Equities have started the day with another minor sell off following yesterday’s consolidation, but The Trader Dominic Picarda reckons more highs are coming.
IC TIP UPDATES:
Broadcaster ITV (ITV) has posted another set of strong results, its fourth consecutive year of double digit profit growth. Adjusted pre-tax profits rose by 27 per cent to £581m with broadcasting and online revenues up by 20 per cent and ITV Studios earnings 24 per cent higher. We retain our buy recommendation.
Travis Perkins (TPK), which we recommended as a buy just last week, posted 5 per cent like for like growth in 2013 with revenues rising above the £5bn mark and pre-tax profits up 12.4 per cent to £321m. Management reports continued improvement in its end markets but points out that the building and construction sector remains some 13 per cent below its peak output of the past decade.
Simon Thompson recommendation Heritage Oil (HOIL) has updated investors on performance at its OML30 licence in Nigeria where production in the early weeks of 2014 has averaged 15,600 barrels of oil per day net to Heritage, up by 17 per cent on the fourth quarter of 2013.
Engineer Weir Group (WEIR) posted mixed results for 2013 with overall revenues down 4 per cent and profits down by the same margin. Margins were maintained at record levels and order input has been gaining momentum with second half orders up 12 per cent on a like for like basis. Management is expecting to report progress in 2014 but is wary of currency headwinds. We keep our buy rating.
Silver miner Fresnillo (FRES) has been awarded a new explosives permit for its Herradura mining unit at the Penmont mine, which means operations can resume there. Buy.
Simon Thompson recommendation WH Ireland (WHI) is enjoying the more buoyant equity market conditions having increased revenues by 18.2 per cent in the year to November, producing profits of £1.7m compared with a loss of £200,000 the previous year. The company also announces the opening of a new Isle of Man office today.
Sell recommendation Restaurant Group (RTN) has posted 9 per cent revenue growth for 2013, 3.5 per cent on a like for like basis, and profit uplift of 13 per cent to £72.7m. This has prompted a 19 per cent increase in the annual dividend. Our recommendation is under review.
Simon Thompson recommendation Molins (MLIN) grew sales by 13 per cent in the year to December and profits rose by 10 per cent to £5.4m. Sales grew across all three of its tobacco-related divisions despite the uncertain regulatory environment.
Property company Segro’s (SGRO) results reflect the period of transition the company is going through as it looks to refocus on industrial warehousing and related properties in the UK and Europe. Profits and net asset value dipped as the company sold £591m worth of properties and spent £250m on new acquisitions and development projects. The loan to value on its portfolio also reduced from 51 per cent to 42 per cent. Buy.
Emerald and Beryl miner Gemfields (GEM) has had another successful auction in Lusaka, Zambia which produced record revenues of $36.5m at an average price per carat of $59.31, up 10 per cent on previous auction records. Revenues for the year to date from the sale of gems total a record $96.4m. We maintain our buy rating.
Chinese children’s clothing specialist Camkids (CAMK), which was recommended in Simon Thompson’s Bargain Shares portfolio, has reported continued strong sales and a forward order book seven per cent ahead of this time last year.
KEY STORIES:
Housebuilder Taylor Wimpey (TW.) posted a 39 per cent rise in operating profits for 2013 and reports a 31.4 per cent increase in its forward order book to £1.25bn. Meanwhile, management is expecting to ramp up returns to shareholders with £50m earmarked for return this year and £200m in 2015.
Direct Line Insurance (DLG) grew its operating profits by 14 per cent in 2013 despite seeing premiums fall in its core motor and home markets. Meanwhile, the group reported that the recent weather-related events in the UK are likely to cost it in the range of £70m-£90m in homes claims.
Baker Greggs (GRG) posted full year like for like sales reduction of 0.8 per cent but a 3.8 per cent rise in overall sales due to expansion and relocation of parts of its estate although closure of some shops meant the estate ended the year unchanged in size at 1,671 shops. Like for like sales trends are said to be improving with second half like for likes up by 1.2 per cent and fourth quarter figures up 2.6 per cent.
Recruiter Hays (HAS) has seen improving operating conditions in the UK, Europe and Rest of the World segments, which has more then offset continued tough conditions in Asia Pacific and Australia in particular. Overall net fees grew by 2 per cent on a like for like basis in 2013 and operating profits were 15 per cent higher at £66.7m.
Petrofac (PFC) edged revenues up by 1 per cent in 2013 to $6.3bn but cash earnings rose by 17 per cent to $1.03bn. Meanwhile, the order backlog rose 27 per cent to a record $15bn at the end of December, with another $3bn of contracts won since the turn of the year.
OTHER COMPANY NEWS:
Centamin (CEY) has achieved acceptances from more than 50 per cent of shareholders in Ampella Mining, a gold miner with interests in West Africa. This means Centamin can now take over the running of Ampella whilst it tries to buy up the rest of the shares.
