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News & Tips: GKN, Mwana Africa, Faroe Petroleum, Monitise, Whitbread, Redrow, Elementis, Hiscox, Kea Petroleum & more

Today's market overview

Equities have reversed sharply in early trading on uncertainty over the inconclusive Italian elections but The Trader Dominic Picarda is cautioning about giving up on the rally just yet.

IC TIP UPDATES:

Engineer GKN (GKN) has reported strong full year results showing a 13 per cent improvement in sales and a hefty 68 per cent leap in profits to £588m. The company enjoyed record results in all of its main divisions and expects the acquisition of Volvo Aerospace to contribute to another strong year in 2013. We keep our buy rating.

Mwana Africa (MWA) says that exploration drilling at the Zani-Kodo gold prospect in the Democratic Republic of Congo has resulted in a 30 per cent uplift in estimated resource over last February’s figure. Buy.

Faroe Petroleum (FPM) reports that the Hyme field in the southern Norwegian Sea has commenced production and is feeding into the Njord A platform in which Faroe has a 7.5 per cent interest. The company reckons this field will generate up to 15 per cent of this year’s production. Faroe also expects to begin drilling the potentially high impact Darwin well imminently. Buy.

Mobile phone payments specialist Monitise (MONI) has launched a mobile payments system for Blackberry in Indonesia. We keep our buy rating.

OTHER COMPANY NEWS:

Insurer Hiscox (HSX) has announced its intention to return £150m to investors through a 38p a share special distribution. Coupled with the proposed 12p a share dividend, this represents a total 50p return for shareholders.

Whitbread (WTB) continues to show resilient performance, reporting total sales growth of 14.8 per cent for the 50 weeks to 11 February with all four of its divisions showing positive momentum. Costa Coffee remains the star performer, recording total growth of 26.9 per cent in the same period, and like for like growth of 6.6 per cent.

Sausage skin maker Devro (DVO) enjoyed a 5.9 per cent rise in revenue in the year to December but higher input costs constrained profit growth.

Housebuilder Redrow (RDW) has continued the trend of strong results from the sector with a 10 per cent rise in turnover and an improvement in margins resulting in a 50 per cent leap in pre-tax profits to £23m.

Chemicals specialist Croda International (CRDA) turned in a creditable performance in 2012 with pre-tax profits rising by 3 per cent. Encouragingly, underlying sales growth in the fourth quarter of 5.7 per cent was the strongest it had been all year.

Another company reporting impressively resilient full year results was Elementis (ELM) which grew turnover and profits by 5 per cent in 2012. The company is also enhancing shareholder returns with a first special dividend payment on top of the normal full year dividend.

OTHER COMPANY NEWS:

Cameroonian gas producer Victoria Oil & Gas (VOG) has appointed a new chief executive in the form of John Scott, who joins from Indus Gas.

Kea Petroleum (KEA) says that discussions with possible farm in partners for its Mauku prospect in New Zealand may not conclude before the well itself is drilling to target depth, expected in April. Meanwhile, the Puka-2 well is expected to begin testing in mid-March.

St Modwen Properties (SMP) is proposing a placing of up to 9.99 per cent of its share capital in order to raise funds for the development of the New Covent Garden site.

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By Graeme Davies,
26 February 2013

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