Equities have rebounded a little in early trading despite a sharp sell off overnight in the US. Click here to find out what The Trader Nicole Elliott thinks of the markets.
IC TIP UPDATES:
The housing boom in the areas of London in which Telford Homes (TEF) operates has not abated. The company sold 661 open market properties in the year to March, up from 515 in 2014 and has sold another 105 since the start of the current financial year, for which it is 95 per cent forward sold already. Profit before tax for the year was £25.1m, up from £19.2m last year. We maintain our long term buy rating.
Recent buy recommendation Workspace Group (WKP) has added to its London office portfolio with the purchase of a property at Easton Street in Clerkenwell which is currently let to Amnesty International.
Sell recommendation De La Rue (DLAR) has posted downbeat results for the year to March, in line with revised expectations. Revenues dipped from £513.3m to £472.1m while reported profits also slipped from £59.8m to £38.9m and the year end order book was down by more than 20 per cent to £243m. New chief executive Martin Sutherland has completed his review of the business and has initiated a turnaround plan.
Debt specialist Arrow Global (ARW) says it has enjoyed a buoyant first quarter in which adjusted earnings rose by 41 per cent to £32.8m with management confident this sets it on course to meet full year expectations. Buy.
Strategic land specialist Urban & Civic (UANC) has announced profits of £6m for the six months to March. The company underwent significant change during the period as the merger with Terrace Hill bedded down and it also acquired fellow land specialist Catesby for £34m. The enlarged company ended the period with 25,000 plots on its books and construction underway on three consented sites. We maintain our buy recommendation.
NAHL (NAH) says trading is going well with National Accident Helpline performing well and the recent acquisition of Fitzalan Partners showing ‘encouraging’ early indications. We keep our buy rating.
Mckay Securities (MCKS) has posted strong results for the year to March as its portfolio rebalancing strategy shows signs of paying off. The company acquired five properties for £51.5m in the period and posted a 38.6 per cent rise in the value of its portfolio to £352.8m and a total shareholder return of a shade under 25 per cent. Buy.
KEY STORIES:
International Consolidated Airlines’ (IAG) long mooted offer for Aer Lingus (AERL) has been confirmed today and recommended by the board of the Irish carrier. The offer of €2.50 a share in cash plus the €0.05 dividend values Aer Lingus at €1.4bn which is a significant premium to the share price before the offer was first suggested in December.
Plus500 (PLUS) has tried to assuage investor nerves after a white knuckle ride in its shares of late after the company was forced to change its method of approving account holders. The company now has 40 staff working on a remediation plan with the backlog expected to take around a month to work through and the short term cost implication is likely to be in the region of $2m. Revenues in the past two weeks have been impacted to the tune of $4m in what is already a seasonally weaker period of the year.
Rolls Royce (RR.) has been awarded a contract worth around £80m to supply 589 engines to the British Army’s SCOUT vehicle programme.
HSS Hire (HSS) says first quarter trading is in line with expectations with revenues up 15.7 per cent and adjusted earnings up 9.2 per cent at £15.4m although profits at the core business suffered due to investment in opening new branches.
Central Europe-focused budget carrier Wizz Air (WIZZ) carried 18 per cent more passengers in the year to March, helping boost revenues by 21 per cent to €1.2bn while underlying net profit rose by two thirds to €146m.
Drinks maker AG Barr (BAG) says that total group sales dropped by 1.1 per cent in the 15 weeks to 9 May against modest growth in the wider drinks market of 0.7 per cent. Management says this reflects a return to more normal sales patterns and also reflects the effect that promotion around the Glasgow Commonwealth Games had on last year’s performance.
Wealth manager Brewin Dolphin (BRW) ended the six months to March with discretionary funds under management of £26.2bn, up from £22.7bn a year before. Total income edged up to £148.4m and pre-tax profits leapt from £22m to £37.9m.
OTHER COMPANY NEWS:
Property company Hansteen (HSTN) has acquired a portfolio of 13 industrial properties in Germany for €21.65m.
Building products specialist Polypipe (PLP) has seen its UK sales grow by 6.3 per cent in the four months to April although trading in its smaller European operations saw a reversal in revenues due to weak housing starts in France.
Industrial adhesives specialist Scapa (SCPA) continues to trade well, posting full year revenue growth of 4.4 per cent and pre-tax profits up more than a fifth at £13.7m.
