FTSE 100 close: London sinks into the red as shares in St James’s Place crash, Reckitt and Taylor Wimpey fall
Shares in St James Place plummeted after it slashed its dividend and warned that costs connected to complaints would be a drag on growth in the coming year.
London’s FTSE 100 closed in the red on Wednesday as poor results from a number of firms weighed on the index.
The blue-chip index closed 0.76 per cent lower at 7,624.98 while the FTSE 250, which is more aligned with the health of the domestic economy, ended 0.78 per cent to trade at 19,013.58.
Shares in St James’s Place plummeted after it slashed its dividend and warned that costs connected to complaints would be a drag on growth in the coming year.
The firm’s notched a cash results of £68.7m last year, a sharp fall from the £410.1m notched in 2022, which bosses said had been “significantly impacted” by an assessment into its service and provisions to settle a slew of historic complaints.
It closed over 18 per cent lower.
Analysts at Numis said that opportunities in the sector remained, but “we increasingly have to question how well will SJP monetize that opportunity”.
Reckitt also fell over 13 per cent. The firm missed expectations for sales in the fourth quarter due to declining sales of cold and flu products.
Kris Licht, chief executive officer, said: “While our performance in Q4 was unsatisfactory, we look to 2024 and beyond with confidence.”
“The cost-of-living crisis has forced consumers to make cutbacks, and Reckitt, like their peers, have seen customers trading down to store brand alternatives,” Mark Crouch, analyst at investment platform eToro, said.
Shares in Taylor Wimpey also fell 4.4 per cent after profit fell over 40 per cent last year while the number of homes it completed dropped 25 per cent.
“Housebuilder Taylor Wimpey has underlined the pressure high borrowing costs have put on sales rates, while inflationary winds have whipped up costs,” Susannah Streeter, head of money and markets, Hargreaves Lansdown said.
Markets were also shaken after Country Garden was hit by a winding up petition from a creditor. The first hearing date has been set for 17 May. Country Garden said that it will “resolutely oppose” the petition.
“The development threatens to reignite concerns about the fragility of the sector and cast doubt on efforts made by authorities to shore it up and stop contagion,” Streeter said.
Its been a quiet week for markets so far, with few major data releases to generate significant market moves.
Analysts at Deutsche Bank said its been “a bit of a crawl…as we await the all-important core PCE print tomorrow”.
