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News & Tips: Persimmon, Dixons Carphone, Johnson Service & more

Equities are groping around for some direction
July 2, 2015

Equities are flat as the Greek impasse remains ahead of Sunday's referendum. Click here to find out what The Trader Nicole Elliott thinks of the markets.

IC TIP UPDATES:

House builder Persimmon (PSN) continues to enjoy strong trading conditions having grown legal completions by 7 per cent and total revenues by 12 per cent during the six months to June. Total forward sales value is up 15 per cent at £1.36bn. We maintain our buy recommendation.

Dixons Carphone (DC.) has announced a deal with US mobile network operator Sprint which will see it open and manage 'a significant' number of stores on its behalf in the US. Should the initial stores prove to be a success then Dixons has the option to invest in a wider joint venture which could result in up to 500 stores. Buy.

Improving trading conditions at Johnson Service Group (JSG) coupled with the contribution from acquisitions means that full year results are now likely to exceed expectations. We keep our buy rating.

Kier (KIE) has completed the disposal of its fleet and passenger services business Kier FPS for £17.9m. Buy.

Simon Thompson recommendation GLI Finance (GLIF) has been awarded an asset management licence in Guernsey.

KEY STORIES:

Oil services group Hunting (HTG) says trading conditions remain difficult with well completed worldwide down by a third in the second quarter, resulting in a 76 per cent slump in profits at the company in the first five months of the year. The rate of decline has slowed but management still expect full year profits to be down in the region of 50-75 per cent on last year.

Primary Health Properties (PHP) has announced a further acquisition. It is spending £2.5m on a newly built facility at Macclesfield Hospital which will be let to the NHS Trust on a 21 year term. Earlier this week the company agreed to acquire properties at Thornaby and Liverpool for a total of £8.7m.

The weak market conditions in coal continue to weigh on Hargreaves Services (HSP) although management's restructuring programme has mitigated some of the effects, helping to almost eliminate its debt in the process.

Recruitment specialist Staffline (STAF) reports that trading has remained buoyant and it is on track to meet expectations.

Performance materials specialist Low & Bonar (LWB) managed to grow adjusted cash profits by 12.8 per cent in the six months to March despite a 5 per cent reversal in revenues as raw material costs fell, helping margins. A strong showing in coated textiles and interiors and transport offset particularly weak conditions in civil engineering.

Temporary energy specialist APR (APR) has announced its second contract this week as it tries to rebuild confidence after a recent withering profit warning. The company has signed a $30m contract in Egypt to follow up a contract for the continuation of a 300MW project in Uruguay announced earlier this week.

Polymer specialist Synthomer (SYNT) reports that trading in Europe and North America has remained difficult with lower volumes compounded by the fact that the cheaper raw material effect seen in the first quarter did not last. But strong demand and improving margins in the Asia and rest of the world segments of the business mitigated this.