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News & Tips: Dunelm, Mondi, Breedon Aggregates, Barclays, Tullow Oil, G4S, Avanti Communications & more

Today's market overview

Equties are relatively flat today but The Trader Dominic Picarda thinks that the relative weakness of the recent bouts of selling indicates preparation for further upside.

IC TIP UPDATES:

Retailer Dunelm (DNLM) has issued good trading figures for the six months to 29 December, posting a 13 per cent rise in revenues and a 14.6 per cent jump in pre-tax profits. Like for like revenues rose by 2.2 per cent and the company opened 10 new stores in the period with another six sites committed. Our sell recommendation is under review.

Paper manufacturer Mondi (MNDI) has confirmed that fourth quarter trading was ahead of the previous quarter and also the same period last year but will not make up for weaker trading earlier in the year. Basic headline earnings per share are expected to be in the €0.61-€0.65 range. We are maintaining our buy recommendation.

Modern Water Group (MWG) is raising £10m at 50p a share to support growth opportunities in its desalination and water monitoring technology businesses. We keep our speculative buy.

Breedon Aggregates (BREE) says trading in the 12 months to December was in line with expectations with revenue meeting expectations but lower depreciation costs and better than expected contributions from associates mean profits will exceed expectations. Buy.

KEY STORIES:

The chief executive of Barclays (BARC), Anthony Jenkins, has put further meat on the bones of his plan to transform the bank which includes the loss of 3,700 jobs this year and a reduction in its cost base of £1.7bn to £16.8bn by 2015. The restructuring will incur a cost of £500m in the current quarter. Full year results accompanying the restructuring announcement showed statutory profit before tax of just £246m, against £5.9bn.

Tullow Oil (TLW) says that its partner Kosmos has failed to find oil in its first target reservoir on the Sapele-1 exploration well offshore Ghana but is only around half way towards its full target depth.

The Olympic contract fiasco that hit guarding group G4S (GFS) last summer cost the company £70m in total, it admitted today after charitable donations and sponsorship costs pushed the initial £50m estimate upwards.

Pawnbroker Albemarle & Bond (ABM) says profits dipped by one third in the six months to December, in line with expectations after lower gold buying profits. Pawnbroking profits rose marginally to £17.6m and retail profits jumped 16.7 per cent to £10.5m.

OTHER COMPANY NEWS:

Avanti Communications (AVN) grew revenues by 68 per cent to £8.6m in the six months to December and order backlog rose by 60 per cent to £290m as it continues to sign up customers for its satellite services.

Volex (VLX) says trading remains subdued and the company continues to concentrate on cost saving initiatives which are expected to strip $10m out of the cost base. Earnings are expected to be in line with revised expectations.

READ MORE...

Read today's press headlines and share tips.

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By Graeme Davies,
12 February 2013

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