Storehouse smacks into `wall of negative sentiment'

MARKET REPORT

The Storehouse retailing chain suffered another analytical setback, cutting the shares 10p to 235.5p, lowest for two years.

After being mauled by BZW and NatWest Securities this year the BhS and Mothercare group found itself the victim of an SBC Warburg profits downgrading. The securities house is thought to have lowered its estimates for the year ending on Tuesday by pounds 4m to pounds 118m. It appears poor children's clothing sales last month prompted Warburg to trim its forecast.

Last year Storehouse produced pounds 108.7m. Profit expectations for the retailer have, despite what appeared to be a reasonably encouraging Christmas trading statement, gradually been reduced. At one time there were hopes this year's figures would nudge pounds 130m.

What has been described as a City "wall of negative sentiment" has taken its toll on the shares. In May they were riding at 361p.

The latest Storehouse discomfort occurred as Next, on results, jumped 22.5p to 618.5p and Marks & Spencer, reflecting Warburg support, put on 17.5p to 481.5p.

The rest of the stock market for the second day running ignored election rumblings and higher interest rates. The US hike came as something of a relief. After intense speculation a rise of only one-quarter of a point, the first increase for two years, is regarded as comfortably containable.

Footsie, therefore, was at one time showing a 49.5-point advance. With New York displaying signs of hesitancy the gain was trimmed back to 30.8 points at 4,301.5 by the close.

Banks managed to shrug off UBS caution. Barclays ended with a 14p gain to 1,030.5p and Lloyds TSB rose 14p to 496.5p.

Energy Group, the Hanson spin-off, was the best-performing blue chip, gaining 18p to 489.5p on Goldman Sachs support.

EMI, on continuing competition worries, spun to a new low of 1,097.5p; at the time of the demerger last summer the price was 1,486p. Granada's pounds 42.5m New York hotel sale left the shares 10p off at 918p.

Biocompatibles International, the healthcare group, gained 67.5p to 1,157.5p. It has acquired the rights to develop new surface compounds which should extend the life of its own technology. Drew Scientific gained 19p to 79p following a bullish statement. Shares are being placed with institutions at 52p.

Glaxo Wellcome gained 24.5p to 1,101.5p as ABN Amro Hoare Govett hoisted a 1,260p valuation.

Avis, the car hire group, appeared in its when issued form, trading at 131.5p against a 124p launch. Whitehead Mann, a recruitment group placed at 136p, reached 144.5p.

Glenchewton, the household goods group, announced the sale of its Country Style Inns chain for pounds 10.75m. Buyer is the Old English Pub Co. The deal left Glenchewton 7.5p down at 64.5p and OEPC a shade easier at 221.5p.

World of Leather, the furniture retailer, jumped 30p to 121.5p on the agreed pounds 14.27m offer from UNO, up 24p at 295p.

Dunton, the bricks and property group run by entrepreneur David Williams, returned to market after capturing Remote Metering Systems, which reads electricity meters remotely, in a pounds 20m reverse takeover. The shares, placed at 100p for the deal, ended at 155.5p.

Princedale, where Hillsdown Holdings founder Sir Harry Solomon is an executive director, firmed 3p to 44p following the pounds 3.6m sale of design and marketing operations. The company intends to concentrate on producing retail display units. Simon Engineering improved 4p to 43.5p on takeover speculation and the feeling Dalgety could turn out to be the Associated British Foods bid target lifted the shares 11.5p to 349p.

Oils were firm with Enterprise Oil, not for the first time, leading the pack. The shares rose 14.5p to 653.5p; British Borneo Petroleum Syndicate flared 29p to 1,477.5p.

Polydoc, one of the second- line operations with strong Dutch connections, gained 35p to 337.5p; the shares were 47.5p in January. The obscure software group was floated last summer by stockbroker Bell Lawrie White at 65p.

Thomas Jourdan, the mini conglomerate embracing the Corby trouser press subsidiary, moved ahead 4p to a 12-month peak of 54.5p. David Abell, who netted pounds 10m when his Suter conglomerate was taken over by Ascot Holdings, has appeared on the share register. There have been reports he does not intend to bid but some speculators find it hard to believe such an experienced campaigner would adopt such a negative approach.

Taking Stock

Ashurst Technology, one of the more obscure AIM companies, added 5p to 65p on its gold adventure in the Ukraine. The company, which also has a Canadian quote, is involved in five projects with indicated reserves of between an astonishing 500 and 600 tonnes of gold. Other prospects are said to be available. Besides its golden link Ashurst, a company which seems remarkably shy and offers very little information about itself despite its AIM listing, is developing various alloys.

CFS, a computer group, rallied 8p to 64.5p after declaring it knew of "no reason" for the fall in its share price. It intends to issue year's results, as scheduled, next month. Last year it produced pounds 385,000. The shares have fallen from the 126p hit last year.