Stay up to date with notifications from The Independent

Notifications can be managed in browser preferences.

Shares in Pearson, Premier Foods and Mitie plunge after profit warning strike

Shares in former Financial Times-parent Pearson, Mr Kipling-owner Premier Foods and outsourcing company Mitie all fell sharply on Wednesday

Zlata Rodionova
Wednesday 18 January 2017 10:09 GMT
Comments

A trio of UK-listed companies issued profit warnings on Wednesday, hitting their shares hard.

Shares in former Financial Times-parent Pearson, Mr Kipling-owner Premier Foods and outsourcing company Mitie all fell by double-digit percentage figures in early trading in London and later ended the day between 4.7 and 29 per cent lower.

Shares in Premier Foods, the maker of Bisto, ended the session almost 11 per cent lower after it warned that its full-year profit will be 10 per cent lower than previously expected, as a result of lower trade and rising food inflation costs. The company blamed the weaker pound for the higher price of ingredients such as sugar, chocolate, dairy, wheat and palm oil.

Education specialist Pearson, was dealt an even worse blow. It saw its share price plummet 29 per cent.The company, which sold the Financial Times and its stake in The Economist in 2015, also cut its profit outlook for the next two years citing an “unprecedented” decline in its US business.

The group said that figures hit by a recovering US economy which was encouraging more people to enter employment, hitting college enrolment numbers.

Premier Foods has Mr Kipling, Bisto and Cadbury cakes in its stable

Finally, Mitie, which supplies social workers for the elderly as well as baggage handlers at Heathrow, said operating profit for the year to 31 March will be in the range of £60m and £70m. That would be around half last year's operating profit of £112m sending shares around 4.7 per cent lower for the day. It is the company’s third profits warning in just five months.

Neil Wilson, senior market analyst at ETX Capital explained: “Staffing costs will only get tougher as the National Living Wage is set to rise along with pension costs and apprentice levies. Meanwhile a weak pound will drive up the cost of imported goods and services.

“Input prices for manufacturers have surged nearly 16 per cent in the last year. All of this piles pressure on Mitie’s clients, making them less.”

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in