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News & Tips: Smith & Nephew, Telford Homes, Kenmare Resources, GW Pharmaceuticals, Thomas Cook, Leyshon, Amerisur, Pursuit Dynamics & more

Today's market overview

A mini correction in equities has continued following last week’s strong gains, but The Trader Dominic Picarda is confident we have not seen the last of this rally.

IC TIP UPDATES:

Sell recommendationSmith & Nephew (SN.) is splashing out $782m (£489m) on the acquisition of US bioactive wound care business Healthpoint Biotherapeutics, strengthening its advanced woundcare business.

Simon Thompson recommendation Telford Homes (TEF) has confirmed its current strong progress in interim results which show a doubling in open market completions, pushing revenue up from £58.6m to £78.3m. Pre-tax profit has more than quadrupled to £6.5m. What’s more, the company has already secured more than 90 per cent of its target completions for the full year and 60 per cent of next year’s. Buy.

Recent buy tipKenmare Resources (KMR) has updated on some marginal pricing pressure in its end markets for ilmenite and zircon and also said that some power disruptions and delays to changes to its production process may shave up to 10 per cent from full year forecast production.

Results from GW Pharmaceuticals (GWP) show a strong improvement in sales of Sativex, its pain relief drug, with revenues from partners’ sales up from £5.3m to £10.1m. Our recommendation is under review.

Baobab Resources (BAO) has announced a joint venture with Metals of Africa, which owns an adjacent licence to the company’s Changara prospect in Mozambique. The collaboration means the two companies can push ahead with developing what is now a 1,300 square kilometre zone which is believed to contain deposits of several metals. We maintain our buy recommendation on Baobab.

Distribution specialist John Menzies (MNZS) has spent £13.3m on the acquisition of marketing and logistics business Orbital Marketing Services. Buy.

Property investment and development specialist Conygar Investment Trust (CIC) has confirmed it will submit planning applications this week for an ambitious redevelopment project in Haverfordwest. We keep our buy rating.

Avingtrans (AVG) has continued its recent run of positive news with the announcement of a 10 year contract with Rolls-Royce (RR.) worth £80m. Buy.

Hire specialist Vp (VP.) has bucked tough market conditions to record profit growth of 6 per cent to £11m from a 2 per cent increase in revenues.

Primary care property specialist Assura Group (AGR) has announced a 3.4 per cent uplift in its property return over the past six months and a 46 per cent rise in underlying profits to £5.7m. We keep our buy.

KEY STORIES:

Thomas Cook (TCG) says its turnaround plan is on track after issuing final results which show a reduction in revenues from £9.8bn to £9.5bn and an underlying loss for the year of £37m, compared with a profit of £103m last year. Net debt has been slashed by £103m to £788m.

Chinese unconventional gas play Leyshon Resources (LRL) has returned from suspension with results from its first exploration well which show the existence of gas which is worthy of further testing. A second well is also to be drilled before the end of the year.

Amerisur Resources (AMER) has announced that drilling at its Platanillo-9 well in Columbia has encountered oil.

Interserve (IRV) has announced plans to hive off its Private Finance Initiative investments into its pension fund.

OTHER COMPANY NEWS:

Pursuit Dynamics (PDX) has announced it has achieved material changes to the terms of its property lease, which fulfils one of the conditions of it being able to pursue its recently announced placing and open offer.

Transmission technology business Torotrak (TRK) grew revenues from £800,000 to £4.7m in the six months to September, producing a profit of £1.6m against a £2m loss last year. Management has announced a change in its strategy aimed at pushing direct sales rather than through partners in an attempt to capitalise on its current momentum.

READ MORE...

Read today's press headlines and share tips.

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By Graeme Davies,
28 November 2012

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