Equities dipped a little yesterday as markets took a breather following recent rises and US and Asian markets were becalmed overnight too.
IC TIP UPDATES:
Babcock International (BAB) has posted 24 per cent revenue growth for the six months to September and a 32 per cent rise in profit before tax to £187m. Meanwhile, its order book has leapt by 54 per cent to £18.5bn with 95 per cent of 2015 revenue already secured. The company also has a £13.5bn bid pipeline and yesterday was declared preferred bidder for the Defence Support Group, which is responsible for military equipment and vehicles. We keep our buy rating.
Close Brothers (CBG) reports a steady start to the year as good trading conditions in its banking operations have offset more difficult trading at the Winterflood securities business. The banking loan book has increased by 2.3 per cent to £5.4bn and assets under management remained stable at £9.7bn. Buy.
Retail property specialist New River Retail (NRR) more than doubled its profits to £12.3m in the six months to September and increased its net asset value per share by 14 per cent to 252p. The company completed £174m of acquisitions in the period at an average yield of 8.2 per cent while assets under management increased by 28 per cent to £767m. We maintain our buy recommendation.
Grainger (GRI) boosted profits by 28 per cent to £81.1m in the year to September, during which time its UK residential assets increased in value by 14.6 per cent. The company also reports a positive start to the current year with a sales pipeline of £77m. Buy.
The Financial Conduct Authority has fined Royal Bank of Scotland (RBS) and its subsidiaries Natwest and Ulster Bank £42m for IT failures which led to customer difficulty in accessing accounts in 2012 with the Prudential Regulation Authority levying a further £14m.
KEY STORIES:
Centrica (CNA) has scaled back expectations for its full year earnings per share to 19p-20p due to a combination of mild weather in the UK, difficult trading conditions for British Gas Services and boiler inspections at Heysham and Hartlepool power stations. Falling oil and gas prices are also expected to affect the upstream business. Nonetheless, management still expects to deliver growth in 2015.
Troubled insurance services business Quindell (QPP) has responded to media speculation by denying it is seeking to sell its shares in Simon Thompson recommendation National Accident Repair Services (NARS).
Qinetiq (QQ.) has experienced challenging market conditions in the six months to September, resulting in minor reductions in revenues but secured a double digit increase in order intake.
Johnson Matthey (JMAT) says performance for the full year is expected to be slightly ahead of last year despite a difficult first six months in which currency movements and the loss of commission revenue from Anglo Platinum hit headline figures. Revenues dropped by a quarter to £4.8bn but underlying profits edged up by 2 per cent to £216.4m.
Mothercare (MTC) continues to reshape its UK business with the closure of 14 stores in the 28 weeks to 11 October and 14 per cent growth in online sales to represent just over a quarter of total UK sales. Like for like sales in the UK edged up by 1.5 per cent with total sales down 1.2 per cent. The international business saw like for like sales growth of 4.9 per cent but unchanged profits due to currency headwinds. Overall group sales were marginally down at £372.7m.
Young & Co’s Brewery (YNGA) grew revenues by 7.8 per cent for the six months to 29 September with pre-tax profits up 26.2 per cent to £18.8m after seeing continued growth in managed pubs, a return to growth in its tenanted division and good performance from hotels. Trading since the period ended has also been strong with like for like revenues in the managed division up by 8.8 per cent
OTHER COMPANY NEWS:
Dart Group (DTG) grew revenues by 15 per cent to £902.2m in the six months to September with underlying profits rising 14 per cent but headline profits fell by 8 per cent to £71.7m after an exceptional provision for £17m was made due to a recent EU ruling on compensation for delayed flights.
Tritax Big Box Retail (BBOX) has confirmed its intention to proceed with an institutional placing to raise £110m at a 3.4 per cent discount to the share price.
Empiric Student Property (ESP) has announced the successful placing of 65m shares at 101p each, raising £65m. It has also agreed to forward fund a student property development called Snow Island in Huddersfield.
