MARKET REPORT: 5G testing firm Spirent slumps as slow summer takes heavy toll

Shares in Spirent Communications crashed to a seven-year low after a thumping profit warning.

The FTSE 250 firm, which tests 5G mobile and wifi networks, said it was ‘extremely challenged’ as its largest customers cut spending. 

A slowdown over the summer carried on into September meaning business missed expectations in the third quarter.

Over the first nine months of the year, orders fell 24 per cent while revenues fell by a fifth.

‘As a result, there is not enough near-term strength in the order book to support our expectations for the final quarter trading, and accordingly we reduce our outlook for the near term,’ Spirent said.

Slowdown: Spirent Communications, which tests 5G mobile and wi-fi networks, crashed to a seven-year low after a thumping profit warning

The firm added that its profit would be affected this year. Shares crashed 31.3 per cent, or 41p, to 90.1p – their lowest level in seven years.

With bond markets in turmoil, the FTSE 100 fell 0.8 per cent, or 57.71 points, to 7412.45 and the FTSE 250 was down 1.1 per cent, or 184.86 points, to 17,492.90. 

Concerns over demand sent oil prices down more than 5 per cent as a barrel of Brent crude dropped to $86 while Saudi Arabia and Russia vowed to cut output.

BP sank 3.2 per cent, or 16.35p, to 499.45p while Shell slid 2.2 per cent, or 56p, to 2521.5p and Harbour Energy lost 4.5 per cent, or 11.3p, to close at 237.4p.

Defence firm Qinetiq won its second contract in as many days from the US, with a five-year deal worth £104.5million, just a day after it was awarded a £69.5million five-year contract with the US army to test and produce 700 new bomb suits to protect soldiers. But shares fell 2.6 per cent, or 8p, to 305.6p.

Pendragon retreated 7.7 per cent, or 2.7p, to 32.5p after one group of suitors pulled out of a three-way bidding war.

European motor dealership Hedin, which has a 26 per cent stake, and Michigan group Penske no longer intend to make an offer, having tabled a proposal worth 32p share after an earlier bid of 28p a share was rejected.

Stock Watch – Net Zero

Green investment firm I(X) Net Zero fell after a business in its portfolio walked away from a merger.

The group has a small, indirect interest in Sustainable Living Innovations (SLI), which will not join forces with the special purpose acquisition company Church Capital Corp V. 

‘SLI will pursue alternative options that can support its plans to address sustainable housing affordability,’ I(X) said. 

Shares, which floated at 76p in February last year, fell 9.3 per cent, or 2p, to 19.5p.

US giant Auto Nation has also offered 32p a share. The Pendragon board, however, has backed a bid for its UK dealership arm from rival US bidder Lithia Motors worth £397million.

Aviva made gains after Jefferies raised its rating on the insurer’s stock to ‘buy’ from ‘hold’ and increased the target price to 480p from 445p. 

The City broker expects the group to return £5.3billion of capital between 2023 and 2026, equivalent to 51 per cent of the current market cap. Shares rose 3.2 per cent, or 12.1p, to 387.7p.

But Vistry sank 6.8 per cent, or 56.5p to 775p after investment bank UBS downgraded the housebuilder to ‘sell’ from ‘neutral’ amid fears over its ‘relatively high valuation’ and caution on how realistic its recentbusiness plan is. 

Topps Tiles increased 1.3 per cent, or 0.6p, to 48.7p after a third consecutive year of record sales.

It made around £263million in the 52 weeks to the end of September, up 6.4 per cent on the previous year.

Price rises, extra sales from the World Cup and one-off news events helped Smiths News, the UK’s largest newspaper and magazine distributor, post a slight increase in revenue.

Profit for the year to August 26 is likely to meet market forecasts of £38.3million and it expects a final dividend of at least 2.7p a share. But shares fell 0.3 per cent, or 0.1p, to 40.7p.

Packaging firm Mondi officially completed its exit from Russia following the sale of a plant to Sezar Invest for £679million last month. It gained 1.4 per cent, or 18p, to 1350p.

Investors in The Works made their opposition known at the arts and crafts firm’s annual meeting.

Almost two-thirds of participating shareholders voted against a final dividend as some expressed a preference for share buybacks.

This post first appeared on Dailymail.co.uk