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News & Tips: Imperial Tobacco, Safestore, Kenmare Resources, Afferro Mining, BP, Johnson Mathey, Renishaw, Victoria Oil & Gas & more

Today's market overview

Equities are flat this morning after another surge higher yesterday and The Trader Dominic Picarda is beginning to wonder how much longer this uptrend can continue without a proper pullback.

IC TIP UPDATES:

IC Tip of the yearImperial Tobacco (IMT) has admitted that the macro environment continues to be challenging with market conditions deteriorating in Russia and the European Union. Ongoing investment means profits for the first half will be below last year’s with the second half now expected to deliver 55 per cent of annual profits. Nonetheless, we picked Imperial Tobacco for its income credentials and we remain buyers.

Shares in self-storage business Safestore (SAFE) are popular today after the company confirmed plans to apply for Real Estate Investment Trust in April. Buy.

Highland Gold (HGM) produced 216,885 ounces of gold or gold equivalent during 2012, an 18 per cent improvement on the previous year and forecasts production of 225,000-240,000 ounces in 2013. Exploration activity has added 2.2m ounces of resources over the year, taking the total to 13m ounces. We keep our buy rating.

Afferro Mining (AFF) has announced positive early drilling results from its Akonolinga project in Cameroon. Meanwhile, suitor International Mining and Infrastructure (IMIC) says it has added to its holding in the company, taking it to 5 per cent, with an option to increase this to 6.8 per cent. Buy.

Kenmare Resources (KMR) increased revenues by 40 per cent in 2012 to $234.5m after shipping 680,800 tonnes of heavy mineral concentrate, ilmenite and zircon. But fourth quarter production dipped due to ongoing changes to its operations and electricity supply issues, both of which should be resolved by the end of this quarter. We keep our buy recommendation.

Transport scheduling specialist Tracsis (TRCS) says trading remains in line with expectations and the company is awaiting the results of the review into UK rail refranchising to give a boost to that sector. We maintain our buy.

Renew Holdings (RNWH) continues to trade in line with expectations. It ended the year with an order book of £340m, up from £289m the year before. Buy.

Buy recommendationTrap Oil (TRAP) has signed a $20m borrowing facility with subsidiaries of GE and BP.

KEY STORIES:

BP (BP.) says a district court in Louisiana has accepted the plea put to the court by the company in November which resolved all federal claims against the company over the Deepwater Horizon oil spill. This confirms that BP will pay $4bn over a period of 5 years.

Johnson Matthey's (JMAT) weak trading performance has continued in the third quarter of its financial year with sales slipping by 2 per cent and underlying profits down 19 per cent to £84.3m.

Engineer Renishaw (RSW) enjoyed record sales and profits in the six months to December 2012 with orders from China in particular proving strong. But the company said that orders began to wane during the second quarter and the second half of its financial year is likely to see revenues in line with last year’s efforts.

OTHER COMPANY NEWS:

Cameroonian gas play Victoria Oil & Gas (VOG) says 15 customers are now taking gas from its Logbaba field at a combined rate of 2.8m standard cubic feet a day with a further 10 contracted to take supply when their facilities are ready.

Toy maker Hornby (HRN) reports that trading remains tough but it has taken action to reduce the supply from a troublesome Chinese supplier and has now sold down most of its excess London 2012 stock.

Gemfields (GEM) produced 14.5m carats of emeralds and beryl during the six months to December, up from 8.8m the previous year with grades per tonne up and costs of production marginally down.

READ MORE...

Read today's press headlines and share tips.

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By Graeme Davies,
30 January 2013

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