Equities started the week cautiously higher, but traders are in brace position ahead of the US Federal Reserve’s decision on interest rates. Economic commentators are split on the question of whether the US economy, which has seen decent employment growth but below-target inflation, is ready for a rise in borrowing costs.
IC TIP UPDATES:
Late on Friday, reports emerged of a €8bn (£5.9bn) memorandum of understanding from the Kuwait government to buy Eurofighter Typhoon jets. This was a big boost for our buy tip BAE (BA.), for whom sales of the jets are crucial to its bottom line. Buy.
IKEA is coming to the Greenwich peninsula. The Swedish home furnishings giant has agreed to buy a former Sainsbury’s site, a stone’s throw from the O2, which LXB Retail Properties (LXB) took over from the grocer in 2011 as part of a larger development project. LXB Retail’s shares were up 3 per cent today. Buy.
Our buy tip Japan Residential (JRIC) is also up this morning after announcing occupancy at its residential properties in the country has increased by 1 percentage point to 96 per cent at the end of August. Buy.
City of London Investment Group (CLIG) has boosted its funds under management by 8 per cent to $4.2bn (£2.7bn) – up 17 per cent in pound terms. Emerging markets have suffered as a result of dollar strength, but revenues were still up in the year to the end of June. We keep our buy rating.
Our sell tip Intertek (ITRK) has found a strong foothold in the Nordics through its acquisition of Danish certification company Dansk Institut for Certificering. We keep our sell rating.
KEY STORIES:
The battle for regional press continues, with Trinity Mirror (TNI) in talks to take over Local World, which owns papers across England and south Wales. Local newspapers have seen a period of losses and consolidation since the financial crisis, but the deal reflects some of the sparks of life in the sector.
Shares in Chemring (CHG) were up 6 per cent after a trading update reported revenue in the four months to the end of August were up nearly a quarter at £119m. The company’s order book looked very healthy too, up 18 per cent at £592m.
AIM-listed medical proteins supplier Abcam (ABC) has announced revenue up 17 per cent at constant currencies to £135m in the year to the end of June. This lifted profits and helped increase the full-year dividend from 7.75p per share to 8.21p.
Empiric Student Property (ESP) has announced a 5 per cent boost in its net asset value to 103p per share at the end of June 2015, compared to a snapshot taken the year earlier. This was driven by an £11.3m boost in the value of its properties over the reported period, which ran from 11 February 2014 to 30 June 2015.
Dr Copper is feeling poorly. Miner Central Asia Metals (CAML) shares fell 3 per cent against a settled market, after a fall in profits and cash balances at the half-year mark meant a slight fall in the interim dividend from 5p per share to 4.5p. The good news is that copper production rose during the period, from 5,094 tonnes to 5,444 tonnes, the bad news is that copper prices suffered.
Shares in Sprue Aegis (SPRP), which makes home safety products such as smoke and carbon monoxide detectors, shot up 7 per cent in early trading after the company announced revenue had more than doubled to £56m in the six months to the end of June. This fed through profits to an interim dividend up a quarter at 2.5p per share. Government initiatives to fit smoke alarms into households has boosted sales.
Energy support services company Lakehouse (LAKE) has bought maintenance provider Sure Maintenance Group for a cash consideration of £6.5m. The acquisition target provides servicing, installation and maintenance to social housing properties in northern England and the Midlands.
OTHER COMPANY NEWS:
Xeros Technology Group (XSG) has announced Mark Nichols, formerly of BOC Group and then chief executive of renewable energy start-up CH4e, as its new chief executive. He takes over from Bill Westwater, who stands aside after seven years in the top job.
Anglo American (AAL) has completed the sale of its Norte copper business to a group of investors fronted by Audley Capital Advisors, and has so far received $1.9bn in cash from the deal.
Small AIM-listed financial advisers Lighthouse Group (LGT) has been buoyed by pensions reform encouraging need for its services. Revenues increased by 2.5 per cent to £24m in the six months to the end of June.
Schroder Real Estate Investment Trust (SREI) has pre-let part of its Leeds property, the Arndale Centre, to Premier Inn. Arndale House, which covers 32,000 sq ft over seven floors, will become a 96 bedroom hotel.
