8th Dec 2016 10:33
LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Thursday.
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FTSE 100 - WINNERS
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WPP, up 2.2%. The advertising group was upgraded to Buy from Hold by Jefferies. The stock had lost 2.8% on Wednesday, after the Wall Street Journal reported that the US Justice Department is investigating whether ad agencies are manipulating the bidding process for commercial contracts.
TUI Group, up 2.1%. The travel operator underlying earnings outpaced its previous guidance in its recently completed financial year, and it anticipates further growth in the coming year. The Thomson and First Choice holiday brands parent, said it made underlying earnings before interest, tax and amortisation of EUR1.00 billion in the year to the end of September, up 5.0% but rising 15% in constant currencies, ahead of the 12% to 13% growth guidance the company had given in its post-close statement in September. Revenue slipped 1.9% to EUR17.19 billion from EUR17.52 billion a year before, due to the weak pound against the euro. In constant currencies, revenue rose 1.4%. TUI declared a total dividend for the year of 63.00 euro cents per share, up 13% on the 56.00 cents it paid out a year prior.
RELX, up 1.6%. The Anglo-Dutch business information and events group said it will launch a non-discretionary share buyback programme in the first two months of 2017. RELX said that, now it has completed its GBP700.0 million buyback programme for 2016, it will implement a further programme to buy back up to GBP100.0 million in new shares between January 1 and February 23, when RELX will publish its 2016 annual results.
Intertek Group, up 1.6%. The assurance, testing, inspection and certification services provider was raised by HSBC to Hold from Reduce.
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FTSE 100 - LOSERS
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Capita Group, down 8.0%. The outsourcer cut its profit forecast for 2016 again, as it outlined plans for a sale of some of its businesses in an attempt to combat difficult market conditions that it now expects to continue into 2017. In a pre-close trading update, Capita said it now expects 2016 profit to be GBP515.0 million, lowered from previous guidance of GBP535.0 million to GBP555.0 million, due to a slowdown in client spend and issues in its IT Enterprise Services division. Capita forecast revenue of around GBP4.80 billion for 2016. The downgraded profit forecast comes after Capita already cut its profit expectations in September. "Shareholders in Capita have been left holding the FTSE wooden spoon after its 2016 pre-close trading update included an unwelcome early Christmas present; another full-year profits warning," said Mike van Dulken, head of research at Accendo Markets.
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FTSE 250 - WINNERS
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Berendsen, up 5.7%. The textile service business was upgraded to Buy from Hold by HSBC.
DS Smith, up 3.9%. The recycled packaging firm reported substantial growth in profit and revenue for the first half of its financial year, buoyed by acquisitions and good organic volume growth. The company said it made a pretax profit of GBP146.0 million in the half-year to the end of October, up 60% from the GBP91.0 million reported a year before. This was helped by the weakness of the pound against the euro, with constant currency pretax profit rising 32%, but also by the contribution from acquisitions. The group declared an interim dividend of 4.60 pence per share, up 15% year-on-year.
Aggreko, up 2.9%. HSBC raised the temporary power provider to Hold from Reduce.
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FTSE 250 - LOSERS
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Sports Direct International, down 9.0%. The sportswear and sporting goods retailer reported a fall in interim profit due to provisions and a weaker gross margin and said it expects these issues will continue to hamper its financial performance in the medium term. The company said it made a pretax profit of GBP140.2 million in the 26 weeks to October 23, down 25% from the GBP187.3 million made a year before. Revenue rose to GBP1.64 billion from GBP1.43 billion, up 14% and by 4.2% in constant currencies, but gross margin sunk 450 basis points to 40.4% from 44.9% a year before, hit by the devaluation of the pound. The retailer sources many of the goods it sells from overseas.
William Hill, down 8.4%, Ladbrokes Coral Group, down 7.4%. The Times reported that a group of UK members of Parliament are set to publish the findings of a six-month inquiry into fixed-odds betting terminals, with expectations they will call for stricter controls. The suggestion of an imminent crackdown on the machines hit shares in the two bookmakers. The pair have the largest high-street bookie estates in Britain and so would be hit hard by stricter controls on the betting terminals. The cross-party parliamentary group sees a case to cut the maximum stake allowed on the machines to GBP100 per spin and to slow the speed at which customers can make bets, currently once every 20 seconds, the newspaper said.
Restaurant Group, down 4.9%. Deutsche Bank started coverage on the Frankie & Benny's, Chiquito and Garfunkel's restaurants parent with a Sell rating, citing weakness in a competitive market. "We remain concerned that the core Restaurant Group format, Frankie & Benny’s, will continue to struggle as the market moves from being competitive due to increased supply, to competitive from lower consumer spending. Further earning downgrades and sites closures are possible," the German bank said.
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MAIN MARKET AND AIM - WINNERS
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ServicePower Technologies, up 31% at 5.43 pence. The workforce management software firm said it has agreed to be acquired by private equity firm Diversis Capital for GBP13.7 million. Diversis will pay 6.00p per share for ServicePower, more than double the 2.62p closing price of ServicePower on November 21, the day prior to the pair having first disclosed they were in talks. ServicePower's board said it will unanimously recommend the offer, which has 45.68% acceptances already.
Nostra Terra Oil & Gas Co, up 27%. The oil and gas company said it has received an additional USD600,000 from the sale of its interest in the Chisholm Trail prospect in the US state of Oklahoma. Nostra Terra sold its interest in the area for USD2.1 million in a deal completed in August, selling to Staghorn Petroleum. But on Thursday, Nostra Terra said it has received USD2.7 million for the stake, due to an adjustment made for an interest in a further well at the project and associated mineral rights which had not been included in the original list of assets that Staghorn had bought.
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MAIN MARKET AND AIM - LOSERS
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Novae Group, down 19%. The insurer said increased losses in the second half mean its underwriting profit is likely to be lower than previous expectations. Novae said that in the second half of 2016 it has seen a "continued prevalence of larger individual risk and catastrophe losses". The company said that while its attritional loss ratio has remained steady, the impact of larger individual risk losses "means that underwriting contribution for the year is likely to be lower than our prior expectations". Novae forecast its overall combined ratio, a key measure of profit for underwriters, to be within 98% and 100% for 2016 as a whole. The further below 100% the ratio is, the more profitable the underwriting business.
Surface Transforms, down 5.7%. The ceramic brakes maker said revenue for the first half of the year dropped by more than half, although the company said it still expects full year sales "broadly similar" to the prior year. Surface Transforms, reported that for the six months to November 30, its revenue was GBP327,000, down by over 50% from GBP782,000 the prior year. Surface Transforms said the biggest change was that it made no sales to race car customers in the six months, having made GBP337,000 sales to such customers in the comparable period, and no aerospace development revenue, worth GBP111,000 in the same period in 2015. Surface Transforms said it expects its full year sales and gross margin to be broadly similar to the prior year, but increased overheads mean its losses will be higher.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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