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News & Tips: Rio Tinto, Afferro Mining, Home Retail, Stobart, Quadrise, Dixons, Associated British Foods, ASOS, Premier Oil & more

Today's market overview

Equities are flat again, but The Trader Dominic Picarda is not giving up on this rally yet.

IC TIP UPDATES:

Rio Tinto (RIO) chief executive Tom Albanese has been bounced out of his job after reporting another round of withering write downs on previous big ticket acquisitions of Alcan and Rio Tinto Coal Mozambique totalling $14bn, which the board described as ‘unacceptable’. Mr Albanese has been rapidly replaced with Iron Ore chief executive Sam Walsh. But we keep our buy rating after the recent resurgence in commodity stocks.

Sell recommendation Home Retail (HOME) has detailed some improvements in trading at its Argos business over the Christmas period. Like for like sales at the retailer rose by 2.7 per cent in the 18 weeks to 5 January as its strategy of growing online and mobile sales began to reap some benefits. But overall group revenue growth was held back by a 3.7 per cent like for like decline at Homebase, and a margin decline at both businesses. Nonetheless, profits are expected to be £10m ahead of current expectations of £73m. Our recommendation is under review.

Afferro Mining (AFF) has confirmed that it remains in talks with a number of potential suitors including the Indian group Jindal Steel & Power. We keep our buy recommendation.

Logistics specialist Stobart Group (STOB) has said that operating performance for the full year is likely to come in slightly short of expectations. Our recommendation is under review.

Quadrise Fuels (QFI) has successfully completed the trials of its MSAR marine fuel with Maersk and says it expects to produce commercial quantities of MSAR from mid-2013 onwards. Buy.

KEY STORIES:

Dixons Retail (DXNS) is benefiting from the demise of its rivals on the high street judging by its latest trading figures which showed like for like sales in the UK and Ireland up by 8 per cent and sales in Northern Europe up by 11 per cent.

Mothercare’s (MTC) total UK sales fell 12.9 per cent in the 13 weeks to 12 January or 5.9 per cent on a like for like basis. International sales mitigated much of this with 14.8 per cent growth in total sales in the same period, leaving group sales flat.

Associated British Foods (ABF) has turned in another solid performance, boosted by impressive 25 per cent sales growth at its retail arm Primark in the past 16 weeks. Group sales were up by 10 per cent as sugar also grew strongly but ingredients, grocery and agriculture turned in flat performances.

Hammerson (HMSO) has announced a landmark redevelopment plan for Croydon town centre in conjunction with retail development giant Westfield.

Online retail specialist ASOS (ASC) has announced another strong performance with total retail sales up by 41 per cent in the year to December.

OTHER COMPANY NEWS:

Software specialist SDL (SDL) has said that both revenues and profits came in marginally below expectations in the year to 31 December.

Premier Oil (PMO) has confirmed production of 57,700 barrels of oil equivalent per day during 2012, up by 43 per cent on the previous year. An active development programme should see this rise to 65,000-70,000 barrels this year.

READ MORE...

Read today's press headlines and share tips.

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By Graeme Davies,
17 January 2013

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