FTSE dragged down as several stocks go ex-dividend, Made.com faces emergency fundraise, and AO shares jump

“After yesterday’s UK inflation figure shock, it’s no wonder investors weren’t feeling too hungry for equities on Thursday. European markets didn’t want to get out of bed, with minimal movements across the main indices,” says Danni Hewson, Financial Analyst at AJ Bell.

“The FTSE 100 was dragged down by some big names trading without the rights to their next dividend, with the index slipping 0.2% in early trading. Relevant names going ex-dividend included Anglo American, GSK, London Stock Exchange, Aviva, HSBC, M&G, Legal & General and Imperial Brands.

“There were some big movements among small-cap stocks, including a 14.5% jump in electrical goods seller AO. The market liked the clarity on the cost of exiting its German business, coming in at the lower end of original guidance. The company was also remarkably upbeat, although that may simply be AO putting on a brave face despite a multitude of problems in the background.

“Fishing equipment seller Angling Direct was unable to catch a whopper with its latest trading update. The hot weather has not been kind to lakes and rivers, with some favourite fishing spots running dry. That’s had a negative impact on demand for fishing equipment, as has the cost-of-living crisis with many people simply not able to afford their usual treats or hobbies.”

Made.com

“Turns out that selling on-trend but relatively pricey furniture is not a great model in the current economic environment.

“Online furniture retailer Made.com looks like it is being forced to pursue an emergency fundraise, which had been euphemistically hinted at in a statement a month ago when it said it was ‘exploring ways to strengthen its financial position’.

“Investors have seen the shares lose more than 90% of their value and may be reluctant to put good money after bad, although if they want to protect some continuing value in their investment they may have little choice.

“There is clear evidence that the scale of the pressures on household budgets is preventing people from buying big-ticket items like a new sofa.

“In different times Made.com might have been a decent proposition, and it has continued to win market share, but now it faces a desperate scramble to reduce costs in order to keep the lights on.

“Made.com needs to sort out inventory issues – effectively clearing out excess stock by selling at a discount – and hope this doesn’t undermine the brand and make it difficult to sell at full price in the future.

“The company has to make sure it gets the basics of retail – holding the right amount of stock while still having what customers want, when they want it – spot on in the future as it is likely to have very little margin for error.”

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