Britain’s largest boxmaker, DS Smith, misdiagnosed investors after choosing to withhold its dividend.
The packaging manufacturer canceled its final payout to shareholders, despite the increase in online shopping that boosted business during lockdown.
Earnings from the group – whose customers are Amazon – rose 5 percent in the year to April to £ 368 million. This was up from £ 350 million the year before.
Packaging manufacturer DS Smith canceled its final payout to shareholders, despite the increase in online shopping that boosted business during lockdown
About half of the FTSE 100 companies have canceled their dividends because they struggle to save money during the crisis.
DS Smith said orders from the packaging manufacturing division for industrial customers have taken a hit.
But in the UK, its e-commerce arm jumped, doubling food and flower packaging and a 60 percent increase in clothing packaging.
But it said the ongoing uncertainty forced it to curb spending as Covid-19 made gains of £ 15 million in March and April.
Stock Watch – Ironridge Resources
Miner Ironridge Resources has obtained a “very valuable” historical dataset from an area it hopes to explore for gold in Ivory Coast.
Ironridge, which is on the AIM list, said the zone, which is on the south side of a much larger project, was “an important target for follow-up drilling.”
The data comes from mining companies Anglogold Ashanti and Etruscan Resources, who previously worked there.
Shares of Ironridge Resources rose 7 percent, or 0.75p, to 11.5p yesterday.
Boss Miles Roberts admitted that it can be considered “too cautious” and lowering the dividend “hurts”.
He added, “We must secure the company, which is our number one priority.” Traders were split due to DS Smith’s caution.
Citi analyst Paul Bradley described it as “an abundance of prudence,” while Hargreaves Lansdown said it was a good move as DS Smith’s success tends to rise in line with the economy, which is heading into a massive recession.
Shares fell 6.9 percent, or 22 pence, to 296.7 p, making it the biggest pitfall in the FTSE 100.
The wider Footsie was fearless, rising 1.3 percent or 82.4 points to 6240.36. The FTSE 250 followed and finished with 1 percent, or 178.43 points, to 17367.86.
Travel stocks climbed across the London Stock Exchange as investors bet on the prospect of at least some summer vacation trips.
British Airways owner IAG was the top Footise riser, up from 5.7 percent or 12.5 p to 231.7 p, while small Jet2 owner Dart Group 5.6 percent or 45 p from 848 p rose and Easyjet rose 2.2 percent, or 14.6p, to 684p.
Meggitt, a mid-cap defense company, gained height, despite sales in the civil aviation division – which manufactures passenger aircraft parts – halved in the second quarter.
Total sales will decline by 30 percent in the second quarter and by 15 percent in the first half as defense and energy companies remained solid.
It plans to cut 1,800 jobs and was boosted this week by selling a training system unit for £ 118 million.
The stock rose 6.2 percent, or 18.9 percentage points, to 324 percentage points after saying it began to see a recovery in aerospace demand as more and more countries reopen their skies for international travel.
A relatively new addition to the FTSE 250 that has flown slightly under the radar, Avon Rubber advanced after selling its milking arm for £ 180 million.
Milkrite Interpuls, which makes the Avon monitoring systems it describes as ‘Fitbit for cows’ and supplies milk tubes, has been sold to a milking equipment specialist DeLaval.
The deal is to be signed by regulators and shareholders, but it means Avon can focus on its fast-growing body armor division. Investors hailed the news by raising shares 2.7 percent, or 90p, to 3380p.
And Premier Oil managed to get approval from its creditors to purchase two fields in the North Sea from BP (an increase of 1.3 percent or 3.9 p, 313.25 p). It only needs to pay £ 168 million in cash after renegotiating the terms of the deal – or £ 260 million if future oil and gas prices rise.
Premier also made a £ 152 million deal to buy another 25 percent stake in a gas project from a South Korean company. But the donors were unaffected: shares fell 0.2 percent or 0.1 pence to 50 pence.
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