A management shake-up at troubled Fiberweb, the maker of fibres for nappies and other textiles, looked on the cards after it issued its third profit warning of the year and wiped 27 per cent, or 35½p, off its value at 97½p.

Andy Murphy of Dresdner Kleinwort said: “Recovering confidence has been destroyed. Questions will be asked relating to internal controls and reporting structures among others.” He cut his price target to 70p and said the dividend was now in question.

French Connection, the retailer in which Baugur has a 20 per cent stake, lost 11p to 184½p after Dresdner cut its rating to “sell” ahead of interims next Tuesday saying tough times on the high street and in fashion would hit the smaller operators harder.

Zenith Hygiene, the maker of soaps and cleaning products for restaurants and schools, has not proved the best investment for Stanley Fink, former chief of Man Group.

In May Zenith dived 85 per cent on revelations of a black hole in the accounts. Yesterday it bounced 23½p to 44½p after executive chairman Ringo Francis said that he had cleaned up accounting procedures and hired a new finance chief.

Polymer Logistics, maker of display units in shops that floated late last year, lost 16½p to 75p after a profit warning over contract delays.

Plethora Solutions, the AIM-listed pharmaceuticals group that specialises in urological treatments, jumped 14½p to 124p after reporting positive phase II trial results for its cystitis treatment.

Water Hall gained 1p to 10p after it “reluctantly” accepted an offer to buy its 6.65 per cent stake in Premier Asset Management, turning a profit of £650,000. It had held out for a higher bid from Harvard but other shareholders had already accepted.

SQS, the German software tester, added 27½p to 285½p after it said full-year results would be better than expected and brokers upgraded their forecasts.

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