Glaxo Wellcome shows youngsters a clean pair of heels

Click to follow
The Independent Online
The granddaddy of the pharmaceuticals showed the hoard of youngsters which have been making all the noise a clean pair of heels.

Shares of Glaxo Wellcome, which have lagged the bio-babes as they have attracted cash from almost every investor in town, jumped 47.5p to 836.5p in busy dealing.

An encouraging trading statement provoked the sudden interest. First four month sales hit pounds 2.8bn, an 11 per cent increase. The group's ulcer drug, Zantac, had, as expected, suffered a decline but other lines enjoyed a 17 per cent improvement.

And suggestions Glaxo could be running short of new products were shown to be wide of the mark. Chief executive Sir Richard Sykes said from next year until the end of the decade the group hoped to launch 20 treatments, covering influenza to smoking.

The Glaxo blockbuster came as the stock market started to fret about the forthcoming cancer presentation by British Biotech. The shares have enjoyed a heady run but the temptation to take at least some profits left them 78p lower at 2,800p.

SmithKline Beecham, another top drug share, gained 9.5p to 669p following a US presentation.

Despite Glaxo's contribution, worth more than 9 points to the FT-SE 100 index, shares had a poor session with Footsie down 22.6 at 3,753.6. At one time it was off 36.

Utilities were again deep in the doldrums with worries about Labour's threatened windfall tax competing with increasing pressure from the regulators and the Government's somersaults over takeover policy to undermine sentiment.

PowerGen started its buy-back with UBS swooping to pick up 4.8 per cent (35 million shares) at 525p from institutions. The generator intends to buy in 10 per cent of its capital, an exercise that will cost pounds 400m. Its shares were unimpressed, falling 8p to 529p.

National Power, expected to engage in a similar operation, slipped 4p to 516p and most of the distributors gave further ground.

The implosion at British Gas, with poor figures following the Draconian Ofgas measures, took another 14p off the shares leaving them at 174.5p. A year ago they were 316p.

Since Monday's Ofgas blast, approaching 250 million shares have been traded. The heavy trading would provide excellent cover for any possible predator wishing to build a stake. In the past year British Petroleum has been linked with Gas and in the past few days PG had made noises suggesting it could nurse predatory ambitions. BT, on its results and with regulatory problems, was little changed at 333p.

Sun Alliance edged forward 7p to 414p on talk that a Continental group planned to barge into the comfy merger arranged with Royal Insurance, up 6p at 438p. Allianz remains the market's favourite to intervene.

Results lifted Mercury Asset Management 38p to 956p and Perpetual continued to draw comfort from its figures, up another 92p to 2,550p.

Oils sank on worries a UN food-for-oil deal with Iraq is imminent. Shell, which failed to produce the expected gems at its analyst meeting, receded 16p to 923p; BP lost 11p to 568.5p and Enterprise Oil 9p to 464p.

But Cairn Energy, which appears to have struck it rich in Bangladesh, moved against the tide, up 16p at 248p. Average production a day last year was 5,843 barrels; it is now running at 9,000. Reserves doubled to 22 million barrels.

A trading statement left BTR 14p off at 297p and Alvis, the defence group, was 14.5p down at 135p after results.

Ockham, firm recently, jumped 11p to 73p. The insurance broker said profits were likely to be "substantially" above the anticipated pounds 7m following the Lloyds reshaping. Central Transport, once Tiphook, gained 3.5p to 14.5p on its restructuring but Amstrad lost further ground, off 13.5p to 160p following its latest trading warning.

Hambro Countrywide, the estate agent, advanced 5.5p to 65.5p, highest for nearly 30 months. The shares are making headway on the back of the improved prospects for the housing market. Although the industry has experienced many false dawns the gradual increase in housing moves should be flowing through to the company's profits. It has made losses in its last two years but achieved profits of pounds 16.5m in 1993.

Lionheart, a bathroom accessories group, held at 0.5p as shareholders took up 24.3 per cent of the shares available under an open offer, part of a pounds 4.5m rescue placing. The price was 70p seven years ago.


An unquoted group, Morley's Stores, has stepped into the acrimonious battle for control of Elys, the Wimbledon department store. It has won the support of shareholders with nearly 40 per cent of the capital by offering 670p cash for each Elys share, topping the hostile offer from Panther Securities. Morley's has four department stores and runs an education and office furniture mail order business. Elys shares held at 542p.

Farringford, the pubs chain controlled by Trevor Hemmings, the former Scottish & Newcastle director, jumped 3p to 18p, fuelled by stories of more acquisitions. The company has been building its pub interests and there is also a possibility that some of the Hemmings private interests could be pumped in.