After a few directionless days, shares in London took a decisive turn southwards this morning. Click here for The Trader Nicole Elliott's latest take on the markets.
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The house seems to be winning over at gambling and financial services technology provider Playtech (PTEC), which has announced a €150m special dividend on top of a 15 per cent increase in its base shareholder payout. And there’s still the best part of €600m net cash meaning management’s key strategic goal of acquiring more businesses remains unimpeded. Currency fluctuations had the biggest impact on the reported figures but adjusted cash profits rose 40 per cent on a constant currency basis. Its poker and bingo businesses helped the casino division perform strongly and changes in the financials division have helped it cut costs there. Buy.
It’s no secret that the NHS has been treading water for some time and as medical demand increases (caused in part by an ageing population), it has been widely accepted that the demand is never going to be met. These trends spell good news for private healthcare company Spire (SPI). Interim results published this morning indicate increased patient numbers - both self pay and through NHS referral - which helped to push up revenue and profits in the first half. Buy.
Macfarlane (MACF) is also benefitting from its own sector trends. In Britain, the sway towards online shopping for everything from backpacks to batteries has led to an increased need for packaging - excellent news for the Scottish packaging distributors and manufacturers. Revenue and profits were both up in the first half, prompting a 4 per cent dividend hike. Buy.
Shares in STV (STVG) climbed 5 per cent in early trading after the Scottish television broadcaster grew sales by 5 per cent in the first half of 2016, sending adjusted operating profits up 28 per cent to £11m. The strong earnings growth reflected strong demand for more lucrative digital and regional airtime activities. Under review.
European broadcaster RTL (BE: RTL) grew sales by 3 per cent in the first half of 2016, driving adjusted cash profits up 9 per cent. Management raised its earnings guidance and now expects growth in full-year cash profits. The group’s strong gains reflected a robust showing from RTL Mediengruppe, one-off gains at Groupe M6 and solid digital growth. Buy.
Closed book life insurance consolidator Phoenix (PHNX) received £147m in cash generated by its operating companies during the first half of the year, up from £110m the previous year. This was the result of the sale of cash investments held by Opal Re. However, operating profits for Phoenix Life declined as its with-profits fund took a £51m provision against persistent low interest rates. More to follow in our full write-up.
The revaluation of its key Kestrel coal asset led to a £5.4m post-tax loss for Anglo Pacific (APF), but the positive translation into pounds reversed the loss in the mining royalty group’s statement of comprehensive income. The firm has also reported an improved outlook for coking and thermal coal prices in the second half of the year, which should boost free cash flows beyond the £3.6m achieved in the first six months. Our buy recommendation is under review.
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Shares in Ascential (ASCL) climbed 3 per cent in morning trading after the information services and events giant announced it would buy Oneclickretail.com, a US e-commerce analytics specialist, for an initial $44m (£33.3m). Management expects One Click - whose customers include Procter & Gamble, Nestle and Panasonic - to lift adjusted EPS in the first full year of ownership.
The multi-faceted Camellia (CAM) - which boasts agriculture, banking and engineering divisions - has swung to a headline pre-tax profit of £4.9m compared to a loss in the same period last year. Strong tea production in India, Kenya and Bangladesh helped in agriculture while its bank Duncan Lawrie reported profits ahead of the corresponding period too - albeit management warned about the potential impact of the cut in interest rates by the Bank of England. The shares are up more than 2 per cent this morning, perhaps also helped by the small rise in dividend at the group.
Full year results for South32 (S32) suggest that the BHP Billiton spin-off has emerged from the commodities ashes faster than several of the large diversified miners. Chief executive Graham Kerr said the company will pursue investments, but only if they do not “compromise our strong balance sheet and investment grade credit rating”. Indeed, management views the balance sheet as sturdy enough to withstand an inaugural, if somewhat token, dividend.
