Sign up to our e-magazine
Live Squawk

Wednesday
Jan142015

 
Past performance is not necessarily a guide to the future, returns are before the application of Titan’s fees, tax legislation can change and you should always take independent advice in relation to your own financial circumstances.
Wednesday
Aug272014

Wednesday's Stock Market report featuring Manchester United, Darty, 888 Holdings, Tyratech and David Lenigas 

The Markets

German consumer confidence has fallen for the first time since January last year as escalating geopolitical pressures and the weakening Eurozone economy contributed to increasing uncertainty. The poll carried out by DfK found evidence of a “collapse” in economic expectations as both “willingness to buy” and “income expectations” have dropped by significant amounts, although both figures retain relatively high levels at the current time. The pollsters concluded that, “Consumers are increasingly taking the intensified geopolitical situation into consideration in their assessment of how the German economy will develop over the coming months. […] A decline of this magnitude in just one month has not been recorded since the survey began in 1980. Consequently, virtually all improvement in the economic expectations indicator over the past year has been negated in one fell swoop.

UK food prices rose at the lowest rate for ten years during the 12 weeks to the end of August, with costs rising by 0.8% over the period, according to data from Kantar Worldpanel. Prices of staple goods were particularly subdued, with growth of just 0.2% as supermarkets engaged in a battle for market share. The data agency believes that discounters such as Aldi and higher end retailers like Waitrose have been outperforming the wider market.

At the London close the Dow Jones had increased by 10.53 points to 17,117.23 and the Nasdaq had grown by 3.00 points to 4,074.67.

In London the FTSE 100 closed up by 4.45 points at 6,827.21 and the FTSE 250 rose by 22.88 points to 16,020.88. The FTSE All-Share increased by 3.01 points to 3,647.51 while the FTSE AIM Index grew by 8.44 points to 778.76.

Broker Notes

Panmure Gordon reiterated its “buy” rating on defence business Chemring (CHG) as the situation in the Middle East intensifies and as NATO has said that troops will be deployed to new Eastern European bases to counter potential threats from Russia. The broker believes that the munitions and equipment manufacturer is well placed to benefit from any emergent conflict and therefore expects EPS growth in 2015 and 2016 to exceed the market consensus view. The shares fell rose by 0.75p to 229.75p.

Software developer Publishing Technology (PTO) had its “buy” rating retained by Westhouse Securities after the firm signed a deal with the Chinese academic and trade publisher Zhonghua Book Company via its joint venture in the country. No financial information on the deal has been released. The firm will adapt its existing online platform to allow Zhonghua Book Company to publish and manage its back catalogue on the web. Westhouse believes that this deal will help Publishing Technology advance further into potentially lucrative Chinese language markets. The shares grew by 15p to 192.5p.

Electronics retailer Darty (DRTY) has also held onto its “buy” rating, from N+1 Singer, ahead of the firm publishing its interim results. The analysts feel that while the last set of revenue figures disappointed, a combination of strong margins and the World Cup having a positive effect on demand for electronics will lead the company to low single figure growth in the core French, Belgian and Dutch markets. The broker continues to see significant further growth potential. The shares increased by 1.25p to 82.25p.

N+1 Singer still feeling Darty

Blue Chips

Exploration and liquefied natural gas firm BG Group (BG) has announced that a second drill-stem test in the Mzia block off the southern coast of Tanzania provided further support for a hub project to supply a potential onshore LNG project. Management said that the “results from this latest drill-stem test further reduce reservoir risk, a critical factor as we progress design of the upstream production facilities and infrastructure. Also, the Mzia-3 DST, along with previous appraisal activities, supports our efforts to optimise the value of a development across our Block 1 discoveries”. The shares grew by 4.5p to 1,205p.

Football club Manchester United (NYSE:MANU) fell by $0.17 (12.8p) to $17.49 (1,325p) on the back of a shock early exit from the Capital One League Cup. No brokers have given updates at the current time, but GECR said that “the performance was not encouraging, as regarding the possibility of next year’s chances for Champions League football, but we can not neglect the experience of the management team and the ongoing possibility of a quick improvement in fortunes”. The team has made significant investment in players and hope last season’s lowest finish in a generation will not translate into ongoing financial malaise.

Devils looking to end deeper in the red?

Mid Caps

Steel and vanadium outfit Evraz (EVR) posted revenues of $6.8 billion (4.1 billion pounds) in the six months ended 30th June, a 7% decline from the $7.3 billion (4.4 billion pounds) earned in the same period of last year. Sales volumes fell by 4% in the firm’s core steel business and revenues from the division dropped by 8% due to global overcapacity in the industry. Management have implemented cost reduction strategies to maintain competitiveness in the face of continuing pressure on margins. The shares fell by 0.5p to 113.4p.

Online gaming firm 888 Holdings (888) increased its first half revenues by 13% to $225.1 million (135.8 million pounds) with a 40% increase in the outfit’s business to business sales. However, profits before taxation fell by 4% to $34 million (20.5 million pounds) due to foreign exchange fluctuations. The company had a strong World Cup performance and management are confident heading in to the rest of the year. The shares dropped by 2.25p to 128.25p.

Marine services provider James Fisher and Sons (FSJ) recorded revenues of 216.1 million pounds during the first half of 2014, an 8% improvement over the same period of prior year despite adverse currency effects. The group’s performance was driven by a number of major contract wins, particularly in the offshore oil division, which recorded a profit increase of over 30%. Overall profits before taxation were 20.79 million pounds. The shares rose by 15p to 1,370p.

James Fisher nets new contracts

Small Caps

Life sciences firm Tyratech (TYR) has announced that Sainsbury’s and Tesco stores will stock the company’s range of head lice treatments from September, in addition to previously announced arrangements with Superdrug and Boots. The products have successfully launched in the US and are carried in over 4,000 stores in the country. The firm had total revenues of $1.4 million (0.84 million pounds) in 2013, but expects to significantly improve its performance this year. The shares rose by 1p to 10.125p.

David Lenigas is stepping down from the board of his eponymous exploration firm Leni Gas & Oil (LGO) as well as African explorer Polemos (PLMO) to focus on developments at Rare Earth Minerals, AfriAg and other companies where he holds directorships. Mr. Lenigas said that he remains committed to the firms’ success, but that it was time to “put the big lads in charge”. Share in Leni Gas & Oil closed down by 0.025p at 3.5625p and shares in Polemos dropped by 0.035p to 0.125p..

Meanwhile, Rare Earth Minerals (REM) itself further progressed its Mexican lithium project during the six months ended 30th June, with ongoing testing increasing the estimated reserves and confirming 99.5% lithium carbonate purity. The company recorded no revenues, but the management remain confident in the long term value of the held assets and believe that current trends in the lithium market could be extremely beneficial to the company. The shares rose by 0.125p to 1.58p.

Ultrasound training and education solutions business Medaphor Group (MED) has raised 4.7 million pounds via the issue of new shares at a placing price of 50p. The proceeds of the fundraising will principally be used to fund the expansion of the company’s sales network and the development of new applications for Medaphor’s training platform. The shares were admitted to trading on AIM this morning and closed at 55p.

Real estate developer Rose Group (RGI) increased revenues twelve times over in the six months ended 30th June, with sales of $140 million (84.4 million pounds) compared with $11 million (6.6 million pounds) in the same period of 2013. The increase came due to the completion of a major Russian construction project and the firm expects to have sold all 1,193 apartments in the development by the end of the year. However, there are difficulties at two other projects as the group’s partners have failed to fulfill their obligations and legal action is underway, leading the management to book a $48 million (28.9 million pound) impairment on the developments. The shares rose by $0.05 (3p) to $1.83 (1.1p).

Ceramics manufacturer and distributor Churchill China (CHH) announced that revenues in the first half of the year were 20.9 million pounds, an increase of 6% over the same period of the prior year. Profits before tax rose 0.3 million pounds to 1.4 million pounds on the back of improved sales, manufacturing efficiency and product mixtures. Management expect growth to moderate in the second half due to stronger comparatives, but believe that full year results will be strong. The shares rose by 17.5p to 460p.

Fruit and vegetable outfit Fyffes (FFY) grew revenues to €592.8 million (471.4 million pounds) in the six months to 30th June. While production rose this was largely offset by a drop in prices. Profit before taxation rose by 7.4% to €22.2 million (17.65 million pounds). Management remain committed to a merger with peer Chiquita and estimate that such a deal would lead to annual cost savings of $60 million (36.2 million pounds). The shares increased by 3.5p to 78.5p.

No slip-ups at Fyffes

Tuesday
Aug262014

Tuesday's Stock Market Report featuring LSE, WPP, Stagecoach, Regus and Plexus 

The Markets

Savills expects that UK house prices will rise by 9.5% during 2014, an increase over their previous forecast of 6.5%. However, this level of growth could lead to the London market flatlining in 2016, according to the real estate specialist’s report. The firm has downgraded its 2015 expectations for price rises in the capital from 6% to 5% and has left current five year forecasts unchanged. Lucian Cook, Savills UK Head of Research, said that the “extraordinary rates of house price growth cannot continue in the current, more regulated mortgage environment, particularly in the face of likely interest rate rises.”

UK banks have reported an increase in savings during July following the launch of New Individual Savings Account (NISA) rules, with deposits of 4.9 billion pounds placed into accounts after the Treasury increased the tax free savings allowance to 15,000 pounds. However, some of this increase may be due to savers delaying deposits until the new rules came into force, as the usual surge in April savings at the start of the tax year was weaker than usual.

At the London close the Dow Jones had increased by 70.37 points to 17,049.50 and the Nasdaq had grown by 0.70 points to 4,041.41.

In London the FTSE 100 closed up by 51.91 points at 6,827.16 and the FTSE 250 rose by 113.53 points to 15,994.61. The FTSE All-Share had increased by 25.12 points to 3,644.50 while the FTSE AIM Index grew by 5.97 points to 770.02.

Broker Notes

Panmure Gordon has stuck to its “buy” rating on Computacenter (CCC) ahead of the IT infrastructure services company reporting tomorrow morning. The analysts expect the firm to confirm a strong UK performance, held back by less positive news from continental Europe, but believe that the changes that the business has made to its management and structure should help to change the trend in those markets. Full year expectations remain unchanged. The shares dropped by 14p to 604p.

London Stock Exchange (LSE) has had its “hold” rating reiterated by Beaufort Securities. The exchange operator published results for the second quarter of 2014 last week, which showed strong improvement in both primary and secondary trading in London and Italy. Pre-tax profits rose by 40% to 83.6 million pounds. The broker expects the firm’s forthcoming rights issue to help it improve earnings, but feels that the upside has already been integrated into the price. The shares rose by 7p to 2,036p.

Containment and decontamination specialists Bioquell (BQE) has been upgraded to a “buy” by N+1 Singer. This comes after the firm published interim results showing that it had traded at a slight loss during the first half of the year. Revenues were below last year’s strong comparative period, as the Biocontamination division saw weak demand for capital equipment in the US and China. The broker feels that market conditions have improved for current trading and that the shares are significantly undervalued, leading to the improved recommendation. The shares closed flat at 90.5p.

Broker says Bioquell can contain poor results

Blue Chips

Advertising and public relations outfit WPP (WPP) reported revenues of 5.47 billion pounds over the six months ended 30th June, an increase of 2.7% over the same period last year and an 11.3% increase in constant currency terms. Profits before taxation were 522 million pounds, up 1.5% over the same period in 2013. The firm has struggled with the ongoing strength of sterling, but remains confident that full year results will meet expectations given the firm’s current position and trading. The shares rose by 17p to 1,244p.

Outsourcing services provider Bunzl (BNZL) reported revenues of 2.93 billion pounds over the half year to 30th June, a slight decline from the 2.95 billion pounds recorded in the same period of 2013 due to the ongoing strength of the pound. Profits before taxation rose by 2% to 132.3 million pounds due to significant margin improvements. Management remain focused on growth via acquisitions and announced four new purchases this morning in the the UK healthcare, safety and cleaning products sectors, which had combined revenues of 34.8 million pounds in 2013. The shares grew by 9p to 1,639p.

Oil and gas services provider Petrofac (PFC) received new orders worth $7.2 billion (4.34 billion pounds) during the first half of 2014, with the backlog standing at $20.3 billion (12.24 billion pounds) as at 30th June. Revenues during the period fell to $2.5 billion (1.51 billion pounds) from $2.8 billion (1.7 billion pounds) in the first half of 2013. Management believe that the company will achieve its full year revenue target of $580-600 million (349.7-361.8 million pounds) helped by an ongoing strong performance by the engineering and consulting services division. The shares fell by 3p to 1,123p.

Is Petrofac sales pipeline exceeding pressure guidelines as backlog builds up?

Mid Caps

Luxembourg based office solutions outfit Regus (RGU) increased revenues to 804.7 million pounds for the six months ended 30th June after the firm substantially invested in network expansion, with 194 new centres added during the period. Profits before tax fell from 31.1 million pounds in the first half of 2013 to 31 million pounds in the same period this year due to the rising value of sterling, which continues to worry management. The shares declined by 17.5p to 179p.

Cable & Wireless Communications (CWC) has acquired Panama-based IT services firm Group Sonitel for an initial consideration of $36 million (21.7 million pounds), with further conditional incentives based on the firm’s performance. The acquisition expands Cable & Wireless’ Business to Business capabilities across a number of Central American states. Several senior members of staff will remain will the business. The shares fell by 0.92p to 49.08p.

Transport group Stagecoach (SGC) has seen revenue growth across its operations over the period from 30th April to date, with particularly strong improvements in London bus operations after the firm acquired two new contracts. Bus services in the rest of the UK were one of the lower performing divisions, with recorded revenue growth of 4% largely being driven by individual fee paying customers rather than new commercial or school contracts. While management think that the current year will be difficult, they believe the firm is on track to satisfy expectations. The shares fell by 5.7p to 365.2p.

No stops for Stagecoach’s London bus business.

Small Caps

Copper, zinc and nickel explorer FinnAust Mining (FAM) acquired three new projects in Finland during the year ended 30th June as it continued to develop its existing assets and build a viable mining proposition. Management feel that it has been a productive year and hope that the drilling results from the Hammaslahti site show the commercial value of the firm’s portfolio. The shares ended the day flat at 2.875p.

Asia Ceramics Holding (ACHP) had sales of 5.19 million pounds over the six months ended 30th June, a 29.7% improvement over the firm’s performance in the same period last year. However, the company’s pre-tax loss deepened to 162 thousand pounds, from 49 thousand in the comparative period, which was principally due to a higher costs of sales. Management hope that improvements in the global economic climate will help the outfit to further increase revenues. The shares fell by 1p to 46.5p.

Embedded computer specialists Concurrent Technologies (CNC) increased revenues to 5.57 million pounds over the six months ended 30th June, as it released four new products. Profits before tax were stable at 0.4 million pounds due to increased R&D investments and the development of an engineering facility in the United States. The board believes that the resolution of past issues with UK export licensing and the expanded product range will lead to sound full year results. The shares dropped by 0.5p to 43.5p.

Oil & gas engineering business Plexus Holdings (POS) has announced that revenues for the year ended 30th June will be broadly in line with market expectations, with profits after taxation exceeding forecast levels. The company has started trading well in the current year with good momentum behind its Asian expansion strategy. Full results will be published in October. The shares rose by 10p to 266.125p.

Sylvania Platinum (SLP) increased revenues by 18% to $47.2 million (28.47 million pounds) over the year ended 30th June, as production exceeded expectations by rising 22% to 53,808 ounces. The firm’s South African operations were not directly affected by the five month long miners’ strike. However, the firm made a pre-tax loss of $2.9 million (1.75 million pounds) due to asset impairments and foreign exchange losses. The shares fell by 0.0625p to 6.2p.

Social media firm Audioboom (BOOM) posted revenues of 24,000 pounds for the five months to 31st May, but the company’s expansion has accelerated since its reverse takeover carried out in May, with numbers of both users and corporate clients rapidly expanding. The company raised 3.5 million pounds via share issue in March and it is currently using the funds to development of the Audioboo social media platform. The shares rose by 0.625p to 9p.

Will Audioboom raise the volume?

Thursday
Aug212014

Thursday's Stock Market report featuring Nighthawk, Premier Oil, WH Smith, Stratex and Fiske

The Markets

UK retail sales rose by 2.6% year-on-year in July according to figures from the Office for National Statistics. The numbers were only 0.1 percentage point higher than in June and below analysts’ expectations. The ONS said that the sector faced downward pressures on sales from fuel and non-store retail, and that prices had dropped by 0.9% after being stable during the prior month. The 1.3% drop in food spending was the first year-on-year decrease in the series’ history. Ian Geddes, Head of UK Retail at Deloitte, said that, “many consumers are yet to feel the benefits of the economic recovery and are reluctant to let go of their recessionary behaviours, particularly when shopping for food”.

The Treasury borrowed 239 million pounds in July, less than the 1,047 million pounds borrowed in July 2013. However, economists had expected there to be a small surplus to the order of around 50 million pounds. Ignoring cash transfers from the Bank of England, the Government has borrowed 37 billion pounds over the year to date, 1.8 billion more than at this point in the prior year. The Office for Budget Responsibility had predicted a drop in full year borrowing and Azad Zangana, European Economist at Schroders, commented that, “despite the very strong economy we are seeing, the government is really struggling to get the public finances under control”.

At the London close the Dow Jones had increased by 70.37 points to 17,049.50 and the Nasdaq had grown by 0.70 points to 4,041.41.

In London the FTSE 100 closed up by 17.47 points at 6,772.95 and the FTSE 250 rose by 81.50 points to 15,830.42. The FTSE All-Share had increased by 12.56 points to 3,618.89 while the FTSE AIM Index shrank by 0.37 points to 763.96.

Broker Notes

Engineering and design firm WS Atkins (ATK) has had its “hold” rating and 1,340p target price reiterated by N+1 Singer after stock prices in the sector have not risen in the way that the broker had anticipated following recent consolidation. N+1 Singer believe that Atkins is a credible takeover target, despite its status as the largest operator in the UK sector in terms of revenues and EBITDA, due to trading conditions in the UK becoming more difficult. The shares fell by 8p to 1,356p.

Panmure Gordon stuck to its “hold” rating and 600p target price for pharmaceuticals firm Immunodiagnostics (IDH) after the company’s automated immunoassay system was approved for sale in Chinese markets. The broker noted that the assays themselves also require approval and the firm’s Chinese partner has to begin manufacturing before it will be possible to reap any returns from the lucrative Chinese health market. Panmure said that it’s target price may be ambitious, given the firm’s aggressive forecasts and history of downgrades. The shares rose by 17p to 492p.

Oil & gas explorer and producer Nighthawk Energy (HAWK) has kept its “buy” rating and 16.5p target price from Westhouse Securities, despite a drop in production during July. The downturn was due to planned pressure buildup tests at two wells in the US, but this and further similar tests should have a positive effect on production over the lives of the wells. The company has also secured a new $35 million (21.1 million pound) loan facility on competitive terms. The shares grew by 0.75p to 10.25p.

Westhouse still keen on Nighthawk, despite production pressures

Blue Chips

On a quiet day for the blue chips Lloyds Banking Group (LLOY) appointed Alan Dickson, currently chairman of Willis Group’s risk committee, as a non-executive director with effect from 8th September. The firm’s chairman, Lord Blackwell, said that the company was “delighted to welcome Alan to the Board. Alan is a highly regarded retail and commercial banker having spent 37 years with the Royal Bank of Scotland, most notably as Chief Executive of RBS UK,and more recently as a Non-executive Director of Nationwide Building Society”. The shares rose by 0.1875p to 75.25p.

Lloyds not rolling the dice with new board member’s risk expertise

Mid Caps

Petroleum producer Premier Oil (PMO) produced an average of 64.9 barrels of oil a day in the six months to 30th June, an 11% increase over the same period of 2013 and ahead of previously issued guidance. Profit before tax rose to $172.7 million (104.15 million pounds) from $161.1 million (97.16 million pounds) in the first six months of last year. The company also expanded it’s reserves with a number of exploratory successes in Indonesia and Pakistan. The shares fell by 4.6p to 334.7p.

Copper-focused natural resources firm Kazakhmys (KAZ) recorded revenues of $1.28 billion (0.77 billion pounds) during the six months ended 30th June, an 18% fall from the same period last year due to reduced output at lower margin operations and the suspension of the Zhezkazgan smelter in the second half of 2013. The company’s pre-tax loss was $118 million (71.1 million pounds). The shares fell by 17.4p to 291.1p.

Retail chain WH Smith (SMWH) will publish results for the year ended 31st August in October and management have said that both the travel and retail businesses have remained highly cash generative over the period. The retail business has focused on improvement in gross margins as well as domestic and international store openings. Overall, results will meet market expectations. WH shares, which have almost doubled since the start of 2013, rose by 15p to 1,137p.

Good news from WH Smith

Small Caps

E-commerce platform developer Cloudbuy (CBUY) increased revenues by 7% to 1.46 million pounds over the six months ended 30th June. However, the firm’s loss worsened to 1.62 million pounds from 0.3 million pounds in the same period of 2013 due to increased planned investments in expanding the business. As a result of these investments and the firms partnership with Visa, Cloudbuy is entering a number of markets more quickly than expected and management believe that sales pipelines are developing well. The shares rose by 1p to 40p.

Exploration and development firm Stratex International (STI) had no revenues in the six months ended 30th June, but construction is underway at the Altintepe gold project and first production is expected in the current year. The company retains cash reserves of 7 million pounds and there have been encouraging test drilling results in a number of projects where Stratex holds a stake. Stratex shares rose by 0.025p to 2.875p.

Investment management and stock broking firm Fiske (FKE) had a disappointing second half to the year ended 31st May, with good first half profits before taxation of 239,000 pounds only leading to a full year pre-tax profit of 268,000 pounds. This was due to a number of one off expenses that have been accounted for entirely within the period. Management remain confident in both client growth and the strength of the firm’s investments. The shares fell by 0.37p to 763.96p.

Marketing outfit Tangent Communications (TNG) announced that group profits for the six months to 28th August will not meet market expectations due to poor performance in the firm’s digital arm, Tangent Snowball. Management now believe that operating profit for the 12 months ending February 2015 will be roughly the same as in the prior year. The company remains focuses on improving online sales and expects 10% sales growth this year, but agency sales may drop by as much as 20%. The shares fell by 1.6p to 7.64p.

Food and sport nutrition specialists Provexis (PXS) has continued to restructure itself over the year ended 31st March as it moves to primarily focus on licensing income. This is after the demerger of Sport in Science, which provided an initial rate of return of 25% to Provexis’ shareholders. Revenues from continuing operations fell to 4,000 pounds from 37,000 in the prior year, due to the terms of the firm’s licensing partnership, and the loss before taxation was reduced to 1.01 million pounds. The shares fell by 0.025p to 0.75p.

Business procurement services company Office2office (OFF) has reached an agreement with Evo Business Supplies regarding a recommended cash offer of 51 pence for shares in the firm, which values Office2office at 19.1 million pounds. The offer represents a premium of 84.6% over yesterday’s closing price, with the consideration being paid in cash. Controlling interests regarding 44.7% of the issued share capital have committed to the deal. The shares rose by 21.375p to 49p.

Office2Office offers upside as Evo offer now official

Wednesday
Aug202014

Wednesday's Stock Market report featuring Gem Diamonds, Antofagasta, Balfour Beatty, Robinson and EG Solutions 

The Markets

Two members of the Bank of England’s Monetary Policy Committee voted in favour of an increase in interest rates this month. The minutes of the committee’s August meeting show that 2 of the 9 person body voted to raise rates to 0.75%, making this the first time since 2011 that the monthly vote has not been unanimous. The dissenters said that the state of the economy justified an immediate rate rise, while the majority held the view that weak earnings growth and low inflation supported keeping rates at the current 0.5% level. James Knightley, UK Economist at ING, commented that, “in the absence of upside activity data shocks the majority will continue to opt for the status quo in the next few months. Indeed, it currently looks more likely to be February when we see the first rate rise than our current published forecast of November”.

Two thirds of new jobs created since 2008 are classed as self employed according to figures from the Office for National Statistics. The data show that 1.1 million new positions have been made, of which 732,000 are self employed. Notably, the number of people in this category over the age of 65 has doubled during the period. Structurally, these positions are focused in the construction and transport industries, and the overall level of self employment in the UK economy is the highest at any point in the last 14 years. Separate figures from the IPPR think tank published last week, showed the UK surging ahead of similar countries on this front, after having relatively low levels of self employment compared to the rest of Western Europe for many years..

At the London close the Dow Jones had increased by 36.15 points to 16,955.74 and the Nasdaq had grown by 2.79 points to 4,042.92.

In London the FTSE 100 closed down by 25.80 points at 6,753.51 and the FTSE 250 fell by 147.02 points to 15,748.24. The FTSE All-Share had decreased by 16.39 points to 3,604.95 while the FTSE AIM Index shrank by 0.91 points to 762.38.

Broker Notes

Web hosting and data centre provider Iomart (IOM) had its “hold” rating reiterated by N+1 Singer, with the target price increased from 282p to 300p. This comes after the company confirmed that it had received a possible offer from Host Europe regarding a takeover at a price of 300p per share. The CEO, Finance Director and Operations Director of Iomart control 18.5% of the firm’s shares and have indicated that they would accept the proposal. The broker feels that this support from within means that the deal is likely to proceed and have therefore increased the guideline price. The shares rose by 1.25p to 281p.

Panmure Gordon has maintained its “buy” rating and 33p target price for small business financial services provider Inspired Capital (INSC). The broker expects the company to quadruple its loan book to 200 million pounds by the end of 2016 if customer numbers increase in line with growth targets. Over the course of the current year, lending has increased by 28%, with 25% more customers on a year-on-year basis. The shares closed flat at 15.5p.

Lesotho and Botswanan focused mining firm Gem Diamonds (GEMD) has had “buy” ratings repeated by analysts from Westhouse Securities, FinnCap and Liberum Capital, with respective target prices of 235p, 261p and 190p. This was after the company published its results for the first half of 2014. Westhouse felt that the results were in line with expectations and that the company’s strong start to the year puts it in a good position to pay a maiden dividend. The shares rose by 14.25p to 222p.

Analysts say Gem Diamonds are an investor’s friend

Blue Chips

Natural resources group Glencore (GLEN) recorded a statutory profit before tax of $2.498 billion (1.5 billion pounds) for the six months ended 30th June, a major improvement from the $9.48 billion (5.71 billion pound) loss the firm made in the same period of 2013. Revenues increased by 1.8% to $114 billion (68.6 billion pounds), as increased volumes outweighed the effects of falling commodity prices and the worsening exchange rate environment. Management believe that commodity prices may begin to increase as the rate of supply growth has fallen from its peak. The shares grew by 1.5p to 360.5p.

Copper mining outfit Antofagasta (ANTO) has appointed Diego Hernandez as group CEO. Mr. Hernandez has been CEO of Antofagasta Minerals since 2012 and his promotion will take effect from the 1st of September. The company’s output fell over the first half of 2014 due to lower grade and a scheduled maintenance shut-downs at two of the firm’s mining sites. The shares rose by 1p to 819p.

Antofagasta dig out new CEO from subsidiary

Mid Caps

Hikma Pharmaceuticals (HIK) increased group revenues by 16% to $738 million (444 million pounds) in the 6 months ended 30th June, driven by strong performances in the injectables sector. Profits before taxation rose from $143 million (86 million pounds) in the first half to 2013 to $236 million (142 million pounds) this year, due to the increased revenue and profit margins. Management continue to expect full year revenue growth of around 5%, with the most of the progress coming from generic drugs and injectables. The shares fell by 112p to 1,692p.

Closed-ended investment company UK Commercial Property Trust (UKCM) has increased net asset value by 6.8% over the six months ended 30th June to 78.1p per share from 73.1p at 31st December. This was driven by a 6% increase in like-for-like capital value of the property portfolio. The NAV total return for the period was 10.1%, ahead of the IPD benchmark and in-line with the FTSE REITs Index. Management believe that the firm will be able to meet and outperform expectations in the current year. The shares dropped by 0.9p to 82.25p.

The board of infrastructure firm Balfour Beatty (BBY) have rejected Carillion’s (CLLN) latest merger terms on the grounds that they feel the proposed business plan is excessively risky and the continued demand that the sale of Parsons Brinckerhoff should be halted. After consultation with major shareholders, the board voted unanimously to reject the proposal and continues with the implementation of its standalone strategy, which it believes will allow the firm to take advantage of the recovery in the UK construction industry. Carillion announced in the afternoon that it will no longer be pursuing a merger at this time. Balfour Beatty shares fell by 17.1p to 238.9p and Carillion shares lost 6.7p to close at 330p.

Balfour Beatty to roll on alone

Small Caps

Back office software provider eg solutions (EGS) has won a major new contract with an existing client worth at least 1.2 million pounds, of which the company expects to recognise 0.63 million pounds in the current year. Management say that the firm has traded well during the beginning of the second half of the year and expect the market for the company’s offerings to expand during the period. Full results for the six months ended 31st July will be released in September and will be ahead of previous expectations. The shares rose by 17p to 71p.

Exploration and development firm Coal of Africa (CZA) has noted the announcement by the Shanghai-listed firm Beijing Haohua Energy Resource Co. that, through a subsidiary, it intends to acquire up to 215 million shares in Coal of Africa at a price of not more than 5.5p per share. The board confirmed that they are in talks with a number of parties to find additional funding, given that the company’s status as a going concern is under question as noted in the last set of published results. The shares fell by 0.095p to 2.84p.

Exploration outfit Chariot Oil & Gas (CHAR) has agreed to terms of a farm-out arrangement with AziLat for 4 of the company’s Brazilian blocks. AziLat will acquire a 25% working interest in the licenses and will pay 50% of the costs of the 3D seismic modelling and subsequent processing which will be carried out in 2015. Chariot will continue to act as operator and maintains a 75% interest. The shares fell by 1p to 15.25p.

Speciality pharmaceuticals manufacturer Clinigen (CLIN) has acquired the global rights to the oncology support therapy Etylol from AstraZeneca. The drug has FDA approval and generated revenues of $4.9 million (2.95 million pounds) in 2013. Under the agreement, Clinigen will immediately assume all distribution responsibilities and AstraZeneca will continue to manufacture the product while the licences and intellectual property are transferred. The share price increased by 45.5p to 446.75p.

Plastic and paper packaging producer Robinson (RBN) saw broadly flat revenues of 10.8 million pounds over the six months ended 30th June. This was despite a weak second quarter where the grocery and major brand divisions struggled due to competition from discounters. Gross margins have fallen as operating costs have increased and it has not been possible to pass them along to customers. Profits before taxation shrunk from 2.2 million pounds in the first half of 2013 to 0.3 million pounds this year, The shares fell by 22.5p to 202.5p.

Robinson not packing it in, despite disappointing results