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News & Tips: Royal Dutch Shell, AstraZeneca, Lonmin, Enterprise Inns, Faroe Petroleum, Diageo, Lamprell, Sirius Minerals & more

Today's market overview

Equities are off a little after yesterday’s news of a fall in US GDP in the final quarter of 2012, but The Trader Dominic Picarda is not sure this marks the top of the market, he rather suspects it is a welcome consolidation.

IC TIP UPDATES:

Royal Dutch Shell (RDSA) enjoyed higher earnings in the fourth quarter of the year, coming in at $7.3bn against $6.5bn in the previous year but the lower price of oil generally over the whole 12 months meant annual earnings dipped from $28.6bn to $27bn. Nonetheless we keep our buy rating.

Sell recommendationAstraZeneca (AZN) has produced disappointing full year figures showing a 15 per cent decline in full year revenues to $27.97bn leading to a 9 per cent decline in earnings per share, after the sale of some products and businesses and the end of exclusivity on others hurt performance. The coming year is unlikely to provide much relief with revenues expected to decline in mid-to-high single digits and the earnings per share retreat expected to be even more pronounced.

Drinks maker Diageo (DGE) enjoyed a 6 per cent growth in volumes during the six months to December, leading to a 5 per cent uplift in net sales to £6bn. Pricing improvements and more sales of premium products drove profits 11 per cent higher. We keep our buy.

BSkyB (BSY) interim results reflect a strong trading period with revenues up by 5 per cent, operating profits 8 per cent better at £647m and the dividend hiked by 20 per cent. Buy.

Retailer N Brown (BWNG) has announced the appointment of former Factory Shop, Asda and Coca Cola executive Angela Spindler as chief executive. We maintain our buy recommendation.

Enterprise Inns (ETI) had a decent Christmas period but the poor Autumn weather and snow in January affected its figures for the 17 weeks to 26 January with like for like net income down by 4.4 per cent. Our recommendation is under review.

Buy recommendationFaroe Petroleum (FPM) has announced a gas condensate discovery at the Rodriquez well in the North Sea.

Paragon Group of Companies (PAG) continues to trade well with operating profits in the October to December period of £23.5m, up from £20.3m the previous year. Talks over the acquisition of a bank, The Hampshire Trust, have now terminated. We keep our buy.

Healthcare property business Assura (AGR) has driven its annual rent roll 2.3 per cent higher and continues to dispose of non-core properties. Its plan to convert to a real estate investment trust remains on track for 1 April. Buy.

Trading at plastics specialist RPC (RPC) remains decent although timing issues in passing through input cost increases to customers meant third quarter operating profits dipped below last year’s, but should be made up in the final quarter. We keep our buy.

KEY STORIES:

Troubled South African platinum miner Lonmin (LMI) has announced an improvement in performance in the latest quarter with production up 16.7 per cent against the previous strike-affected period and pricing improving by 3.5 per cent.

Trading at Lamprell (LAM) has stabilised after a disastrous 2012 with a number of rig refurbishment contracts coming through but the company continues to rely on the support of its lenders during talks to try to sort out its financial situation.

Pubs group Mitchells & Butlers (MAB) saw like for like sales dip by 0.3 per cent in the 17 weeks to 26 January with recent trading conditions described as ‘challenging’.

Babcock International (BAB) continues to trade well with the company on course to meet expectations. The order book stands at £12bn, against £12.5bn in November. But the pipeline has risen from £13bn to £14bn since then.

OTHER COMPANY NEWS:

Sirius Minerals (SXX) has made further moves towards submitting a full planning application for its onshore potash mining project in North Yorkshire.

San Leon Energy (SLE) has completed the farm out of its interests in Morrocco to Cairn Energy (CNE).

Healthcare business BTG (BTG) says recent trading has been strong and revenues are expected to be at the top end of expectations for the year to March.

READ MORE...

Read today's press headlines and share tips.

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By Graeme Davies,
31 January 2013

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