Market Report: Office equipment supplier Danka blots its copybook
Thursday 04 July 1996
But the office equipment group has blotted its copybook and Footsie dreams have evaporated. A surprise profit warning has sent the glamour-rated shares crashing; yesterday they fell 35p to 448p making a crushing 237p fall since the caution became known last week. They reached 848p in May when Danka's market capitalisation approached pounds 2bn.
The slide, underlining the market's reluctance to take prisoners, has arrested what had been an outstandingly successful run. The shares were a mere 42p in 1992. They have soared as, seemingly defying the odds, Danka made startling profits progress, helped by a succession of acquisitions. In the year to end-March it produced pounds 53.9m and analysts pencilled in a confident pounds 80m or so for the current year.
Although most observers still expect profits of the Florida-based group to advance this year, say to pounds 73m, the Danka experience shows that high- flyers have little, if any, room for disappointment.
The mostly US investors who stumped up pounds 129m in a placing at the equivalent of 683p in February most be feeling particularly miffed.
Danka was not the only share to sink in another lacklustre session. Allied Domecq, the struggling drinks group, found yet another low, off 6p at 445p, and Hanson continued to ignore the alleged benefits of its four- way demerger, losing 2.5p to 173p. Footsie fell 11.6 points to 3,714.1 and there was not even the redeeming feature of much activity in the rest of the market.
The Ken and Eddie meeting came and went without any interest rate change but in the US the rate fixing FOMC meeting could, it was feared, lead to higher transatlantic rates.
With Wall Street closed today and any activity tomorrow likely to be unsettled by the unpredictable US employment figures as well as any interest rate move, there was an investor reluctance to get too deeply involved.
But the odd take overstory flickered. Utilities were helped a little by the disclosure that Labour's proposed windfall tax already needed redrafting. East Midland had the added advantage of bid talk, gaining 22p to 565p. A US strike - yes again - was the buzz. MAID, the on-line information group where Reuters is said to be displaying interest, gained another 11p to 296p.
Yorkshire Tyne Tees TV, Tuesday's star bid candidate, held most of its gain, closing just 3p lower at 1,235p. Granada, the favourite to pounce, gave up 11p to 838p. Pearson, said to be near to selling its Westminster newspaper chain, lost 18p at 644p.
General Electric Co led blue chips as Lord Weinstock produced his last set of results as managing director. The better-than-expected profits and dividend lifted the shares 12p to 363p in busy trading.
Pilkington's meetings with analysts had little impact with the glass maker's shares unchanged at 183p. But paper and packaging group David S Smith, little changed at 277p shrugged off a downgrade from SBC Warburg; the investment house cut from pounds 130m to pounds 105m.
Redland, the building materials group. shaded 4p to 397p as Mees Pierson lowered its forecast by pounds 5m to pounds 332m. Unilever retreated 17p to 1,257p on Merrill Lynch sell advice.
Sherwood, the clothing group, slipped 9p to 73p following a profit warning; Courtaulds Textiles lost 10p to 344p in sympathy.
Hopes of defence contracts lifted British Aerospace a few coppers and Warburg support pulled FKI 3.5p higher to 176p. RJB Mining, after its buy-back of 17.1 million shares at 551p through Barclays de Zoete Wedd, dropped 13p to 540p.
Calluna, making miniature hard disks for computers, managed a 1p gain to 89p. The company said it was not aware of any reason for the recent share slide which has cut the price from around 120p.
Psion, planning to buy much of Amstrad, gained 16p to 425p as chairman David Potter met institutional investors to outline the Amstrad deal.
Newcomers continued to arrive on AIM. They included Circle Communications, a TV rights group, which closed at 185p against the 170p placing. On Offex, Robotic Technology Systems touched 40p, closing at 30p against a 20p placing.
- 1 The black and blue dress: Makers considering a white and gold version
- 2 Man to be beheaded in Saudi Arabia after ripping up a Koran and hitting it with his shoe
- 3 Husband and wife die holding hands within hours of each other after 67 years of marriage
- 4 PornHub turns masturbation into energy in bid to save the planet
- 5 The remarkable archaeological underwater discovery that could open up a new chapter in the study of European and British prehistory
Stephen Hawking's wife Jane Wilde on their marriage breakdown: 'The family were left behind'
PornHub turns masturbation into energy in bid to save the planet
Boko Haram: Thousands march in Cameroon to protest against the Islamist terror movement
White and gold or blue and black – what colour is the dress? An eyewitness gives a definitive answer
Kelly Osbourne leaves Fashion Police after Zendaya dreadlocks racism row
New theory could prove how life began and disprove God
This is what it's like to be dead, according to a guy who died for a bit
'Cash for access' scandal: Sir Malcolm Rifkind says 'unrealistic' for MPs to live on £67,000 salary
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Ukip would cut billions from Scottish budget to fund English tax cuts
Russia's roadmap for annexing eastern Ukraine 'leaked from Vladimir Putin's office'
iJobs Money & Business
£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...
£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...
£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...
£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...