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Why Balfour Beatty plc, Countrywide PLC And Lookers PLC Should Lag The FTSE 100 Today

Hopes that the FTSE 100 (FTSEINDICES: ^FTSE) was heading for a winning week have taken a blow, after yesterday’s modest 38-point gain has been followed by a 14-point fall to 6,599 by mid-morning today. Ironically, it was news of an improving jobs market that led to this morning’s caution — while that’s good news for most people, it could signal an earlier-than-expected rise in interest rates.

Which companies are also having a down day? Here are three from the various indices that are not keeping up the FTSE today:

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Balfour Beatty

Infrastructure developer Balfour Beatty (LSE: BBY) has been troubled of late, with its shares falling around 20% over the past 12 months. Today’s first-half results didn’t help, sending the price down 11.6p (4.6%) to 239p. Although the company reported a 3% rise in order book value to £13.9bn, revenue for the period fell 3% with underlying pre-tax profit down 70% to £45m — on a reported basis, the firm made a £6m loss. Underlying earnings per share (EPS) fell 66% to 6.3p, but Balfour Beatty held its interim dividend at 5.6p per share.

For the full year, chief executive Andrew McNaughton said that “we expect to achieve a performance in our continuing operations that is in line with the current market expectations for 2013“, which would suggest a fall in EPS of around a third.


Estate agent Countrywide (LSE: CWD) saw its share price drop 22.5p (3.8%) to 575p after telling us that “certain of its significant shareholders” have offloaded their stakes in the firm, and that the company director appointed by those shareholders has stepped down from the board.

The institutions involved were named as Oaktree Affiliates, reducing its stake from 37% to 28%, and Apollo-Affiliated Funds down from 18% to 11%. The move came a couple of weeks after Countrywide published its first interim results since rejoining the stock market, telling us that EBITDA was up 35% to £26.4m and proposing a 2p dividend.


A first-half report sent Lookers (LSE: LOOK) shares down this morning, with a drop of 1p (0.7%) to 127p, thought things sounded pretty good. Revenue at the car dealer rose 20% to £1.24bn, with adjusted pre-tax profit up 19.5% to £28.8m and EPS up 21.3% to 5.52p. The firm proposed a 10% lift in its first-half dividend to 0.88p per share.

A similar rise in the final payment would provide around 2.6p per share for a yield of 2%. But it’s not dividends that have rewarded Lookers shareholders this year — over the past 12 months, the shares have soared nearly 90%.

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

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