Equities have begun the day in a downbeat mood after yesterday's sell off. See what the Trader Nicole Elliott thinks here.
IC TIP UPDATES:
Shares in support services group Interserve (IRV) were up 3 per cent after management revealed its UK support services business performed well during Q3, maintaining its margins despite weak oil prices. Management also revealed “outstanding growth” in the group’s equipment services business. Buy.
Media magnate Rupert Murdoch’s daughter Elisabeth will join the board of recently-listed shoe king Jimmy Choo (CHOO) as a non-executive director. Although her expertise is media and technology weighter, Choo’s chairman Peter Harf has said he looks forward to her arrival and “wealth of experience”. We reiterate our recent sell recommendation.
The share price of Nighthawk Energy (HAWK) was in retreat after the company revealed that it has plugged and abandoned the Happy Jack 7-10 well at its project in Pennsylvania in the US. The well was drilled to total depth, with oil shows seen in the Marmaton and Cherokee zones, but no oil shows in the Mississippian section. Buy
Simon Thompson this week highlighted the possibility of a bid premium at Renewable Energy Generation (WIND) and today the company has confirmed that it remains in talks over a possible offer for its assets and will update investors shortly.
The board of Japan Residential (JRIC) says it is recommending a 72p a share offer from a bid vehicle owned by Blackstone, which valued the business at £152.6m. Meanwhile the company says it has received a competing approach from a third party at the same price and will update investors in due course. We advise investors to sit tight.
Empiric Student Property (ESP) has done yet another deal, acquiring a forward funded property development in Glasgow for £9.6m. We repeat our recent buy recommendation.
KEY STORIES:
The UK’s bad bank is shrinking. The government has sold £13bn of former Northern Rock loans, taken over in the financial crisis, to Cerberus Capital Management. Of that total, £3.3bn will be sold by Cerberus to TSB, the retail bank owned by Spanish group Banco de Sabadell. “The sale of this £13bn loan book is a significant step in accelerating the repayment of our government loans and demonstrates our continuing success in maximising value for taxpayers,” said Richard Banks, chief of UK Asset Resolution, which manages the government’s banking stakes.
Rotork’s (ROR) struggles with the downturn in oil and gas spending continue. Fresh from issuing a profit warning in September, the maker of actuators used to open valves said order intake fell 17 per cent in the four and a half months leading to 12 November. But despite its challenging markets showing little sign of easing, the group refused to downgrade guidance again.
Legal & General (LGEN) chairman John Stewart is stepping down after five years. “I feel we are now coming to a stage where the post-financial crisis work has been successfully delivered,” he said in a farewell statement. “The company is now focused on the right markets in the UK and internationally and well prepared for the transition to Solvency II.” The May 2016 annual general meeting will be Mr Stewart’s last.
Investors sent shares in Auto Trader (AUTO) up 3 per cent after the digital automotive marketplace posted a 17 per cent rise in underlying operating profits in the six months to 27 September. Operating cash flow leapt 46 per cent, enabling management to slash net debt by 13 per cent. The number of advertisers and average revenue per retailer forecourt also rose.
OTHER COMPANY NEWS:
With a takeover by Capita (CPI) seemingly a done deal, Xchanging (XCH) has received a last minute approach for New York-listed Computer Sciences Group. Shares jumped 7 per cent on the news of the indicative 170p proposal, above the 160p of the recommended offer by Capita and in line with a since withdrawn bid by buyout house Apollo.
Pre-tax profit at Castings (CGS) increased 14 per cent to £9.5m in the six months to September, as the engineer benefited from improved manufacturing practices and a favourable product mix.
Shares in Fusionex (FXI) leapt 8 per cent after the Malaysia-based ‘big data’ software group inked a partnership with Dell in Asia. The deal promises to combine Dell’s enterprise hardware with Fusionex’s analytics and data management platform and broaden the pair’s geographical reach.
Polymetal International (POLY) has entered into a four-year pre-export finance facility agreement for $245m. The facility includes an accordion feature which allows the miner to request an increase of the facility in an amount of up to $ 105m. Seperately the company announced that it has taken full control of the Lichkvaz property in Armenia. The decision to increase the Company's interest to 100 per cent was taken following successful results of exploration drilling performed during surveying season 2015.
Enteq Upstream (NTQ) has narrowed its half-year loss to $1.3m, from a loss of $2.2m a year earlier. Enteq's revenues and profits have suffered due to the scale of the industry down-turn and have prompted an wide-ranging internal cost reduction programme.
