Equities have steadied themselves in early trading in London ahead of news from the US Federal Open Markets Committee later today, the European Central Bank tomorrow and the Scottish referendum result on Friday. Click here for Nicole Elliott’s latest views.
IC TIP UPDATES:
IG Group (IGG) has announced subdued trading figures for the first three months of its financial year after volumes and volatility were becalmed over the summer months. Revenues came in 9 per cent lower than last year with reversals in all key regions. IG has just launched its stock broking business in the UK and Ireland. We maintain our buy recommendation.
Packaging specialist DS Smith (SMDS) says it is trading well with growth in all its regions running ahead of its GDP+1 per cent target. We keep our buy rating.
Simon Thompson recommendation Cenkos Securities (CNKS) has issued strong half year results showing a 226 per cent leap in revenues and a surge in profits from £3.1m to £23.5m, allowing management to double the dividend to 7p. First half figures were boosted by a significant transaction but management is confident of meeting full year expectations.
Smiths Industries (SMIN) posted mixed results for the year to July as gains in commercial markets were offset by ‘challenging’ healthcare and homeland security markets leaving revenues down by 5 per cent and pre-tax profits 11 per cent lower, exacerbated by currency movements. Our recommendation is under review.
Another Simon Thompson recommendation 600 Group (SIXH) says trading in the year to date is ahead of last year with order intake up by 6 per cent, although without adverse currency movements this would be more like 11 per cent.
Petroceltic International (PCI) produced an average 25,200 barrels of oil equivalent in the first half of the year, leaving it on course to meet full year targets of 21,000-23,000. Revenues were $96.3m but exploration write offs led to a loss of $57.4m. The company will recommence drilling in Kurdistan in October. Buy.
Town Centre Securities (TCSC), a Simon Thompson recommendation, edged underlying pre-tax profits up to £7.6m in the year to June with net asset value per share rising from 267p to 308p.
KEY STORIES:
JD Sports (JD.) posted record interim results, bolstered by a strong showing in its core sports business and improving performance from its outdoors business. Revenues rose by 27 per cent to £721.5m and profit before tax and exceptionals doubled to £20m.
Revenues at Chemring (CHG) slipped from £110.5m to £77.5m in the three months to July with countermeasures revenues down marginally and sensors and electronics sales down by half. The order book is up 3.9 per cent at £417.5m.
Funerals business Dignity (DTY) is proposing a restructure of its debts with a view to reducing its annual debt service obligations from £40m to £34m and freeing up funds to return 100p a share to investors.
OTHER COMPANY NEWS:
Intermediate Capital (ICP) has exercised its option to buy the 49.3 per cent of Longbow Real Estate Capital that it does not already own for an initial downpayment of £13m and further deferred payments up to a total of £24m.
Wealth manager Brooks Macdonald (BRK) only increased profits by 2 per cent for the year to June but a 28 per cent uplift in total funds under management to £6.55bn, through organic growth and acquisitions, augurs well for further improvements.
