Market Report: Safeway puts Footsie on a lean diet

SAFEWAY, the supermarket chain where profits are under pressure, fell 6.5p to 276p, uncomfortably close to the 12-month low. Half-year profits are due today and they are expected to be disappointing: say, 17 per cent down at pounds 190m. For the year the market has pencilled in pounds 360m, which would represent a near-pounds 20m increase on last year but below the pounds 400m of earlier times.

The shares, around 426p two years ago, have suffered as competition has grown ever more fierce, putting margins under intense pressure. The group also encountered stock problems.

At one time it looked as though rival Asda would take advantage of Safeway's discomfort by mounting a bid. But Westminster killed off any such deal, indicating it would run into monopoly problems. Since then Asda's shares, down 1.5p at 155.5p, have lost so much ground that a merger must have lost much of its appeal.

As the market fretted about Safeway, still classified as a food retailer, investors were eating into the shares of food producers following the disappointing trading performance by Northern Foods, off 12.5p to 155p. Terranova, the chilled foods spin-off from Hillsdown Holdings, lost 10.5p to 101.5p, Hazlewood Foods 9p to 125.5p and United Biscuits 13p to 237p. Hillsdown lost 5.5p to 85p.

Geest, the old banana group now in chilled foods and fresh produce, lost 16.5p to 418.5p; the price has tumbled from 472.5p this month. There are indications that profit forecasts are being cut, and investment meetings this week are not expected to bring much comfort. The company could be in danger of falling out of the mid cap index when its composition is reviewed next month.

The rest of the market spent a quiet day waiting for the US interest- rate decision. Footsie, at one time 51.9 points higher, ended 7.8 off at 5,502.7. Mid caps, suffering indigestion from its food constituents, fell 26.5 to 4,809.1. The small cap index slipped 6.3 to 2,060.9.

GRE, the Guardian Royal Exchange insurance group, climbed 18.5p to 293.5p on The Independent's story of a strike from French group AXA/UAP. Trading was brisk. Sun Life & Provincial, the AXA vehicle which could make the bid, fell 22p to 500p.

FirstGroup's much better than expected results helped transport shares, with Stagecoach riding 14.5p higher to 242.5p and Go-Ahead 30p to 655p. FirstGroup put on 27p 392p.

Cable & Wireless firmed 8.5p to 696p as its 52.8 per cent-owned Australian off-shoot scored a 23 per cent premium on its Sydney market debut. Energis, which like so many hi-tech groups has produced figures offering nothing as crude as profits, rose 11p to 870p (after 902.5p). Dresdner Kleinwort Benson put a target of 1,015p on the shares.

Tomkins, following an investment presentation, was little changed at 273.5p and BTR, ahead of today's meeting with analysts, lost 6p to 100p.

Engineer TI's progress after Monday's trading update was short-lived; the shares fell 23.75p to 331p, losing most of their gains.

Drugs group Skyepharma rose 11p to 82.5p. A cancer drug being developed by a US group it has agreed to buy is edging towards approval by the US Food and Drug Administration; Skyepharma also disclosed that Swiss group Novartis is pumping pounds 6m into its shares at 70p a time and had signed a collaboration agreement to develop an asthma treatment.

Takeovers continued on the undercard, with Media Business up 28p to 104.5p as a US group offered an agreed 107p a share. Last month long-running takeover talks with an unidentified group were called off.

Profit warnings were also evident, with VHE, a building and engineering services group, signalling a profits slide and falling 32p to 39p. United Carriers fell a further 3p to 11p after last week's profits caution. Struggling Stordata Solutions lost 0.75p to 2.5p after abandoning a takeover deal.

The perils of US bids was illustrated by recruitment group Robert Walters, which fell 40p to 295p. The shares are to be delisted on Wednesday following the takeover by Staffmark. Until then Walters shares track the Staffmark price, which fell 11 per cent overnight. The August deal was said to value Walters at 430p a share.

Stockbrokers were firm on signs that Beeson Gregory could be for sale. Charles Stanley added 26p to 318.5p and Brewin Dolphin 20p to 380p. Garban, the money and securities broking group spun off from United News & Media, had a volatile debut. The shares moved between 197.5p and 235p, closing at 217p, with Seaq putting volume at 6 million. United rose 24o to 638p.

Sherwood International, the computer group, jumped 85p to 1,185p ahead of an investment presentation. Shield Diagnostic lost 50p to 517.5p on profit taking.

SEAQ VOLUME: 750.3 million

SEAQ TRADES: 57,829

GILT INDEX: 112.37 + 0.35

SOUTH BEACH Concepts, a loss-making group developing US-style restaurants, held at 1.25p after licensed dealer Everett Financial Management acquired a 9.6 per cent stake, subscribing for 18.8 million new shares.

A former Ofex company which moved to AIM, SBC's restaurants feature bagels, speciality coffees and fruit and vegetable juices. Its shares are 1.25p. They have been as high as 6p since switching to AIM.

SHARES IN Desire Petroleum, floated as a vehicle to search for oil and gas reserves off the Falkland Islands, fell 4p to a new low of 30p.

Fears are growing that the major oil groups are becoming disenchanted with exploring around the South Atlantic islands and plan to pull out. When Falkland fever was at its height Desire shares hit 445p. Westmount, with 14 per cent of Desire, lost 1p to 32.5p. Its shares hit 275p.

Suggested Topics
PROMOTED VIDEO
News
A model of a Neanderthal man on display at the National Museum of Prehistory in Dordogne, France
science
News
Dawkins: 'There’s a very interesting reason why a prince could not turn into a frog – it's statistically too improbable'
newsThat's Richard Dawkins on babies with Down Syndrome
Sport
Malky Mackay salutes the Cardiff fans after the 3-1 defeat at Liverpool on Sunday
footballFormer Cardiff boss accused of sending homophobic, racist and messages
Sport
Rodgers showered praise on Balotelli last week, which led to speculation he could sign the AC Milan front man
transfers
Life and Style
life – it's not, says Rachel McKinnon
Arts and Entertainment
Eye of the beholder? 'Concrete lasagne' Preston bus station
architectureWhich monstrosities should be nominated for the Dead Prize?
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Test Lead (C#, Java, HTML, SQL) Kingston Finance

£40000 - £55000 per annum: Harrington Starr: A Global Financial Service Organi...

Access/Teradata Developer, Banking, Bristol £400pd

£375 - £400 per day: Orgtel: Access / Teradata Developer - Banking - Bristol -...

Quantitative Analyst (Financial Services, Graduate, SQL, VBA)

£45000 per annum: Harrington Starr: Quantitative Analyst (Financial Services, ...

Day In a Page

Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape
eBay's enduring appeal: Online auction site is still the UK's most popular e-commerce retailer

eBay's enduring appeal

The online auction site is still the UK's most popular e-commerce site
Culture Minister Ed Vaizey: ‘lack of ethnic minority and black faces on TV is weird’

'Lack of ethnic minority and black faces on TV is weird'

Culture Minister Ed Vaizey calls for immediate action to address the problem
Artist Olafur Eliasson's latest large-scale works are inspired by the paintings of JMW Turner

Magic circles: Artist Olafur Eliasson

Eliasson's works will go alongside a new exhibition of JMW Turner at Tate Britain. He tells Jay Merrick why the paintings of his hero are ripe for reinvention
Josephine Dickinson: 'A cochlear implant helped me to discover a new world of sound'

Josephine Dickinson: 'How I discovered a new world of sound'

After going deaf as a child, musician and poet Josephine Dickinson made do with a hearing aid for five decades. Then she had a cochlear implant - and everything changed
Greggs Google fail: Was the bakery's response to its logo mishap a stroke of marketing genius?

Greggs gives lesson in crisis management

After a mishap with their logo, high street staple Greggs went viral this week. But, as Simon Usborne discovers, their social media response was anything but half baked
Matthew McConaughey has been singing the praises of bumbags (shame he doesn't know how to wear one)

Matthew McConaughey sings the praises of bumbags

Shame he doesn't know how to wear one. Harriet Walker explains the dos and don'ts of fanny packs
7 best quadcopters and drones

Flying fun: 7 best quadcopters and drones

From state of the art devices with stabilised cameras to mini gadgets that can soar around the home, we take some flying objects for a spin
Joey Barton: ‘I’ve been guilty of getting a bit irate’

Joey Barton: ‘I’ve been guilty of getting a bit irate’

The midfielder returned to the Premier League after two years last weekend. The controversial character had much to discuss after his first game back
Andy Murray: I quit while I’m ahead too often

Andy Murray: I quit while I’m ahead too often

British No 1 knows his consistency as well as his fitness needs working on as he prepares for the US Open after a ‘very, very up and down’ year
Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home