After hitting record intra-day levels yesterday, equities in London have seen some profit taking today. Click here for The Trader Nicole Elliott's latest take on the markets.
IC TIP UPDATES:
Like-for-like sales in the largest division at pub group Marston’s (MARS) have risen by 2.3 per cent in the year to 1 October, above the 1.8 per cent rise registered for the same period last year. The rise in the destination and premium segment of the business was thanks to an increase in food and drink sales. Management said operating margins were in line with last year and that it had completed 22 new pubs and bars and six lodges. In the current financial year, it plans to open at least 22 pubs and bars and five lodges. Perhaps even more encouraging was the turnaround in the taverns division which turned a like-for-like sales drop last year into a 2.7 per cent improvement. Ale volumes in its brewing division were also robust, up 13 per cent. Buy.
The crust is being further stuffed at Domino’s Pizza (DOM) with sales in its key UK division up more than 10 per cent to £221m. But strong comparators in the back half of the 2015 financial year mean like-for-like sales in this trading update, which covers the 13 weeks to 25 September, are weaker. This metric of sales rose 3.9 per cent in the quarter under review compared to 14.9 per cent in Q3 2015. But management said its two-year like-for-like sales growth in Q3 was “robust” at 19.4 per cent. As a clear sign of how we’re ordering our pizza these days, more than 81 per cent of its delivered sales in the year-to-date have been online with 64 per cent through the app or mobile website. Buy.
Shares in low-cost airline easyJet (EZJ) have managed to pull up marginally this morning thanks to market confidence about its debt raising. The group raised €500m of bonds with a coupon of just 1.125 per cent. They mature in 2023 and have been rated stable by both Moody’s and Standard & Poor’s. Andrew Findlay, chief financial officer, said the successful placing “shows the market's belief in easyJet's balance sheet and its confidence in the strength of our strategy of long term profitable growth". Buy.
Tarsus (TRS) investors sent shares in the industry events organiser up 2 per cent after management said it remained on track to meet full-year market expectations. Like-for-like bookings are up 8 per cent, and the key Labelexpo Americas event recorded an 8 per cent rise in visitor attendance. Buy.
Shares in East London focused housebuilder Telford Homes (TEF) rose nearly 5 per cent after delivering an upbeat trading statement on trading in the six months to the end of September. Increased sales activity means that 95 per cent of targeted completions for the year to March 2017 have already been secured, and the forward sold position now exceeds £650m. Having already secured two joint ventures in the private rented sector, detailed discussions are in place with a third prospective purchaser. These agreements are forward funded by Telford’s institutional partners, thus releasing significant working capital for investment in further ventures. Buy.
In addition to their full year results which were broadly in line with City expectations, Quadrise Fuels (QFI) announced a placing to raise £4m along with an open offer to raise another £1m in order to fund the continued advancement of MSAR as a new bulk fuel in the shipping and power generation sectors. Buy.
KEY STORIES:
It seems like an early strike for the newly-listed Hollywood Bowl (BOWL) which has reported like-for-like sales up more than 6 per cent. If its recent acquisition Bowlplex is included, then revenue is up more than a fifth. A refurbishment programme and an improved food and drink offering have helped, management says.
The dramatic year at Premier Foods (PFD) certainly doesn’t seem to be over with the shares off by 10 per cent in early trading. The group’s shares have been extremely volatile this year after it rebutted a takeover approach from US group McCormick in favour of a strategic agreement with Japan’s Nissin Foods, which owns a major stake in the company now. Sales have dropped 5.4 per cent to £172.5m in the 13 weeks to 1 October which will have a marginal impact on trading profits. But management says a keen eye on costs should ensure profits remain within the expected range. The main reason for the decline has been put at the door of the weather, due to it being warmer in each week of the quarter was warmer than the prior year thanks partly to September being the second warmest month since records began. Products such as gravy and stock were down as were desserts meaning grocery branded sales fell 9.5 per cent.
OTHER COMPANY NEWS:
Analysts are describing interim results from motor retailer Vertu (VTU) as “reassuring” amid a softening new car market. Revenues rose by a fifth during the opening six months, which translated into a 14 per cent rise in pre-tax profits to £18.7m thanks to improved margins. But like-for-like new car retail volumes fell 4.2 per cent, which helps explain minimal movement in the share price this morning.
