Kids may love Finsbury Food Group for its Star Wars-themed cakes, but the “force” was certainly not with the bakery firm on Monday.
The City quickly left the cake-maker with a soggy bottom after the company warned that revenues for the year to June fell 3.4% to £303.6 million.
The AIM-listed firm’s trading was hit by the closure of two bakeries towards the end of last year. However, comparable sales rose 2.4% to £290.2 million.
Chief executive John Duffy also spooked investors by claiming the challenging UK economic environment “is showing little sign of abating from the levels experienced”. He pointed to higher costs linked to wages and ingredients. Shares fell 2.2p, or 2%, to 112.8p.
Moving from pastries to property, and the Square Mile shunned a number of housebuilders and estate agents. Investors ditched stock on the same day that online giant Rightmove published a gloomy report that showed London’s housing market woes worsening ahead of the traditional summer lull.
Rightmove said the average asking price in the capital this month is down £11,040 from a year earlier. Throughout the country, property prices are almost flat. The report warned that finding a buyer over the summer has been made more difficult by an 8.6% increase in new seller numbers. The closely watched index further reported that there is “no corresponding increase in buyer numbers to soak up new seller influx”.
FTSE 250 housebuilders Bovis Homes and Redrow saw their shares sink lower on the report, down 3p to 1137p, and 4.35p to 530.65p respectively. The FTSE 250 index as a whole was up 107.61 points to 20,920.73.
On blue-chip FTSE 100 index, housebuilders were also out of favour. Berkeley lost 16p to 3604p, and Persimmon was down 9p at 2473p.
The FTSE 100 was also grappling with the implications of the latest comments from Donald Trump. The US President named Europe as one of America’s “foes” but investors seemed largely unmoved with the index down only 8.81 points at 7653.06p.
Stockbroker AJ Bell said the flat market was a result of a robust performance from utility and engineering stocks, offset by weakness in miners and insurers.
One company that put traders on a high was Sativa Investments, which in March became the first cannabis-focused vehicle to list in London after debuting on the Nex.
The firm said it has signed an IP sharing agreement with Canada’s Veritas Pharma, which it hopes will help its efforts in the UK’s emerging cannabis market.
Shares in Sativa edged up 0.09p, or 2.74%, at 3.37p.
CentralNic, the AIM-listed internet platform that gets revenue from the worldwide internet domain name and web services industry, is relisting on the junior market today after buying German-based domain names business KeyDrive, in effect doubling its size.
CentralNic shares fell 6p to 52p.
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Evening Standard – Market report: Finsbury Food sours after traders find lower revenues hard to digest, Monday 16 July, 2018