Equity markets are steady as America goes to the polls to elect its next president. The Trader Dominic Picarda is still bullish on equities but cautions on trying to second guess when the next leg of the rally will be.
IC TIP UPDATES:
Highland Gold Mining (HGM) has issued positive drilling results from its Blagodatnoye prospect in eastern Russia. The company, which is part owned by billionaire Roman Abramovich, said drilling suggests the prospect holds the potential to be a ‘substantial’ near surface gold mine. We keep our buy rating.
The Spaniards East well in the North Sea, being drilled by Premier Oil (PMO), has failed to find any hydrocarbons. IC tips Parkmead Group (PGM), Serica Energy (SQZ) and Faroe Petroleum (FPM) all had exposure to this highly prospective well.
Packaging specialist DS Smith (SMDS) has announced a solid trading update with margins remaining in the 7-9 per cent bracket. Northern and western Europe has seen good demand although the UK has shown some weakness. Nonetheless management expect ‘substantial’ year on year EPS growth. We maintain our buy.
Costain (COST) has announced continued solid progress. During the first half of its financial year it won a landmark £288m contract with Magnox for nuclear work and its order book now stands at £2.4bn, 90 per cent of which is repeat business. Buy.
Outsourcer Mitie (MTO) has won a five year £100m contract with Sky. We keep our buy rating.
Sell recommendation Capital Shopping Centres Group (CSCG) has issued a reasonably resilient trading statement showing a second successive quarter of positive year on year footfall growth in its shopping centres and occupancy holding steady at 96 per cent.
KEY STORIES:
Despite stemming the decline in its sales over recent months Marks & Spencer (MKS) still posted a 10 per cent slide in first half pre-tax profit. The three months to 29 September saw flat like for like sales, which was an improvement on the 2.8 per cent decline of the previous quarter but chief executive Marc Bolland sounded a note of caution on recent unpredictable trading.
Property businesses London & Stamford (LSP) and Metric Property (METP) are proposing a merger which would see the former own three quarters of the enlarged business. Completion of the deal is also likely to mean a cash return to shareholders of both companies.
Associated British Foods (ABF) has announced a strong set of full year results with revenues 11 per cent better at £12.3bn and adjusted pre-tax profits up by 17 per cent to £1.08bn. The sugar and Primark clothing divisions were major contributors.
Morgan Sindall (MGNS) has announced a boardroom shakeup with chief executive Paul Smith departing as it continues a restructure of the business amid tough trading conditions.
Oil services business Petrofac (PFC) has signed a strategic alliance with Bowleven (BLVN) for the development of the Etinde prospect in Cameroon.
Support services giant G4S (GFS) delivered revenue growth of 6.9 per cent during the first nine months of the year but this includes the ill-fated Olympics security contract for which the group is taking a £50m hit.
Imagination Technologies (IMG) is to acquire fellow semiconductor design business MIPS Technologies for $60m.
OTHER COMPANY NEWS:
Pennon (PNN) subsidiary Viridor has signed a 25 year South London waste contract with four boroughs to treat 200,000 tonnes of waste a year.
Hilton Food Group (HFG) has continued to trade solidly in tough market conditions.
