fraud Office into money laundering, bribery and corruption linked to business conducted by one of its subsidiaries.
Issues surrounding two “specific historic contracts” were self-reported by the subsidiary. Investors instead focused on a 15% rise in full-year revenues and a 14% jump in underlying operating profit to £55.4 million.
Countrywide plunged 25.2p to 110p after the estate agency said it had experienced a “disappointing” fourth-quarter, which will result in full-year income coming in at around £672 million, down from £737 million last year.
The decline was driven by its UK business, in particular London, Countrywide said.
The biggest risers on the FTSE 100 were Hargreaves Lansdown up 79.5p at 1,919.5p, Evraz up 15.3p at 388.4p, Whitbread up 133p at 3,988p, and Coca-Cola HBC up 52p at 2,412p.
The biggest fallers were Associated British Foods down 102p at 2,755p, SSE down 42p at 1,300p, Randgold Resources down 158p at 7,076p, and Mediclinic International down 12.8p at 606.2p.