Market report: Thursday close
NOT everyone greeted news of a potential bid approach for Body Shop from French rival L'Oréal with enthusiasm today.
As shares in the beauty products retailer surged 18p to 265p, after briefly touching 280p, broker Bridgewell Securities was applying dollops of foundation cream to cover its blushes after advising clients to sell. This came after Body Shop was forced to deny suggestions that a management buyout was being lined up.
Bridgewell went on: 'The valuation certainly looks too high for a leveraged buyout, in our opinion, and we remain sellers of the shares.' In fact, Bridgewell is reckoned to be a seller of Body Shop down to 180p.
'In particular, we believe product development and positioning need to make much more progress, and the difficulty in creating a cohesive and credible offer from a disparate and confused base should not be underestimated,' it added. And Bridgewell is not alone in its view, with broker ABN Amro also down as a seller.
Share prices generally were making heavy weather of it as Wall Street continued this week's helter-skelter performance with opening losses this afternoon.
In London, the FTSE 100 index was left nursing a fall of 36.4 points at 5836.0 as investors digested a stream of trading statements from bluechip companies such as Reuters, down 51¾p at 399½p; Centrica, 10½p lower at 285¾p;
BAE Systems, off 26¼p at 421p; Hanson, up 11½p at 710½p; and Capita, 14½p better at 455p.
Also reporting was Brambles, up 13p at 419¾p. The industrial services group's five-year recovery plan is well on track, net profits jumping 28.2% in the six months to December to $241.9m (£138.9m).
Brambles said it expects to complete the unification of its dual-listed companies structure by November. The company plans to create a new holding company for CHEP and Recall with a primary listing on the Australian Stock Exchange and secondary listing on the London Stock Exchange. The two units made up 54% of Brambles' sales in 2005 and 72% of comparable operating profit.
Telecom equipment testing group Spirent expects 2006 to be a year of transition after it sold its network business for £289m earlier this month. Chief executive Anders Gustafsson said he expects a year of recovery with a pronounced increase in activity in the second half, as was the case in 2005.
Excluding the sold-off division, Spirent's headline profit fell from £15.4m to just £4.9m last year on revenues down 10% at £259m. Earnings fell 27% to 2.3p a share. There is no dividend but the group plans a £50m share buyback.
It said it was still looking at selective acquisitions in the quality and testing area, like those of SwissQual and Quad-Tex made recently. The shares dipped 3p to 48¼p.
Trading got under way on Aim today in shares of Ecoenergy International, the clean-energy investment, management consultancy and carbon-credit brokerage. Broker Numis has raised £60m by way of a placing of shares at 100p each. The price opened at 102½p and raced up to a peak of 111½p.
Life is not so much fun these days if you are a shareholder of Games Workshop. The price fell a further 12¼p to 299½p today, and continues to trade at just a third of the value of the shares seen at the start of last year.
Broker Altium Securities has now added to their woes with a sell recommendation and a reduction in its target price from 261p to 240p. Altium went on a tour of GW's stores last week and was none too impressed.
Analyst David O'Brien says: 'We see no catalyst for recovery prior to the autumn and the release of the new Warhammer fantasy game. The contribution from The Lord of the Rings should decline further next year.'
AIM-listed Aurum Mining, unmoved on 55½p, has granted options on more than am shares to chief executive Mark Jones at an exercise price of 55½p and exercisable over the next five years. The company has also granted options on a furtherm shares to Jones at an exercise price of 55½p, but the exercise of these additional options is related to the performance of the group.
Also on AIM, World Television Group marked time at a low of 0.82p. Chief executive Steve Garvey has agreed to buy 1.8m shares from fellow directors Peter Sibley and Andrew Booth, and has subscribed for a further 6.4m new shares at 1p each. It will stretch Garvey's holding to 1.31% of the company, while Sibley and Booth will hold 14.98% each.
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