Market Report: Fears of a dismal new year take toll on Alexon

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The Independent Online

On Thursday a leading broker warned investors that HMV's Christmas is unlikely to be a very merry one. Yesterday, it was the turn of Alexon, the fashion retailer, to suffer a similar fate.

Numis Securities told its clients it has been worried for some weeks about trading at Alexon in the run-up to the festive season, and that it had decided to slash its profits forecasts for the group's current year to £19.7m from £23.2m.

The broker said: "Our store visits suggest that the company's various fascias were discounting earlier and more heavily than the competition, and this is rarely a good sign at this time of year."

Numis showed little reluctance in reducing its price target on Alexon all the way to 200p from 240p. It took the view that there will be little in the way of profits growth at the retailer during the coming year, and even dismissed any hope of a private-equity bid for the group. Alexon finished 2.25p lower at 210.75p.

Elsewhere in the sector, Homestyle, 0.5p better at 108p, continued its march higher on hopes the group's majority shareholder, Steinhoff International, will take the soft furnishings retailer private in the new year. The South African company controls 60 per cent of Homestyle.

Meanwhile, Asos returned from suspension, and assured the City that most of the damage caused to its Hemel Hempstead premises by the explosion at the Buncefield oil depot can be rectified within the next few weeks. The online clothes retailer said its profits for the current financial year would not suffer as a result of the disaster. Despite this pledge, shares in the group closed down 2p at 75.5p, although at one point during the session they traded at just 68.5p.

Seymour Pierce was among a clutch of brokers urging investors to use any weakness in the stock as a buying opportunity. The broker said: "Given the extent of the damage in the area, Asos has escaped relatively lightly."

The broker is convinced the group could provide one of the best growth situations in the retail sector. Blue chips retreated in the half session of trading before Christmas Eve. The FTSE 100, which closed at 12.30pm, lost 1.6 points to 5,595.4. But the FTSE 250 continued its march into new territory and finished at a record 8,759.8, up 32.8.

The housebuilding sector was the driving force behind this performance, with investors still buoyed by Thursday's bullish trading statement from Wilson Bowden. George Wimpey rose 12.25p to 487.25p in surprisingly brisk trade - more than 3.5 million of the group's shares changed hands. Barratt Developments gained 5p to 995p, Bellway added 15p to 1,121p, Persimmon put on 24p to 1,275p, and Bovis Homes ticked 4p better to 780p.

Greene King dropped 7.5p to 736.5p on the back of a downgrade from UBS. "Although we continue to view the company as well placed to make value-adding acquisitions, we see limited upside potential to current market profits forecasts," the Swiss broker said as it slashed its stance on the beleaguered pubs group to "neutral" from "buy".

Evolution Securities pointed out that AstraZeneca's acquisition of the US's KuDOS Pharma is good news for BTG, 3.75p higher to 219.75p. KuDOS is BTG's partner for its Banoxantrone drug.

The broker believes the development of the treatment could attract greater funding as a result of KuDOS's new ownership. Hardy Underwriting, 10p higher at 229.5p, saw its founder and outgoing chairman cash in on his shareholding in a big way. Peter Hardy sold 2.2 million shares at 212p, netting him £4.6m. However, David Mann, the new chairman, and Barbara Merry, the chief executive, picked up 850,000 of that total.

Trafficmaster ticked 2.25p higher to 28.5p after Colin Walsh, the chairman of the traffic information group, bought 100,000 shares at 26p.

Ridge Mining was also in demand after a director share purchase. The explorer added 2.75p to 35.75p in response to the purchase of 100,000 shares at 34p by Terrance Wilkinson, the chief executive.

Ant jumped 9p to 86.5p after unveiling a partnership deal with Siemens, the German electronics giant. The tie-up will see Ant's Galio software used in a range of TV and consumer electronics products produced by Siemens.

Tersus Energy, down 1p at 39.5p, said it had raised £4m through a placing at 36p. Since its float in February, the group has created three operating businesses, one to focus on battery technology, another on bio-energy, and the third on windfarms in Asia. Tersus will use the money to fund these projects. Finally, Central African Mining added 0.5p to 13p after the explorer said it plans to float its coal assets in the Zambezi coal basin in Mozambique.