JOHN MENZIES traded lower as its rival Dawson Holdings gave warning that trading conditions in its news distribution division were tougher than expected.
The greater part of yesterday’s earnings downgrades for Dawson — off 3¾p at 157¾p — were triggered by plans for increased investment in its Frontline division after a contract win. However, Menzies’ shareholders were worried by Dawson’s admission that trading in its news division had become more challenging since November’s full-year figures.
Altium Securities, which lowered its stance from “hold” to “reduce”, suggested that Menzies will have to follow suit in guiding earnings forecasts lower. Dresdner Kleinwort Wasserstein — which this month made Menzies one of its “top picks” for 2006 — was also cautious, trimming its pre-tax profit forecasts by £1.5 million and moving from “buy” to “hold”. Menzies shares eased 18½p at 489p, against a 25.3 point rise in the FTSE 250 to 8,946.8.
Woolworths Group dipped ½p to 37p before tomorrow’s trading update as Citigroup advised clients to sell into the retailer’s recent rally. Northern Foods faded 2¾p to 146½p as Merrill Lynch placed 4.88 million shares at 146p after Friday’s profit warning. Innovata added ¾p to 26¼p as the placing by Nomura Code Securities of 25.2 million shares, or a 5 per cent stake, at 25p on behalf of Raj Uppal, a non-executive, served to clear a stock overhang. Mr Uppal, who was finance director of Quadrant Technologies, which was injected into ML Laboratories last year to form Innovata, was understood to have sold for tax reasons and retains 8.1 per cent.
Gyrus Group added 11p to 385p as a reassuring pre-close trading statement from the medical devices maker prompted Panmure Gordon to raise its price target from 358p to 398p. An extension of its contract with Toyota — for which it supplies speakers — sent NXT up 3p at 67½p.
Advertisement
Visonic, the Israeli developer of electronic security systems, added 8p to 98½p as Corporate Synergy repeated its “buy” advice before Thursday’s trading update. Deltex Medical added 2p to 20p on a bullish circular from Charles Stanley and the purchase of 129,629 shares at an average of 20.06p by Andy Hill, chief executive. Stream Group firmed ¼p to 47p as KBC Peel Hunt cited a positive read-across from its rival Monstermob.