Market report: Tuesday close

By MICKEY CLARK FOR MAILONLINE
Updated:

 

THE profits warning from ICI was like a smack in the mouth for those City investors who chose to support the chemicals giant in its hour of need.

The group raised £800m from investors last year, issuing shares at 180p a shot. Today the price slumped 59 1/2p to 94p, its lowest since 1974, after ICI warned first-quarter profits would be lower than last year and beneath City targets.

Geoff Miller of Exeter Asset Management said: 'If we were holders and had chosen to support the rights issue, we would be fuming. I suspect there are a lot of angry fund managers around today. This whole affair has been a right Horlicks.'

ICI now looks set to lose its place as a constituent of the FTSE 100 in the next quarterly reshuffle. At the close of business on Monday, ICI was lying in 76th place among the top 100 companies with a stock market value of £1.83bn.

ICI has now fallen to 120th with a price tag of £1.1bn, a place behind Royal & SunAlliance, down 1/4p at 75 1/4p, which was relegated to the FTSE 250 index constituents on Monday. If ICI fails to improve on this position in the weeks ahead it will automatically lose its Footsie place.

ICI's alert combined with the plunge by the Dow overnight on Wall Street to send City investors scurrying for cover. But early gains for New York stocks underpinned a Footsie recovery, driving the index ahead 18.7 points to 3762.

Pace Microtechnology, which makes television set-top boxes, fell 3/4p to 27p. Sir Alan Sugar denied reports that he, or his company Amstrad, planned a bid. Amstrad, where he is chairman, has the same technology and the same customer base open to it. 'One of my private companies once owned some Pace shares, but no longer does so,' said Sugar. Amstrad was unmoved at 31 1/2p.

A return to the black last year at Vislink made little difference to the shares which fell 1/2p to 14 3/4p following a cross in 500,000 at 15p. The group, which makes outside broadcast vehicles for TV companies, reported pre-tax profits of £1.14m from a loss last time of £810,000.

Schroder Salomon Smith Barney has lowered its sum-of-the-parts valuation of Dixons, down 2 1/4p at 90 1/2p, from 135p to 100p. SSSB, joint house broker to the electrical goods retailer, also reduced its 2004 profits forecast by 9% to £300m after becoming increasingly cautious about consumer spending.

Deutsche Bank has trimmed its current-year forecast for J Sainsbury by £10m, blaming tougher trading and higher pension fund contributions. Sainsbury fell 1 1/2p to 226 3/4p.

Electrocomponents slipped 4p to 258 3/4p after forecasting pre-tax profits of around £100m for the year to March. The group, about to meet institutional investors and brokers, said its markets remain weak.

• Prices and indices in this section are supplied from various sources and calculated at different times and may not always match those listed on the site.

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