Join our community of smart investors

News & Tips: Kier, Sirius Minerals, Ocado, Plus500 & more

Greek uncertainty weighs heavily on markets
June 30, 2015

Equities continue to slide as Greek uncertainty reigns. Click here to find out The Trader Nicole Elliott’s latest thoughts on the markets.

IC TIP UPDATES:

Construction specialist Kier (KIE) has said that trading remains in line with management expectations and that following the acquisition of Mouchel, its order book now stands at £9.3bn. We keep our buy rating.

A joint venture between Galliford Try (GFRD) and Thames Valley Housing Association has won the contract for a £380m mixed tenure housing project at Silvertown in Canning Town, London. Buy.

Sticking with property, residential specialist Grainger (GRI) has announced that its outgoing chief executive Andrew Cunningham will be replaced by Helen Gordon, who is currently global head of real estate asset management at RBS. We maintain our buy recommendation.

The strong property market conditions are reflected in half year results from St Modwen Properties (SMP) which showed a quadrupling in profits to £203.1m, boosted by property revaluations. Net asset value rose by 21 per cent to 394p. Buy.

Recent Simon Thompson recommendation Elegant Hotels (EHG) has posted a 7.6 per cent uplift in half year revenues and adjusted earnings of $16.3m, up from $14.6m.

Shares in Sirius Minerals (SXX), which is attempting to get planning permission for a potash mine under the North York Moors National Park, have been suspended from trading pending an announcement. A planning decision on its proposed mine is imminent.

KEY STORIES:

Online grocer Ocado (OCDO) grew gross sales revenue by almost 16 per cent to £511.9m in the six months to 17 May with cash earnings 11.4 per cent higher at £38.2m. Average active customers rose by almost 19 per cent with an average of 191,000 orders per week but average basket value fell as price deflation hit the industry across the board.

CFD platform provider Plus500 (PLUS), which has been hampered by compliance concerns, saw revenues for its traditionally quieter second quarter come in at $43m, slightly down on last year’s $45m and well down on the $82m recorded in the first quarter. Remediation efforts to clear accounts for trading have continued with 13,499 accounts reviewed and unfrozen, of whom 72 per cent have resumed trading and only 6 per cent cashing out their funds.

Final results from Carpetright (CPR) suggest the company may have finally turned a corner in trading with group revenues rising 3.3 per cent and profits up from £4.6m to £13m. Like for like sales in the UK rose by 7.3 per cent while in the rest of Europe, where trading has lagged, like for like sales picked up by a modest 0.3 per cent. This has accelerated in the opening weeks of the new financial year with UK sales up 4.9 per cent and Europe sales 7.4 per cent higher.

Processor specialist Imagination Technologies (IMG) saw group revenues tick ahead to £177m in the year to April with strong licensing growth and unit shipments at record levels. Adjusted operating profit was £21.1m, down from £24m last year.

Van hire specialist Northgate (NTG) enjoyed a chunky uplift in profits to £83m for the year to April, although this was boosted by a change to vehicle depreciation rates. The company is expanding into the improving economic conditions and has added 1,000 vans in the UK and 900 in Spain over the past year and now has more than 95,000 across the two countries.

LondonMetric Properties (LMP) has acquired a Next distribution warehouse near Doncaster for £29m.

OTHER COMPANY NEWS:

Film studios operator Pinewood (PWS) posted revenues of £75m for the year to March, up from £64.1m last year with profits rising from £4.9m to £5.8m.

Emissions reduction and fuel efficient engineering business Torotrak (TRK) has announced plans to raise £13.8m from investors alongside full year results within which new chief executive Adam Robson has announced a reorganisation as well as a revision to the terms of the acquisition agreement with Flybrid.

Horticultural products specialist William Sinclair (SNCL) saw revenues dip from £21.8m to £18.7m in the six months to March while losses doubled to £3.5m as exceptional costs from issues at its Ellesmere Port site were absorbed. Management is confident most of the issues are now resolved.