AA down; M&B warns on weather; Stagecoach bond
Tue: Weaker oil and metals prices weighed on commodity stocks, while motor insurer and repair group AA slumped after posting lower earnings.
The negative sentiment saw the FTS 100 index fall below the 6,000 level and was trading at 10.30am at 5,980, down more than 120 points. The wider market was also affected with all key indices in the red.
AA, which is in the FTSE 250 mid-cap index, fell 8.2% after reporting a 6% decline in first-half earnings.
Pubs and restaurant group Mitchells & Butlers warned that wet weather would dampen full-year profits as it unveiled a new chief executive.
M&B said annual results were likely to be at the bottom of market expectations, although still be ahead of last year.
Chief operating officer Phil Urban will become chief executive from 27 September.
Sales growth for the first 50 weeks of the year was 7%, with like-for-like sales growth of 1%.
Transport group Stagecoach is raising £400 million in a bond issue to spend on “general corporate purposes” and pay down debt.
The 10-year bonds will have an annual coupon of 4% and should be issued on 29 September, the company said. The joint bookrunners for the issue are Barclays, BNP Paribas and HSBC.
The company has also extended its £535m bi-lateral bank facilities to October 2020.
Finance director Ross Paterson said the bond issue, together with the one-year extension of the bank facilities, ensures that the group “continues to have an appropriate mix of long-term debt enabling it to plan and invest with some certainty”.