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News & Tips: Barclays, BG, United Business Media, BP, Arm Holdings, Virgin Media, GlaxoSmithKline, Corac & more

Today's market overview

Equities are reclaiming a little of the ground lost in Monday’s sell-off but the Trader Dominic Picarda is wary after the strength of the selling and wonders whether a further sell off is in order.

IC TIP UPDATES:

The PPI mis-selling scandal continues to rumble on with Barclays (BARC) today adding £1bn to its provisions for mis-sold financial products, including £600m for PPI specifically. Barclays’ total provision has risen to £3.4bn. We keep our sell rating.

BG Group (BG.) has warned that its production is likely to dip this year due to shutdowns of existing fields, ongoing maintenance and slower than expected ramp up from new fields. Total production in 2012 was 658,000 barrels of oil equivalent a day, in line with downgraded forecasts. This year’s production is unlikely to meet previous expectations of a standstill from 2012 levels and could even fall to 630,000 boepd.

Media group UBM (UBM) has agreed the sale of its Data Services business to Electra Partners for £160m, of which £100m will be used to pay down debt. We keep our buy.

Huntsworth (HNT) says that cost controls will deliver a double digit improvement in group profitability for the 2012 financial year. It has also announced the appointment of a chief executive for the Grayling business. Buy.

Property developer St Modwen (SMP) grew profits from £51.7m to £52.8m in the year to November and its net asset value also rose by 8 per cent to 251p a share. Property profits, net rental income and trading profit all rose. The company has also sealed a development deal worth £150m with Swansea University. We maintain our buy recommendation.

KEY STORIES:

Virgin Media (VMED) has confirmed that it is in talks over a potential transaction with US media group Liberty Global.

The programme of asset sales at BP (BP.), and in particular the divestment of its joint venture share of TNK-BP, has hampered its financial performance with fourth quarter profits down 20 per cent at $4bn.

Chip maker Arm Holdings (ARM) continues to benefit from the boom in smart phones and tablets, posting a 16 per cent rise in full year revenues and a 20 per cent improvement in profits before tax at £276.5m.

GlaxoSmithKline (GSK) has acquired a further 30 per cent of its Indian healthcare consumer operation for £568m, taking its total interest to 72.5 per cent.

Budget airline FlyBe (FLYB) has confirmed an outline agreement with Ryanair (RYA) under which Flybe would take on certain aircraft and routes from Aer Lingus should Ryanair win its battle to take over the Irish airline. The deal is part of Ryanair’s attempts to win over the European Union with concessions.

Talktalk’s (TALK) third quarter results confirm the impression that the business is turning the corner having returned its customer base to growth for the first time in three years.

OTHER COMPANY NEWS:

Shanks (SKS) has warned that recent deterioration in already tough market conditions is likely to impact on 2013 performance.

Oil and gas technology business Corac Group (CRA) says that full year performance for 2012 will be ahead of market expectations.

Polymer specialist Victrex (VCT) is trading resiliently with sales volumes up by 2 per cent in the past four months.

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By Graeme Davies,
05 February 2013

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