UK equity markets appear to be playing a waiting game in the UK as the general election looms. Click here to find out what the Trader Nicole Elliott makes of the latest market moves.
IC TIP UPDATES:
Engineer GKN (GKN) says trading remains in line with expectations with the automotive business outperforming its markets, aerospace in line with expectations and land systems markets remaining tough. Overall revenues edged ahead for the three months to 31 March to £1.9bn. We keep our buy rating.
Half year figures from Imperial Tobacco (IMT) suggest it is on track to meet management expectations after a strong showing from its growth brands where underlying volumes grew 12 per cent and net revenues by 15 per cent. Overall tobacco net revenues were flat on an underlying basis at £2.9bn. The interim dividend is increased by 10 per cent to 42.8p. We retain our buy recommendation.
Retailer SuperGroup (SGP) has posted a stellar set of trading figures for the final quarter of the year with sales in the 15 weeks to 25 April surging by 18.4 per cent with retail like for like sales up by 11.6 per cent in the same period. This means full year figures are likely to show total growth in sales of 12.5 per cent and like for like retail sales growth of 4.8 per cent. Buy.
Logistics specialist Wincanton (WIN) has been boosted by the renewal of a long standing contract with US foods giant Heinz for its UK logistics. Buy.
Challenger bank OneSavingsBank (OSB) says net loans and advances in the period since the turn of the year have risen by £455m, boosted by the acquisition of a £251m portfolio of UK based second charge mortgages. We reiterate our recent buy recommendation.
Transport specialist National Express (NEX) reports 2 per cent growth in passenger volumes across its business since 1 January with adjusted group profits ahead year on year. UK bus and coach services are performing well and the c2c rail business has seen 4 per cent passenger growth. Elsewhere operations in Morocco, the US and Bahrain have performed well and the company also has a £12bn bid pipeline outstanding in the UK and as far afield as Portugal and Saudi Arabia. We keep our buy rating.
Packaging specialist DS Smith (SMDS) says strong underlying growth is offsetting the continued strengthening of sterling while its return on capital and return on equity continues to improve. Buy.
Irish building products business CRH (CRH) says it has seen a ‘satisfactory’ start to the year with sales from continuing operations up by 2.5 per cent, driven by good momentum in the US where sales grew by 8 per cent while European sales dipped 2 per cent against tough comparatives. Management is expecting the second half of the year to outperform last year. We keep our buy rating.
Property specialist CLS Holdings (CLI) has agreed a €24.4m deal to buy an office building near the German city of Munich which generates a rental income of €2m. Buy.
KEY STORIES:
Supermarket Sainsbury (SBRY) has posted predictably downbeat full year figures showing a 0.9 per cent slide in underlying group sales to £26.1bn and a 1.9 per cent fall in retail like for like sales which meant a near 15 per cent slide in underlying profits to £681m. At a reported level, the group took a charge of £753m which pushed it into a loss for the year.
Legal & General (LGEN) has enjoyed a strong first quarter performance with operational cash generation up 11 per cent to £330m. Amongst the highlights from its business were a 17 per cent rise in assets at Legal and General Investment Management to £736.8bn, a 19 per cent rise in annuity assets to £45.6bn and digital savings assets growth of 16 per cent to £84.2bn.
JD Wetherspoon (JDW) has seen like for like sales growth of 1.7 per cent in the 13 weeks to 26 April with total sales up 5.8 per cent after the opening of 20 new pubs but operating margins dipped to 7.5 per cent. For the 39 weeks to 26 April like for like sales were ahead by 3.6 per cent.
Direct Line Insurance (DLG) says it still expects to achieve a profitable combined operating ratio of 94-96 per cent despite gross written premiums dipping by 0.9 per cent in the opening quarter of the year. There are signs of stability in its motor and home markets and management has stripped 10 per cent of costs out of the business.
Satellite specialist Inmarsat (ISAT) reported that first quarter revenues dipped from $344.7m to $304.8m after continued weakness in business with governments with profits dipping from $100.2m to $77.4m. The launch of a third satellite is planned for June, slightly later than originally scheduled.
Enterprise software specialist Sage (SGE) enjoyed organic revenue growth of 6.2 per cent in the six months to March and a 4.9 per cent rise in profits with recurring revenue now accounting for 73 per cent of group organic revenues.
OTHER COMPANY NEWS:
Online retailer BooHoo.com (BOO) grew revenues by 27 per cent in the year to 28 February but saw operating profits dip by 2 per cent to £10.6m after investing in the business saw margins dip.
Gulf Marine Services (GMS), which supplies vessel services to the energy industry, reports 95 per cent utilisation of its fleet through to the end of the first quarter and a secured backlog worth $685m, of which $318m worth are options.
Tullet Prebon (TLPR) reports a 15 per cent growth in revenues in the four months to April after some volatility began to creep back into trading markets.
Marine services business James Fisher (FSJ) has announced the proposed £3.2m acquisition of consultancy and design specialist Mojo Maritime, which provides services to the renewables industry.
Finsbury Food (FIF) is to buy Johnstone’s Just Deserts from administrators for an as-yet undisclosed sum.
Recently floated support services business Lakehouse (LAKE) is to spend £4.75m on smart metering specialist Providor.
Rugby club Wasps is to close its retail bond offering today and will report back later on how much it has raised. .
