Market report: Thursday close

By MICKEY CLARK FOR MAILONLINE
Updated:

 

SHAREHOLDERS of Robert Wiseman Dairies were enjoying their first bit of cheer for months after the company clinched a major milk-supply deal with J Sainsbury.

Shares in the Scottish business ran up 13 1/2p to 223 1/2p after it was chosen as one of two long-term suppliers by the supermarkets giant.

With a retail value of £66m, the deal comes almost four months after Robert Wiseman, along with rival Dairy Crest, lost a £70m annual contract to supply Asda. That went to Arla Foods, now sacked by Sainsbury's. Arla's stock was the worst hit in the FTSE 250, sliding 2 1/4p to 49 3/4p.

The loss of the Asda contract in May saw Wiseman's shares slump a third, hitting a low of 198 1/2p last week. Its broker, Investec, said the gain was 'very important strategically' but is not changing its profit forecasts just yet as it is looking for further news out of the industry in the autumn when Tesco and Wm Morrison conduct their own milk reviews.

A weaker oil price led to a strong performance by the Dow overnight in New York and that set the pace for trading in London today, where the FTSE 100 index closed up 42.3 points at 4453.9.

The drop in oil below $44 a barrel brought some relief to British Airways, which imposed an extra tariff to help cover higher fuel bills. The shares, which have hit turbulence on the airline's recent staff shortages, cancelled flights and strike threats, led blue-chips higher by 5 1/2p to 229p.

Corporate services provider Rentokil Initial was the biggest faller among the top 100 with a loss of 6p to 147p.

Stand-in chairman Brian McGowan has insisted there will be no break-up of the company following the sacking of chairman Sir Clive Thompson and chief executive James Wilde earlier this year. Deutsche Bank has repeated its hold rating on news that Rentokil's interim pre-tax profits fell from £200m to £180m.

Manchester United streamed forward, up 5p to 257p as the Premiership giant confirmed it has joined the bidding to net Everton and England teenage sensation Wayne Rooney, with an offer of around £20m. Closely held Newcastle United, unchanged on 39 1/2p, already has a similar bid on the table and is expected to raise its offer to at least £22m.

US securities house Goldman Sachs has begun coverage of Associated British Ports, 7p better at 427p, with an outperform rating. It says investors should ignore talk about the lack of growth prospects and, instead, focus on the group's strong cash generation, low cash return volatility and strong balance sheet. It expects the ports operator to perform strongly as financial conditions tighten.

Broker Credit Suisse First Boston has downgraded engineer GKN, 1/4p weaker at 221 1/2p, from outperform to neutral and lowered its target from 275p to 240p.

It blames lower margins at the AgustaWestland helicopter subsidiary which have offset the performance of its automotive division.

It was the first day of dealing on Aim for Mediasurface, the latest vehicle of Sage boss Michael Jackson. Shares in the website technology specialist were placed by Peel Hunt at 12p and opened at 13p. The company's customers include Nato and Prudential, up 9 3/4p at 441 3/4p.

Another Aim newcomer, Spice, curried favour, trading at 132 1/2p, a debutday premium of 17 1/2p to the float price.


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