Spectris, Ladbrokes, Coral and Conviviality

“The FTSE 100 opened strongly, taking its cue from a positive start in Asia and supported by rising oil prices, while US stocks retreated overnight. Bargain hunters were also out in force following yesterday's sell-off,” says AJ Bell Investment Director Russ Mould.

“FTSE 250 precision instrument maker Spectris has clearly failed to lay the ghost of the global slowdown. With its broad spread of sales, both by geography and client industry, Spectris can provide useful insight into global manufacturing trends, so a 4% drop in like-for-like sales in its first quarter is hardly an encouraging sign, coming after a 3% decline in the final quarter of last year. The shares opened down 5%.

“Sales in Asia grew 2% but the US, Europe and Rest of World showed falls of 4%, 8% and 11% respectively, prompting chief executive John O’Higgins to describe trading conditions as ‘challenging’.

“Spectris has a broad spread of customers, with pharmaceuticals and chemicals, aerospace and defence, technology, energy and utilities, metals, academic research and paper and pulp all generating a healthy percentage of group sales. That may help to explain why Spectris, over the past five years or so, has been a pretty fair proxy for the FTSE All-Share, itself a worrying sign given today’s cautious statement, which emphasises the benefits of a £7 million cost-saving programme more than it does confidence in any top-line improvement for the rest of the year.

“It was odds-on that the Competition and Mergers Authority would insist that Ladbrokes and Coral would have to sell hundreds of betting ships to get the go-ahead for their merger. Scaling back on the high street is part of the rationale for the merger and with or without the 350-400 shops that the CMA wants sold, punters will have no shortage of choice when it comes to having a flutter with a plethora of online options now available.

“Investors were raising a glass to alcohol wholesaler Conviviality which expects its full year results to be marginally ahead of market forecasts. Conviviality took over Matthew Clark in October and has now added wine trader Bibendum to the group as it seek to fulfil its aim to satisfy all consumer drinking occasions.”

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