Shares in London are flat again as more positive comments from the US with regard to interest rate rises are cancelled out by the sense of uncertainty over whether Scotland will vote to leave the United Kingdom today. Click here for the Trader Nicole Elliott’s latest views.
IC TIP UPDATES:
Budget airline easyJet (EZJ) has confirmed plans to increase its dividend payout ratio from one third of post-tax profits to 40 per cent of post tax profits, rather than pay out a special dividend as it did last year. Buy.
Theme park and tourist attraction operator Merlin Entertainments (MERL) has issued a trading statement for the 36 weeks to 6 September showing group growth of 9.3 per cent at constant exchange rates or 3.8 per cent at actual rates with like for like growth of 6.7 per cent. We maintain our buy recommendation.
Retailer French Connection (FCCN) has posted its third consecutive half year period of improved performance during which period underlying UK and Europe like for like sales rose by 6 per cent with the added bonus of less discounting leading to an improvement in margins. Total group revenues dipped by 6.6 per cent due to shop closures and exchange rate shifts but group losses narrowed from £6.1m to £3.9m. Our recommendation is under review.
Construction specialist Kier (KIE) enjoyed a 51 per cent uplift in revenues in the year to June with underlying profits rising by 54 per cent to £73.1m. During the period the company won £1bn worth of new services work and £2bn of construction contracts, taking the combined order book for construction and services to £6.2bn with the housing and property pipeline firm at £1.5bn. Buy.
Development Securities (DSC) has won planning permission for a £100m mixed use regeneration scheme in Brighton. We keep our buy rating.
Developer CLS Holdings (CLI) has been awarded consent for its planned redevelopment of Westminster Tower on Albert Embankment in London. Buy.
Simon Thompson recommendation Safestyle (SFE) enjoyed a strong opening half to the year during which revenues rose by 10 per cent and profits by 13 per cent to £8.8m, allowing the payment of a 3.1p interim dividend. The company’s share of the UK’s replacement windows market has grown from 7.85 per cent to 8.24 per cent.
Fellow Simon Thompson recommendation, Nationwide Accident Repair Services (NARS), has announced the acquisition of Gladwins, a crash repair services specialist concentrated in East Anglia, for £9.5m.
Canary Wharf property owner Songbird Estates (SBD) enjoyed an 8.2 per cent uplift to its property portfolio valuation to £6.28bn in the six months to June with adjusted net asset value per share rising 10 per cent to 319p. The company recently sold 10 Upper Bank Street for £795m and is investing in its estate including new buildings at 25 Churchill Place and around the Canary Wharf CrossRail station. Buy.
Pressure Technologies (PRES) has announced the acquisition of New Zealand biogas engineering specialist Greenlane which specialises in equipment for turning biogas from waste into biomethane. Greenlane will merge with Pressure’s Chesterfield Biogas to form an enlarged Alternative Energy subsidiary. The deal involves a payment of NZ$12m (£6m) up front with a further maximum NZ$13m spread over four years. We keep our buy rating.
Simon Thompson recommendation Trifast (TRI) reports that trading remains encouraging despite the strengthening of sterling and it is on course to meet expectations.
Electronics distributor Premier Farnell (PFL) posted 3.3 per cent sales growth for the first half with the trend accelerating in the second quarter with adjusted profit before tax up by 2.4 per cent despite currency movements. Buy.
KEY STORIES:
Van hire specialist Northgate (NTG) says it sees continued return to profit in both its UK and Spanish operations.
Petra Diamonds (PDL) enjoyed a strong year to June during which it grew revenues by 20 per cent to $471.8m and adjusted earnings by 47 per cent to $187.7m. Production rose by 17 per cent to 3.1m carats with production forecast to top 3.2m carats in the current year.
Just Retirement (JRG) posted a 6 per cent rise in new business sales to £1.75bn, boosted by good sales of defined benefit products and lifetime mortgages which helped to offset the slide in annuity sales following March’s budget. Individual annuity sales have settled at just less than half their previous levels.
