Equities in London have crunched into reverse in early trading as Donald Trump creates waves with scattergun policy. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
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Certain of the world’s citizens might not get the reception they would ordinarily hope for at US border control given President Trump’s interim immigration measure but the grower of sugar substitute stevia PureCircle (PURE) no longer has this worry for its products. The group had struggled to get shipments through US border control recently due to those authorities’ wrong belief slave labour could have been used to harvest the stevia. But the US Customs and Border Protection has removed PureCircle from the Withhold Release Order ('WRO') which had been used to detain shipments. The company's trade with its US based customers, which represented one third of sales in its last financial year, can now resume on a regular basis. Buy.
Interim results from Wine Rack and Bargain Booze owner Conviviality (CVR) seem to be exactly what analysts were expecting. Corporate activity boosted revenues by 211 per cent to £785m, with like-for-like sales growth coming in at 4.4 per cent. Pre-tax profits also moved up by a whopping 295 per cent to £15.4m, which fed through to a 142 per cent increase in EPS to 9.2p. The interim dividend has also doubled. We remain buyers.
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The bed looks pretty comfortable at PPHE Hotel Group (PPH) thanks to some sound numbers from 2016. The acquisition of a Croatian business it completed during the year (of which it owns 77 per cent) helped push revenue up more than a quarter although the like-for-like figure, which excludes the deal, rose roughly 7 per cent. Likewise, reported revenue per available room, a key performance metric known as RevPAR, dropped 8.2 per cent to £84.40 as the group’s occupancy rate was pushed down by the Croatian business. Management said this was expected given the acquisition didn’t feature in 2015’s numbers and it hasn’t had a full summer of ownership of the Croatian business, the time of year when it is most popular. But the weakening of the pound against the euro helped like-for-like RevPAR rise 7.2 per cent to £85.40. The group’s debt has also been renegotiated on more favourable terms and shareholders benefited from an extra pillow too - or rather special dividend.
Porvair (PRV) produced another strong set of annual figures, with operating profits of £10.7m up 9 per cent on its 2015 year-end, driven by a particularly strong showing from its microfiltration division. The annual pay-out increased from 3.5p to 3.8p as cash-flows (and revenues) were boosted by sterling’s post-referendum decline.
Vodafone (VOD) has confirmed the mounting media speculation that it is considering merging its Indian subsidiary with rival Idea Cellular. India’s three main mobile operators (which include Vodafone and Idea) have struggled against the rising competition provided by the arrival of Jio Infacomm - a new operator owned by Millionaire Mukesh Abani. Vodafone has been trying to spin off ist Indian subsidiary but was waiting for market conditions to stabilise. This mornings news was greeted well be investors who sent the share price up 3 per cent in early trading.
Strong demand for polls around the US election provided YouGov (YOU) with an excellent six months of trading to January 2017. Management thinks half year revenues will now come in ahead of expectations. Given the stronger weighting of the second half of YouGov’s financial year, broker Numis has upgraded its full year profit and earnings guidance by 5 per cent.
Significant historic mistakes discovered last year in the accounts of Redcentric (RCN) - a revelation which sent shares down two thirds in one day - has not stopped the NHS awarding the group with a significant contract. The managed IT services company will deliver a critical component to the new Health and Social Care Network, a new data network for organisations to access and share information more readily, set to launch at the end of March this year.
OTHER COMPANY NEWS:
The plane looks to be less buffeted over at Flybe (FLYB) which will please new chief executive Christine Ourmieres-Widener, who joined the Exeter-based airline earlier this month. The group will take on four new aircraft in its final trading quarter having taken on four in the three months to 31 December. This should mark the end of its capacity growth for now, with the company saying it would be at its “peak fleet size”. As part of this, six end-of-lease aircraft will be returned to lessors. This will be a relief for shareholders given the airline’s historic problems with over capacity. Passenger revenue was up 13.5 per cent in the quarter under review, well above the growth of the prior half-year, while load factors against the same period also declined at a slower rate. Passenger revenue per seat dropped just 0.2 per cent compared to 6.9 per cent in its first trading half.
Scientists concerned that Brexit could reduce cross border collaboration and investment in new medicines have reason to feel a little relieved this morning. Danish drugs giant Novo Nordisk (NOV) has confirmed plans to host a £115m diabetes research centre at Oxford University, funded over 10 years. Novo Nordisk will join a very small number of global pharmaceutical companies undergoing early stage drugs research in Britain, but Sir John Bell - a medical professor at Oxford - hopes that this move will help spark a revival in the early stage drugs development here.
