Equities have ticked up once more. Click here to find out what the Trader Nicole Elliott thinks of the latest market moves.
IC TIP UPDATES:
Specialist insurer Novae (NVA) has enjoyed buoyant trading in the six months to June, during which time gross premiums written rose from £362.6m to £463.1m, partly through 7.7 per cent like for like growth and 13 per cent contribution from investment in new underwriting teams. The company was also more profitable with its combined ratio improving from 91.8 per cent to 89.8 per cent, allowing for a 10.6 per cent uplift in the interim dividend. Buy.
Recent sell recommendation BBA Aviation (BBA) saw tough trading conditions reflected in its half year results which showed a 5 per cent decline in revenues and flat underlying profits of £79.2m.
Alternative finance provider S&U (SUS) continues to trade well with its Motor division receivables passing £200m for the first time. Meanwhile the sale of the home loans division Loansathome4u completed yesterday. We maintain our buy rating.
Defence engineering specialist Cohort (CHRT) has announced plans to acquire Portuguese defence contractor EID for €19m, a deal which will be financed from existing resources and is expected to be earnings enhancing in the full year to April 2017. Buy.
Another company on the acquisition trail is Polypipe (PLP). The building products specialist has agreed a £145m deal to buy Nuaire, a supplier of ventilation products which generated sales of £63.5m and profits of £12.8m in the year to June. The deal is expected to result in a double digit enhancement to Polypipe’s earnings per share. We keep our buy recommendation.
Further, more modest, acquisition news from document storage specialist Restore (RST) which has bought The Data Imaging and Archiving Company for £1.45m. Buy.
KEY STORIES:
The new chief executive of Standard Chartered (STAN), Bill Winters, has made his mark on the business at its interim results with the announcement of a halving of its dividend payout. Weaker trading in its core emerging markets operations resulted in an 8 per cent fall in revenues and profits of $2.1bn, down from $3.25bn a year ago.
Legal & General (LGEN) has published a strong set of interim results with most areas of the business thriving. The company has managed to mitigate weakness in the individual annuity market by growing its bulk annuity business strongly, leaving overall annuity assets up 13 per cent at £43.4bn. Assets under management at Legal & General Investment Management grew by 12 per cent to £714.6bn, net cash generation rose by 11 per cent and operating profits were 18 per cent higher at £750m.
London Stock Exchange’s (LSE) acquisition of Russell, a US indices and ETFs specialist, helped boost revenues by 90 per cent in the opening half of the year with adjusted operating profits up 27 per cent at £366.1m.
Weak commodity markets and ongoing problems in Ukraine weighed heavily on results from iron ore pellet producer Ferrexpo (FXPO) which posted a 33 per cent dip in half year revenues and a 42 per cent reversal in profits despite an 8 per cent uplift in total pellet production.
Student property specialist Unite Group (UTG) enjoyed a 45 per cent uplift in earnings in the first half of the year while net asset value per share is up 20 per cent at 521p. The business looks to be on track to achieve like for like rental growth of 3.5 per cent to 4 per cent for the coming academic year.
Oil and gas explorer Soco International (SIA) has been hampered by the weak oil price, reflected in revenue more than halving to $116.6m and net profit falling from $79.8m to $5.9m during the opening half of the year. But operationally, the business is going well with average production of 11,856 barrels per day during the first half which has led management to raise guidance for the full year to 11,000-12,000 barrels of oil per day.
Collagen food products specialist Devro (DVO) grew sales volumes and revenues at constant currency by 5 per cent in the opening half while profits rose from £1.6m to £9.6m as management continued to rationalise and refocus its manufacturing facilities.
Slowing growth rates in industrial markets have not helped engineer Spirax Sarco (SPX) and currency headwinds are growing which makes its resilient half year results showing flat revenues and only marginal reduction in profits impressive.
OTHER COMPANY NEWS:
LondonMetric Property (LMP) has agreed to sell a distribution facility in Wellingborough for £29.2m. The property was originally acquired in 2009 for £19.6m.
Market Tech Holdings (MKT), the property company which owns vast swathes of Camden Market in North London, has won planning permission for part of the Hawley Wharf development where it intends building a mixed use residential and office block.
Sinclair Pharma (SPH) says trading during the second half of its financial year has been strong, resulting in a 19 per cent uplift in revenues even despite currency movements.
