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Why Gulf Keystone Petroleum Limited, Genus plc And Johnson Service Group plc Should Lag The FTSE 100 Today

The FTSE 100 (FTSEINDICES: ^FTSE) doesn’t seem to know here it’s headed today, having bobbed up and down all morning.

By early afternoon, it’s 8 points down at 6,498, with Vodafone‘s fall holding the index back — there’s been some profit-taking, and some had been hoping for a bigger special dividend. The banks and miners are still reacting in mixed fashion on strengthening news from China.

But which shares are beating the FTSE during its fall today? Here are three names that are dropping and look set to lag the market today:

Gulf Keystone Petroleum

Shares in Gulf Keystone Petroleum (LSE: GKP) slipped 0.8p (0.5%) to 173.5p today, although the only news was the appointment of a slew of new non-executive directors.

The new board members consist of Andrew Henry Simon O.B.E., Jeremy Benjamin Gerald Asher, Thomas Counter Shull, John Bell and Philip Anthony Dimmock. The firm is also seeking one further independent non-executive director. In addition, the current chairman of the Nominations Committee and also an existing non-executive director, Lord Guthrie, has been appointed deputy chairman.

The appointments should help bring to an end the bitter boardroom battles that have been plaguing Gulf Keystone in recent months after M&G Recovery fund, a major shareholder, criticised directors’ pay. Today’s appointments come after the Gulf Keystone board gave in to M&G’s demands.


Figures from Genus (LSE: GNS), the animal genetics specialist, were poorly received this morning, and the firm’s shares fell 133p (9%) to 1,346p as a result.

With revenues flat, adjusted pre-tax profit gained 2% to £47.2m, but statutory pre-tax profit slumped by 30% to £38.1m after Genus was forced to write down the value of some of its biological assets — its herd of sperm-producing bulls, apparently. Adjusted earnings per share (EPS) rose by 3%, and the interim dividend was lifted 10% to 16.1p per share.

Genus shares are up only a few percent over the past twelve months, but they’re still quite highly valued based on the potential for its in-demand products. With a 12% rise in EPS forecast for the year to June 2014, which follows five years of rising earnings, the shares are on a forward P/E of 24.

Johnson Service Group

It was a first-half report that did the damage at Johnson Service Group (LSE: JSG), too, with the share price falling 1.2p (2.4%) to 48.8p — but that’s no great tragedy for shareholders, as the price is still up nearly 75% over the past year.

The textile rental and dry-cleaning firm saw a 1% fall in revenue, but adjusted pre-tax profit soared by 53% to £5.5m  over the period, with adjusted EPS up 25% to 1.5p. The interim dividend was raised by 11% to 0.4p per share.

Johnson has also been engaged in the facilities management (FM) industry, but has offloaded that division with executive chairman John Talbot saying: “The disposal of the FM activities represents a major step in the Board’s strategy to refocus the Group on our original core business of Textile Services and to reduce net debt“.

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.