St James's raises alarm on new business

The wealth management firm St James's Place Capital yesterday predicted another slump in new business levels, sending its shares down 21 per cent.

The company said a 19 per cent drop in new business in the first quarter had been "broadly mirrored" in the second quarter. The shares fell 35p to close at 133.5p.

"The investment climate has worsened over the last three months and whilst our second-quarter results will not be reconciled until later in the month, the indications are that the fall in new business of 19 per cent in the first quarter has been broadly mirrored in the second," it said.

The company, which is controlled by HBOS and run by the chairman, Sir Mark Weinberg, also announced some changes to its accounting practices, including moving away from so-called 'embedded value' accounting for its life assurance units and also adopting the FRS 19 accounting standard, which deals with the treatment of deferred taxation.

But St James was not the only business to fall from grace yesterday. Elsewhere in the market, a host of other companies served up warnings that sent their shares diving as well.

The pub and hotel operator Eldridge Pope warned that full-year profits were likely to be "below market expectations" as it could not see any uplift in the fourth quarter.

Trading in the third quarter, it said, had been "disappointing" with like-for-like sales down four per cent on last year. Its shares finished down 35p at 212.5p.

The company, which owns Toad pubs and Fireside Inns, blamed the World Cup and a "disappointing tourist trade" for the weaker performance at its food and accommod-ation business.

"With no indications that UK and overseas tourism will improve, continued poor weather and economic uncertainty, the outlook for the peak summer months is below our original expectations," it said.

Separately, the sports rights business Media Content warned that it might not have sufficient working capital for its "medium-term requirements" after acquisition and fundraising talks fell apart.

Shares in Media Content dropped 0.37p, or 64 per cent, to close at 0.21p after it warned that if it had not come up with a plan by the end of the month, it was "unlikely" to be able to get new funding to meet its commitments.

"Consequently, the directors would be obliged to pursue alternative solutions," it said, adding it would make another announcement in due course.

While it said it was continuing to look at "strategic alternatives", which could include acquisitions or "other strategic business transactions", it noted they remained subject to getting financing.