Equities have fallen back further in early trading despite marginally better than expected factory data from China overnight. Click here for the Trader Nicole Elliott’s latest views on the markets.
IC TIP UPDATES:
Shares in Tate & Lyle (TATE) have taken a tumble this morning after the company issued another profit warning on the back of worse than expected trading due to pricing competition in the sweeteners market and weather related problems in the US which hit the supply chain. Half year results are expected to see adjusted profit of around £95m-£105m and full year profits are expected to be in the £230m-£245m range, around 20 per cent below previous forecasts. Our recommendation is under review.
PZ Cussons (PZC) has issued a generally positive trading update detailing continued improvements in the UK and Asia but some difficulties in Nigeria where unrest in the north of the country has hampered sales. Overall trading is in line with expectations. We maintain our buy recommendation.
Simon Thompson recommendation National Accident Repair Services (NARS) posted a 13.7 per cent rise in first half revenues and an 86 per cent leap in underlying pre-tax profits at £2.5m.
Half year results from Faroe Petroleum (FPM) reflected shut-ins at two producing wells which reduced revenues from £89m to £53.5m with profits also slipping from £56.9m to £15.6m. But the company ended the period with significant cash reserves which fully fund its proposed drilling programme through this year and next. Buy.
Northbridge Industrial Services (NBI) posted half year revenue growth of 13.8 per cent to £21.2m with gross profits up 16.6 per cent at £11.6m. Meanwhile, the company has announced a £3.5m fundraising to help pay for the acquisition of Tasman Tools, a New Zealand based specialist drilling tools hire company. The deal reunites the New Zealand arm of this business with the Australian arm which Northbridge previously bought. We maintain our buy recommendation.
Simon Thompson recommendation KBC Advanced Technologies (KBC) enjoyed a 9 per cent uplift in revenues in the opening half of the year but profits were flat at £2.9m due to exchange rate movements, strip them out and profit would have risen by 64 per cent to £3.6m.
Another Simon Thompson recommendation, Netcall (NET) grew revenues by 5 per cent and adjusted earnings by 16 per cent to £4.9m in the year to June. The customer engagement software provider also upped its dividend by 29 per cent and reported a ‘double digit’ increase in sales order inflows.
KEY STORIES:
Tesco (TSCO), still reeling from yesterday’s shock profit warning, has fast tracked the appointment of chief finance officer Alan Stewart, who joins from Marks & Spencer. He will now start today rather than the original intention of a 1 December start date. For the Trader Nicole Elliott's technical analysis of the Tesco share price, click here.
Mothercare (MTC) has announced a proposed £100m rights issue in a bid to reduce debts and accelerate its board’s strategic plan.
Roadside safety and insurance business AA (AA.) has issued its maiden interim results since floating in June. Revenues rose from £484.1m to £491.7m and trading earnings rose by 3.9 per cent to £211.8m but reported operating profit fell by 11.7 per cent to £148.5m.
New issues appear to be back on the agenda with two sizeable potential IPOs announced today in the form of regional housebuilder Miller Homes and luxury shoe company Jimmy Choo.
Drinks business AG Barr (BAG) posted strong interim results showing a 5.4 per cent uplift in revenues and a 14.6 per cent rise in profits before tax and exceptionals. The company also announced a new licensing deal for the UK and certain EU countries with US drinks brand Snapple.
Merchant bank Close Brothers (CBG) enjoyed a 20 per cent rise in adjusted operating profits in the year to July as its banking, securities and asset management arms all enjoyed solid growth. The banking business grew adjusted operating profits by 15 per cent, securities saw a 57 per cent rise in operating profits and asset management profits more than doubled to £9.9m on the back of a 7 per cent rise in assets under management to £9.7bn.
OTHER COMPANY NEWS:
Private jet business Air Partner (AIP) saw revenues and profits slip in the opening half of the year due to a lack of one-off contracts in its commercial jet business, which has led the company to cut costs in the division. The private jet business performed better with deposits in its JetCard business at an all-time high after sales of £5m in the first half compared with £1.8m last year, although these are not recognised as profit until they are used.
