Equities have bounced higher again after a positive end to last week, bolstered by news of consolidation among the major pharma players.
IC TIP UPDATES:
GlaxoSmithKline (GSK) has announced a far reaching deal with Swiss pharma peer Novartis which will see GSK sell its cancer drugs portfolio to Novartis for $14.5bn, buy its vaccines business for $5.25bn while the two companies will also combine their consumer healthcare business into a joint venture which Glaxo will hold a majority 63.5 per cent stake in. Meanwhile Novartis is selling its animal health business to Ely Lilly for $5.4bn. We maintain our buy recommendation on GlaxoSmithKline.
An interim management statement from Genel Energy (GENL) confirmed production guidance of 60,000-70,000 barrels of oil per day and revenues of $500m-$600m for this year. The company has $600m in the bank to fund further development work on its Kurdish fields plus high impact exploration in West Africa. Buy.
Qinetiq (QQ.) has announced the proposed disposal of its US services business for £165m, plus a potential £50m in earnout payments. This will allow the company to pay down some debt and also return £150m to shareholders via a buy back. We maintain our buy rating.
Document storage specialist Restore (RST) has acquired records management and document shredding business Magnum Secure for £4.6m, extending its geographical spread to the North East. We keep our buy.
Randall & Quilter Investments (RQIH) has announced a 5 per cent uplift in revenues for 2013 although profits dipped from £11.6m to £9.6m. Nonetheless, the shareholder payout is maintained at 8.4p for the year.
KEY STORIES:
Colt Telecom (COLT) has warned on profits, saying that margin pressure will mean that earnings for the year are likely to be 5-10 per cent below current market consensus estimates of €325m before an additional €30m of restructuring charges.
Greeting card retailer Card Factory has announced its intention to float on the stock exchange. The business sold more than 285m greetings cards in 2013, producing revenues of £326.9m and earnings of £80.4m.
Another company to announce its intention to float is NAHL Group, whose core brand is the National Accident Helpline which provides outsourced marketing services to the personal injury market.
OTHER COMPANY NEWS:
Amerisur Resources (AMER), the Colombia-focused oil explorer has issued strong full year results after a year of success on its Platanillo prospect where it has thus far enjoyed a 100 per cent success rate with ten wells and three sidetrack wells. Revenues for the year leapt 301 per cent to $169.2m with pre-tax profits up 275 per cent to $75.3m.
