Equities bounced out of the traps in early trading today after a rebound in the US overnight. Click here to read the Trader Nicole Elliott’s latest take on the global markets.
IC TIP UPDATES:
Sell recommendation Royal Mail (RMG) has come to a settlement agreement with the French competition authorities over alleged breaches of anti-trust regulations, although it remains subject to continuing investigations which may alter the final fee. Royal Mail has made an £18m provision in its accounts, of which £12m is for the estimated fine and £6m for legal costs.
Shares in retailer N Brown (BWNG) have dipped after the company admitted in its interim results that recent market conditions had been ‘very difficult’. This echoes the warning from high street star Next recently and prompted management to ‘re-set’ expectations for the full year. Figures for the six months to August showed a marginal dip in revenues to £407.6m and a 3.2 per cent decline in pre-tax profits at £42.7m, although some of this was expected due to changes in the business and its marketing activities. Our recommendation is under review.
Ithaca Energy (IAE) confirms production averaged 11,600 barrels of oil per day in the third quarter, which leaves full year expectations of 12,500 barrels per day unchanged. This figure was revised down from 13,500 after earlier problems at its Causeway Area fields. We keep our buy rating.
Rolls Royce (RR.) has won an order with Norwegian Airlines for Trent 1000 engines for nine Boeing 787 Dreamliners with an associated after care contract worth $440m. Buy.
Simon Thompson recommendation Greenko (GKO) says that its Mauritius subsidiary has secured a $125m investment from EIG Global Energy Partners of the US which will help it refinance a $70m facility with Standard Chartered and also invest in its business.
Specialist engineer Hayward Tyler (HAYT) won more than £10m worth of contracts in September, pushing its contracts won in the first half up to £27.6m, 7 per cent ahead of last year. Contracts won included nuclear spares for Korea, motor pumps for Sellafield in the UK and aftermarket sales in Argentina and China. We keep our buy rating.
Industrial adhesives specialist Scapa (SCPA) says it has seen ‘good’ growth in the six months to September despite currency headwinds. Buy.
Breedon Aggregates (BREE) has agreed a deal to acquire Barr Quarries in south west Scotland for £20.8m in cash. The deal will add 11 quarries, five asphalt plants, six ready mix concrete plants and 57m tonnes of reserves. Buy.
KEY STORIES:
Palm oil producer New Britain Palm Oil (NBPO) has attracted a takeover offer from Malaysian giant Sime Darby worth 715p a share, a premium of 85 per cent to last night’s closing price. The offer values the business at just north of £1bn and only requires 51 per cent acceptances. The independent directors are recommending the offer.
Oil services business Wood Group (WG.) says that trading has remained consistent with expectations with weakness in its upstream operations being offset by better performance in downstream.
Recruiter Hays (HAS) posted overall growth in fees of 4 per cent in the three months to September with like for like net fees up by 9 per cent. The UK and Ireland has been the main driver with performance in Europe and Asia more subdued.
Polymer specialist Victrex (VCT) has reported a strong end to trading in the year to September which meant that sales volumes for the year grew by 22 per cent overall with second half volumes 29 per cent better.
OTHER COMPANY NEWS:
IGas Energy (IGAS) says production of onshore gas in its UK fields averaged 2,766 barrels of oil equivalent in the first half. Meanwhile its acquisition of Dart Energy is mostly complete.
