FTSE 100 close: ITV rules out cash call
Shares in ITV were sent on a roller-coaster ride today after Michael Grade announced he will step aside and the broadcaster said it was not planning to make a cash call to shareholders.
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Investors had feared they would be asked to fund a £300m rights issue. The shares were down 11% in early trading as Michael Grade said he would relinquish day-to-day running of the company before the end of the year, sooner than expected, and stay on only as non-exectuive chairman.
But as the significance sunk in - that ITV had become more vulnerable and a more likely takeover target - the stock bounced back, closing just 1p down at 31p.
The Footsie had been in positive territory for most of the day as retailers found favour with investors amid brighter signs from the high street. But the blue chip index closed 12.4 points down at 4018.2, after a negative start from the Dow Jones, which was 69.5 points down at 7,817.1 at the London close.
Top-flight players such as Marks & Spencer and Next were helped by better-than-expected half-year figures from department store chain Debenhams.
Debenhams set the pace in the FTSE 250 after it announced a 10.7% rise in half-year profits and said current like-for-like sales were up 1.9%. Shares jumped 13.75% to 77.25p as analysts suggested that the strong trading figures reduced the need for the company to carry out a rights issue.
The retail sector's rally came a day after broker Citigroup reviewed its position in the sector with a series of price upgrades.
With WH Smith also reporting solid half-year results, the signs of a return in consumer confidence meant top-flight fashion retailer Next rose 94p to 1529p and Argos firm Home Retail Group added 15p to 279p. M&S improved 10.75p to 340p.
WH Smith shares were ahead 5p to 415p as investors welcomed a 17% rise in the company's dividend payment, alongside optimistic comments from chief executive Kate Swann.
Housebuilder Persimmon was down 3p at 392p despite announcing that it was trading ahead of expectations. Perhaps shares were dampened by its 'cautious outlook until mortgage availability improves further and employment prospects become less uncertain'.
The group said it currently has '6,500 homes reserved, contracted or legally completed with total sales revenue of about £960m', and added its position in the market 'will provide a strong platform for growth when the market improves'.
CFD broker Blue Index takes the view that the UK's second-largest housebuilder by market cap is well placed for a slowly improving market. Head of Dealing Richard Curr says, 'Although the shares have outperformed other housing stocks with a 72% rise since the start of the year, we see further upside and have a short term target price of 435p.'
Back in the top flight, shares in testing and inspection firm Intertek climbed to the top of the risers board amid speculation of possible bid interest. Shares were 8.4% or 78p higher at 1004p.
Many miners were also on the front foot, led by platinum firm Lonmin, which pleased investors with second-quarter production figures. Lonmin was 118p ahead at 1357p - or 9.5% - while elsewhere in the sector Rio Tinto added 99p to 2571p and BHP Billiton gained 13p to 1385p. The exception was Eurasian Natural Resources, the leading top-flight faller after a downgrade from HSBC brokers. Shares lost 37p to 550.5p.
Mecca firm Rank slid 8.8% in the second tier, or 6.5p to 67.5p, after it warned on profits yesterday in the wake of a surprise hike in bingo duty and poker tax in the Budget.
But business software firm Autonomy added 89p to 1378p after it posted strong first-quarter results and said it expected upgrades to analyst estimates for 2009.
The Cambridge-based IT company said it was 'cautiously optimistic for the full year'. It added that the synergies from the acquisition of Interwoven are 'expected to be ahead of plan'. CEO Mike Lynch said 'our pipeline remains strong and our backlog remains stable'.
Richard Curr of Blue Index says Autonomy is a genuine sector bellwether: 'We reiterate our buy recommendation from earlier this month with a short term target price of 1387p.'
Fellow software firm Sage also climbed the leaders' board, up 10p to 183p.
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