28th Sep 2016 09:43
LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Wednesday.
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FTSE 100 - WINNERS
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Smiths Group, up 2.0%. The engineering firm, which runs oil services, medical devices and detection sensor businesses, said pretax profit fell in its recent financial year to the end of July amid a margin squeeze on its John Crane oil services business and said it anticipates a broad continuation of the same trends in its current financial year. The group also outlined plans to invest in its business in order to boost productivity and improve execution and said it expects its results in the current financial year will get a boost if sterling continues to trade at present levels against the US dollar. The group said its pretax profit for the year to July 31 declined 2.0% to GBP451.0 million from GBP459.0 million a year prior. The group's operating margin narrowed to 17.3% from 17.6% the year before, due to oil-sector challenges faced by John Crane, which offset margin expansion in the Medical, Detection and Interconnect businesses.
TUI Group, up 1.8%. The travel operator said the summer 2016 holiday season is closing as expected, while winter 2016/17 also is trading in line with expectations, ahead of the close of its financial year. TUI said the summer 2016 season is 97% sold to date, with revenue and bookings up 1% year-on-year, driven by a strong performance in the UK business, where revenue and bookings are up 5%. Trading for the winter 2016/17 season is in line with the company's expectations as well, TUI said, with revenue up 11% on this time last year and bookings up 5%. TUI said this was driven in particular by UK long-haul growth.
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FTSE 100 - LOSERS
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J Sainsbury, down 3.4%. The supermarket chain reported a fall in sales in the second quarter of its financial year, but said sales rose at Argos digital and catalogue stores, which Sainsbury's bought earlier this year. The group said total retail sales in the 16 weeks ended September 24 fell by 0.4% year-on-year excluding fuel, while they were flat including fuel. Like-for-like retail sales declined by 1.1% excluding fuel and by 0.5% including fuel. Sainsbury's said its results were hit by continuing deflation in UK food prices, but noted that it achieved like-for-like transaction growth and volume growth. As such, Shore Capital put its forecasts and recommendation on J Sainsbury under review saying, "we feel the need to be reasonably cautious on our profit expectations for Sainsbury's core business in the near-term."
Shire, down 0.3%. HSBC downgraded the Irish pharmaceutical company to Hold from Buy.
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FTSE 250 - WINNERS
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Kennedy Wilson Europe Real Estate, up 4.0%. The property investment firm launched a programme to buy back and cancel GBP100.0 million worth of shares as part of its strategy to build balance sheet strength, improve capital efficiency and ensure it has enough liquidity. The company said the buyback programme will be launched immediately and executed on the authorisation from shareholders at a meeting back in April this year. J&E Davy will managed the programme during the company;s close period starting on October 5, it said. "The share buyback programme is part of our ongoing commitment to balance sheet management and capital efficiency," said President and Chief Executive Mary Ricks.
PZ Cussons, up 3.4%. The personal care products supplier said it performed in line with expectations in the period from June 1 to September 27. In Africa, performance across personal care, home care, electricals and food and nutrition was robust in Nigeria. PZ Cussons added that its brand portfolio with product offerings at all price points is working well "in an environment where the consumer is under significant inflationary pressure".
Petrofac, up 3.3%. Goldman Sachs raised the oilfield services company to Buy from Neutral.
Phoenix Group Holdings, up 3.3% at 866.00p. The life and pension funds manager said as part of its GBP935.0 million acquisition of the Abbey Life insurance business from Deutsche Bank it will be conducting a GBP735.0 million rights issue. The rights issue will offer 7 new shares at 508p each for every 12 existing Phoenix shares. Dealings in the rights issue shares are expected to start in the second half of October 2016, subject to shareholder approval of the acquisition and issue. If the acquisition is not completed before its long-stop date of March 28, Phoenix said it intends to retain the net proceeds of the rights issue for use within the next 12 months on alternative acquisitions. The deal will bring in approximately GBP10.0 billion in assets, which Phoenix estimates will generate GBP500.0 million in aggregate cashflows between 2016 and 2020 and GBP1.10 billion in aggregate from 2021 onwards.
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FTSE 250 - LOSERS
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Tritax Big Box REIT, down 5.0% at 136.49p. The big box warehouse and self-storage investor announced plans to raise GBP150.0 million via a share placing, open offer and subscription to finance near-term acquisition opportunities. Tritax said a total of 113.6 million shares will be issued in the placing at 132.00 pence per share, a 7.1% discount to its closing price of 143.60p on Tuesday. Tritax said its manager, Tritax Management, is holding "detailed discussions" with the owners of potential investment assets which meet the fund's criteria and which will be available to buy in the near-term. They include two assets in the Midlands and one in the South East of England. One of the Midlands assets would cost GBP80.0 million, the other GBP35.0 million, and the assets in the South East would cost GBP60.0 million, the company said.
ICAP, down 2.9%. The interdealer broker was downgraded to Neutral from Buy by Citigroup.
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MAIN MARKET AND AIM - WINNERS
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UK Mail Group, up 43% at 440.28p. The postal service operator said it has agreed to the terms of a cash offer from German postal group Deutsche Post to acquire its entire business. Deutsche Post is ready to pay GBP242.7 million for UK Mail, translating to 440p a share, assuming an interim dividend of 5.5p per UK Mail share. UK Mail said the price represents a premium of approximately 43% on UK Mail's average share price of 307.2p for the three month period up to September 27. UK Mail is recommending the offer to its shareholders and Deutsche Post has already secured undertakings to vote for the deal in respect to 60% of UK Mail shares. Cantor Fitzgerald sees no stumbling blocks to the takeover or any counter offers. "We believe that Deutsche Post wants to rebuild its UK express parcel network using UK Mail, and it probably views UK Mail's new automated Coventry hub as a key asset with which to do this," the broker said. Shares in competitor Royal Mail were down 2.0%.
easyHotel, up 11% at 93.50p. The budget hotel chain said it has raised GBP38.0 million through the placing of 38 million shares at 100p each. easyHotel will use the proceeds to fund its owned hotel roll-out strategy, for which it has a pipeline of 2,437 owned hotel rooms. It also has a pipeline of 2,075 franchise hotel rooms, and expects investment in its hotel pipeline to be materially earnings per share enhancing in the medium term. "With more opportunities available than had been expected, and over 4,500 rooms committed or identified in the owned and franchise development pipeline, the proceeds of the placing will primarily be used to fund the continuation of our owned hotel roll-out to deliver enhanced financial returns," Chief Executive Guy Parsons said in a statement.
Clinigen Group, up 7.9%. The pharmaceutical and healthcare services group reported an acquisition-driven surge in profit and revenue for the year to the end of June. Clinigen reported its pretax profit nearly-doubled in the year to the end of June, up to GBP15.9 million from GBP8.3 million a year prior, as revenue increased 84% to GBP339.9 million from GBP184.4 million. Profit and revenue were both boost substantially by contributions made by ethical unlicensed medicine supplier Idis and Australian pharmaceutical and medical technology business Link Healthcare, two acquisitions Clinigen made and which have now been substantially integrated. Those two acquisitions drove revenue and profit surging higher in Clinigen's Global Access and Managed Access units, though its Specialty Pharmaceuticals and Clinical Trial Services units also performed well.
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MAIN MARKET AND AIM - LOSERS
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ZincOx Resources, down 31%. The zinc miner revealed it has one month to complete a reverse takeover to prevent its shares being suspended and that its loss in the first half swelled significantly. ZincOx has been classed as a cash shell under AIM rules following the company's decision to lower its interest in its principal asset, a metal recycling plant in South Korea, meaning it has to conduct a reverse takeover before the end of October to avoid shares being suspended from AIM. If suspended, ZincOx would have six months to get them reinstated before they are cancelled permanently from trading. ZincOx also reported a pretax loss for the first six months of 2016 amounting to USD5.2 million compared to the loss of USD2.2 million a year earlier. That loss was despite a rise in revenue to USD604,000 from USD292,000 and a turn to a gross profit of USD91,000 from a USD33,000 loss.
Aquatic Foods Group, down 20%. The Chinese marine foods and seafood processor reported a fall in profit in the first half of 2016 and cut its dividend, on challenging conditions and slowing economic growth in China. The group said its pretax profit in the six months to the end of June more than halved to CNY49.4 million from CNY101.5 million in the first half of 2015, as revenue fell to CNY419.0 million from CNY444.0 million, and operating expenses rose to CNY5.3 million from CNY81,000. Aquatic Foods said operations in the first half were "subdued", which it blamed on a continuing challenging business environment caused by the slowdown of economic growth in China, as well as unfavourable movements in foreign exchange rates and a highly competitive marketplace.
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By Arvind Bhunjun; [email protected]; @ArvindBhunjun
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