Equities are holding their own in early trading after heavy losses last week with news of a comprehensive victory for Japanese prime minister Shinzo Abe giving some hope to QE junkies that Japan’s expansionist policies will continue. Click here for The Trader Nicole Elliott’s latest take on the markets.
IC TIP UPDATES:
Property specialist Segro (SGRO) has sold a portfolio of six industrial estates in the UK for £113.8m to Orchard Street Investment Management, a price 10 per cent in excess of the book value in the June 2014 accounts. The sale almost completes Segro’s sale of non-core assets. We keep our buy rating.
Half year figures for defence technology specialist Cohort (CHRT) reflect a solid performance with adjusted operating profits up by more than a third at £2.5m after a 13 per cent uplift in revenues to £37.6m. Recent order wins have been strong with order intake up 80 per cent to £64.5m. Combined with acquisitions which added £38m to the order book, the period to October closed with an order book worth £146.6m. Other orders since the period end mean 86 per cent of the second half consensus forecast revenue is already underpinned. We maintain our buy recommendation.
Simon Thompson recommendation entu (ENTU) says that demand for its energy efficiency products has been ‘robust’ and it is on course to meet expectations.
Brick maker Michelmersh (MBH) says that recent positive trading coupled with strong pricing performance means that the full year results are now expected to exceed market forecasts. We keep our buy rating.
Another Simon Thompson recommendation, specialist finance business 1pm (OPM) says it has continued to see high levels of demand for its lending for smaller companies in the six months to November including record monthly new business figures of £1.5m for October. Its asset finance and loans portfolio was 37 per cent higher at the end of November than a year previously.
KEY STORIES:
Carpetright (CPR) has seen a marginal improvement in trading in recent months in the UK, where revenues for the six months to 25 October rose by 5 per cent, but a 9.4 per cent reversal in European revenues in the same period dragged group performance back. Overall group sales rose by 2.6 per cent and profits rose from £1.9m to £6.7m. New chief executive Wilf Walsh is carrying out a strategic review of the business.
Terra Firma, the private equity vehicle of Guy Hands, has announced that it is considering its options regarding its 68.6 per cent shareholding in renewable energy company Infinis (INFI) which may lead to a sale of its shares.
Greggs (GRG) says own shop like for like sales rose by 5.4 per cent in the 24 weeks to 13 December, giving year to date like for like sales growth of 4.2 per cent with total sales growth of 3.6 per cent. The recent strong performance, against tough comparatives from last year, means management now expects full year figures to beat expectations.
Johnson Matthey (JMAT) has announced the sale of its gold and silver refining business to Asahi Holdings for £118m.
Building materials group CRH (CRH) has agreed to sell its clay and concrete products businesses in the UK and US to Bain Capital for an enterprise value of £414m, of which net cash due to CRH will be £295m.
OTHER COMPANY NEWS:
UK onshore oil and gas business IGas (IGAS) has completed drilling of a well at Ellesmere Port which management reports encountered ‘significant gas indications’ across a 1,400 feet section of shale.
Online flash sale retailer MySale (MYSL) has suffered from the slowdown in the Australian economy, where sales were flat in the five months to end November. But overall group revenues rose by 4 per cent in the period as its performed well in Asia, where like for like sales rose by 29 per cent, and saw contributions from the UK and US for the first time. Investment in the business means profits will now be ‘materially below’ market expectations.
