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Markets rocked as Britain's credit rating is downgraded
Having started last week in a positive manner, the markets were rocked by concerns over US growth and more heavily by Standard & Poor's downgrade of its credit-rating outlook for the UK from "stable" to "negative".
Although S&P affirmed the country's AAA sovereign credit rating, recent investor optimism took a step back in light of the UK's soaring public debt. Banks, miners and oil producers were the biggest losers as the FTSE 100 fell 2.75 per cent on Thursday.
White Young Green, the company which provides consultancy to the built, natural and social environment, expects its fiscal year pre-tax profit to be down 29 per cent year on year. Pre-tax profit before amortisation and exceptional costs is anticipated to be about 12m for the year ending June 30. With trading in the second half of the year likely to be even more challenging, the company expects to incur significant costs due to more redundancies and the closure of seven regional offices. The Leeds-based firm which has been focused on reducing costs, has cut 324 jobs in the four months to April while also scrapping its dividend. Having announced concerns in February that the company may breach one of its banking covenants, talks are said to be continuing with lenders in an effort to secure revised debt facilities.
Sheffield-based company Henry Boot has announced that the group continues to trade profitably in line with market expectations at the half year, excluding property revaluation adjustments. The company involved in property development and construction services, have secured borrowing facilities for the three years to 2012 which should allow them to benefit from opportunities that arise. While the property sector remains under pressure, management continue to focus on cost control with the emphasis on reducing borrowings. The company remains confident that performance for the year ending December will be in line with expectations but for an unforeseen deterioration in market conditions.
Engineering and construction services group Renew Holdings, announced a 41 per cent decline in first half pre-tax profit partly due to the settlement of an old contract. Pre-tax profit fell to 2.35m from 3.93m which included 1.2m charge to settle the old construction contract. The company said revenue for six months to March 31 declined to 171.6m from 192.9m a year earlier. While maintaining its interim dividend, the company said it would continue to grow its engineering business and seek out acquisitions.
n The value of investments can fall and you could receive less than you invested. No investment is suitable for all people and should you have any doubt about this service you should consult an authorised financial adviser. The opinions expressed in this article are not necessarily the views held throughout Brewin Dolphin Ltd. No director, representative or employee of Brewin Dolphin Ltd accepts liability for any direct or consequential loss arising from the use of this document or its contents.
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Weather for Yorkshire
Tuesday 22 May 2012
Today
Sunny
Temperature: 9 C to 23 C
Wind Speed: 21 mph
Wind direction: North
Tomorrow
Sunny spells
Temperature: 10 C to 23 C
Wind Speed: 12 mph
Wind direction: North east
