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News & Tips: Fyffes, Marshalls, Photo-Me & more

Shares are holding on to their gains
December 9, 2016

The FTSE100 is up a little as equities look to a positive end to a strong week. Click here for The Trader Nicole Elliott's latest views.

IC TIP UPDATES:

One stock going absolutely bananas this morning is fruit producer Fyffes (FFY) which has received a recommended cash offer by Swordus Ireland, a wholly-owned subsidiary of Sumitomo Corporation. The pair have reached agreement on the terms and the shares have leapt 45 per cent this morning to 187p. Investors will get €2.23 (£1.87) in cash for each Fyffes share, which represents a 49 per cent premium to the closing price on 8 December, before news of the deal was released. There will also be a final dividend of 2 cents per share, nudging the total up slightly. This will be paid on 1 May at the latest. We’ll take a closer look at the deal before updating our current recommendation.

Revenue grew by 3 per cent for Marshalls (MSLH) in the 11 months to the end of November, with UK revenue boosted by a strong domestic market. These account for around one third of group sales, and revenue in the last five months was up 15 per cent. On the commercial and public sector side, commercial sales were broadly in line with the previous year. The group is expected to meet full-year expectations. Buy.

Shares in Euromoney Institutional Investor (ERM) slumped 8 per cent in morning trading after Daily Mail and General Trust (DMGT) reduced its stake in the financial information, training and events group by more than a quarter, from 67 per cent to 49 per cent. Sell.

There are some happy snaps over photo booth operator Photo-Me International (PHTM) this morning with the stock almost leading the FTSE. The shares are up 6 per cent this morning thanks to a record first half performance after sales leapt nearly a fifth to £110m. This was in large part driven by the rollout of its Revolution laundry product. Adjusted pre-tax profit was also up a fifth to £31m. The group still boasts net cash too even after buying the UK photo division of supermarket Asda. Management says its profits for the year to April 2017 will “significantly exceed” market expectations.Broker finnCap upgraded its FY17 and FY18 pre-tax profit figures by 14 per cent on the results. Buy.

In a trading update, recruiter SThree (STHR) said that pre-tax profits for the year are expected to be slightly above the top end of the range of current market expectations, though its UK and Ireland segments were hurt by a slowdown in finance and the public sector partly due to Britain's vote to leave the EU. "Looking ahead to 2017, global political and macro-economic uncertainties have increased across a number of our key regions," according to the group’s chief executive Gary Elden. Recommendation under review.

Plant Impact (PIM) has made a strong start to its 2017 financial year. Revenue and profit for the quarter were consistent with achieving full-year expectations. The company has also received further committed orders for the company's flagship soybean crop enhancement product Veritas. Buy