Equities are up marginally as they continue to brush off wider geopolitical concerns, although The Trader Nicole Elliott fears we are getting sucked into a summer lull.
IC TIP UPDATES:
Outsourcing giant Capita (CPI) has enjoyed a strong opening half to its financial year, growing revenues by 13.9 per cent to £2.07bn with pre-tax profit up 16 per cent to £238m. The company won £1.3bn of new contracts during the period during which its major contract win rate was 2 in 3. We keep our buy rating.
Alternative lender Provident Financial (PFG) grew its first half profits by 23 per cent to £94.1m, with particularly strong progress in the UK where customer growth was 17 per cent, average receivables were up by 32 per cent and arrears are at a record low. Buy.
Entertainment One (ETO) reports a 4 per cent rise in revenues in constant currency terms in its trading statement for the period from 1 April to 30 June but within that film revenues dipped by 4 per cent due to the timing of releases while television revenues surged by 67 per cent. We maintain our buy recommendation.
Half year results from Morgan Advanced Materials (MGAM) were hampered by currency headwinds which meant reported revenues showed a dip of 7.8 per cent but improving margins and returns on capital employed meant that cash earnings dipped by only 3.3 per cent and underlying profits rose by 10.3 per cent to £43.8m. Buy.
Simon Thompson recommendation 32red (TTR) says trading continues to be buoyant with total gross gaming revenues up by 19 per cent in the opening half of 2014 and net gaming revenues 20 per cent better.
Assura Group (AGR) is to acquire a 3,300 square metre medical centre in Middlesbrough for a total consideration of £12.3m, with a rental yield of 6.3 per cent. We keep our buy rating.
Energy Assets Group (EAS) has signed a contract with British Gas to install smart meters in half of its industrial and commercial customers’ premises. Buy.
KEY STORIES:
Johnson Matthey(JMAT) has posted flat sales figures for the first quarter of its financial years with decent progress in Emission Control Technologies offset by the double pressure of weaker Process Technologies and Precious Metals performance coupled with adverse currency movements. Underlying profit before tax was 10 per cent lower at £95m although stripping out £50m of exchange rate movements and £10m of lost commission income from Anglo American would have seen sales rise by 9 per cent.
Charles Stanley(CAY) says that revenues increased marginally in its first quarter despite a 16 per cent drop in commission income. This was offset by improvements in fee income and total client funds were up 0.2 per cent to £2.14bn. Management says it is cautious about the coming months.
TalkTalk (TALK) has continued its steady improvement by posting a sixth consecutive quarter of year on year revenue growth, up 3.1 per cent, and a seventh consecutive quarter of base growth with a net 10,000 new broadband customers. TV is also a strong growth channel with a net 185,000 new customers added in the period, taking the total to 1.1m.
OTHER COMPANY NEWS:
Engineer Renishaw (RSW) has posted record revenues for the year to June, up 2 per cent to £355.5m after record fourth quarter revenues of £107m. Reported profits rose by 17 per cent to £96.4m.
Recruiter Staffline (STAF) has announced a contract win in Northern Ireland with the Department of Employment and Learning to run one of three ‘Steps to Success’ programmes. Meanwhile, half year results showed an 11 per cent uplift in revenues to £208.1m and underlying pre-tax profits up by 30 per cent to £6.4m.
