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News & Tips: Melrose, Parkmead Group, Ultra Electronics, Stratex International, IMI, Rotork, Albemarle & Bond & more

Today's market overview

Equities are suffering another day of selling but, as The Trader Dominic Picarda points out, it has taken two months of erratic performance to sell off less than 4.5 per cent, suggesting this is a bull market correction.

Parkmead Group ( PMG ) has issued final results detailing the recent progress made building up its operations. It has made four acquisitions in the past seven months and has reserves of 25m barrels already with the potential for growth through exploration. We keep our buy.

Engineering conglomerate Melrose ( MRO ) has said that trading is in line with expectations but there has been some softness in recent weeks. Year to date revenue growth in Melrose companies outside of the recent Elster acquisition is 8 per cent but the overall rate of weekly order intake at the moment is 8 per cent lower now than during the first half.

Ultra Electronics ( ULE ) has admitted that the prospect of sequestration in the US is affecting its end markets in defence but it expects full year performance to be broadly in line with 2011 levels.

Industrial property investor Hansteen Holdings ( HSTN ) has announced interim results confirming it made £26.4m of acquisitions in the half year and has now made £250m of acquisitions since a fundraising in April 2011. We keep our buy.

Life insurance business Chesnara ( CSN ) has announced a rise in European Embedded Value from £294.5m to £305.8m since December 2011. Profits on an IFRS basis for the nine months to September came in at £20.1m compared with a loss of £8.9m last year. We maintain our buy rating.

MJ Gleeson ( GLE ) has updated on a strong trading period for the housebuilder and construction specialist in which total sales are running 42 per cent ahead of last year. Buy.

Stratex International ( STI ) and its partner in the Inlice gold project in Turkey have agreed to seek a sale of the project.

KEY STORIES:

Support services giant Serco ( SRP ) has reported a solid first half trading period with softness in US markets being offset by decent demand elsewhere. The company has won £5.6bn worth of contracts so far this year and has an order book worth £19.4bn.

Salamander Energy ( SMDR ) has continued its investment in the Bualuang oil field offshore Thailand and expects to report average daily production of between 10,500 and 11,500 barrels a day for the year. Current production is running at 11,700 barrels.

Several engineers have issued trading statements today, starting with IMI ( IMI ) which has reported resilient performance in the period from 1 July to 15 November with reported revenues ahead by 5 per cent.

Bodycote ( BOY ) has grown revenues by 2.9 per cent in the same time period, with strong growth in its aerospace, defence and energy business offsetting a 5.2 per cent decline in its automotive business.

Rotork ( ROR ) has enjoyed a strong period of trading with third quarter order intake at record levels, up 24.9 per cent on last year, and third quarter revenues up by 9.9 per cent. Its order book of £190.8m is 16.5 per cent ahead of last year.

Pawnbroker Albemarle & Bond ( ABM ) has announced decent trading performance, with its pledge book up by 5.3 per cent at the end of October. But the exceptionally strong gold buying performance of last year is not being repeated.

Weather issues have affected the performance of New Britain Palm Oil ( NBPO ) in the opening nine months of this year with the amount of fresh fruit bunches processed down by 5.9 per cent, resulting in lower production of palm oil and a fall in sales revenues. A falling crude palm oil price has not helped either, it is down from $1,055 a tonne at the beginning of the year to $800 now.

Bookmaker Paddy Power ( PAP ) has grown revenues by 23 per cent in the period from 1 July, with a particularly strong performance from its Australian operations.

OTHER COMPANY NEWS:

Brammer ( BRAM ) has announced that it is trading resiliently in the face of tough market conditions in Europe in particular.

Carpets and floor coverings specialist Headlam ( HEAD ) has increased its revenues by 3.8 per cent in the ten months to 31 October with a good performance in the UK offsetting tough trading in Europe.

READ MORE...

Read today's press headlines and share tips.

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By Graeme Davies,
16 November 2012

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