The FTSE 100 has made a muted start to the day as the year draws to a close.
KEY STORIES:
Shareholders voted to approve the £4bn takeover of Cobham (COB) by US private equity group Advent International in September. But completion of the deal has been held up by a Competition and Markets Authority review into possible national security concerns and a government consultation. Having received pledges from both parties to address these issues, business secretary Andrea Leadsom is now satisfied that any national security risks have been mitigated to an “acceptable level”. It was announced late on Friday evening that the merger has finally been cleared to proceed. The scheme of arrangement is expected to become effective on 17 January.
Shares in Nichols (NICL) fell by around 17 per cent this morning, after the soft drinks group noted that the Saudi Arabian and UAE tax authorities have recently implemented an excise tax of 50 per cent, to be levied on the retail price of non-carbonated sweetened drinks – and that, while there is “a broad range of possible outcomes”, this could lead to pre-tax profits for FY2020 being “materially below current expectations”. The tax will be applied to all non-carbonated drinks containing either natural or artificial sweeteners, including sales of its Vimto products. The group is developing plans with its long-term in-market partner to mitigate the impact, which will require increased investment in the Vimto brand. The actual impact on sales in the Middle East won’t be known until after the Ramadan trading period. For 2019, Nichols anticipates full-year pre-tax profits in line with market expectations.
After its first major rebuttal to the Muddy Waters’ short attack, NMC Health’s (NMC) shares continued to fall. But after a statement outlining an “independent review” of its disclosure practices by its non-executive directors on Monday, investors have lept back on board and its share price is up 28 per cent, to 1,660p. NMC also said it was hiring an accounting firm to review Muddy Waters’ balance sheet claims. The company said it was sure its directors would not find any issues with its disclosure practices: “We are confident that this review, when complete, will be entirely confirmatory of the disclosures provided by the company to date,” NMC said.
