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News & Tips: Anglo American, Debenhams, BG, IQE, African Barrick Gold, Domino's Pizza, Sound Oil, Roxi Petroleum & more

Today's market overview

Equities are marginally ahead after yesterday’s pull back, which The Trader Dominic Picarda says is perfectly healthy in any rally and sets us up for fresh highs.

IC TIP UPDATES:

Sell recommendationAnglo American (AAL) has announced that Australian mining executive Mark Cutifani will replace the departing Cynthia Carroll as its chief executive.

Retailer Debenhams (DEB) has issued relatively strong trading figures in spite of the moribund state of the UK economy. The 18 weeks to 5 January saw like for like sales rise by 2.9 per cent with December proving particularly strong with like for like sales growth in the past five weeks of 5 per cent. We keep our buy.

Persimmon (PSN) continues to benefit from the relative lack of supply in the housing market and support initiatives such as the NewBuy scheme which is helping first time buyers onto the property ladder. In the year to end December it grew completions by 6 per cent and average selling prices by 6 per cent too, which means a 12 per cent hike in revenues. Chief executive Mike Farley is leaving in April after 30 years with the group to be replaced by managing director Jeff Fairburn. We maintain our buy rating.

BG Group (BG.) has commenced commercial production on the Sapinhoa oil and gas field offshore Brazil just four years after its discovery. Sapinhoa is one of the ‘big five’ major oil discoveries in the Santos basin offshore Brazil. Buy.

Simon Thompson recommendationCommunisis (CMS) has won an extended nine year contract with existing customer Nationwide for all of its customer communications.

Cinema’s operator Cineworld (CINE) reaped the benefit of a strong final quarter of film releases including the Bond movie Skyfall, which helped to make up for a flatter third quarter. Overall revenues for the year grew by 2.4 per cent. We keep our buy.

Buy recommendationTopps Tiles (TPT) has announced solid trading in the first quarter of its financial year with like for like sales up 1.6 per cent in the 13 weeks to 29 December.

Packaging specialist Rexam (REX) has confirmed the details of a return of cash to shareholders following completion of the sale of its personal care business. Each shareholder will receive 45p either as cash, capital or income in a total return of £395m. We maintain our buy recommendation.

Semi conductor technology specialist IQE (IQE) has admitted that it is in discussions with regard to ‘a potential significant acquisition’ and is reviewing its financing options. Buy.

Sell recommendationDunelm (DNLM) has announced a 2.2 per cent improvement in like for like sales in the first half with margins also improving. Total sales grew by 13.4 per cent as the company continues to expand its footprint.

Carr’s Milling Industries (CRM) says that strong trading in its animal feeds and engineering businesses has more than offset the continued weakness in its milling operations. Buy.

KEY STORIES:

Shares in African Barrick Gold (ABG) have taken a hit after the company confirmed that it is no longer in discussions with China National Gold Corporation over the sale of its 73.9 per cent stake in the company.

Pizza delivery remained popular over the 14 weeks to 30 December according to Domino’s Pizza (DOM) which recorded a 20 per cent hike in system sales over the period, driven by a strong online performance and a 5 per cent rise in like for like sales in its mature UK stores.

Majestic Wine (MJW) found Christmas a little more tricky as it reported customers leaving their purchasing decisions till late. Nonetheless, it still grew sales by 5.1 per cent between 13 November and 31 December with like for like sales growth up by 1.1 per cent.

OTHER COMPANY NEWS:

Sound Oil (SOU) has confirmed good flow rates from its Rapagnano gas field and reiterated that commercial production will commence this month.

Roxi Petroleum (RXP) shares are very popular today after the Central Asian oil and gas explorer announced a $40m equity investment in the business at 7p a share from a Kazakh investor.

SQS Software Quality (SQS) has signed its largest ever contract, worth €25m over three years, with an existing client in the automotive sector. This is one of several contract wins and extensions adding up to €64m over the next three years.

The growth in internet shopping over the Christmas period has benefited UK Mail (UKM), boosting group revenues by 14 per cent over the quarter.

Bayfield Energy (BEH) confirms it is close to completing its merger with fellow Trinidad & Tobago oil company Trinity Exploration & Production and should relist, named Trinity, in mid-February after raising up to $90m through the issue of new shares and a placing.

READ MORE...

Read today's press headlines and share tips.

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By Graeme Davies,
08 January 2013

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