Why Croda International Plc, Beazley PLC And Monitise Plc Should Lag The FTSE 100 Today

Croda International Plc (LON: CRDA), Beazley PLC (LON: BEZ) and Monitise Plc (LON: MONI) all slip.

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The FTSE 100 (FTSEINDICES: ^FTSE) is having a modestly optimistic day today, gaining 12 points to 6,635 by early afternoon, after Chinese premier Li Keqiang reassured the markets that his country’s growth rate should not fall below 7%. That gave mining shares a boost, and helped push the FTSE to seven-week highs.

But Mr Li can’t cheer everyone up, as shareholders in a number of companies found out today. Here are three from the FTSE indices whose shares responded badly to news:

Croda International

First-half results helped push Croda International shares down 89p (3.5%) to 2,480p this morning, despite the chemicals manufacturer lifting its dividend by 8.4% to 29p per share. Sales grew by a total of 1.3% to £563m, with pre-tax profit from continuing operations up 6.3% to £133m, so why the share price fall?

Well, it seems mostly down to tough markets in Europe, with chairman Martin Flower telling us that no improvement is expected in the near term. So, future growth must be under pressure, and the shares are already on a fairly demanding forward P/E of 19 based on full-year forecasts.


It was also interim day for insurer Beazley (LSE: BEZ) today, and again the results gave the share price a hit. In this case, we saw a fall of 15.5p (6.4%) to 227p, though up until today the price had been up more than 50% over the past 12 months.

Although Beazley reported increases in the numbers of premiums written during the six months to 30 June, pre-tax profit fell by 27% to $82.3m, with rising interest rates apparently hitting the firm’s fixed-income investments. Today’s report also talked of “increasing competition”, which is rarely a phrase that investors like to hear.


Our third faller for today is Monitise (LSE: MONI), the provider of mobile banking and payment services, with a trading update ahead of full-year figures knocking 1p (2.6%) off the share price to 37p — although it is still up nearly 40% over the past year.

Revenue for the year to 30 June is expected to have nearly doubled, to at least £70m, with gross margins above 70% (against 66% a year ago). Chief executive Alastair Lukies was upbeat, talking of “substantial revenue growth, numerous launches on a global basis, some very important new partnerships, the integration of three acquisitions and the raising of more than £100m“. The results should be with us on 5 September.

Finally, reliable dividends can more than compensate for the day-to-day ups and downs of share prices. So how about a company that’s offering a 5% yield and which could be set for some nice share price appreciation too?

It’s the subject of our BRAND-NEW report, “The Motley Fool’s Top Income Share For 2013“, which you can get completely free of charge — but it will only be available for a limited period, so click here to get your copy today.

> Alan does not own any shares mentioned in this article.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

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