Equities are flat in early trading as investors keep their powder dry ahead of the European Central Bank meeting later today. For the Trader Nicole Elliott’s latest views on the markets, click here.
IC TIP UPDATES:
Packaging specialist DS Smith (SMDS) continues to eke further efficiency from its operations. First half results showed flat revenues of £1.97bn but profits grew 45 per cent to £123m. Net debt has also been reduced by £133m to £694m. Results were boosted by acquisitions but organic revenues grew by 2.3 per cent. Buy.
Sky (SKY) has announced plans to sell its Sky Bet gaming operations to private equity group CVC in a deal which values the business at £800m. Sky will receive £600m upfront and a further £120m of deferred payments plus it retains a 20 per cent stake in the business. We maintain our buy rating.
Simon Thompson recommendation Amino Technologies (AMO) reports that trading has remained strong since it last updated in October and management now expects full year results to surpass market expectations.
Another Simon Thompson recommendation, Indian renewable power generator Greenko (GKO) grew its operational capacity by 45.6 per cent in the six months to September and now has 715MW of generating capacity operational. The resultant uplift in revenues was 125.6 per cent to $82.7m with cash profits more than doubling to $74.2m. The company has a further 590MW of projects under construction.
KEY STORIES:
Betting exchange operator Betfair (BET) has continued to enjoy buoyant trading, helping it to post record interim results for the six months to October. Revenues rose by 26 per cent and pre-tax profits more than doubled to £67.3m as the company both grew its customer numbers and cross-selling while sports results continued to be favourable. Management has decided to reward investors with a £200m return of cash as well as a 50 per cent hike in the interim dividend to 9p a share.
Pubs and brewing giant Greene King (GNK) posted record sales for the 24 weeks to 19 October with total revenues up 3.3 per cent to £595.4m and underlying profits 3 per cent higher at £79.2m. Like for like sales in the past 12 weeks are 1.5 per cent higher with Christmas bookings up by 7.2 per cent.
Tui Travel (TT.) has declared ‘another year of outperformance’ after posting full year profit growth of 3 per cent to £475m or underlying profit growth of 11 per cent at constant currencies. The company has sold 63 per cent of its winter programme at prices 1 per cent up on last year with summer 2015 bookings in the UK up 9 per cent at this early stage.
Interim results from Pets at Home (PETS) for the 28 weeks to 9 October showed total revenue growth of 10.2 per cent to £381.5m with services revenues growing strongly at 27 per cent. Underlying earnings grew by 10.8 per cent to £58.6m.
Strong trading over the past couple of months means that recruiter Robert Walters (RWA) is now expecting full year results to come in ahead of forecasts.
Drinks maker AG Barr (BAG) saw like for like revenues dip 0.6 per cent in the 18 weeks to 30 November due to lower promotional activity and a tough pricing environment. Year to date revenues, excluding Orangina, have grown 3.5 per cent.
Half year results from posh bag maker Mulberry (MUL) were in line with the profit warning issued in October with sales down 17 per cent to £64.7m after a 9 per cent decline in retail sales and a 31 per cent slump in wholesale revenues. Losses were £1.1m against a profit of £7.2m a year ago. Current trading has shown an improvement with retail revenues for the past nine weeks up 8 per cent.
Pharmaceuticals specialist BTG (BTG) has announced plans to raise £150 through a placing, some of the proceeds of which will be used to help fund the acquisition of pulmonology business PneumRx Inc in a $230m deal.
OTHER COMPANY NEWS:
Carillion (CLLN) has won support services contracts worth an aggregate £80m at Heathrow and St Barts Hospital.
Numis Group (NUM) continues to thrive despite more difficult equity market conditions in recent months. Results for the year to September showed 20 per cent revenue growth and a 22 per cent uplift in adjusted profits to £30.5m. The company has admitted that volatility has affected markets in recent weeks and says it ‘remains sensitive’ to such conditions.
Photo-Me International (PHTM) saw turnover dip by 4.9 per cent in the six months to October, although this was affected by currency movements but underlying pre-tax profits rose by 10 per cent to £25.3m.
