Xi Jingping jets into London this morning, the first time a Chinese head of state has visited the UK for a decade. Click here for The Trader Nicole Elliott’s thoughts on the markets this morning.
IC TIP UPDATES:
Entertainment One (ETO) has found buyers for 96 per cent of the new shares it issued to fund the acquisition of Peppa Pig creator Astley Baker Davies, in turn bringing its stake in the beloved children’s cartoon character to 85 per cent. The heavily discounted rights issue has depressed the share price, but we are convinced of the company’s global ambitions for the porcine hero. We stick with our buy recommendation.
Weak investment markets in the three months to 30 September were blamed for a one per cent drop in funds under management at wealth manager Brooks Macdonald (BRK). And while the group’s investments lost £263m in the period, it still attracted £180m of new business. We maintain our buy stance.
Shares in Simon Thompson recommendation BP Marsh & Partners (BPM) climbed by 4.5 per cent on interim results, thanks to a 100 per cent increase in post-tax profit to £3.4m and a further planned hike in the full year dividend. The venture capital group also saw a 9.5 per cent year-on-year increase in the net asset value of the portfolio, after BP Marsh took additional stakes in its insurance company portfolio.
KEY STORIES:
Whitbread (WTB) has beaten analyst forecasts by boosting pre-tax profits 13.8 per cent to £291.3m in interim results. Chief executive Andy Harrison, who is due to step down in December, said both Costa Coffee and Premier Inn were winning market share thanks to "strong organic growth". Total sales at Premier Inn jumped 12.6 per cent, double the growth in rooms, while Costa grew sales by a whopping 16.2 per cent.
The market welcomed a third quarter trading statement from Intercontinental Hotels (IHG), sending the shares up 5 per cent despite a slowdown in reported revenue per available room (revpar) in the third quarter to 4.8 per cent. Though this represents a drop on the first half of the year, analysts had expected slimmer growth of 3.9 per cent in the three months to September.
There was an equally warm reception for ASOS’ (ASC) final results. Shares in the online retailer leapt 4.5 per cent thanks to a 20 basis point increase in gross margins, a 60 per cent growth in cash and a 27 per cent boom in UK retail sales. Chief executive Nick Beighton expects an £80m investment programme for this year to deliver sales growth of 20 per cent and a similar operating income margin this year.
A full royal welcome is in place to greet China’s president Xi Jinping, who arrived at Heathrow today. The visit is the first to the UK by a Chinese head of state in 10 years, and comes as the Conservative government seeks greater financial ties with the world’s second largest economy.
OTHER COMPANY NEWS:
Gold and silver miner Polymetal (POLY) whose shares have rallied 40 per cent since early August, used third quarter results to announce expectations of 1.35 million ounces of gold equivalent production next year.
Curtis Banks (CBP) has reached an agreement to take on the administration of a “significant book” of self-invested personal pension schemes (SIPPs), for a minimum 10 year period. The portfolio is expected to be worth £2.25m in fees in the first two years of the contract.
Drug supplier and developer Quantum Pharma (QP.), which floated at the end of 2014, announced a maiden interim dividend of 0.5p in its interim results. Revenue increased by more than a fifth to £34.3m, though administrative expenses weighed on the bottom line, bringing pre-tax profits down 20 per cent to £2.8m.
Al Noor Hospitals (ANH) has received a “highly preliminary indication” of interest from VPS Healthcare, the third takeover approach for the UAE-based group. Last week, Al Noor agreed to a combination with South Africa’s Mediclinic International worth £1.4bn, despite rival interest from NMC Health.
Genel Energy (GENL), the Tony Hayward-chaired oil group with operations in Iraqi Kurdistan, has received a $16.5m payment from the Kurdistan Regional Government, in addition to third quarter revenues of $77m. But crude oil realisations of $37 a barrel in the period helped to push the shares down 6 per cent.
Shares in Stagecoach (SGC) nudged up 0.7 per cent on news the transport operator will redeem £400m of outstanding bonds before they mature next year, at a cost to the company of around £23m.
Stagecoach rival Go-Ahead (GOG) increased regional bus revenue by 1 per cent in the first quarter of its financial year, despite a 1.5 per cent dip in passenger journeys. London bus revenue and mileage grew at 2 and 2.5 per cent, while passenger revenue in its rail groups increased by 4.5 to 11 per cent.
