A slump in Admiral shares dragged Britain's top stock index down further from the 14-month highs it hit on Wednesday, after the car insurer said that market volatility caused by Britain's vote to leave the EU had hit its solvency ratio. Shares in Admiral, which missed analyst estimates with its results, fell 7.7 percent, their biggest fall since November 2011. Admiral also warned of the additional fallout from Brexit of economic uncertainty and interest rate and forex volatility.
"Although the pre-tax profit of 189.5m pounds was in line with our forecast, it represented a small miss against consensus, itself a rare occurrence for Admiral," Shore Capital analysts said in a note. "However, it was the 'noise' around the group's Solvency II position, which dropped sharply in H1 16, and Brexit which were the most worrying, to us, and does question the wisdom of Admiral's return-of-capital strategy."
The stock was the stand-out loser on Britain's FTSE 100, which was down 34.77 points, or 0.5 percent, at 6,859.15 by the close, extending Tuesday losses. The mid-cap FTSE 250 was down just 0.3 percent. Bucking the trend, Indivior surged 8.8 percent to close at an all-time high after its drug for opioid use disorder passed its latest clinical trials. Infrastructure firm Balfour Beatty rose 3 percent after beating first-half expectations and resuming dividend payouts. It said there was little sign yet of the Brexit vote affecting its markets, but that it was too soon to know how the decision would eventually play out.
"The big news from Balfour Beatty this morning is the reinstatement in the dividend," Edison Investment Research analyst Stephen Rawlinson said. "With the order book up 11 percent at 12.4 billion pounds, the legacy contracts well understood and in many cases resolved and with both risk and cash management under tight control, it is perhaps appropriate that the shareholders get the benefit of the improvement earlier than many expected." Fellow construction firm CRH rose 0.9 percent and was among the top gainers on the FTSE 100. The biggest mid-cap faller was tech firm Laird, down 6.9 percent, after Cobham announced that Laird's boss would replace the Cobham CEO by the end of the year. Defence company Cobham's shares advanced 0.4 percent.
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