Major UK tobacco stocks sank after US regulators indicated that they might impose strict limits on nicotine levels in cigarettes. Lynn Hull, a pharmacologist who works within the US Food and Drug Administration (FDA), said in a webcast that reducing the amount of nicotine in cigarettes by as much as 96% would improve public health. Imperial Brands (IMB), the company behind Lambert & Butler, dipped 6%, or 161.5p, to 2516.5p. British American Tobacco (BATS), the Lucky Strike manufacturer, slid 3.9%, or 133p, to 3272p. Hull said: ‘Making all cigarettes minimally addictive could significantly reduce the morbidity and mortality caused by smoking.’
Copper specialist Atalaya Mining (ATYM) is exploring ‘strategic options’ for its business. The Cyprus-based firm, backed by Swiss trading giant Trafigura, may sell itself or be broken up. Atalaya’s main copper asset is a mine in Spain. It produced 166,000 tonnes of copper concentrate for use in the renewable energy and electric car industries last year. Trafigura is the biggest shareholder, followed by China’s Yanggu Xiangguang Copper.
Rentokil Initial (RTO) was also weighed down by regulatory scrutiny, this time from the UK’s Competition and Markets Authority (CMA), which said it was looking into whether the £40million acquisition of Mitie’s pest control division, announced this month, would limit competition and push up prices in the sector. Until the authority completes its investigation, Rentokil will not be allowed to take any action to merge the Mitie Group (MTO) unit in with its own business.
CMA announced it was looking into aircraft leasing arrangements between Aer Lingus, owned by International Consolidated Airlines Group SA (CDI) (IAG), and Cityjet. Cityjet entered into an agreement with Aer Lingus in August to lease a number of its planes, along with their crew, to its Irish competitor. But the CMA has flagged that this may substantially reduce competition. Hungarian budget airline Wizz Air Holdings (WIZZ) benefited from the troubles among its competitors, soaring 5.5%, or 129p, to 2458p. Analysts at Berenberg have issued the airline with a ‘buy’ recommendation, saying fear over a potential profit warning – as seen at competitor Ryanair Holdings (RYA) – had pushed the shares down. The current share price would now allow for a ‘sizeable cut’ to earnings guidance, analysts added.
Carclo (CAR) gave investors mixed messages as it said had underperformed in the first half of the year due to problems in its technical plastics division. Three new medical programmes were delayed by customers, it said, but these should be carried into the second half of the year. Meanwhile its aerospace business had performed slightly ahead of expectations, meaning full-year results should be on track.
Investment firm Blackrock has won the right to manage £30billion for Lloyds Banking Group (LLOY). The portfolio is part of Lloyds’ £109billion Scottish Widows pension book, which was looked after by asset manager Standard Life Aberdeen (SLA). The remaining £79billion is still up for grabs to manage.
Sky’s boss has been handed a near-£40million windfall following the takeover of the broadcaster by the US owner of Universal Studios. Jeremy Darroch, who has run Sky (SKY) as chief executive since 2007, sold his holding of more than 2.2m shares to Comcast for 1728p each, earning him £38.3million. The 55-year-old was given many of these shares at no cost through long-term incentive plans and bonuses.
Sports Direct is planning to create the ‘Harrods of the North’ after snapping up Glasgow’s iconic Frasers building in a £95million deal. The retail giant, which bought the House of Fraser chain out of administration earlier this year, said the deal will save 800 in-store jobs. , owned by business tycoon Mike Ashley, has obtained the freehold from Glasgow City Council, ensuring the future of one of the House of Fraser flagship stores
