Sector movers: Tougher still for Close Brothers
Just days after bid talks with Cenkos bid talks collapsed, merchant bank Close Brothers has warned current market conditions are making life tough for its securities and corporate finance arms.
The bank posted a 2% drop in operating profits to £75.3m in the six months to December. Post-tax profits fell to £48.6m from £70.7m.
Close Brothers added that challenging market and trading conditions were set to continue in the second half of its financial year.
The group also explained why the takeover talks had ended, stating that it had pursued a sale of the whole business but "no firm, fully financed, offer was forthcoming."
The board rejected a total break-up of the company because of the "extremely high execution risk", while the sale of one or more of its divisions was deemed equally unattractive because of a possible lack of bidders.
The market's decline today is broad based and it is difficult to find bright spots, though healthcare and pharmaceuticals stocks seem to be a favoured choice.
The pharmaceuticals sector is higher despite predictably dire warnings from natural healthcare products supplier Wm Ransom, which said it will make a loss this year as a consequence of having its manufacturing licence temporarily suspended earlier this year.
The licence suspension will mean a loss of contract manufacturing revenues for the full year ending 31 March 2008 of approximately £5m, it said. It also still faces weakness in consumer healthcare sales, where a stronger performance in January has not been maintained in February.
"Overall, the company expects to deliver approximately a break-even performance for the current financial year before amortisation and one off costs associated with the restructuring of the business, which are now estimated to be in the region of £2.5m," it said.
Top performing sectors so far today
Automobiles & Parts 4,355.40 +4.15%
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Industrial Metals 7,855.80 +1.44%
Forestry & Paper 4,260.10 +1.15%
Health Care Equipment & Services 4,023.90 +0.80%
Pharmaceuticals & Biotechnology 6,911.90 +0.57%
Bottom performing sectors so far today
General Financial 6,873.40 -2.68%
Fixed Line Telecommunications 2,964.60 -2.06%
Life Insurance 4,705.50 -1.99%
Construction & Materials 4,864.30 -1.89%
Food & Drug Retailers 4,600.80 -1.86%
