FTSE 100 today: latest UK stock market news

As Warren Buffett once mused, on the subject of corporate red flags: “There is seldom just one cockroach in the kitchen”. Such appears to be the plight at Rentokil Initial.
One week after a profit warning wiped 20 per cent from the value of the world’s largest pest control company, shares continue to crawl downwards, yesterday losing another 17½p, or 4.5 per cent, to 364p.
The initial slide was triggered by a warning that a slowdown in its key North American business would cause adjusted pre-tax profits to come in at about £700 million this year, against expectations of £780 million pencilled in by City analysts.
Now, deeper concerns about its troubled $6.7 billion takeover of Terminix, a US rival, in 2022 are coming out of the woodwork.
RBC Capital revised its price target for the company from 570p to 450p, saying that they were “not wholly sure” what had happened at the business, and they were “not convinced management” knew either.
They added that they were “slightly flabbergasted” at the £70 million operational hit in the second half of the year, concluding that “it is clear that execution has gone awry” leaving management with a “tough task to rebuild credibility.”
Peel Hunt, meanwhile, warned that “a lot of risk and questions remain” with potentially the most disruptive stage of the Terminix integration still to come. Noting that the stock has recently been buoyed by the addition of Nelson Peltz’s Trian Partners and other activists to its shareholder register, and speculation of private equity interest, they conclude: “In our view, it would take a brave acquirer to step in now.”
Joining Rentokil towards the bottom of the FTSE 100, Legal & General fell by 6½p, or 2.9 per cent, to 222p over concerns about the sale of its Cala homebuilding division for £1.35 billion to funds managed by Sixth Street Partners and Patron Capital. Analysts noted that only £500 million of the purchase price will be paid upfront, with the rest deferred.
At the other end of the index, Kingfisher rose by 3¾p, or 1.2 per cent, to 326½p as analysts at Deutsche and Citigroup raised their price targets for the company a day after it said in its interim results that it expected its adjusted profit before tax would come in towards the upper end of forecasts.
Reckitt Benckiser, the consumer goods company, also rose by 57p, or 1.2 per cent, to £46.67 after Bloomberg reported it was in early discussions over potential suitors for its homecare assets.
A deal for the division, which includes brands such as Air Wick air fresheners and Cillit Bang cleaners, could fetch more than £6 billion with a formal sale process expected to kick-off within months.
InterContinental Hotels Group was up by 50p, or 0.6 per cent, to £79.14 after Goldman Sachs upgraded the company from “neutral” to “buy”, saying that its shares have de-rated compared to its US peers despite it catching up in terms of growth.
Overall, the FTSE 100 fell by 56.18 points, or 0.68 per cent, to 8,253.68 and the FTSE 250 dropped by 109.29 points, or 0.52 per cent, to 20,835.31 as speculation about the size of a possible rate cut by the Federal Reserve after market close in the UK pushed stocks lower across Europe and the US.
The biggest faller on the FTSE 250 was PZ Cussons, which dropped by 15¾p, or 15.2 per cent, to 87½p after it reported that revenue and profit fell in its last financial year.
Spectris was also down by 130p, or 4.6 per cent, to £26.76 after HSBC downgraded the stock to “hold” from “buy”. Analysts at the bank pointed to the fact that the precision engineering group has made three meaningful acquisitions this year.
While they said the takeovers followed “sound business logic”, it had introduced risk back into the investment case for Spectris as the company’s fortunes depend on the successful integration of its new businesses — all during a generally weak trading environment.
At the other end of the FTSE 250, Hammerson rose by ½p, or 1.9 per cent, to 30¼p after Citi upgraded it to “buy”. Analysts at the bank said that the retail landlord can finally look forward to growth as a new positive real estate cycle emerges.
Elsewhere, Creo Medical Group rose by 3¾p, or 13 per cent, to 32½p after the medical device company announced the sale of the majority interest in its European subsidiary for around €36.7 million to Micro-Tech, a Chinese medical device manufacturer.
Despite the expected 50-point cut to interest rates, indices turned negative in the final half-hour of trading. The Dow Jones industrial average shed 103.08 points, or 0.3 per cent, to 41, 503.10 while the S&P 500 fell 16.32 points, or 0.3 per cent, to 5,618.26.