Equities continue to struggle to rustle up any positive momentum with a fall in early trading today. Click here to see what The Trader Nicole Elliott makes of the markets.
IC TIP UPDATES:
Housebuilder Crest Nicholson (CRST) delivered an upbeat performance in the six months to April, pushing completions ahead by 7 per cent to 1,206, with average selling prices up by a quarter at £387,000. Forward sales totaled £409m, up 22 per cent from a year earlier, while the land bank was restocked with 1,016 ploys across 9 sites, with a gross development value of £416m. Buy.
Carclo (CAR) has opted to exit its diagnostic solutions business after a review found that a significant level of future investment would be required to make it realise its potential. The engineer plans to now fully focus on its core fLED technologies and technical plastic operations. But while these businesses continue to flourish investors were disappointed with the news, sending the shares down 4 per cent in morning trading. We maintain our buy rating.
A 10 per cent fall in revenue and 12 per cent drop in pre-tax profit may not sound very inspiring. But it was enough to propel shares in Victrex (VCT) up 4 per cent in morning trading, off the back of what analysts described as a “highly reassuring” set of interim results. Positives included the speciality chemical group reiterating full year guidance and an encouraging outlook for consumer electronics. Buy.
E2v (e2v) continued to benefit from self-help measures in the year to 31 March, delivering a 5 per cent rise in adjusted operating profit against a challenging trading backdrop. Highlights included a robust performance from imaging, further operating margin growth and new semiconductor partnerships. Buy.
KEY STORIES:
The sparring match being waged between Stock Spirits (STCK) and its largest single investor, Western Gate Private Investments, has continued this morning. Unfortunately for the company’s management though, the points for this round seem to be going to the activist investor, which has released a buoyant statement this morning. The reason for its cheer is three well-known proxy advisers - Institutional Shareholder Services (ISS), Glass Lewis and Pensions & Investment Research Consultants (Pirc) - all agree Alberto da Ponte and Randy Pankevicz should be appointed to the board. These two individuals are people who Western Gate has found and is trying to get onto the board via a requisition which will be voted on at the May 23 annual general meeting. The three advisers do, however, disagree with Western Gate’s view that Stock should put its M&A strategy on hold.
Despite a $21m half-year pre-tax loss for Lonmin (LMI), the embattled platinum miner’s shares rocketed by 9 per cent following news of good progress in its restructuring. Net debt of $185m swung to a $114m cash surplus in the space of six months, during which time Lonmin tackled two-thirds of its R700m full-year cost savings target.
Preliminary results for Braemar Shipping Services (BMS) show that not every company exposed to energy markets suffered last year. Not that the fall in the oil price didn’t have an impact; underlying operating profit in the technical division declined from £5.2m to £1.1m, while broking in the offshore markets remains weak. However, the first full-year of contributions from ACM – the shipbroking firm acquired in 2014 – led to a 137 per cent increase in operating profit in the division.
The 10 per cent increase in half-year revenues at building components specialist Diploma (DPLM) is impressive, though most of the uplift came from a record period for acquisitions. Despite this outlay, the significant boost in free cash flow has pushed analysts at Numis to forecast a debt-free balance sheet by September.
ICAP (IAP) will become Nex Group after its deal to sell its core global broking business to Tullett Prebon (TLPR) completes by the end of this year. ICAP reported a 6 per cent decline in sales last year as a result of continued low interest rates and low levels of volatility and bank deleveraging, which resulted in a reduced risk appetite from customers. Trading profit from the global broking business was down by more than a quarter.
OTHER COMPANY NEWS:
Shares in Xeros (XSG) rose 2 per cent after the maker of environmentally friendly washing machines confirmed that its polymer bead technology successfully completed a full-scale trial for use in the leather processing industry. The Group intends to continue further trials to determine the maximum potential of its technology in this field.
