|CATEGORY: RISERS AND FALLERS
Wed 06 Sep 2017
LONDON (SHARECAST) - (ShareCast News) - London's mid cap stocks were on the back foot on Wednesday, with the FTSE 250 index down 0.49% late in the afternoon as results from Vectura and Berkeley weighed, alongside insurers hit by hurricane worries.
Respiratory medicines device specialist Vectura reported a wider first-half operating loss as its revenues moved towards recurring sources amid fewer milestone payments. Turnover was slightly behind consensus expectations but recurring revenues swelled 26% to £71m where they represent 90% of total turnover versus 76% a year ago and EBITDA was £4.5m ahead of forecasts.
Vectura, which has designed a dry-powder inhaler and drug formulation for partner Hikma's generic version of asthma drug, said it expects to be able to "confirm the regulatory timetable before the end of 2017" after US authorities called for a revised application in May.
With discussions ongoing, most analysts seem to assume the application will be re-filed in the first half of next year. But analyst Mike van Dulken at Accendo Markets noted that the companies were using more cautious language around the risks of the new drug application. "Pipeline uncertainty is never good - especially for smaller companies for whom success and/or failure can hinge on a select few drugs compared to more diverse revenue streams at bigger pharma counterparts."
Housebuilders were down for a second day, with Berkeley Group saying the London market continues to be hit by Brexit uncertainty and tax changes although this is partly being offset by good mortgage availability, favourable FX rates and their strong product offer. The company did not downgrade its guidance though, with its capital return plan still on track. FTSE 250 peer Redrow was also dragged down.
Insurers Beazley and Lancashire were down amid concerns about Hurricane Season. Following Harvey, Irma has now been upgrade to maximum Category 5, with another storm following on called Jose. Insurers in the UK and globally saw small price falls earlier in the week as the US Everest Re (US reinsurance and property and casualty) and XL Group down nearly 7% and 6% respectively and Travelers off over 3%. "First thoughts from investors are losses but the key for me is will a second big storm be enough to turn the rate cycle," wondered Jamie Constable at N+1Singer.
Unlike its pure-play housebuilding rivals, retirement specialist McCarthy & Stone said it saw a "strong" recovery in the second half of the year, with revenue and the order book up on the previous year despite uncertainty brought about by Brexit and the general election.
Petrofac was climbing even higher as its strong contract momentum continued with the award of a contract worth more than $700m by Sakhalin Energy Investment Company for its onshore processing facility on Sakhalin Island. The oil services engineer said the project comprised a lump-sum engineering, procurement and offshore fabrication component, as well as a reimbursable element for construction and site services.
FTSE 100 (UKX) 7,361.09 -0.16%
FTSE 250 (MCX) 19,630.60 -0.49%
techMARK (TASX) 3,419.92 -0.25%
FTSE 250 - Risers
Petrofac Ltd. (PFC) 445.80p 8.44%
TalkTalk Telecom Group (TALK) 214.10p 5.42%
Hunting (HTG) 431.80p 3.75%
Indivior (INDV) 290.80p 3.45%
Tullow Oil (TLW) 165.50p 3.30%
Dixons Carphone (DC.) 171.60p 3.00%
Amec Foster Wheeler (AMFW) 467.40p 2.94%
Wood Group (John) (WG.) 626.00p 2.71%
TP ICAP (TCAP) 495.60p 2.23%
Grainger (GRI) 259.60p 1.68%
FTSE 250 - Fallers
Vectura Group (VEC) 95.00p -12.92%
Carillion (CLLN) 45.02p -6.11%
Evraz (EVR) 314.40p -4.73%
Beazley (BEZ) 465.30p -4.59%
Inmarsat (ISAT) 667.50p -2.91%
Berkeley Group Holdings (The) (BKG) 3,646.00p -2.83%
Lancashire Holdings Limited (LRE) 647.00p -2.71%
Redrow (RDW) 631.50p -2.40%
Hastings Group Holdings (HSTG) 305.60p -2.36%
Go-Ahead Group (GOG) 1,749.00p -2.29%