MARKET REPORT: Investors bring down Hikma Pharmaceuticals
MARKET REPORT: Investors drop Hikma Pharmaceuticals after half-year results fail to impress
Investors brought down Hikma Pharmaceuticals after its half-year results failed to impress.
The company, which makes drugs to treat pain, cancer and infections, said its revenue rose 7% in the first six months of the year to reach £ 877million.
Sales increased in all three of its businesses – generic, branded and injectables – but investors seemed to be hoping for more.
The “injectables” division showed only modest growth, compared to the first half of 2020 when hospitals were getting supplies in anticipation of the Covid chaos.
Managing Director Siggi Olafsson said: “We continue to benefit from the investments we have made to develop our new drug portfolio, and our progress in the first half of the year underpins our outlook for improvement for the year as a whole.
But stocks had their worst day in over a year, falling 7.1%, or 187p, to 2455p.
Hikma was the worst performer on the FTSE 100, which trod the water and barely moved, advancing just 0.04%, or 2.52 points, to 7122.95. Other notable players were the banks after the Bank of England said yesterday it would be ready to hike rates in the face of rising inflation. Banks are making more money in a higher interest rate environment and Natwest added 2.2%, or 4.7p, to 215.7p, HSBC climbed 1.7%, or 6.95p, at 409.85p and Standard Chartered rose 1.8%, or 8p, to 459.2p.
Capita was also roaring on the mid-cap FTSE250.
Investors applauded the tech-focused subcontractor after it returned to profit – making £ 261million in the first half of the year against a loss of £ 29million over the same period of 2020. The company – long nicknamed “Crapita” in the city – was the best hike on the FTSE250 because it gave the strongest signal to date that a long-standing restructuring is paying off.
The group, which handles everything from London congestion charge to collecting the BBC fee, government and local authority call centers, has landed £ 2.6bn in contracts.
And he cut his costs by £ 79million over the six months, which made up for much of the drop in income and allowed him to resume an employee bonus program.
Traders were particularly pleased with the company which said it plans to sell an additional £ 175million from businesses before the end of the first half of next year.
Capita shares rose 11.3%, or 4.07 pence, to 40.06 pence.
A more moderate rise in the mid-cap index was the Sanne group, which is at the center of a bidding war. The company, which provides administrative services to fund managers, initially entered talks with private equity firm Cinven – but rival Apex launched a potential £ 1.5bn offer this week.
Cinven was either scheduled to make a formal offer or walk away yesterday, but said in light of Apex’s offer he was granted an extension until August 30. Shares climbed 0.7%, or 6p, to 918p.
But that wasn’t enough to keep the FTSE 250 higher, as it slipped 0.2%, or 49.95 points, to 23,456.16.
Wizz Air lost ground (down 0.9%, or 48p, to 5196p) as boss Jozsef Varadi signed a five-year contract with the Hungarian low-cost airline.
It comes a week after his stonking bonus plan – which could see him win a maximum of £ 100million if he can get a market value of Wizz Air in excess of £ 12 billion – was approved by the shareholders.
Cairn Energy was also another notable gain, up 6.1%, or 9.7p, to 168.2p.
The move comes as India is set to repay £ 720million to Cairn after deciding to scrap a retrospective tax law that has sparked fierce battles with major foreign investors.
The parties have argued over India’s tax grab under rules introduced in 2012.
“This decision helps clarify our position,” Cairn said. “We are monitoring the situation. “