Market report: Inmarsat shares lose height as Barclays turns the screw

Losing altitude: Inmarsat slipped after Barclays expressed concerns
Leon Neal/AFP/Getty Images
Jamie Nimmo5 May 2017

Executives at Inmarsat may have just about escaped from yesterday’s pay revolt at the AGM, but they could not dodge a rebellion in the City today as investors dumped the satellite communications group’s shares.

A downgrade to Underweight from analysts at Barclays was the trigger, causing the shares to dive 50.5p, or 6%, to 774p.

They agreed yesterday’s first-quarter results were solid, but argued the 25% rally from the shares over the past three months makes them far too expensive as its concerns have not abated.

Analyst Mathieu Robilliard thinks the company will meet its guidance for the year, but is wary about after that.

“Supply is set to increase materially while demand growth should be more volatile; technological obsolescence is a question mark with VHTS [very-high-throughput satellite] around the corner,” he said, referring to the superfast speeds on the way from rival satellite communications firms.

The company said it would review its remuneration policy next year after almost half of shareholders rejected the report at yesterday’s AGM.

On the wider market, the FTSE 100 rose 14.06 points to 7262.16 despite yesterday’s collapse in crude oil prices to their lowest level since November.

Hip and knee replacement firm Smith & Nephew was in rude health on the large-cap index, up 31.44p at 1301.44p. It came after its first-quarter update impressed investors as it left its full-year guidance intact.

On the AIM, Highland Gold, the Russian gold miner part-owned by Chelsea FC owner Roman Abramovich, shone 5p higher at 137.75p after unveiling increased reserves at its Mnogovershinnoye mine.

It also revealed Eugene Shvidler, Highland’s largest shareholder and Abramovich’s business partner, pledged part of his stake to Citibank “as security in respect of a personal loan”.

Israeli internet-of-things specialist Telit Communications, edged down 8.38p to 351.88p after raising £39 million through a share placing to fund potential acquisitions.

Management Resources Solutions, the scandal-struck support services firm, returned to the market after several months’ suspension. The shares resumed 9.96p, or 66%, off at 5.17p.

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