Equities are up, following Wall Street's lead after the latter's record 15-year high. Watch The Trader Nicole Elliott discussing the markets.
IC TIP UPDATES:
Phoenix Group (PHNX) saw shares rise after an interim management statement reported that it generated £87m of cash in the three months to the end of March, and is on track to meet its financial targets. It also bought a £300m portfolio of equity release mortgages to help back its annuity liabilities. Buy.
Derwent London (DLN) has secured annual rents worth £10.6m so far this year, eclipsing the £9.2m achieved in the whole of 2014. We maintain our buy advice.
French Connection (FCCN) has said its first half sales growth is now forecast to be “materially lower than expected” as the challenging year-end retail conditions continued through the Easter period. Overall financial performance for the year is now expected to be below current market expectations. We are reviewing our buy recommendation.
BAE Systems (BAE) has engaged external advisers to assess its US intelligence and security business after enquiries were made by interested parties. The assessment does not include the technology or geospatial intelligence parts of that division, nor does it include BAE Systems Applied Intelligence. We maintain our buy recommendation.
Specialist currency manager Record (REC) has increased its assets under management to $55.4bn at the end of March from $52.7bn at the end of the year. Return-seeking and passive strategies made up the bulk of the net inflow. The company also recorded its first performance fee for five years. Buy.
Engineering group Smiths (SMIN) has announced a €600m senior bond offering, with a 1.25 per cent coupon and maturing in 2023, to improve its corporate funding and repay some of its existing debt. The offer is expected to close on 28 April. We keep our sell recommendation.
Dixons Carphone (DC.) has entered into an agreement to sell its 83 per cent stake in The Phone House Netherlands to Relevant Holdings. Dixon Carphone will remain a minority shareholder. We reiterate our buy advice.
KEY STORIES:
HSBC (HSBA) has announced, 150 years after it was founded, that it is considering moving its headquarters. The company's board has asked the management team to consider the best centre for its operations. Speculation has been building that the bank may depart the UK as bank fines and levies mount.
The government has sold another 742m shares in Lloyds (LLOY). It pushes the government’s stake below 21 per cent.
AstraZeneca (AZN) saw its shares fall despite first quarter results in line with expectations, and the announcement of a tie-up with Celgene Corporation to develop cancer medication. Analysts have raised questions about R&D costs and the value of the base business.
Shares in Clinigen Group (CLIN) rose strongly after it announced the acquisition of Idis Group Holdings to create what the company called a market leader in the sale of the ethical unlicensed supply of medicines.
Reckitt Benckiser (RB.) has announced like-for-like trading up 5 per cent to £2.2bn, excluding the impact of currency movements, acquisitions, disposals and discontinued operations. Its consumer health business performed most strongly, and the group saw growth across Europe and North America, though weaker performance in Latin America. The group is in line with its full-year targets.
Ithaca Energy (IAE) is to sell its wholly owned Norwegian exploration subsidiary Ithaca Petroleum Norge AS to a subsidiary of the Hungarian-listed company MOL for an initial consideration of $60m, with the potential of a $30m bonus depending on exploration success from the existing portfolio.
Rotork (ROR) has reported order intake for the first quarter to be 7.3 per cent lower than the same period last year due to low levels of investment in the upstream oil and gas market, which the company put down to continued political uncertainty in Russia, eastern Europe and the Middle East.
OTHER COMPANY STORIES:
Pearson (PSON), the owner of the FT Group which publishes Investors Chronicle, reported trading in line with expectations. It also said chairman Glen Moreno is to step down after more than nine years in his post.
Petra Diamonds (PDL) has announced a $300m notes issue, as well as increasing its senior debt facilities, in part to fund the opening of a processing plant at the Cullinan mine in South Africa. The company has agreed with its lender group to increase its debt facilities by $81.6m to $302.4m.
Spectris (SXS) has reported like-for-like sales growth up 1 per cent in the first three months of 2015, while acquisitions provided further growth of 5 per cent. Growth was strongest in Europe, while North America and Asia-Pacific struggled.
UBM (UBM) reported good first quarter performance, in line with expectations – including growth in its events business, as anticipated. The company’s larger events are performing most strongly, while it has “rationalised” a number of its smaller, less profitable programmes.
Sweeteners producer PureCircle (PURE) has bought the remaining 1.4 per cent equity interest in PureCircle Jiangxi Co. Ltd for $1.8m. It already owns the rest of the company, which manufactures and sells crude stevia extract in China. The group is issuing 240,000 new ordinary shares to pay for the acquisition, which should be admitted to Aim on 27 April.
The AA (AA.) has continued with its march to improve its debt structure by redeeming the outstanding payment in kind notes through its subsidiary AA Pik Co. The redemption was funded by a placing and open offer that was completed on 21 April.
Cobham (COB) is selling its Weinschel and Inmet businesses for $80m in cash, to API Technologies.
