Equities are still sticking around recent highs, buoyed by fresh records in the US overnight, but a sense of firm direction is lacking. Click here to see what the Trader Nicole Elliott thinks of the current state of play on the markets.
IC TIP UPDATES:
Full year results from Barclays (BARC) were hit by provisions for forex trading fines and a sharp drop in profits at its once-mighty investment bank. But excluding exceptional items, adjusted profits rose by 12 per cent to £5.5bn. We retain our long term buy recommendation based on chief executive Anthony Jenkins’ reorganisation of the bank, which is ongoing.
Building products specialist Travis Perkins (TPK) is another to benefit from the strong housing and construction markets, posting an 8.4 per cent rise in revenues for 2014 with adjusted operating profits up 10.5 per cent. The full year dividend is 22.6 per cent higher than last year. We keep our buy rating.
Strong trading at industrial hire group Ashtead (AHT) resulted in record third quarter results and an indication from management that the company is now likely to exceed expectations with its full year results. Nine month revenues were 23 per cent ahead of last year with profits up by one third. Buy.
Moneysupermarket (MONY) enjoyed growth across its three main businesses in 2014 with overall group revenues up by 10 per cent and statutory profits 52 per cent higher at £52.8m. Current trading has been strong, with the first two months of the year ahead of last year but comparatives will become tougher as the year progresses. We maintain our buy rating.
Construction business Costain (COST) saw revenues rise from £960m to £1.1bn in 2014 with underlying profits up from £27.4m to £28.7m. The order book has risen by 17 per cent to £3.5bn with more than £1bn secured for 2015. Buy.
Shares in ISG (ISG) have taken a knock after the company announced a discounted £16m fundraising to strengthen its capital base after it had to make a number of provisions in its interim results against loss making contracts in its construction division. Half year results showed an increase in revenues to £819m and a loss of £20.8, resulting in the company suspending its dividend payout. Our recommendation is under review.
IC Tip of the year Pace (PIC) has published strong results for 2014 showing a 24.5 per cent uplift in adjusted cash earnings and a 27.5 per cent rise in the annual dividend after a 6 per cent improvement in revenues to $2.62bn. Management is expecting 2015 revenues of $2.75bn and adjusted earnings of $255m with continued strong free cash flow. We keep our buy rating.
Breedon Aggregates (BREE) is enjoyed the upturn in fortunes for the UK construction industry which resulted in a 20 per cent improvement in its revenues and a 94 per cent rise in profits to £21.4m for 2014. Buy.
Laird (LRD), the electronics connectivity products specialist, enjoyed a 5 per cent rise in revenues for 2014 measured in sterling with profits also up 5 per cent to £63.2m. The company has now recorded six successive quarters of growth. Buy.
The continued improvement in trading at Johnson Service Group (JSG) is reflected in solid results for 2014 showing a 49 per cent improvement in adjusted profits to £20m, a reduction in net debt and a 40 per cent rise in the dividend. We keep our buy recommendation.
Telematics specialist Quartix (QTX) has announced its maiden results as a listed company showing a 16.5 per cent rise in group revenues and a 9.5 per cent improvement in pre-tax profits to £5m. A maiden dividend of 3p a share will be paid. Buy.
Pharmaceuticals specialist Clinigen (CLIN) posted a 17 per cent rise in group revenues to £72.6m for the six months to December with gross profits up 11 per cent at £22m. We keep our buy rating.
KEY STORIES:
House builder Taylor Wimpey (TW.) has demonstrated its confidence in current trading conditions by returning more of the cash its business is throwing off to shareholders through a doubling of its final dividend. A further £250m, or 7.48p a share, is to be returned to investors in July. Full year revenues rose by 17 per cent and pre-tax profits before exceptionals jumped by 68 per cent. The company has forward sold 51 per cent of its target for 2015 and has an order book worth £1.66bn.
Mining and commodities trading giant Glencore (GLEN) posted a modest reduction in group earnings for the year to December as the weak commodity pricing environment hit performance. Adjusted cash earnings dipped by 2 per cent to $12.8bn with the company’s marketing business showing 15 per cent growth and its industrial operations a 7 per cent reduction in earnings.
Paddy Power’s (PAP) strong performance has continued with the bookmaker posting an 18 per cent rise in net revenues to €882m for 2014 and record pre-tax profit of €167m, up 21 per cent with both the retail and online operations producing good growth. Management is raising its dividend by 13 per cent to €1.52 for the full year and is also proposing an additional cash return of €8.00 a share.
Interdealer broker Tullett Prebon (TLPR) saw revenues and profits dip in 2014 in challenging markets but management is maintaining its dividend payout. Meanwhile the company has settled its legal dispute with BGC and decided to retain the funds for corporate purposes.
Direct Line Insurance (DLG) saw gross written premiums dip by 3.8 per cent in 2014 in tough trading conditions although the fourth quarter saw a marginal improvement in premiums written. Meanwhile the combined operating ratio measurement of profitability showed a slight improvement to 95 per cent. The dividend is increased marginally and bolstered by a second special interim dividend of 4p taking the full year payout to 27.2p.
A leap in exceptional items due to restructuring costs at collagen products specialist Devro (DVO) meant a slump in full year profits to £2.2m but management has maintained the dividend payout as a reflection of its confidence as it awaits completion of new facilities.
