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News & Tips: Halfords, Genel Energy, Compass Group, DMGT, Vialogy, Imagination Technologies, Gemfields & more

Today's market overview

Equities have pared back a little on news of a failure to agree further lending for Greece overnight, but The Trader Dominic Picard is encouraged by the strength shown since the beginning of this week.

IC TIP UPDATES:

Halford Group’s ( HFD ) half year results show a significant improvement in performance in the second quarter of the year after a tough opening three months. The second quarter was boosted by the ‘summer of sport’ which saw a surge in demand for cycling products in particular. Overall total group revenue edged ahead by 0.4 per cent, boosted by strong performance in autocentres. Profits dipped by 23 per cent as performance at the larger retail business suffered from its poor start to the period.

Sticking with the high street, buy recommendationJD Sports Fashion ( JD .) has continued its resilient performance with overall like for like growth of 1.5 per cent in the 16 weeks to 17 November. The sports business, up by 3.5 per cent, is holding up well whilst the fashion fascias saw sales dip by 6.6 per cent.

Genel Energy ( GENL ) has secured the rights to the Mir Left oil exploration block offshore Morocco. We maintain our buy.

Caterer and support services business Compass Group ( CPG ) has posted strong figures for the year to September with revenues up by 8 per cent and pre-tax profits 7 per cent better at £1.09bn. North America and emerging markets continue to grow strongly while the company is restructuring in Europe. Buy.

Engineering consultancy Hyder Consulting ( HYC ) is also enjoying strong performance with revenues up by 8 per cent to £150m in the six months to September and pre-tax profits 36 per cent better at £11m. Its order book is up from £291m to £353m to boot. We keep our buy rating.

Avon Rubber ( AVON ) has improved its margins in the year to September, hence a 10 per cent uplift in pre-tax profit to £11m despite flat turnover. Buy.

Johnson Matthey ( JMAT ) has suffered a less happy trading period with revenues down by 17 per cent in the six months to September and profits 6 per cent lower at £191m, primarily due to lower precious metals prices. Our recommendation is under review.

KEY STORIES:

Daily Mail & General Trust ( DMGT ) has confirmed the sale of its Northcliffe regional newspapers division in a deal which will see DMGT receive £52.5m and retain a 38.7 per cent stake in the business. Trinity Mirror ( TNI ) is buying 20 per cent of the Local World business along with other financial investors. The business will be chaired by David Montgomery.

French Connection’s ( FCCN ) trading continues to be impacted by the tough consumer environment with third quarter revenues flat compared to last year although this is a significant improvement from the 9.5 per cent like for like reversal in sales in the first half.

Oilfield technology provider Vialogy ( VIY ) has been asked by a ‘supermajor’ under one of its existing contracts to evaluate shale oil deposits for the first time, opening up a potentially huge market if successful.

Imagination Technologies ( IMG ) faces competition for its bid target MIPS. The chip maker has already agreed a $60m deal to buy the operating businesses of MIPS but it has now received a $75m bid from mobile chip maker CEVA.

OTHER COMPANY NEWS:

Gemfields (GEM) has announced an all-paper deal to buy Faberge, giving the company a presence in the luxury end of the gemstones market.

UK Mail ( UKM ) has traded well in the six months to September with revenues up by 12 per cent to £225.7m and profits 21 per cent higher at £7.3m.

READ MORE...

Read today's press headlines and share tips.

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By Graeme Davies,
21 November 2012

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