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News & Tips: AstraZeneca, Anglo American, Unilever & more

Equities have pushed on through the 6,700 level
April 24, 2014

Equities enjoyed a good start to the trading sessions, buoyed by good news from US tech giants Apple and Facebook overnight, with the FTSE100 popping through the 6,700 barrier in early trading. Meanwhile, The Trader Dominic Picarda is beginning to assess when the bull run may end.

IC TIP UPDATES:

AstraZeneca (AZN) which is the subject of rumours of a mega bucks takeover by Pfizer, has announced first quarter figures this morning which showed 3 per cent revenue growth at constant exchange rates to $6.4bn but earnings were hit by the loss on the disposal of its Alderley Park site and the cost of acquiring the global diabetes alliance. Nonetheless we reconfirm our recent buy recommendation.

IC Tip of the Year Anglo American (AAL) saw growth in production across all its key commodities bar platinum in the first quarter with iron ore production up by 10 per cent and metallurgical coal by 31 per cent, thermal coal by 16 per cent and copper by 18 per cent. Buy.

Personal good giant Unilever (ULVR) delivered underlying growth of 3.6 per cent in the first quarter of 2014 with emerging markets growth at 6.6 per cent but an 8.9 per cent negative currency impact meant that revenues dipped by 6.3 per cent to €11.4bn. Emerging markets growth is slowing and developed markets remain relatively weak but management is confident of maintaining growth ahead of its markets. We keep our buy rating.

Builders merchant Travis Perkins (TPK) enjoyed a strong first quarter with total sales up by 15.6 per cent and like for like sales 12.7 per cent better, albeit against relatively weak comparatives from last year. Buy.

Sell recommendation Cobham (COB) says trading is in line with expectations with organic revenues expected to decline in mid-single digits this year, with weaker trading exacerbated by currency headwinds.

Chemring (CHG) has announced the proposed disposal of its European munitions business to Nexter Systems for €167.8m with the proceeds earmarked for paying down debt. We keep our buy rating.

International Greetings (IGR) reports that progress in the 12 months to March has been ‘encouraging’ and that moves to reduce debts have resulted in ‘an outcome ahead of expectations’. Buy.

Spirit Pub Company (SPRT) grew its earnings by 5 per cent in the 28 weeks to 1 March with pre-tax profits 11 per cent higher at £22m. Like for like sales in the managed division grew by 4.8 per cent and like for like income in the leased division was up 2.6 per cent. We keep our buy recommendation.

KEY STORIES:

Set top box maker Pace (PIC) says it has enjoyed a solid start to the year which means it is on track to meet expectations of revenue of $2.7bn.

Chemicals specialist Croda International (CRDA) has seen a ‘modest but improving’ trend in underlying sales continue through its first quarter with group turnover up 2.9 per cent on a constant currency basis but down 3.2 per cent after a 6 per cent swing in currency is taken into account. Pre-tax profits were flat at £65.2m.

Aerospace engineer Senior (SNR) says adjusted profits for the opening quarter were in line with expectations despite the adverse currency impact of 6 per cent over the period.

OTHER COMPANY NEWS:

Henderson Group (HGG) has seen assets under management grow by £4bn to £79.2bn during the first quarter of the year, including £3bn of net inflows.

Conviviality Retail (CVR), the owner of the Bargain Booze chain of off licences has confirmed that it is in discussions with Bibby Retail Services with regard to the possible acquisition of a number of off licences.