Shares dipped at the open in London this morning but have since recovered to be trading flat at just before midday.
IC TIP UPDATES:
Demand for industrial warehouse space has served industrial landlord Segro (SGRO) well, and £8m of new pre-lets were signed in the period from 1 July to 19 October. Assets worth £131m were sold during the period, all at above book value, and £174m has been invested in improving and growing the portfolio. Demand is underpinning rental growth, and rents on review and renewal grew by 5.5 per cent in the first nine months of the year. Buy.
Shares in NCC (NCC) slumped by more than a third in morning trading after the cyber security group warned that three contract cancellations, a contract deferral and issues renewing some managed services contracts were likely to push profits into the second half of the year. Nonetheless, organic sales rose 21 per cent in the four months to 30 September as both assurance and escrow revenues rose. Under review.
Microbiome specialist OptiBiotix (OPTI) has invested £400,000 into its SkinBiotix division using a convertible loan agreement which will convert should SkinBiotix IPO. The money will be used to complete the human studies for the company’s first product. Shares in Opti are trading down 2 per cent this morning, perhaps as current investors are a little concerned about the group’s plans to spin out different valuable divisions of its business. We like OptiBiotix for its market leading technology in an incredibly exciting area of scientific development. Buy.
Redx Pharma (REDX) has selected its candidate drug for its leukemia programme. The drug has the potential to treat the majority of patients suffering with chronic lymphoblastic leukemia, including those who become resistant to commonly used treatment, ibrutinib. Shares have jumped 6 per cent in early trading. Buy
Shares in International Personal Finance (IPF) have risen 12 per cent after the sub-prime credit group reported an improved performance in its troubled Mexico business during the three months to September, as credit issuance was up 10 per cent. Credit issued by the Poland-Lithuania business also increased 1 per cent, following a 4 per cent contraction during the first half of the year, although customer numbers declined 7 per cent year-on-year. This was reflective of the overall trend asl credit issued by the group was up 9 per cent, yet customer numbers contracted 1 per cent. We place our sell recommendation under review.
Rathbone Brothers (RAT) reported a 9 per cent increase in funds under management to £33.2bn for the three months to September, compared with the end of June. Its unit trust business posted particularly strong net inflows of £170m. Year-on-year investment management fees increased by almost a fifth to £43m, pushing total net operating income up by the same amount to £66m.
Brooks Macdonald (BRK) founder and chief executive Chris Macdonald will be stepping down from his role to become deputy chairman in April. He will be replaced by HSBC head of UK premier and wealth Caroline Connellan. In line with the announcement the wealth manager reported an 8 per cent increase in discretionary assets under management during the three months to September, compared to a rise in the WMA Balanced Index of 5 per cent. The group received £170m in net inflows and generated £451m in investment growth. Buy.
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Shares in GB Group (GBG) fell 11 per cent in morning trading after the identity intelligence specialist revealed organic growth of about 9 per cent in the six months to 30 September. Management said its software was rolled out across central government departments more slowly than expected, but still expects to meet the market’s first-half profit expectations.
High street bookie Ladbrokes (LAD) has highlighted fourth quarter results from Gala Coral ahead of its conditionally-approved merger with Coral. Trading over the 12 weeks to 25 September 2016 was positive with total Coral Group net revenue 8.9 per cent ahead of last year. Online also saw continued strong growth with net revenue 23.7 per cent up on last year, with Coral.co.uk net revenue rising 31.7 per cent, driven by strong sports stakes growth.
Engineer Senior (SNR) has seen its shares take a pasting this rmoning, losing 17 per cent of their value after it warned that weakness in its Flextronics division would impact its full year performance.
Shares in Keller (KLR) slid 25 per cent after the ground engineering specialist warned that full-year results will be around 15 per cent lower than market estimates. While its core markets in the US and Europe (70 per cent of group turnover) remain robust, trading in Canada and sub-Saharan Africa has remained tough. Trading here incurred a third quarter loss, and will remain loss-making into the fourth quarter. Measures to downsize its operations here will result in exceptional costs of around £10m. Analysts at Peel Hunt have downgraded their forecasts for the year to December 2016 from adjusted pre-tax profits of £102m and EPS of 96.1p to £86.5m and 77.8p respectively. Having downgraded the shares from buy to hold on the back of weaker interim results, we downgrade the shares again to sell until some progress emerges on restructuring its loss making division.
