Royal Mail plunges as staff plan more strikes

SHARES in Royal Mail hit a two-year low as it remained locked in a union dispute.

The Communication Workers Union (CWU) has announced another 19 days of strikes between October and November at the postal group.

The stock fell 3.5pc, or 6.85p, to 187.2p but there was a glimmer of hope after the CWU said Royal Mail had agreed to further talks today. If a solution cannot be found, the strikes will fall on some of Royal Mail’s peak days.

Workers want a pay rise but, having made a loss of £92m in the first quarter, Royal Mail last week said the CWU has not outlined ‘viable alternatives that will fund further pay increases’.

It also called for talks to be taken to Acas, the dispute resolution service, alongside modernising the ways it works with the union.

JP Morgan analysts think strikes will spur customers to use rivals, and Peel Hunt reiterated a ‘sell’ recommendation. Royal Mail floated at 330p in 2013. It is now worth around £1.85bn, and its shares have fallen 63pc this year.

On another turbulent day in London, the FTSE 100 was up 0.3pc, or 20.8 points, to 7005.39 and the FTSE 250 by 0.1pc, or 16.86 points, to 17,320.97.

A stark warning from the International Monetary Fund (IMF) was followed by a dramatic intervention in the bond markets by the Bank of England in a bid to restore calm.

Concerns over the health of UK pension funds amid ructions on the bond markets prompted L&G, the UK’s largest provider of workplace pensions, to plunge 5.6pc, or 13.1p, to 220.3p while investment group M&G tumbled 6.2pc, or 11.1p, to 168p and the insurer Aviva fell 4.9pc, or 19.9p, to 389p.

There was better news for Spirax Sarco after its £307.5m takeover of the US firm Durex, which makes temperature sensors used to build semi-conductors. The engineer, which snapped up Paris industrial heating firm Vulcanic in July, rose 2.5pc, or 255p, to 10385p.

Wetherspoons was among the biggest fallers on the mid-cap index – down 4.3pc, or 19.4p, to 429.2p – after analysts at Liberum issued a bleak outlook.

Ahead of the pub group’s preliminary results on October 7, the broker slashed the target price to 450p from 600p and said the company’s current trading is likely to have remained ‘subdued’.

Aston Martin hit a record low as the luxury car maker completed its £575.8m rights issue. With analysts uncertain as to whether its huge debt can be lowered, it fell 5pc, or 7.55p, to 142.25p.

Airport caterer SSP slid 1.1pc, or 2.3p, to 207.1p after mixed reports from brokers. The firm, which owns Upper Crust and Millie’s Cookies, had its target price raised by Morgan Stanley but lowered by Stifel and Deutsche Bank.

Meanwhile, Credit Suisse cut the target price of Deliveroo to 114p from 130p. But the stocks rose 3.8pc, or 3.24p, to 87.8p.

An I3 Energy co-founder has resigned as chief financial officer.

Graham Heath, who helped set up the oil and gas firm in 2014, is leaving immediately. Shares rose 1.8pc, or 0.4p, to 23.65p.

Fuel cell maker Ceres Power took a hit after Boston-based Fidelity Investments lowered its holding. Shares fell 2.1pc, or 8.2p, to 383.8p. Amigo Holdings became the latest company rocked by a shareholder revolt over fat cat pay. At its annual general meeting, 45pc voted against the lender’s remuneration report. Shares rose 5.9pc, or 0.22p, to 4.02p.

Getech hailed its ‘critical role in energy security’ as it soared 3pc, or 0.5p, to 17.25p after its order book hit an all-time high, up 118pc to £4.8m in the six months to June 30. The energy software firm said revenue rose 11pc to £2.7m.