Sentiment in China’s factories dipped to 47.0, down from 47.3 in August and the lowest since March 2009. This is its seventh consecutive monthly decline where levels under 50 denote a contracting sector. President Xi Jinping in Seattle yesterday vowed to crack down on cyber hackers and said he would not use a weaker yuan to grow exports to the United States. But shares in London and Europe have shrugged off Chinese concerns, see The Trader Nicole Elliott's latest thoughts.
IC TIP UPDATES
Engineering and technology company Smiths Group (SMIN) may have seen revenues fall by 2 per cent but the market is optimistic about the annual results with the shares up 4 per cent in early trading. The company said it had experienced "tougher trading" in its Smiths Interconnect, Smiths Detection and John Crane divisions but that Smiths Medical, which accounts for 29 per cent or revenues, achieved its highest revenue growth in almost 10 years.
Chief executive Philip Bowman said during the past eight years, the group had increased its investment in revenue growth opportunities through innovation, expansion into emerging markets and better sales and marketing. He said the Fuel for Growth restructuring programme was "on track and has generated £33m of annual savings". Sell.
The $2bn (£1.3bn) acquisition of Landmark Aviation by BBA Aviation (BBA) has been called a "transformational step" by chief executive Simon Pryce. But the deal, which will include a £748m rights issue, hasn't taken off with the market as the shares are down 2 per cent.
The purchase from US private equity firm Carlyle will double BBA's size and will extend its Signature flight services brand but will not been earnings enhancing until 2017. But the company said there would be "substantial cost synergies and tax benefits". We retain our sell recommendation.
Student accommodation specialist Unite Group (UTG) has acquired two development sites in central Bristol, which will house roughly 900 students, subject to planning permission. The group said it expected both sites to achieve returns "in line with Unite's target for regional development" and be completed in 2019. It predicted total development costs, including the land, would be £85m. Buy.
Collectibles marketplace Stanley Gibbons' (SGI) proclamation of health seems to have worked with shares up more than 5 per cent in early trading. This will be welcome news for the group, which decided to update the market ahead of its results given its shares have fallen more than 45 per cent in 2015 to 155p yesterday.
The company said its auction calendar was more heavily weighted towards the second half than last year and the group had therefore "budgeted to deliver materially higher revenues and profits in the second half". It also said it was working on a "number of high value sales with potential new clients" which would have a material impact on H1. Our buy recommendation is under review.
KEY STORIES
A sign of a booming sector is a listing and so it seems the holiday market must be in full swing given the flotation of On The Beach (OTB). The online travel agent listed this morning at 184p a share and hit a high of 210p in early trading. The float means the company has a market cap of roughly £240m on admission to the main market.
The company said the offer was expected to raise £90.2m of net proceeds, of which £6.4m was for the company and £83.8m is for the selling shareholders comprising private equity firm Inflexion, the company's directors, members of senior management and other individuals. Inflexion holds approximately 37.1 per cent of the company's ordinary shares, directors and management hold roughly 21.7 per cent and 37.8 per cent will be free float.
OTHER COMPANY NEWS
B&Q and Screwfix owner Kingfisher (KGF) has announced a share buyback programme today until 23 November. The shares have risen just 1.86 per cent in 2015, with a chunk of that coming this morning on the buyback announcement. The move forms part of the group's capital return programme announced on 31 March.
It might be cheering the fact its first 'Big Data' customers have gone live but the market is sour on software firm WANdisco's (WAND) results. The group registered a 13 per cent rise in revenue to $5.7m (£3.7m) and pre-tax losses were reduced by 4 per cent but still came in at $17.7m, pushing shares down 11 per cent this morning.
The company will be hoping contract wins including with major customers HP, Teradata and Oracle can turn things around.
Premier Oil (PMO) has said the number of barrels it pumps on average per day is ahead of full year guidance of 55,000. It said its summer maintenance had now been completed and production had returned to previous levels.
