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News & Tips: Gulf Keystone, BT, Vodafone, RSA, Netcall, Weir Group, BHP Billiton, Countrywide, Tanfield & more

Today's market overview

Early trading sees the FTSE100 flat after yesterday’s healthy leap higher, a move which The Trader Dominic Picarda believes vindicates his continued optimism for equities.

IC TIP UPDATES:

Gulf Keystone Petroleum (GKP) has announced that the Bakrman-1 exploration well in Kurdistan, in which it has a 20 per cent interest, has discovered hydrocarbons. The well has flowed oil at 2,616 barrels a day and is also producing 5.86m cubic feet of gas a day. The company also announces another two wells which have not produced hydrocarbons and elsewhere its development of the huge Shaikan discovery continues apace with the first production facility close to completion. We keep our buy.

BT (BT.A) and Vodafone (VOD) have both announced success in their bids for spectrum space in the 4G spectrum auction. We keep both companies as buys.

Simon Thompson recommendation Netcall (NET) has reported successful trading in the six months to December with revenues ahead by 12 per cent to £8.16m and profits 46 per cent higher at £1.34m. The company ended the period with more than £8m in the bank. Buy.

Shares in RSA Insurance Group (RSA) have slipped by 13 per cent this morning after the company accompanied results which showed net written premiums up by 5 per cent but a flat underwriting result with news of a ‘rebased’ dividend.

Motor retailer Inchcape (INCH) has announced the acquisition of Trivett Automotive Group in Australia for £78m. We keep our buy rating.

Sell recommendation PZ Cussons (PZC) has sold its Polish Home Care brands for £46.6m.

Packaging specialist Rexam (REX) grew sales by 2 per cent to £4.3bn and underlying profits by 1 per cent to £418m in tough market conditions during 2012. Beverage cans performed well, growing volumes by 6 per cent, but its healthcare business saw operating profits fall back. We maintain our buy recommendation.

Instrumentation and controls business Spectris (SXS) enjoyed revenue growth of 11 per cent in 2012 with profit before tax coming in 12 per cent higher at £186.7m as Asian and North American operations performed well. The company has also hiked its dividend by 16 per cent. Buy.

Engineer Weir (WEIR) has enhanced its business with three acquisitions in fast growing mining markets. It has bought a specialist rubber and wear resistant linings business in Canada and foundries in Malaysia and South Africa for a combined £55m. We keep our buy rating.

Television production company STV Group (STVG) grew earnings by 13 per cent to £19.5m in 2012, boosted by 21 per cent growth in STV production revenues and an 84 per cent rise in digital revenues. Buy.

Sell recommendationA&J Mucklow (MKLW) has reported flat revenues in the six months to December but profits were boosted by a property revaluation. Net asset value has edged up from 295p a share to 298p.

KEY STORIES:

The chief executive of BHP Billiton (BLT), Marius Kloppers, has announced his intention to retire from the board in May. He will be replaced by the current head of non-ferrous, Andrew MacKenzie. BHP also announced interim results which showed a 38 per cent decline in underlying earnings to $9.8bn.

Full year results from Travis Perkins (TPK) showed a 1.4 per cent rise in revenues produced a 4.3 per cent improvement in adjusted profits at £327m. The company is hiking its full year dividend by 25 per cent to 25p.

Estate agency Countrywide has announced its intention to float on the main list of the London Stock Exchange with a view to raising £200m.

OTHER COMPANY NEWS:

Aerial access equipment specialist Tanfield (TAN) produced a rather drab trading statement, with revenues in the second half only expected to match the previous half year’s effort, but livened it up with news that it has received approaches for its aerial work platforms business.

Printing.com (PDC) has disappointed the market by admitting that the company is likely to be ‘materially’ behind full year expectations.

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By Graeme Davies,
20 February 2013

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