Woolies at loss over gossip

Geoff Foster12 April 2012

FOLLOWING some lumpy institutional selling, pick'n'mix High Street retailer

Woolworths

Woolworths said it knew of no reason for the sharp fall. It reports interims on September 12 and dealers will have to wait until then to see whether trading has deteriorated further since May's disappointing sales report.

House broker UBS Warburg downgraded pretax forecasts for the year to end-January 2003 by £5m to £55m following news that like-for-like sales were flat for the first 15 weeks of the year.

Analysts had forecast sales growth of 1pc-2%. The admission that its health and beauty focused stores had been a failure also gave cause for concern.

The weakening share price could yet tempt BhS boss Philip Green to launch a hostile bid. He held acrimonious £2bn merger discussions with Gerald Corbett, his Woolies counterpart, in June before Corbett and his team walked away citing 'risks and uncertainties'.

With its £2bn rights issue due to close on Friday, B&Q-to-Comet retailer Kingfisher improved 1 1/4p to 184 1/2p. Meanwhile, US investment fund Capital Group looks to have cleaned up by buying 54.6m, or 4.22%, of Kingfisher's new nil-paid at 13 3/4p on Friday. Yesterday's close was 1/2p harder at 28p.

Marked up 68.6 points in celebration of Wall Street's overnight surge of 447 points, the Footsie soon succumbed to profit-taking. It drifted gently lower to stand 69 off at worst before closing 21.8 easier at 4180.9.

Following its incredible four- day jump of 1,000 points-plus, Wall Street also met with profit-taking and traded 171 lower in early trading following news that US consumer confidence dropped to 97.1 in July. That compared with economists' expectations of 100 and June's 106.3.

Sterling improved to $1.5703, while the euro was worth 62.7p.

Scottish & Southern Energy, the operator of Southern Electricity, sparked 31 1/2p higher to 660p on a revival of the ancient Scottish Power (7 3/4p better at 350p) merger rumour.

Biotech group Celltech crashed 56 1/2p to a three-year low before closing-31 1/2p down at 397p. Investors raced for the exit on disappointing late- stage clinical trial data on its Humicade treatment for Crohn's disease, a chronic bowel disorder.

Celltech also revealed it plans to halve its US general sales force to 170 in the coming months due to disappointing sales of Metadate, its hyperactive treatment.

Powderject also found itself in intensive care for a while after reports from the US-based Potomac Institute raised doubts about whether the smallpox vaccine purchased from the company by the UK government would be effective in the event of a possible biological attack by terrorists.

The stock collapsed to 325p before rallying strongly to finish only 1p easier at 380p.

The government placed its order with Powderject without putting the contract out to general tender. It caused quite a stink because Powderject is headed by Dr Paul Drayson. a Labour Party supporter, who has made political donations totalling £100,000.

Acambis, which received orders for 209m doses of smallpox vaccine earlier this year, jumped 21p to 212p.

Phytopharm stormed ahead to 300p before closing 12 1/2p dearer at 280p. It signed an agreement with Pfizer for the future development of P57, Phytopharm's novel appetite suppressant for the treatment of obesity and metabolic syndrome.

Phytopharm will own all rights to the product development it undertakes and has the ability to seek other partners to commercialise this work.

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