Markets are largely flat in early trading as investors digest disappointing business and consumer confidence figures from the eurozone and keep an eye on protests in Hong Kong. Click here for the Trader Nicole Elliott’s verdict on the world’s equity markets.
IC TIP UPDATES:
Qinetiq (QQ.) confirms guidance for its full year results with good performance in its Europe, Middle East and Africa business streams picking up slack being created by uncertainty caused by the US military drawdown. We maintain our buy rating.
Telford Homes (TEF) has sealed a deal with Workspace Group (WKP) for the development of its Poplar Business Park close to Canary Wharf. Telford is paying £16.3m for the first phase which will result in it building 120 open market homes, 50 affordable homes and 8,000 square feet of light industrial space which will be returned to Workspace. The development value of the project is £75m, taking Telford’s total pipeline through the £1bn barrier for the first time. Buy.
Plastics specialist RPC (RPC) says revenues for the period from April to September are likely to be ‘significantly’ ahead of last year due to contributions from acquisitions and good growth in the US and UK. We keep our buy recommendation.
Simon Thompson recommendation Dragon Ukrainian Property (DUPD) has issued solid half year results considering the wider context in which the business is operating. Revenues were down slightly at $11.4m but profits rose from $1.6m to $5.4m. Net asset value has dipped by 15.1 per cent over the period. The company had pre-sold 43 per cent of the apartments and commercial areas of its Obolon Residences project by the end of June, which is in line with plan.
KEY STORIES:
Next (NXT) has admitted that the recent unseasonably warm weather has resulted in poor sales, reversing the benefits of cooler weather in August. Third quarter sales to date are up 6 per cent, compared with forecasts of 10 per cent sales growth. If the warm weather continues through October, management will revise full year profit guidance lower to £775m to £815m.
Royal Bank of Scotland (RBS) reports that improving economic conditions in the UK and Ireland have boosted performance in the third quarter of the year with the RBS Capital Resolution part of the business seeing lower impairments and disposal losses and the rest of RBS’ businesses seeing lower impairments although the corporate and institutional business has seen weaker than anticipated revenues.
Saga (SAGA) posted a 15.2 per cent uplift in group operating profit for the first half of its financial year with pre-tax profits up 14.9 per cent on a like for like basis at £106.5m.
The chief executive of car dealership Inchcape (INCH), Andre Lacroix, has announced his intention to resign in March 2015 to take over at Intertek.
Builders merchants Wolseley (WOS) posted a 6.1 per cent uplift in revenues at ongoing businesses in the year to July at constant exchange rates with like for like sales up 4.2 per cent. Profits rose from £460m to £698m and the final dividend of 82.5p is 25 per cent higher than last year. Management has also announced a £250m share buy back.
Icap (IAP) says first half group revenues are likely to be 10 per cent lower than last year on a constant currency basis due to challenging market conditions. Meanwhile, finance director Iain Torrens is leaving the business to join TalkTalk.
Melrose Industries (MRO) is to acquire Eclipse, a US manufacturer of gas combustion components and industrial heating applications, for $158m in cash.
OTHER COMPANY NEWS:
Appliances retailer AO World (AO.) has opened its German operations six months ahead of schedule.
South American focused oil and gas business Amerisur Resources (AMER) saw production reach 6,561 barrels of oil per day in the first half, up from 3,715 bopd in the previous year with output being held back by constrained oil export routes from its Colombian site. Overall revenues were $114.1m and profits $50.8m, up from $64.4m and $29.1m respectively.
