Equities are off a little in early trading, continuing yesterday’s theme of mild selling after last week’s healthy rise.
IC TIP UPDATES:
Bovis Homes (BVS) has continued the string of impressive trading statements from the housebuilders as they continue to benefit from the housing revival. It completed 1,487 homes in the first half of 2014, up 54 per cent from last year at an average sales price 11 per cent higher at £210,000. Like for like growth is set to slow in the coming months as comparatives become steadily tougher but we retain our buy recommendation.
Homewares retailer Dunelm (DNLM) is also benefiting from the housing revival. It enjoyed a strong final quarter in which like for like sales rose by 5.5 per cent, giving full year like for like sales growth of 2.1 per cent. Total sales rose by 7.8 per cent. Buy.
Pawnbroker H&T Group (HAT), a Simon Thompson recommendation, has traded in line with expectations despite tough market conditions, primarily due to lower gold prices. The pledge book reduced from £48.6m to £38.4m over the six months to June, but this was expected and management is only expecting a small reduction in the second half. Meanwhile, retail sales rose by 49 per cent on last year, boosted by the launch of the Discount Secondhand Jewellery brand. Debt has also been slashed from £28.5m to £13.5m over the past year.
Cambria Automobiles (CAMB) is to acquire its first Land Rover franchise and a further Jaguar franchise from Lookers for £10.5m. Meanwhile, trading is in line with expectations. We keep our buy rating.
Galliford Try (GFRD) has been appointed to the Education Funding Agency framework for the North West, South West and London and South East regions. This is the preferred method for delivering smaller projects and has a combined pipeline of £3.25bn of work in the three regions Galliford will operate in. Buy.
Alternative financing and e-invoicing specialist Tungsten (TUNG) has reported an 11 per cent increase in pro forma revenues in its maiden results since listing on Aim. We keep our buy recommendation.
Simon Thompson recommendation Netcall (NET) has signed a five year deal with Scottish social housing operator Cairn Housing Association to provide its entire customer engagement platform.
Monitise (MONI) is forecasting revenue growth of between 31 and 33 per cent for the full year, which is lower than the 40 per cent originally forecast as more customers have shifted to its subscription model than anticipated, which brings in lower up front fees. The company expects to end the year with £145m of gross cash which gives it the financial strength to get to profitability in the 2016 full year. Our recommendation is under review.
Tribal Group (TRB) has been awarded a contract to deliver a global student management system for the British Council. We keep our buy rating.
KEY STORIES:
Marks & Spencer’s (MKS) disappointing run has continued with the 13 weeks to June seeing continued tough trading in clothing and general merchandise with particularly poor returns from the M&S.com online business which saw sales reverse by 8.1 per cent after the release of a new website hampered performance. Positives came in womenswear, which enjoyed sales growth and better margin due to more full price sales, and continued strength in the food offering which grew total sales by 4.2 per cent despite the weak environment for grocers.
Young & Co’s Brewery (YNGA) continues to trade well with managed house sales up by 8.3 per cent in total and 7.3 per cent on a like for like basis over the first 13 weeks of its current financial year.
Building products specialist SIG (SIG) has announced a 6.5 per cent uplift in sales 30 £1.285bn in the opening six months of the year with like for like sales growth in key markets such as the UK, Germany and France although comparatives will become tougher as the year progresses.
OTHER COMPANY NEWS:
XP Power (XPP) grew revenues by 2 per cent in the first half despite currency headwinds with orders 3 per cent higher. Order intake during the second quarter is reported to have been ‘robust’.
