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News & Tips: Stagecoach, Cineworld, Mulberry, Barclays, Standard Chartered, Rolls Royce, Escher Group, Indus Gas, Falkland Island Holding & more

Today's market overview

Equities are on good form again today as they continue their recent positive run, and The Trader Dominic Picarda is gearing up for more gains.

IC TIP UPDATES:

Stagecoach (SGC) has been given a boost by the news that Virgin Trains, with whom it collaborates on running the West Coast Mainline, has been awarded a 23 month extension to the tender while the franchising process is reviewed. We keep our buy.

Cinema operator Cineworld (CINE) has announced a placing of 6.4m shares to raise funds towards the £47.6m acquisition of the Picturehouse chain of independent cinemas. Meanwhile trading for the year remains in line with expectations. We maintain our buy recommendation.

Sell recommendationMulberry (MUL) saw pre-tax profits fall by 36 per cent to £10m in the first half of the year although like for like trading in the opening weeks of the second half is 11 per cent better.

Rolls Royce (RR.) is co-operating with the Serious Fraud Office about allegations of malpractice in Indonesia and China. Rolls has passed the SFO information regarding its concerns about bribery and corruption among intermediaries in overseas markets.

The effect of the acquisition of SCA Packaging in June is illustrated in a strong set of half year results from packaging specialist DS Smith (SMDS). Revenues grew by 61.6 per cent and profits by 62.5 per cent to £106.1m with four months contribution from SCA. Organic revenues edged ahead by 0.5 per cent. We keep our buy.

Simon Thompson recommendationEros International (EROS) has signed a collaboration with HBO Asia to launch two new movie channels in India. Buy.

PZ Cussons (PZC) continues to struggle with tough trading conditions in Nigeria, prompting flat revenues, but an improvement in the Australian and UK businesses has driven a 10 per cent profit improvement. Nonetheless, we retain our sell rating until we have more clarity.

Buy recommendationDigital Barriers (DGB) is raising £10.4m to accelerate the development of its businesses in the surveillance space and to pursue an acquisition.

KEY STORIES:

Barclays (BARC) has announced an agreement with subsidiary Absa which will see the majority of the Barclays Africa operations combined with Absa’s.

A trading statement from Standard Chartered (STAN) says that income growth for the year is expected to be in the ‘high single digit’ range, or in double figures if currency effects are taken out.

Premier Oil’s (PMO) Cyclone exploration well has been plugged and abandoned after failing to find commercial quantities of oil.

Micro Focus (MCRO) has made ‘solid progress’ in challenging markets with a marginal advance in adjusted profits and investors are being rewarded with a dividend hike of 45 per cent to 11.9c a share at the interim stage.

OTHER COMPANY NEWS:

Falkland Oil & Gas (FOGL) has confirmed the end of its disappointing drilling campaign for 2012 with the rig to be decommissioned. Meanwhile Falkland Island Holdings (FKL), which owns a chunk of FOGL, has issued interim results showing flat revenues and adjusted profits.

Postal technology specialist Escher Group (ESCH) has announced a major contract win with Malaysia’s postal service. This means revenues for the year will exceed expectations, but investment in the business means profits will be in line with existing forecasts.

Indus Gas (INDI) has announced an 87 per cent increase in its gross proven plus probable reserves in India to 573 billion cubic feet of gas.

READ MORE...

Read today's press headlines and share tips.

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By Graeme Davies,
06 December 2012

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