London shares dipped a little on the open as European banking sector machinations went on. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
XLMedia (XLM) - a recent IC buy tip - is expanding into the fast growing world of cyber security. The digital marketing specialist, which advertises the products of its partners via its own ‘click-bait’ style websites, has announced the acquisition of Securethoughts.com, a cyber security price comparison website. Buy
Photo-Me International (PHTM) reported a 16 per cent rise in sales during the 12 months to the end of April, or 3 per cent at constant currency. The group continued to expand its laundry business, with 3,251 units now operating across France, Ireland, Belgium, Portugal and the UK. It also began to roll-out its direct data transfer technology in photobooths in Germany and encrypted photo ID upload technology in Ireland. Buy.
Motion specialists Oxford Metrics (OMG) has bought a specialist sports motion sensor company based in New Zealand. The company - appropriately named IMeaureU - enables researchers and elite athletes to gain data driven insights into athletic performance, which can be of particular use in injury prevention. The £2m acquisition is expected to enhance revenues in the 2019 financial year by 6 per cent, and pre-tax profits 9 per cent. Buy
Shares in support services group Mears (MER) fell 5 per cent in early trading following the release of its pre-close trading update. The group’s care business has continued to struggle and is expected to make a loss in the first half of this year, before turning to profit in the second half. Closures covering 10 per cent of the care division’s revenues were carried out in the first half of 2017. Buy.
Debenhams (DEB) had a rocky third quarter in a volatile UK market. Like-for-like sales at constant currency fell 2.4 per cent in the quarter, but are up 1.4 per cent in the financial year to date. The retailer has been improving its online presence with digital sales up 7.9 per cent in the period and 12.6 per cent year to date. Management expects pre-tax profits for the year to still be in line with expectations, though likely towards the lower end of estimates if volatility continues. Shares fell about 3 per cent in early trading. We’re sticking with buy.
Shares in Playtech (PTEC) fell more than 3 per cent in early trading after an institutional shareholder sold more shares than it had originally indicated. Brickington has previously stated that it would sell 32m shares, but has today sold 36.5m shares at 924p each, though still retains 20.1m shares or 6.3 per cent of voting rights. Buy.
KEY STORIES:
Shares in Findel (FDL) fell nearly 6 per cent in early trading after the company announced a loss before tax of £59.4m in the year to March, compared to a £1.7m loss during the same period the previous year. Group revenue was up 11.3 per cent in the year to £457m, but individually significant items, including bad debt provisions and impairment of intangible assets, totalled a £82.2m cost.
Shares in Northgate (NTG) are down 12 per cent this morning after reporting weakness in its UK business. Underlying profit before tax was down 10 per cent to £75m due to the impact of lower numbers of vehicles on hire in the UK and a £5.7m adverse impact from changes in vehicle depreciation rates. The business, however, performed strongly in both Ireland and Spain.
Polar Capital (POLR) continued its recovery during the 12 months to the end of March, growing assets under management by £2bn to £9.3bn. Its long-only strategies gained the most assets, up 91 per cent in sterling terms. However, the dividend was held steady at 25p a share.
OTHER COMPANY NEWS:
It is not just the reported interim numbers that have got investors excited about Blue Prism (PRSM), but also the potential additional revenue which is already booked but not yet recognised. Revenue in the six months to April doubled to £9.3m and 118 new customers were signed - many in the US. After what appears to be a couple of weeks of profit taking, Blue Prism’s share price is back on its upward trajectory, up 7 per cent following these numbers.
RhythmOne’s (RTHM) evolution into a digital focused marketing group has been given another boost by the acquisition of certain assets from RadiumOne, a data driven platform which analyses consumer signals in real time. The scale of the acquisition means management expect it to take up to 18 months to be fully integrated but, even so, in the next twelve months it is expected to contribute $70m of revenue and $3m of adjusted cash profits. The group is hoping to move back into a cash profit position for the first time since 2014.
