Equities sold off in early trading but have since reversed their losses, and The Trader Dominic Picarda is not losing faith in the rally just yet.
IC TIP UPDATES:
Rolls Royce (RR.) looks like being one of the chief beneficiaries of the spate of aircraft orders from the Gulf in recent days. It has won a $5bn order from Etihad Airways for Trent XWB engines to power 50 Airbus A350 aircraft. Buy.
Thomas Cook Group (TCG) has continued its policy of selling off non-core satellite businesses with the disposal of its UK corporate foreign exchange business for £4.5m. We maintain our buy recommendation.
Broadcasting equipment specialist Vislink (VLK) says it is on track to meet expectations for the full year despite rather limited visibility in its order book. The company has repeated its aim to grow turnover to £80m and adjusted operating profits of £8m by the end of next year. We keep our buy rating.
Simon Thompson recommendation Raven Russia (RUS) posted net operating income of $192.2m for the period from 1 July to 15 November with its portfolio of industrial warehousing around Moscow 97 per cent let at the end of the period. Buy.
Gemfields (GEM) reports that the most recent emerald and beryl auction in Lusaka, Zambia, yielded revenues of $16.4m, a record for lower grade auctions with the average price per carat up by 27 per cent on the previous record, Year to date auction revenues total $56.4m, up from $48.4m last year. We maintain our buy recommendation.
Shares in Petrofac (PFC) have been hit by news that changes to the scope and delivery dates for the Upper Zakum contract mean revenues will slip into 2015 and later. Elsewhere, the group has posted order intake of $5.9bn for the year to date, with a backlog now stretching to $14.3bn. Our recommendation is under review.
KEY STORIES:
Aberdeen Asset Management (ADN) has announced the acquisition of Lloyds Banking Group’s (LLOY) Scottish Widows Investment Partnership asset management business in a deal worth £550m. The consideration, in shares, means Lloyds will now have a 9.9 per cent stake in Aberdeen with an added £100m performance related payment on top over five years. The two businesses are also forming a strategic relationship which includes introducer agreements and a long term contract to manage Lloyds’ insurance funds. Aberdeen also issued final results today showing a 24 per cent rise in revenues at £1.08bn and pre-tax profit up 39 per cent to £482.7m.
Paul Pindar, the chief executive of outsourcing giant Capita (CPI) has announced his intention to resign from the company next March, he will be replaced by deputy chief executive Andy Parker. Meanwhile, Capita also issued a strong trading statement detailing £2.9bn of new contract wins this year and strong sales activity with a bid pipeline of £4.2bn.
The chief executive of BT’s (BT.A) Openreach division, Liv Garfield, has been appointed as the next chief executive of Severn Trent (SVT), she will replace Tony Wray upon his retirement next Spring.
Aviva (AV.) continues the sale of non-core assets with the disposal of Italian insurance business Eurovita to JC Flower for €33m.
Majestic Wine (MJW) has posted a 4.2 per cent improvement in interim profits to £9.5m following a 3 per cent rise in turnover to £130.2m, which has allowed management to increase the dividend by 5 per cent.
Half year results from Mitie Group (MTO) showed a 10.5 per cent rise in turnover and a 9.5 per cent improvement in pre-tax profits to £55.3m for the six months to 30 September with the company’s Facilities Management business proving to be a strong growth driver. The company has booked 99 per cent of this year’s forecast turnover and 74 per cent of next year’s.
Oil services and engineering specialist Kentz (KENZ) has seen order intake of $1.8bn in the first ten months of the year, which has pushed its backlog to a record $3bn. The company also has a pipeline of prospects worth $15.2bn.
OTHER COMPANY NEWS:
Student accommodation specialist Unite Group (UTG) says lettings have been strong during the period from 1 July to 15 November with occupancy levels running at 98 per cent. The company is also on track to achieve 3 per cent rental growth for the year.
Fastnet Oil & Gas (FAST) reports that Kosmos Energy, its partner on the Foum Assaka project, has estimated that the prospect holds 360m barrels of oil equivalent.
Graphene specialist Applied Graphene has announced details of its proposed float which will see the company issue 16.9m shares at 155p each, raising £11m and valuing the company at £26.2m.
