Equities continue to hold steady around the record high posted earlier this week with little direction in the markets. Click here to see what the Trader Nicole Elliott makes of the latest market action.
IC TIP UPDATES:
Lloyds Banking Group (LLOY) has finally returned to the dividend list, six years after last making a payout to investors. Having made progress on rebuilding its balance sheet and turning in an underlying profit of £7.8bn for 2014, Lloyds is paying a 0.75p a share dividend. Our recommendation is under review.
Engineer Ricardo (RCDO) has continued its strong performance by posting an 8 per cent rise in interim revenues to £120.5m with underlying profits up 9 per cent at £10.1m. Strong order intake means the company had a record order book worth £152m at the end of January. We keep our buy rating.
Pest control specialist Rentokil (RTO) continues to make progress in its turnaround plan with revenues from ongoing operations rising 3.6 per cent at constant exchange rates for 2014 and profits surging by 58 per cent on the same basis. Momentum improved throughout the year with fourth quarter trading showing solid progress. The company bought 30 bolt-on businesses during the year, with combined revenues of £66m. Management says it is confident despite difficult trading conditions in some European countries. Buy.
Simon Thompson recommendation Macau Property Opportunities (MPO) has seen the value of its property portfolio decline by 2.1 per cent during the six months to December, a shift it puts down to the anti-graft campaign of the Chinese authorities.
Fuel cell specialist Intelligent Energy Holdings (IEH) has announced the acquisition of Societe Bic, a developer of portable fuel cells and cartridges, in a deal worth up to $20m which enhances IEH’s manufacturing capabilities and intellectual property. Meanwhile, the company has updated on trading saying its most recent quarter saw an eightfold increase in revenues compared with the same quarter a year ago. We keep our buy rating.
Urban & Civic (UANC) has agreed to acquire strategic land company Catesby Property, which has assets primarily in the Midlands, for £34m. We maintain our buy rating.
KEY STORIES:
Full year results from International Consolidated Airlines (IAG) showed an 8 per cent rise in revenues to €20.2bn and post tax profits of €1bn, up from €151m last year. British Airways made a healthy operating profit of €1.2bn, up from €715m in 2013 while Iberia’s turnaround was marked by a profit of €50m, up from a loss of €166m the previous year. The company expects to generate an operating profit of €2.2bn in 2015.
Investors Chronicle owner Pearson (PSON) posted a 4 per cent decline in sales to £4.87bn, although at constant exchange rates sales grew by 2 per cent. Pre-tax profits dipped by 20 per cent to £305m, partly due to currency movements and restructuring costs but management has increased the dividend by 6 per cent to 51p.
Restaurant Group (RTN) enjoyed a 10 per cent uplift in annual revenues to £635m for 2014 with cash earnings 8 per cent higher at £117m. The company opened 40 new sites during 2014 and expects to open 42-50 this year. Like for like sales in the first 8 weeks of the financial year are up 2.5 per cent.
Japanese optical instruments giant Nikon has agreed a 340p a share offer for Optos (OPTS) which values the company at £259.3m. The offer has been recommended by the board of Optos.
Bookmaker William Hill (WMH) generated record operating profits of £372m in 2014 after an 11 per cent rise in revenues to £1.6bn, helped by good growth in its sportsbook and online channels as well as a record breaking football World Cup.
The strong property market enabled online property portal Rightmove (RMV) to grow revenues by 19 per cent in 2014 after a 10 per cent rise in traffic saw 15.4bn page impressions over the year. Underlying profits rose by 20 per cent to £124.6m.
Engineer IMI (IMI) saw organic revenue growth of 2 per cent in 2014 although currency movements saw overall revenues dip by 3 per cent and profits dipped by 7 per cent as margins came under pressure. But management believes actions taken are beginning to produce growth and has upped the dividend by 7 per cent to illustrate its confidence.
OTHER COMPANY NEWS:
Market Tech Group (MKTs), the owner of large parts of Camden Market in London, has agreed to buy the Interchange Building, Camden Wharf and the freehold over the Camden Lock Market for a combined £95m.
Revolution Bars has announced the pricing of its forthcoming Initial Public Offering at 200p to 240p, which would value the company at £110m at the middle of this range.
