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News & Tips: Debenhams, Kentz, Bunzl, CLS Holdings, Faroe Petroleum, Bumi, Keller, Max Petroleum, New World Oil & Gas, Rangers FC & more

Equities are down in early trading and The Trader Dominic Picarda suspects some markets may be entering a period of correction.

IC TIP UPDATES:

Shares in Debenhams (DEB) have taken a hit after the company admitted that the snow in January had a damaging effect on sales, sending them down 10 per cent over the period from 14-27 January. The need to discount following this period to shift stock has also hit margins. Profits for the year are now expected to be in the region of £120m. Our recommendation is under review.

Distribution specialist Bunzl (BNZL) has bought a medical supplies distributor in Brazil. We keep our sell recommendation.

Property specialist CLS Holdings’ (CLI) full year results showed a 49 per cent uplift in pre-tax profits at £56.1m due to a 2.4 per cent rise in like for like rental income and a 31 per cent gain on its bond portfolio. CLS’ portfolio valuation rose from £902m at the end of 2011 to £934.5m at the end of 2012. The year end distribution, in the form of a tender offer at 900p a share, is equivalent to 19.6p a share. Buy.

Sell recommendationAmlin (AML) has announced a profit of £264.2m for 2012 after £141.6m of claims related to Superstorm Sandy. The company is enjoying strong trading conditions and also benefited from good returns on its investment portfolio. Separately, the company has announced the acquisition of managing general agent Raetsmarine for $50m in cash and shares.

Kentz (KENZ) has won a telecommunications connection contract with the Fort Hills oil sands project in Canada. We keep our buy rating.

EKF Diagnostics (EKF) has announced its intention to set up a molecular diagnostics business, bolstered by the acquisition of 360 Gemonics for £1.6m. Buy.

Results for the six months to 31 January at transport scheduling specialist Tracsis (TRCS) revealed a 29 per cent rise in revenues to £4.7m and profits of £1.7m, up 50 per cent. We keep our buy.

Marine fuel developer Quadrise Fuels (QFI) saw losses double in 2012 but the company made significant technical progress with its new, cleaner marine fuel and also raised £3.5m during the year to bolster its balance sheet. Buy.

Engineering specialist Amec (AMEC) has won a £68m contract to supply engineering services to the Clair Ridge oil project. We maintain our buy recommendation.

Faroe Petroleum (FPM) announces the commencement of drilling on the Darwin prospect in the Barents Sea. Buy.

KEY STORIES:

Indonesian coal miner Bumi (BUMI) announces further boardroom changes with Sonny Harsono and Philip Yeo stepping down.

Testing specialist Intertek (ITRK) has made two small acquisitions in Brazil and South Africa alongside its results which showed revenue growth of 17 per cent and profit growth of 19 per cent in 2012.

Ultra Electronics (ULE) grew revenues by 4 per cent in 2012 despite tough market conditions which left profits flat. The company started 2013 with an order book of £905m, covering 58 per cent of 2013 analyst forecasts.

Keller (KLR) posted record revenues in 2012 of £1.3bn with profits more than doubling to £43.5m.

OTHER COMPANY NEWS:

New World Oil & Gas (NEW) announces the commencement of drilling in the West Gallon Jug Crest prospect in Belize.

Max Petroleum (MXP) has received various regulatory approvals from the government of Kazakhstan extending licences for exploration on the Blocks A&E licence and granting trial production status to the Asanketken field and full development status to the Borkyldakty field.

Rangers FC (RFC) has announced its maiden results since it listed on Aim last year, showing revenues of £9.5m and operating expenses of £16.6m. The company has lined up a retail arrangement with Sports Direct, a new kit manufacturer in the form of Puma and Blackthorn cider as a new shirt sponsor.

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