Market Report: Dividend worry puts Lasmo under pressure

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The Independent Online
The FT-SE 100 index finished near its low point of the day, down 17.3 points at 2,799.2, the first time it has closed below 2,800 for four weeks. The FT-SE 250 index, which has hit three peaks this week, lost 7.6 to 2,932.7. Turnover was an impressive 773.1 million shares with 13,824 bargains recorded

IBM, the US computer giant, is expected to decide to subscribe for shares and warrants in high- flying Tadpole Technology later this month. The deal could leave the US group with a 12.4 per cent interest. Tadpole is to develop a portable workstation which IBM will market. Launched at 65p last month, Tadpole shares are now 180p after touching 237p. Profits could be pounds 1.3m this year.

Ian Tickler and Donald Crammond, former directors of the loss-making building products group Arthur Shaw, are on the verge of returning to the company. They are seeking to remove the chairman, Gordon Pearson, and have the support of shareholders with nearly 50 per cent of the capital. Mr Tickler left in April, Mr Crammond in August. The shares rose 1p to 41p.

LASMO, the oil group, was back in the firing line yesterday. The shares fell 13p to 152p at one time as doubts resurfaced about its ability to hold its dividend. They closed, in often busy trading, at 156p.

Since Lasmo acquired Ultramar after a controversial and fiercely contested takeover battle in 1991, its shares have often been under intense pressure. They topped 500p in 1990 and were above 300p during the Ultramar confrontation.

Hoare Govett caused the latest discomfort. It suggested the final dividend for 1992 should be axed, leaving shareholders with the 2.3p interim payment. Last year Lasmo paid a 6.2p final.

The securities house said if Lasmo again paid a 6.2p final its dividends would be uncovered until 1995.

Lasmo shares have had an uncomfortable ride this year, falling from a peak of 263p. They have been as low as 112p. The shadow of a cut - or axed - final has prevented them from joining fully in the Christmas rally that has driven many prices to new peaks.

Societe Generale Strauss Turnbull, the arch-bears of British Petroleum, have also fretted about Lasmo. They suggest the shares should be sold down to 125p. NatWest Securities is another to advocate selling.

Elsewhere, the stock market's new year boom ran out of steam, with many of the second-liners and tiddlers succumbing to the inevitable profit-taking.

Disappointing sales figures from Boots started the rot. Then New York weakness killed off a half-hearted rally.

Lasmo was not the only downgrading casualty. BAA, the airports group, continued to suffer from profit estimates being pulled back, falling another 12p to 746p. Pearson, the banking and publishing group, was another under the downgrading whip, falling 11p to 359p.

The Boots sales performance in the last three months of last year prompted profit downgradings. Kleinwort Benson cut its estimate for the year to March from pounds 411m to pounds 400m. S G Warburg went to pounds 400m from pounds 405m.

It was the surprising weakness at Do It All, the do-it-yourself chain that Boots owns with W H Smith, that created the anxiety. Smith 'A' shares fell 19p to 469p and the 'B' 4p to 91.5p. Kingfisher, the B&Q chain, lost 18p to 571p.

But Ladbroke Group, taking in the Texas business, rose 4p to 194p, apparently drawing support from advice to switch out of Forte. However, Forte gained 8p to 197p. Other hotel shares were firm, with Friendly Hotels up 21p to 199p and Queens Moat Houses putting on 2p to 52p.

Retail group Amber Day rose another 5p to 56p, Next gained 1.5p to 150p and Storehouse 5p to 201p.

Rank Organisation, which denied reports it intends to sell its films division, rose 12p to 716p, helped by suggestions of developments at its partly-owned Xerox offshoot.

Euro Disney jumped 52p to 765p on a plan to offer entrance discounts to shareholders living near the theme park. The company has few French shareholders.

Invergordon Distillers, on the Teather & Greenwood caution, fell a further 8p to 301p.

Airtours, as a line of 5.75 million shares (6.7 per cent) went through at 260p, slipped 3p to 288p. Equitable Life Asurance was the seller. Bid target Owners Abroad fell 3p to 119p.

Laporte, which looks like capturing Evode, fell 27p to 583p. Evode gained 13p to 119p. Wassall, which dropped out of the battle, added 1p to 210p.

Mirror Group Newspapers continued to attract attention. In brisk trading the shares rose 4p to 101p. George Soros, the international investor, has, through his Quantum Fund, been a significant shareholder for more than a year. He is thought to have been trickling shares into the market recently.

Hong Kong shares were supported by indications that the Chinese could be softening their attitude towards the colony and its Governor, Chris Patten.

An asset reshuffle among the Chinese authorities' investment funds also helped. HSBC, the banking group, rose 20p to 516p and Cable and Wireless 5p to 707p.

Electrical group Pifco had a strong session. The ordinary shares rose 25p to 380 and the 'A' shares 25p to 340p.

A Hoare Govett buy recommendation inspired the advance. The securities house expects profits to climb pounds 800,000 to pounds 2m this year and reach pounds 3m in the following year.

First National Finance Corporation lost 6.5p to 60p on fears that next week's figures will be accompanied by a rights issue.

Estate agent Herring Baker Harris tumbled 27p to 103p on its dividend warning.