Yesterday's trading: Buyers hail taxi maker
Taxi, taxi! News that a 28% stake in Manganese Bronze has changed hands had excited punters hailing shares of the maker of iconic black cabs.
Geoff Foster: Daily Mail
They swiftly retrieved a 22p loss and accelerated to 348¾p before closing 27p higher at 341p. Toscafield, the investment vehicle of shrewd hedge fund manager Martin Hughes, announced it no longer held any shares in the company after first appearing on its share register in 2004. The surprise sale prompted hopes that Hughes had sold the stock on block to one buyer or potential bidder.
Earlier in the session, scrappy selling followed MB's announcement that sales of black cabs had dropped 30% in the past year. The sales depend heavily on consumers' willingness to splash out on taxi fares and are seen as a barometer for the wider economy. So with the UK said by many 'experts' to be on the verge of recession, it was no surprise to hear drivers have not invested in cabs.
Collins Stewart is an MB fan and has a target price of 715p. The broker says profits are being kept up by higher spares and service revenue, which offer significantly higher margins. The introduction of a Mercedes derivative competitor to London has had minimal impact to date. Progress in China continues in line with expectations, with commercial production of black cabs there likely at the year end. The Chinese joint venture has net cash of £23.5m and will not need more funds.
Buyers suddenly turned sweet on Pure Circle, 15p better at 239p, on news that the company with a market value of only £300m had signed a long-term contract with US drinks giant PepsiCo and Whole Earth. Brokers said it could be huge for Pure Circle, which will supply Rebaudioside A, or Reb-A for use in their beverages and tabletop sweeteners. The product is a natural, calorie free and ecologically sound complement to sugar and substitute for existing high intensity sweeteners.
PepsiCo and Whole Earth will also grant the firm an exclusive licence to market Reb-A under the PureVia brand. The sweetener will also be launched in the US this autumn, before expanding into drink and food products around the world. Broker Killik says buy and suggests there is scope for substantial earnings growth in 2008 and beyond.
A lengthy list of company trading statements kept dealers on their toes and left the Footsie 8.8 points lower at 5,411.9. Overall, profit performances were mixed. BT fell 23.7p to 173.9p and Unilever fell 122p to 1388p on disappointing earnings but HBOS jumped 19¼p to 290½p following smaller-than-expected write-downs. Drugs giant AstraZeneca rose 78p to 2468p on better-than-expected second-quarter sales.
Wall Street, which had soared 452 points in the previous two sessions, fell 153 points on early profit-taking as economic concerns resurfaced. It followed weaker-than-expected growth in the second-quarter and an unexpected jump in jobless claims last week to the highest level in five years. That made dealers particularly nervous ahead of today's crucial July non-farm payrolls report.
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Randgold Resources topped the FTSE 250 with a gain of 204p to 2559p after the Africafocused miner announced higher secondquarter profits. Support services company Xchanging gained 7¼p to 241½p after better than expected half-year results.
As the price of zinc jumped to $1.920 a metric tonne on the belief that China will today withdraw a 5% tax rebate for exporters of the best-quality zinc and silver, buyers chased Griffin Mining 1¼p higher to 39¼p. Gold Oil slipped 0.43p to 9.1p following a successful-placing of 22.95m shares at 8p by broker-Blue Oar Securities. The £1.8m cash raised will help fund the acquisition of Inversiones Petroleras de Colombia , which has substantial oil interests in Southern Colombia. A positive drilling update lifted D1 Oils 7p to 26½p.
VPhase, a developer of energy saving products for home and small commercial applications, edged up ½p to 9¼p following news of the planned launch of its first energy saving product, called VX1, in October this year.
Toy designer Character Group slumped 15p to 70p on its warning that the downturn in consumer spending will probably lead to a slower order intake this August and in the run up to the crucial festive trading period.
Medical Marketing shed 2¼p to 15¼p following an institutional placing to raise £950,000 for its DNA vaccines and oncology pipeline. The company proposes changing its name to Oncosense.
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