2nd May 2014 11:00
LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices midday Friday.
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FTSE 100 - WINNERS
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InterContinental Hotels Group, up 8%. The company has reported that revenue per available room was up 6% in the first quarter and declared a USD750 million special dividend after completing two asset disposals during the period, in line with the firm's ongoing strategy to reduce the capital intensity of the business.
Royal Bank of Scotland Group, up 7.5%. The bank said first-quarter pretax profit doubled, helped by lower operating expenses and a significant reduction in impairment losses. It said first-quarter pretax profit increased to GBP1.64 billion from GBP826.0 million in the corresponding quarter a year earlier, even as total income decreased to GBP5.05 billion from GBP5.16 billion. Operating expenses were reduced to GBP3.19 billion from GBP3.38 billion, with RBS saying it remains on track to meet its target of cutting costs by GBP1.00 billion in 2015. Impairment losses fell to GBP362.0 million from GBP1.03 billion. Critically, the 81%-state-owned bank made no further provision for the payment protection insurance mis-selling scandal or for interest-rate hedging products compensation.
Lloyds Banking Group, up 0.9%. The group is once again among the biggest blue-chip risers after Societe Generale and Citigroup increased their respective price targets. Societe Generale raised its price target to 96.00 pence from 94.00p, while Citigroup lifted it to 83.00p from 82.00p. Lloyds ended the day as the biggest gainer in the FTSE 100 on Thursday after kicking off the banking sector's first quarter earnings season. It reported on Thursday that its pretax profit dropped by a third to GBP1.37 billion after last year was buoyed by gains on the sale of government securities. However, its underlying profit increased to GBP1.80 billion from GBP1.48 billion a year earlier, while it made better-than-expected progress on its net interest margin and its tier1 capital ratio.
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FTSE 100 - LOSERS
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Rexam, down 1.5%. The beverage can maker is a big faller despite saying its overall trading for 21014 so far has been in line with expectations. In an interim management statement for the period January 1 to date, the company said volumes of its standard and speciality cans were "quiet" at start to the year in Western Europe. "Having fled Plastic Packaging and become the focused Beverage Can business many observers had long demanded, this update provides the first opportunity to have a look at ‘new’ Rexam," said Jefferies analyst Sandy Morris.
WM Morrison, down 1.1%. Barclays has cut the food retailer to Underweight from Equal Weight, and lowered its price target to 180.00 pence from 210.00p. The supermarket unveiled a detailed turnaround plan in March and launched the first wave of its price cuts on Thursday. Barclays analyst James Anstead believes that the plan is "in many ways very sensible", but notes that it is "far from risk free". The analyst is "especially wary of the dangers of cutting the range by 20% and of the planned GBP500 million cut to the cost base." While the former threatens to alienate customers, the latter risks alienating staff, he says.
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FTSE 250 - WINNERS
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Rentokil Initial, up 3.5%. The pest control to facilities management company said pretax profit in the first quarter 2014 was ahead of the same period in 2013, but said revenue was held back by lower revenues from its Protect and Enhance business, particularity in Benelux, as expected. It said pretax profit in the first quarter 2014 amounted to GBP19.3 million compared with GBP10.6 million in the first quarter 2013. Restructuring and one-off costs for continuing operations were significantly lower during the period at GBP2.1 million, versus GBP5.1 million a year earlier, contributing to the increase in profit. Revenue fell to GBP412.3 million in the first quarter 2014 compared with GBP644.8 million a year earlier, reflecting the disposal of Initial Facilities.
Capital & Counties Properties, up 3%. The property investment and development company said it has made a "positive" start to the year after launching its new residential development in Fulham, London. In an interim management statement for the period January 1 to date, the London-focused company said over 200 flats have now been reserved or exchanged as part of the first phase of its Lillie Square development. Once completed, Lillie Square will be one of the largest residential developments in London, transforming what is currently a 7.5 acre car park on Seagrave Road into 808 high-end homes set around a new garden square. Capco also said its Covent Garden estate continues to be attractive to tenants, with leasing transactions completed at 3.6% above December's estimated rental value.
Dechra Pharmaceuticals, up 2.2%. The company has received approvals in the US and UK for one of its products for horses, and marketing approval to re-launch a product in the US. It received approval from the US Food and Drug Administration and the UK Veterinary Medicines Directorate for its product Osphos, used to treat navicular syndrome in horses. It also received marketing approval for the re-launch of sterile ophthalmic treatments Vetropolycin and Vetropolycin HC in the US, after they were transferred into a new manufacturing site.
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FTSE 250 - LOSERS
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Ladbrokes, down 1.2%. Jefferies has lowered Ladbrokes' price target to 150.00 pence from 170.00p, saying that the betting company is "tradable", but not "investible", following the rise in gaming machines duty to 25% from 20%, announced at UK Chancellor of the Exchequer George Osborne's budget in March. "Despite the publication of the UK government's 'Gambling Protection & Controls' paper providing some near-term relief, lack of clarity around future taxes and the ad-hoc nature of this latest tax grab undermines longer-term confidence in the UK-facing gaming sector," says Ian Rennardson, an analyst at Jefferies.
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AIM ALL-SHARE - WINNERS
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Falcon Oil & Gas, up 29%. The exploration and development oil and gas company has announced that its 98% subsidiary, Falcon Oil & Gas Australia Limited has signed "transformational" agreements for its exploration permits in the Beetaloo Basin in Australia. Falcon said that its Australian firm has executed definitive agreements including a farm-out agreement and joint operating agreements with Origin Energy Resources Limited, a subsidiary of Origin Energy Limited, and Sasol Petroleum Australia Limited, a subsidiary of Sasol Limited, for each to farm into 35% of Falcon's exploration permits in the Beetaloo Basin, Australia. The agreements are subject to conditions inter alia government, statutory authority consents and relevant Stock Exchange approvals, said the company.
Premier African Minerals, up 20%. PREM has negotiated an interest-free USD2.5 million bridge loan from Circum Minerals Ltd, which will allow it to exercise its option to acquire AgriMinco Corp's interest in the Danakil Potash project. Premier African holds a 42% interest in AgriMinco, which has a 30% stake in the Danakil project. Circum Minerals holds the other 70% stake. The option strike price is CAD4.9 million and would comprise the settlement of up to CAD1.5 million of AgriMinco’s debts, the issue of CAD1.0 million of PREM shares to AgriMinco, and the cancellation of PREM’s interest in AgriMinco. PREM has granted Circum an option, valid until June 5, to acquire the 30% interest in the project from Premier African for the USD2.5 million that it lent, plus new Circum shares and further deferred consideration payable in either cash or Circum shares, "that is anticipated, in aggregate, to be no less than the consideration paid by PREM to AgriMinco," PREM said.
Rose Petroleum, up 9.7%. The natural resources company has drawn attention to the first-quarter earnings of MDU Resources Group, in which the company said the Paradox Basin in Utah is MDU's "fastest growing" oil producing area. Rose Petroleum recently acquired three-quarters of the working interest in 195,000 acres of the basin and an equal interest in one shut-in well. According to MDU Resources' statement, the Paradox Basin's status as its fastest growing producing area is backed up by first-quarter production more than doubling. Rose Petroleum Chief Executive Mattew Idiens said, "MDU's update reaffirms what we firmly consider to be one of the most exciting oil exploration plays onshore USA."
Trakm8, up 6.5%. The telematics hardware and software company has been appointed as FTSE 250-listed Direct Line Insurance Group's sole telematics supplier of self-install devices for the insurer's DrivePlus Plug-in device. The partnership confirms the significant hardware order Trakm8 reported on January 13. Telematics devices are fitted to cars and collect data on how well they are driven so that insurers can personalise insurance.
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AIM ALL-SHARE - LOSERS
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Redhall Group, off 13%. The specialist engineering support services group said it is trading in line with expectations but said further delays are being experienced converting major opportunities into contract awards. It said it now expects these delays to result in a deterioration in its performance to a level below current market expectations, but not materially so. It still expects to report growth in revenue and underlying profitability in the year to September 2014. The company also said Finance Director Chris Lewis-Jones has stepped down with immediate effect. Redhall has appointed former Town Centre Securities Finance Director Chris Kelly as interim finance director.
SolGold, down 11%. The gold exploration company has terminated Hole 6 at its Cascabel copper-gold porphyry project in northern Ecuador at a depth of 1,401.5 metres. It said it is "clear" that Hole 6 drilled on the margins and to the east of the central zone. Shore Capital analyst Yuen Low said that the hole represents "an expensive disappointment", illustrating the "difficulties and costs associated with exploring such a deep deposit."
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By James Kemp; [email protected]; @jamespkemp
Copyright 2014 Alliance News Limited. All Rights Reserved.
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