Equities continued their gains from the end of last week after news of a deal between Greece and its creditors. Click here for The Trader Nicole Elliott's view, written prior to the last-gasp agreement.
IC TIP UPDATES:
Our buy tip Genel Energy (GENL) took the unusual step of bumping chief executive Tony Hayward up to the chairman’s seat, appointing Murat Özgül in his stead. The oil company’s shares were down against the market today despite production growing 41 per cent in the first-half, compared to the same period the previous financial year. Our buy recommendation is under review.
Alent (ALNT) shareholders are set to receive 503p per share, in cash, following an agreed takeover of the company by US-based Platform Specialty Products Corporation. The offer – which values the UK company at £1.4bn, and a premium of around 49 per cent to Friday’s closing price – sent shares in our buy tip up a stunning 45 per cent. Await documents.
Real estate investment trust NewRiver Retail (NRR), which owns shopping centres and retail warehouses across the country, has exchanged contracts on the £69m Ramsay Retail Warehouse Portfolio. The asset includes nine retail parks and four development sites, and currently has 463,000 sq ft of lettable space and an occupancy rate of 97 per cent. We reiterate our buy call.
The blades keep spinning at onshore wind farm operator Renewable Energy Generation (WIND), which has been granted planning permission for a 9MW wind farm in Rhondda Cynon Taf in southern Wales. The project includes three wind turbines as high as 147m at their tip. Buy.
Our buy tip Tarsus Group (TRS) has reached an agreement to sell its French business to Magellan VI SAS for €9.2m (£6.6m). The sale is part of the company’s strategy to ‘quicken the pace’ of growth in its shareholder returns, by focusing on the growth markets of the US and the emerging economies. Buy.
Our buy recommendation Telit Communications (TCM), which specialises in machine-to-machine communications, has told the market it expects to report revenue of $156m (£100m) for the six months to 30 June, up 13 per cent compared to the same period last year. For the first time, the company is providing full-year revenue guidance, expecting between $347m and $354m, and is forecasting adjusted cash profits in the $42m to $47m range. Buy.
Shares in our buy tip Pace (PIC) are down 4 per cent today following disappointing forecasts from US-based Arris Group, which is to take over the company. The entertainment and communications group expected $1,250m to $1,260m for the second quarter, compared to its previous expected range of $1,270m to $1,310m for the period. Await documents.
Our buy tip Derwent London (DLN) is to acquire RBS’s Aldgate Union building in Whitechapel for £132m, which it will target at the start-up companies of the east London ‘tech belt’. The property has eight storeys and 255,000 sq ft of space. Buy.
AIM-listed, Guernsey-based Japan Residential Investment Company (JRIC), which does exactly as the name suggests, achieved an occupancy rate at its properties of 95.1 per cent on June 30, up 120 basis points from the same day the preceding year. Average occupancy across the year was 94.9 per cent. We keep our buy call.
KEY STORIES:
Recruiter SThree (STHR) is a fan of the ‘rule of three’ – its business strategy is one of specialisation, organic growth and homegrown management. Well, its shares were up 3 per cent today after it delivered the trifecta of revenue, pre-tax profit and earnings per share growth in its half-year results to end-May. Operating profit was up 79 per cent on a constant currency basis, as strong performance in IT and life sciences was offset by weaker performance in its energy division. The interim dividend did not go up, however, remaining at 4.7p.
Conviviality Retail (CVR), which runs the wonderfully named Bargain Booze high street chain, released unspectacular results today. Glass half-full: profit before tax and exceptionals increased 4.4 per cent to £9.7m for the 52 weeks ending 26 April. Glass half-empty: like-for-like sales were down by 1.7 per cent, and diluted earnings per share – before exceptionals – were down at 11.2p from 11.6p in the preceding period.
Smoke and carbon monoxide alarm seller Sprue Aegis (SPRP) saw its shares rocket 13 per cent in early trading after a stunning trading update for the six months to the end of June. The company expects sales for the first half to be around £57m, more than double the £24m of turnover achieved in the same period last year. Operating profits were also up strongly, but gross margins were down from 37 per cent to around 29 per cent as the weak euro hit the currency conversion of sales on the continent, and the strong dollar increased the price of its US-sourced products.
Precious metals producer Polymetal (POLY) has bought a 100 per cent interest in a Russian silver-gold mine from Decamor Investments, with an initial consideration of $4.5m (£2.9m) paid in 533,301 new Polymetal shares – plus a deferred cash consideration of $13,333 for each tonne of contained silver equivalent that is found. The company hopes to complete at least 15km of exploratory drilling before the end of September 2016.
Support services business Lakehouse (LAKE) has purchased the entire share capital of energy management services provider and broker Orchard for £7m. The acquisition, which boosts Lakehouse’s staff to 1,400, should help it improve the energy efficiency of its social housing clients.
OTHER COMPANY NEWS:
Avanti Communications (AVN) has agreed a contract with South Africa’s trade department to provide high-speed satellite broadband to more than 1,000 small and medium-sized companies in the country.
