Equities have started the day in positive fashion, consolidating the strong start to October registered last week. Click here to find out what The Trader Nicole Elliott makes of the latest market moves.
IC TIP UPDATES:
Lloyds Banking Group (LLOY) is in the spotlight this morning after the Treasury confirmed that it plans to offer £2bn worth of shares in the bank to retail investors through a share offering in the Spring. The sale is thought likely to happen after results in March and could signal the end of the government’s involvement at Lloyds as it continues to divest the stake it took when it kept the banking system afloat during the finance crisis. We maintain our buy rating.
Outsourcing and support services specialist Capita (CPI) has announced plans to acquire XChanging (XCH), the insurance software specialist, after making a 160p a share cash offer. But the board of XChanging has also allowed Apollo Global access to its books after it indicated it was willing to put a 170p a share offer on the table. Our buy recommendation on Capita remains.
The proposed acquisition of Irish CFD and forex trading platform Ava Trade by Playtech (PTEC) may have run into trouble after the company received a letter from the Central Bank of Ireland opposing the deal. Playtech is taking legal advice. We keep our buy recommendation.
CLS Holdings (CLI) has announced a deal to acquire an office building in Sutton for £10.2m on an initial rental yield of 7 per cent. Buy.
Professional services specialist Charles Taylor (CTR) has agreed to sell its stake in Bestpark International, an insurance company which has entered run-off, to Ashbrooke Financial. We maintain our buy.
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Rolls Royce (RR.) has announced plans for the further transformation of its marine business, where the slump in oil prices has hampered performance. A further 400 jobs will go, on top of the 600 already announced. This, and other changes, are expected to result in £40m a year of savings by 2016.
Ryanair’s (RYA) strong summer of trading continued into September when its passenger numbers grew by 12 per cent to 9.55m while its load factor also improved by 4 per cent to 94 per cent.
Central European budget airline Wizz Air (WIZZ) also enjoyed a strong September as the expansion of its network fed into 22 per cent growth in passenger numbers to 1.8m with load factors also up 3.3 per cent to 90.9 per cent.
Publisher Trinity Mirror (TNI) says trends in its trading continue to improve, although revenues continue to decline. Third quarter underlying revenue fell by 7 per cent against a 10 per cent decline in the second quarter. The digital business remains a bright spot with revenues up by 24 per cent and digital display advertising revenues up by one third.
The woes continue at Hargreaves Services (HSP) where demand for thermal coal has remained depressed, resulting in prices falling further. Meanwhile, the company will also be hit by the decision to end steel making operations at Redcar, where Hargreaves has provided ancillary services for several years. The closure could cost Hargreaves £4m in operating profit and £1.5m in costs of redundancy and other closure-related issues.
