MARKET REPORT: De La Rue exits FTSE 250 as rising costs hit profits

It literally has a licence to print money, yet for De La Rue that didn’t count for much after it sounded the profit alarm, driving the share price down 10.1 per cent.

Such has been the fall from grace for the banknote printer, it has dropped out of the mid-cap FTSE 250 index to be counted among the City’s smaller fry these days. 

De La Rue said its earnings would be hit by the rising input costs as it also cautioned over a ‘substantial degree of uncertainty in the outlook’.

Profit warning: Banknote printer De La Rue said its earnings would be hit by the rising input costs as it also cautioned over a ‘substantial degree of uncertainty in the outlook’

‘There is a possibility that disruption may affect revenue,’ it said. The stock, down 50 per cent in the last year, was changing hands for 10.2p less at 99.8p yesterday.

The FTSE 250 gained 84.22 points to close at 19,934.04.

Turning to the wider market, the FTSE 100 advanced 38.4 points to 7522.75. Gains were led by Imperial Brands, up 3.2 per cent, or 56.5p, to 1841.5p, after Goldman Sachs tipped the tobacco firm’s shares.

Retailers were struggling over concerns about the cost of living crisis and a warning from Marks & Spencer that shoppers are tightening the purse strings.

Tesco was down 1.2 per cent, or 3p, to 255.3p, Sainsbury’s lost 1.3 per cent, or 3p, at 229.3p but Marks gained 4.8 per cent, or 6.4p, to close at 138.65p.

The day’s big riser came from the world of medical technology with Angle, the maker of a blood test that can detect cancer, soaring 58.4 per cent, or 57.5p, to 156p after getting a green light from the US Food & Drug Administration.

Approval for its parsortix testing system from the regulator heralds a new era for personalised cancer care in a market estimated to be worth in excess of £100billion.

Stock Watch – Genflow Biosciences

Belgium and UK-based Genflow Biosciences, a pioneer in developing anti-ageing drugs, ignored the lure of US markets and listed in London in January, raising £3.7million.

It makes treatments for a healthy long life and is focused on a stress-responsive protein – Sirtuin 6 – researching the role it plays in people who live to 100 and beyond.

Yesterday, it filed patent applications related to the therapeutic uses of the protein and its variants. 

Shares were flat at 4.75p.

 Caspian Sunrise, a Kazakhstan oil and gas producer, rose 41.4 per cent, or 1.2p, to 4.1p, as it reported a rise of 1,400 barrels of oil to its production capacity to 4,000 per day.

Elsewhere, the £310million takeover of M&C Saatchi by Next 15 Communications is ‘far from a done deal’, reckons broker Peel Hunt.

The maths is interesting and leaves the acquisition finely poised as tech entrepreneur Vin Murria, whose earlier bid was trumped by Next 15, holds more than 22 per cent of M&C, which could end up being a blocking stake.

Next 15 requires 75 per cent of investors to get behind its board-backed 247.2p-per-share cash and shares deal, so it requires a strong turnout from investors get the transaction over the finish line without Murria’s backing. 

Saatchi fell 1.9 per cent, or 4p, to 206.5p

Meanwhile, a proposed £482million takeover for Randall & Quilter seems to have hit the buffers, with US suitor Brickell saying it is pulling out just as shareholders were about to vote on the deal. 

The AIM-listed insurance group said it had received a letter from Brickell Insurance – controlled by Miami-investment group 777 Partners –alleging that it was in breach of certain obligations under the terms of the deal.

R&Q said it does not believe it has breached the terms or that Brickell had the right to terminate the offer. 

It said it will seek the US firm’s consent for an equity fundraising instead, but saw shares plunge 42.1 per cent, or 59p, to 81p.

Morses Club also slumped – by 31.1 per cent, or 2.5p, to 5.55p – after joining the list of companies to have pushed back results this year. The sub-prime lender is delaying its figures three months to August.

Drug developer Synairgen wheezed 24.5 per cent lower, or 8.52p, to 26.3p after reporting an increased operating loss of £57.9million.

Although its lead drug failed to meet the targets of a late-stage Covid clinical trial, management said further analysis has provided encouragement that it has the potential to save patients with severe viral lung infections.