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News & Tips: CSR, Ladbrokes, Afferro Mining, Tullow Oil, BAE Systems, Sports Direct, Quindell Portfolio, Centamin, Baobab Resources & more

Today's market overview

Equities have reversed some of their recent gains in early trading, but The Trader Dominic Picarda sees no reason to panic yet.

IC TIP UPDATES:

Bluetooth technology specialist CSR (CSR) has crowned a strong year by reporting record revenues of $249.2m, profits of $10.3m and a 15 per cent increase in its dividend payout. What’s more the company is proposing another $50m return to shareholders through buy backs, which comes on top of the $285m returned to shareholders through a tender offer in the final quarter of 2012. Buy.

Bookmaker Ladbrokes (LAD) enjoyed an 8 per cent uplift in group operating revenues in 2012 and has boosted its dividend payout by 14 per cent, the company also shaved £67m off its debt pile, reducing it to £386.9m. The company plans 100 new shops in the UK in 2013 and should launch its online platform in the second quarter. We maintain our buy recommendation.

Afferro Mining (AFF) says drilling at its Nkout iron ore project in Cameroon has identified further extensions to its mineral resource there. Buy.

Sell recommendationKingfisher (KGF) has suffered another poor period of trading with like for like sales down 3.4 per cent in the 13 weeks to 2 February with the UK and Irish businesses performing worst.

Packaging specialist Mondi (MNDI) grew annual revenues by just 1 per cent and operating profits slipped back by 5 per cent over 2012 but the second half of the year showed a significant improvement on the first, and recent acquisitions should contribute further to 2013 performance. We keep our buy.

KEY STORIES:

Tullow Oil (TLW) says its Twiga South-1 well in Kenya is flowing oil at a good rate and could contribute 5,200 barrels of oil per day when fully consolidated. On the downside, an exploration well in Uganda, Ondyek-1, failed to find any hydrocarbons.

Defence giant BAE Systems (BA.) saw its sales decline by 7 per cent in 2012 but the company ended the year with an order back log 8 per cent higher at $42.4bn after growing its non-US and UK order book from $4.8bn to $11.2bn. The company has also signed a longevity deal with Legal & General over its pension scheme and announced a £1bn share buy back programme over the next three years.

Trading at Sports Direct (SPD) continues to barrel along with group sales in the 13 weeks to 27 January up by 21.1 per cent. Sports retail, premium lifestyle and the brands divisions all enjoyed positive sales growth.

Filtrona (FLTR) grew revenues by 26 per cent in 2012, 11 per cent on a like for like basis, as its progress towards its Vision 2015 strategy. Management expects at least single digit revenue growth this year and double digit earnings per share growth. The company also announced the acquisition of Scandinavian components business Ulinco and a joint venture in United Arab Emirates.

Quindell Portfolio (QPP) has issued another bullish trading statement which says that the group now has visibility of outsourcing volumes required to meet full year expectations.

OTHER COMPANY NEWS:

Fastnet Oil & Gas (FAST) has agreed to farm-in to the Deep Kinsale prospect, beneath the operating Kinsale gas field.

Centamin Egypt (CEY) has announced its intention to participate in a fundraising by Nyota Minerals to the tune of around £1.5m. Following the placing, Centamin will hold 19.9 per cent of the company.

Baobab Resources (BAO) has received further positive upgrades to the estimated resource at its Tete pig iron project in Mozambique. The projects global resource now stands at 752m tonnes.

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By Graeme Davies,
21 February 2013

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