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News & Tips: Carillion, Phoenix, Vodafone & more

Today's market overview

News & Tips: Carillion, Phoenix, Vodafone & more

London shares were down a little in morning trading as the government confirmed it plans to formally begin the EU exit process at the end of this month. Click here for The Trader Nicole Elliott's latest thoughts on the markets.

IC TIP UPDATES:

Public-private partnership specialist Carillion (CLLN) has won a £90m contract to design and build a communications centre in Cyprus. The UK defence infrastructure organisation awarded the contract, which starts next month to be completed by January 2019. Buy.

Phoenix Group’s (PHNX) acquisition of Abbey Life and Axa Wealth last year pushed up its cash generation and meant it beat its target of between £350m and £450m - generating cash of £486m. As a result management was able to recommend a 5 per cent dividend increase. However, customers held onto valuable guarantees for longer due to low interest rates, hurting pre-tax profit. Nevertheless the buy case for this income stock remains intact. Buy.

Telecoms giant Vodafone (VOD) has finally managed to secure a deal for its India subsidiary. Vodafone India will team up with rival Idea to create the country’s largest telecoms group, with roughly 400m customers. The company has struggled amid intense competition in recent months and the deal comes after much speculation that these two rivals will seek to cut costs in order to deal with new, fast growing telecoms providers. Vodafone will own 45 per cent of the new company and spinning off the company will take over $8bn off the group’s net debt figure. Buy

Reported earnings for Volution Group (FAN) were constrained due to increased amortisation and fair value adjustments, together with continuing weakness in UK Public Residential RMI (Renovation Maintenance Improvement). But the ventilation specialist still produced strong cash-flows and underlying operating profits at the half-year mark as the benefits of recent acquisitions flow through. Buy

KEY STORIES:

Despite a continuously difficult grocery market in the UK, analysts have described this morning’s results from Finsbury Food (FIF) as ‘resilient’. Interim pre-tax profits moved ahead by 5 per cent year-on-year thanks to improved margins and a solid performance at the operating level. Net debt levels also remain conservative despite record levels of investment.

OTHER COMPANY NEWS:

Shares in Aim-listed mobile advertiser Taptica International (TAP) climbed 9 per cent in early trading on release of its most recent set of results. The group has continued to focus on its shift to mobile, which now accounts for 86 per cent of revenues (61 per cent in 2015) and is looking to make acquisitions to expand internationally and improve its video capability.

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By Graeme Davies,
20 March 2017

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