This is the first day of the fourth quarter. Back of the envelope calculations suggest $11trn was wiped off global portfolios in the third quarter, reports the Trader. But today the UK market is in bullish mood, perhaps because a survey of purchasing managers in the manufacturing sector came in slightly ahead of expectations.
IC TIP UPDATES:
Contrarian tip of the year Record (REC) announced that one of its currency-hedging clients was planning to terminate a £900m mandate, probably by the end of the year. Record provided the client with ‘dynamic hedging’ – that is, it tried to predict the course of currency markets to make a return on currencies. The shares did not move in morning trading, but our buy recommendation is under review.
Recent tip LondonMetric Property (LMP) has sold two retail parks, one in Milton Keynes and the other in Southampton, for the combined sum of £43.4m. The company had signed up new tenants and extended leases to make the assets more attractive to institutional investors, and the payback is a geared return on the assets, which were both bought in 2013, exceeding 30 per cent.
KEY COMPANY STORIES
Alliance Trust (ATST), the investment trust that has been under attack from activists, announced a package of “significant changes” to shore up support from shareholders. It will keep investment in house but at an annual management charge of just 35 basis points. The investment trust’s board will become fully independent, with controversial member Katherine Garrett-Cox stepping down – though she will remain chief executive of the investment company.
Embattled trade fair company ITE (ITE), which specialises in Russia and central Asia, said revenues in the year to 30 September were down 14 per cent on a like-for-like basis as a result of the weak rouble and tough trading conditions. Comparatives will be tough for the coming half, too. Other regions are performing better, but only account for about two-fifths of sales.
Shares in fuel-cell company Intelligent Energy (IEH) jumped 13 per cent on news of a “landmark transaction worth £1.2bn of revenues over 10 years”. The deal is complex, but involves Intelligent Energy acquiring a business for about £85m in exchange for £120m of revenue a year and a cash margin of 15 per cent.
OTHER COMPANY NEWS:
Numis Securities (NUM) posted a pre-close update for the year to 30 September. The second half proved stronger than the first, leaving revenues in the company’s “core activities” 5 per cent higher for the whole year. The advisory and fund-raising businesses continue to strengthen – 12 new corporate clients added during the year brought the total to 183 - but there was no mention of revenues from institutional investors, a substantial legacy income stream which has been weakening.
Just days after strong annual results, vet consolidator CVS (CVSG) announced the purchase of a vet practice in North East England called Alnorthumbria for a maximum total of £7.7m, including £6.6m in cash paid on completion. Founded in 2007 by the merger of two practices, the acquired company employs 24 vets at nine surgeries.
Gulf Keystone Petroleum (GKP) announced the results of a third-party audit of its reserves at the Shaikan field in Kurdistan. 1P reserves – the most restricted measure of the volume of oil in the field – increased by 55 per cent compared with the previous March 2014 estimate.
RM2 International (RM2) announced the completion of its share placing to shore up the balance sheet following delays to the roll-out of its revolutionary pallet technology. The placing, which will expand the company’s equity capital by £30m or 23 per cent, was fully subscribed, with Neil Woodford handing over more than half the cash.
Vertu Motors (VTU) seems to be betting on a recovery in the Volkswagen brand. This morning the car retailer announced the purchase of three show rooms in Hereford, one selling Audi cars and the other two selling VWs (one cars, the other commercial vehicles). The initial consideration is £12.8m, with £1.5m due if performance hurdles are hit in two years.
Rathbone Brothers (RAT) has bought out a network of independent financial advisers focusing on wealthier individuals. The Vision Group had 78 advisers and £925m of assets under advice at the end of August. Rathbones bought 20 per cent of the company in 2012 for £2m and is now buying the rest for £5m plus the net asset value of the business upon completion, and further payments of up to £13m.
