Market report: Kier tumbles after revealing cash plea
Shares in construction services company Kier Group suffered their sharpest fall since March after the group revealed it is considering an equity raise.
Its slipped as much as 15pc, the most since late March, before pulling back later in the day to close down 7.6p to 90p. Expectations of increased Government spending on infrastructure had sent its shares up on Monday.
The group re-emphasised in an announcement on that it should benefit from Boris Johnson’s “build, build, build” pledge – even though the promise does not have a lot of money behind it.
In an update to the City, Kier noted it was “well-placed” to benefit as a key supplier to the Department for Education. It confirmed that trading since its last update at the end of March had been in line with expectations, and said its order book gives it confidence in its outlook for the new financial year.
Kier said more steps may need to be taken in the medium term, however, including potentially raising money from the markets.
Liberum’s Joe Brent said the update showed Kier’s “underlying resilience”, despite an expected hit from costs related to Covid-19.
The FTSE 100 had a poor session, spending most of the first day of the second half in the red, before clawing its way back to trading flat at the close.
Medical technology maker Smith & Nephew led blue-chip risers after reporting a steady improvement in its trading performance.
The group said it expects underlying revenue to drop 29pc in the second quarter, but said it is has undergone an improvement in recent months. Its revenues have bounced back steadily since their April nadir – though they remain down. Shore Capital’s Tara Raveendran said the expected fall was “consistent with prior expectations”, but said the progress on revenue was encouraging. The group’s shares rose 75p to £15.81.
Premier Inn owner Whitbread and food services group Compass were lifted after being named Credit Suisse’s new top picks for the hotel and catering sector respectively. Whitbread rose 31p to £22.53, while Compass climbed 27p to £11.39.
The FTSE 250 outperformed its large-cap sibling. B&M European Retail jumped 19.5p to 417p after reporting first quarter sales that beat analysts’ estimates. Citi’s Adam Cochrane praised the results, but said the group may struggle to expand further without an online offering. He added: “This may reflect the peak for the current year with a decline from this point.”
The biggest faller among the mid-caps was John Laing Group, which fell 36.6p to 311.8p after noting lower power prices were hitting the value of its renewable energy assets.
