Yesterday's trading: Dividends dry up at Enterprise
Long-suffering shareholders of Enterprise Inns could again be drowning their sorrows down the local boozer today if rumours doing the rounds prove correct.
Geoff Foster: Daily Mail
Shares of the UK's biggest leased pubs operator were sold down to 166p before closing 4½p cheaper at 173p on gossip that today's half-yearly statement will confirm that the interim dividend has been sacrificed to conserve cash. Last year shareholders enjoyed a mouth-watering payment of 5.8p.
Analysts believe Enterprise must re-finance at least £650m of a £1bn bank facility due in May 2011. It desperately needs to save as much cash as it can and so poor old shareholders could be left holding an empty glass.
The group has apparently so far sold 150 pubs for around £44m in the first six months of the year at prices slightly ahead of book value.
In its pre-close trading statement released in March, Enterprise said that first-half trading was weak but not deteriorating. It along with the its rivals must be hoping that official forecasts for a red hot UK summer this year prove correct.
There's nothing like a continuously shining sun to get thirsty punters back in pubs and help an industry which has been badly hit by the smoking ban, duty rises, the recession and cut-throat competition from supermarkets.
Britain's biggest pub landlord, Punch Taverns, eased 6p to 159p. It pleased followers last month by saying it is not planning a rights issue and that there is absolutely no risk of it breaching borrowing terms this year, after reducing its debt pile by pub sales.
Profit-taking following its spectacular 28% rally since the early March low saw the Footsie fall 60 points before closing 26.59 points lower at 4435.5.
The FTSE 250 lost 195.82 points to 7610.36. With yet more millions being taken out of the system yesterday with platinum miner Lonmin (162p down at 1460p) asking for £302m and Wickes-DIY group Travis Perkins (6p dearer at 759½p) for £300m of shareholders' cash to bolster battered balance sheets, fund managers decided it was better to be safe than sorry.
Wall Street's early 151-point setback also did the London market no favours. Investors in New York ran for the exit on hearing that a handful of large US banks plan to sell shares in order to repay government bailout funds.
Bullish comments on the utility sector from Morgan Stanley and vague takeover speculation lifted United Utilities 4½p to 537½p.
National Grid sparked 13½p higher to 583p after Citigroup upgraded to buy from hold, saying the shares offered good value.
Funeral services group Dignity leapt 46p to 584p after reporting a strong start to the year. Operating profits jumped 15% to £20.4m in the first quarter helped by a healthy death rate. KBC Peel Hunt's target price is £7 as it believes the company is recession resilient and its pricing power means that margins will continue to improve.
African Copper doubled in price to 8¼p on turnover of 30.8m shares after the exploration development company agreed to be acquired by rival ZCI, which will provide it with a comprehensive financing package of around £15m.
Tristel, the specialist infection and contamination control company, rose 3p to 47p following its appointment as the exclusive UK distributor for the air decontamination systems of the French company, Air in Space.
News of a placing of 4.1m shares at 45p with three long-standing institutional shareholders left Petrel Resources 4½p down at 48p. The £1.8m raised will be used to advance its projects in Iraqi oil exploration and development.
Reports of a large line of stock overhanging the market left PLUS Markets 5&frac8;p easier at 4&frac3/8p. Simon Brickles' independent stock exchange continues to trade strongly. April saw a record 1m trades concluded, a 169% increase on the same month in 2008. Trade value was also at an all-time record of £6.439bn, up 105% on last year.
Almost 7m Monitise shares changed hands and the close was ¾p better at 5¾p. The company provides mobile banking and payment technology solutions and Canaccord is a big fan. Its target price is 18p.
The company last week revealed it registered a record 25,000 new customers, continuing a trend up from 10,000 a week earlier in the year. Its target is 1m customers.
Osmetech added ½p at 3&rac3/8p after the diagnostic specialist asked America's FDA to allow it to sell its portable swine flu test under emergency procedures that could put it on the market in days or weeks.
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