Why Capita PLC, Johnson Matthey PLC And Marston’s PLC Should Lag The FTSE 100 Today

Capita PLC (LON: CPI), Johnson Matthey PLC (LON: JMAT) and Marston’s PLC (LON: MARS) are falling.

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Can our big miners continue their recent mini-recovery? Nope. They’re all slipping again today, and that’s helped knock the FTSE 100 (FTSEINDICES: ^FTSE) down 70 points to 6,553 by late morning. What would have been the FTSE’s fifth week of gains in a row is looking less likely now, with the index down 77 points on the week so far.

But which shares are falling further? Here are three that are doing that today:


Capita shares dropped 57p (5.4%) this morning to 981p after the outsourcing company released a first-half report. While revenue rose by 13% to £1.8bn and underlying pre-tax profit was up 10% to £205m, the group’s operating margin slipped from 13.3% a year ago to 12.5%. Capita’s pipeline is looking good, with £4.2bn of work currently lined up, though it did stand at £5.2bn in February.

With underlying earnings per share up 9% to 25.8p, the board lifted the interim dividend by 10% to 8.7p per share. If the final dividend should grow by a similar percentage, we’d be looking at a full-year yield of a modest but well-covered 2.6%.

Johnson Matthey

Shares in specialist chemicals producer Johnson Matthey (LSE: JMAT) have risen around a third over the past 12 months, but the price took a 62p (2.2%) hit to 2,741p on the morning of the firm’s first-quarter update.

Things sound good, with sales (excluding precious metals) up 13% to £745m and underlying operating profit up 10% to £116m. The second quarter, however, is expected to see sales “slightly down on the first quarter, primarily due to planned summer shutdowns in the automotive industry“. Full-year guidance remains unchanged.


An interim update for the 42 weeks to 20 July sent shares in Marston’s (LSE: MARS) down 5.3p (3.2%) to 159p, despite the pub manager and brewer telling us that “our trading performance since the announcement of our interim results has been strong“. Like-for-like sales across the business are up on the same period last year, with 16 new pub-restaurants having been opened.

The price fall might just be due to a bit of profit-taking — the price is still up 50% over the past 12 months. The shares are on a forward P/E of about 13, with a dividend yield in excess of 4% forecast.

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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