Equities have retraced pretty much all of yesterday’s losses in early trading as confidence floods back into the market, but The Trader Nicole Elliott points out that professional investors are beginning to question valuations.
IC TIP UPDATES:
Royal Mail Group (RMG) has admitted that one of its operations in France has received notice from competition authorities there that it has allegedly breaching anti-trust laws. The company says it is investigating and can’t yet quantify any losses although they ‘could be material’. We maintain our sell rating.
Silver miner Fresnillo (FRES) says its latest quarterly silver production figure was 5 per cent up on the first quarter although year to date production is in line with last year. Gold production is down on last year due to temporary disruptions at one mine which have now passed. Management says it is on track to produce guidance of 43m ounces of silver and 450,000 ounces of gold in the full year. We keep our buy rating.
IC Tip of the Year Wincanton (WIN) continues to trade in line with expectations as a number of new contract wins have helped it to negotiate what continue to be competitive market conditions. Buy.
Simon Thompson recommendation Safestyle (SFE) says revenues for the first half of the year are expected to be 8.9 per cent higher than last year’s figure and that the company has grown its market share from 7.85 per cent to 8.24 per cent during the first half. Overall market growth is said to have moderated in the second quarter after a strong opening to the year.
Fit out and construction specialist ISG (ISG) has announced the acquisition of 50.1 per cent of a Spanish interiors company for a maximum consideration of €4.7m. We keep our buy rating.
Electronic payments specialist Earthport (EPO) says that revenues for the year to June are expected to be 160 per cent higher, with like for like revenue growth of 60 per cent with the remainder coming from an eight month contribution from the Baydonhill acquisition. In total, 33 new customers were signed up during the year with 14 going live and there are now 25 customers contracted in the pipeline compared with seven at the same stage last year. Buy.
Sell recommendation Speedy Hire (SDY) reports a 15.7 per cent rise in revenues for the three months to June, driven by improving economic conditions in the UK and Ireland. The troubled international division, which was the source of a profit warning earlier this year, is focusing on a return to profitability. Our recommendation is under review.
Development Securities’ (DSC) subsidiary Cathedral Group has signed a contract with Brighton and Hove council and the University of Brighton for a mixed use development of the Preston Barracks site. Buy.
KEY STORIES:
Sports Direct (SPD) founder Mike Ashley has decided to withdraw from the controversial 2015 bonus share scheme just two weeks after it was approval by a slim margin after investor complaints.
Rio Tinto (RIO) has reported a strong first half production performance with global iron ore production up by 10 per cent and shipments up 20 per cent and copper up 23 per cent.
Severn Trent (SVT) says trading has been in line with expectations during the past three months with customer bills up by 1.5 per cent and consumption expected to be down in the full year.
British Land (BLND) continues to trade well with retail occupancy up by 0.1 per cent to 98.6 per cent in the past three months and retail footfall 2.5 per cent higher. Office occupancy also rose by 0.5 per cent to 96.6 per cent. The company continues to reshape its portfolio with £115m of retail disposals during the period and a further £150m under discussion.
Balfour Beatty’s (BBY) Hong Kong joint venture has been awarded £300m worth of construction contracts.
OTHER COMPANY NEWS:
Luxury wallcoverings and furnishing group Walker Greenbank (WGB) is enjoying further solid growth with sales up by 6 per cent in the first five and a half months of its financial year with UK brand sales up by 10 per cent and overseas sales down 0.1 per cent, although this is primarily due to currency moves with sales up 4.7 per cent in constant currency terms.
Workspace (WKP), which provides office and small scale industrial units to small and medium sized enterprises, grew rent roll by 4.6 per cent in the three months to June and 14.9 per cent over the same period a year ago.
