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News & Tips: Workspace, S&U, Tracsis, Cable & Wireless Communications, Imagination Technologies, Trap Oil, Sefton Resources & more

Today's market overview

Equities are regaining some of yesterday’s losses at the end of a volatile week, buoyed by further improving economic data from China and signs of an EU budget agreement being made without too much rancour, which has helped to stabilise the euro.

IC TIP UPDATES:

Industrial property specialist Workspace Group (WKP) enjoyed a solid quarter of trading in the three months to December with like for like rent roll up by 1.4 per cent, and 4.5 per cent over the year to date. Its London property portfolio has risen in value by 3.6 per cent, or £28m, since last March. We keep our buy.

Finance and credit provider S&U (SUS) says it is on track to meet expectations for the full year. Trading in its home credit business has been impacted by wider economic conditions and will suffer in comparison with last year’s strong performance but the motor finance division is mitigating this with record trading. Buy.

Transport scheduling specialist Tracsis (TRCS) has made its first breakthrough into the rail freight sector after winning a contract with a UK rail freight company for a customised version of its software. We maintain our buy recommendation.

KEY STORIES:

Cable & Wireless (CWC) says trading is in line with expectations and that the refocusing of the business is on track following the sales of non-core parts of the business in recent months.

Microchip specialist Imagination Technologies (IMG) has completed the acquisition of MIPS Technologies for $100m.

Tough conditions in the South African mining industry coupled with weak prices hit Aquarius Platinum’s (AQP) performance in the six months to December with revenues falling 29 per cent to $179m, earnings down 24 per cent and cash flow turning from a positive inflow of $25m last year to a $38m outflow this year. A recent rise in selling prices, plus operational improvements and exchange rate movements mean management is hopeful of turning cash positive at a mine level in the current period.

OTHER COMPANY NEWS:

Local Shopping REIT (LSR) has maintained its annualised rent roll at £16m due to a robust lettings performance and rent reviews which have averaged a 9 per cent uplift. The company’s void rate is at its lowest since 2008.

Trap Oil (TRAP) has agreed to buy a one third interest in the Trent East gas play in the southern North Sea on which the company is expected to become operator.

Sefton Resources (SER) says that its interests in Kansas are now producing around 300 barrels of oil a month.

Petroneft (PTR) shares have fallen sharply after the company admitted that production from its interests in Russia has been hit my mechanical issues. Production is running at 2,600 barrels of oil a day and another recently drilled well has been shut in to allow for pressure build up and should contribute 400 barrels a day when it is up and running.

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By Graeme Davies,
08 February 2013

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