1st Aug 2014 10:36
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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Smith & Nephew, up 1.5%. The medical devices company has raised its interim dividend and reiterated confidence in its outlook for the full year, even though pretax profit declined in the second quarter to June 28 due to costs related to its acquisition of ArthroCare Corp in May. It proposed an interim dividend of 11.0 cents, up from 10.4 cents in the previous year. Smith & Nephew posted a pretax profit of USD128 million in the quarter, down from USD188 million a year earlier, despite seeing revenue rise to USD1.15 billion from USD1.07 billion. It was hit by acquisition costs of USD55 million, and USD30 million in amortisation. In the half year, the company posted a pretax profit of USD349 million, down from USD392 million, even as revenue rose to USD2.22 billion from USD2.15 billion.
Rexam, up 0.8%. The world's largest drinks can maker said its half-year results were in line with expectations, despite reporting a marginal decline in revenue and pretax profit as good volume growth was offset by sterling's strength and metal premium costs reaching an all-time-high. It said its revenue in the half-year to end-June fell to GBP1.90 billion ,from GBP2.0 billion last year, while pretax profit declined to GBP166 million, down from the GBP169 million posted in the corresponding period of 2013. While a GBP3 million decline in pretax profit may not look impressive, in the face of an adverse foreign exchange hit of GBP20 million, a significant headwind from an elevated metal premium, and what Jefferies analyst Sandy Morris calls a "scratchy" trading backdrop in many markets, Rexam's results are "not bad at all," says Morris.
BG Group, up 0.7%. The natural gas company is the third of just three risers in the blue-chip index, even though it said notice has been given by one of the unions representing workers at the Queensland Curtis Liquefied Natural Gas project that it will take protected industrial action later this month. The Construction, Forestry, Mining And Energy Union, one of four unions representing workers at the plant on Curtis Island, Queensland, Australia, said it would take the action on August 7. The news comes after the company released a trading update on Thursday, which revealed that its pretax profit soared in its second quarter due to strong performance at its liquefied natural gas division, allowing the company to increase its interim dividend by 10%.
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FTSE 100 - LOSERS
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Schroders, down 3.4%. The asset manager is once again among the heaviest fallers in the blue-chip index, having ended the day as the biggest loser in the FTSE 100 Thursday. Shares in the company fell 4.4% Thursday, even though its first-half pretax profit increased to GBP233.9 million, from GBP221.7 million, and the asset manager hiked its dividend payout by 50% to 24.0 pence per share. However, while the dividend rise was a positive surprise, analysts were less impressed by the outlook on asset flows. Group net inflows were GBP4.8 billion in the first half, which looks light when compared to Liberum Capital's full year forecast for GBP14.4 billion.
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FTSE 250 - WINNERS
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Direct Line Insurance Group, up 3.7%. The insurer's shares have jumped after the company surprised investors with a special dividend, announced along with its interim results that were also ahead of the consensus expectation. It said it made a GBP225.1 million pretax profit in the six months to end-June, compared with GBP208.8 million in the corresponding period last year. While the group's operating profit from ongoing operations fell to GBP249.1 million, from GBP286.6 million, this was still above the consensus forecast of GBP231 million, brokerage Shore Capital says. It increased its interim dividend by 4.8% to 4.4 pence and said it will pay a 10.0 pence special dividend to shareholders.
UBM, up 0.2%. The events marketing and communications services business said it remains on track to meet expectations for the full year and raised its interim dividend, as profit in the half year to end-June was boosted by an exceptional gain, offsetting a decline in revenue caused by the strength of sterling. In the six months to end-June, the company posted a pretax profit of GBP82.5 million, up from GBP40.5 million in the previous year, despite revenue declining to GBP361.0 million from GBP391.8 million. It was boosted by a GBP20.8 million contribution from its share in a joint venture. UBM said that the decline in revenue was due to the strength of sterling, which knocked off GBP31.7 million. On a constant currency basis, revenue was up 0.3%, it said. It proposed an interim dividend of 6.8 pence, up from 6.7 pence.
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FTSE 250 - LOSERS
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Man Group, down 5.1%. The investment manager is a big faller, even though it reported USD800.0 million of net inflows in the second quarter, which combined with a USD1.4 billion positive investment movement to help send funds under management up by USD2.7 billion to USD57.7 billion at the end of June. Its funds under management were also buoyed by sales of USD5.9 billion, outweighing USD5.1 billion of redemptions over the the three-month period. Over the first six months of the year as a whole, Man Group's funds under management increased by 7%. The figures were published within half year results showing a USD106.0 million pretax profit, compared with USD122.0 million in the corresponding period last year. Revenue fell to USD500.0 million, from USD619.0 million, as a USD130.0 million fall in gross management and other fees to USD399.0 million more than offset an USD11.0 million increase in performance fees.
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AIM ALL-SHARE - WINNERS
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Renewable Energy Holdings, up 55%. The company said the Planning Inspectorate has received an Order Granting Development Consent application from Mynydd y Gwynt Ltd for the Mynydd y Gwynt Wind Farm. Renewable Energy Holdings said the Planning Inspectorate will now assess the application and has 28 days to decide if the application meets the required standards for acceptance. The Mynydd y Gwynt application involves 27 wind turbines of 3-3.3 megawatts each, giving an overall capacity of 81-89.1 megawatts.
Northcote Energy, up 12%. Northcote and London-listed MX Oil have announced a strategic agreement giving Northcote access to the Mexican oil and gas market. Under the three-year deal, Northcote will continue providing advice, introductions and support to MX, the Mexico-focused oil and gas firm formerly known as Astar Minerals. In exchange, Northcote will win the right to participate with MX as a partner on exploration, drilling, development or production of its oil and gas projects in Mexico. It will be able to participate in the projects to an interest of up to 20%. In addition, it will be awarded warrants, subject to MX shareholder approval, which it can vest on the date that MX enters into any exploration, development or production agreements in Mexico. Northcote will also get the right to appoint a director to the board of MX Oil. MX Oil's shares are quoted up 2.3%.
Sula Iron & Gold, up 4.9%. The iron ore and gold exploration and development company said that results from the final three batches of its direct shipping ore drilling programme at its Ferensola project in Sierra Leone support the presence of a well-defined iron oxide cap. It said that SRK Consulting (UK) Ltd has begun work on the direct shipping ore mineral resource estimate at the mine. Sula said it has now received all assay results from the drill programme. The main purpose of the campaign was to estimate an inferred mineral resource for the banded iron formation at the project, when used in combination with the company's 2013 drilling campaign.
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AIM ALL-SHARE - LOSERS
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Eco City Vehicles, off 35%. The developer and supplier of the London licensed Mercedes Vito taxi has blamed taxi booking app Uber and London Mayor Boris Johnson for causing its market to remain challenging in the first half of the year. It said its revenue in the six months to end-June declined by 33% to GBP11.14 million, down from GBP17.0 million a year earlier, as new Vito taxi sales declined to only 139 vehicles, compared with 299 in the first-half of last year. It said the Vito's share of the new London licensed taxi market fell to 24%, from 44% a year earlier. "Trading has remained challenging mainly due to uncertainty caused in the London licensed taxi trade by the emergence of Uber as well as the Mayor of London's proposed introduction of zero emissions standards from 2018," the company said.
Avacta Group, down 12%. The life sciences company's shares dropped sharply after it said its in-clinic diagnostic device Sensipod has been further delayed and the performance of its Optim product in North America was below expectations. It said revenue for the year to July 31 was up 18% to GBP3.2 million, from GBP2.7 million a year earlier, and said earnings before interest, tax, depreciation and amortisation is expected to be in line with market expectations. However, despite posting a 7% rise in revenue for its reference laboratory services and diagnostic kits business, it said progress on the Sensipod device has been further delayed. Sales of Optim, the firm's protein stability analysis tool, were in line with expectations in Europe and Japan but underperformed in its key North American market. Owing to the problems, Avacta's Avacta Analytical unit has altered its strategy in the market, with its current commercial partner becoming a non-exclusive distributor. It warned the change in strategy is likely to further slow sales in North America.
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By James Kemp; [email protected]; @jamespkemp
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