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News & Tips: JD Wetherspoon, Booker, Thorntons & more

Equities are downbeat again
July 9, 2014

Equities have started the day in the same downbeat mood which saw a solid sell off yesterday, not helped by news of a surprise slowdown in UK manufacturing and an unexpected fall in house prices in June.

IC TIP UPDATES:

JD Wetherspoon (JDW) has seen a slight weakening in sales growth during the past few weeks due to the World Cup effect, or lack thereof on England’s part. Nonetheless, like for like sales were up 4.9 per cent in the ten weeks to 6 July with year to date figures for the opening 49 weeks of the year up by 5.4 per cent and total sales 9.8 per cent higher. The company has opened 40 pubs and closed five during this year with eight sites under development. We keep our buy rating.

Wholesale specialist Booker (BOK) produced solid figures for the 12 weeks to 20 June with total group sales including the Makro acquisition up by 3.8 per cent and like for like sales, excluding Makro, 2.9 per cent better. Buy.

Galliford Try (GFRD) says profits for the year to June should be at the upper end of analysts expectations of £92.8m-£95.2m, which would represent a record performance for the housebuilding and construction specialist. The Linden Homes business ended the year with a record £348m carried forward sales position and the construction business order book is £1.4m, up from £1.25bn. We maintain our buy rating.

ISG (ISG) has been appointed by the Education Funding Agency to the Regional Framework for school building for four regions, the North East, South West, East of England and Midlands West. Jobs are mostly smaller new build and refurbishment contracts of £3m-£7m. We keep our buy recommendation.

KEY STORIES:

Thorntons (THT) increased total company sales in its final quarter by just 0.6 per cent, although this was held back by the closure of a number of stores as it transitions towards a fast moving consumer goods model. Over the year to 28 June, the fast moving consumer goods business grew sales by 7.9 per cent while the retail business saw sales dip 5.6 per cent.

Gaming group 888 (888) says trading in the opening six months of the year has been strong and the company expects to report earnings ‘significantly ahead’ of last year.

Interserve (IRV) reports continued strong trading and growth in its order book.

Student accommodation specialist Unite (UTG) announces that the Unite Student Accommodation Fund, in which it owns a 21 per cent stake, has acquired a 2,904 bed student accommodation portfolio, the Cordea Savills Student Hall Fund, for £137m.

Fellow student property business Empiric (ESP), which only recently floated, has bought a redevelopment project in Southampton in 50:50 partnership with Revcap Advisors for £3.75m.

OTHER COMPANY NEWS:

Irish oil explorer Providence Resources (PVR) has been dealt a blow with news that the rig it had contracted to drill exploration and appraisal wells on its Spanish Point prospect will not be ready to drill before the winter season kicks in. The company has cancelled its contract and is seeking a new rig, which will push first drilling back to 2015.

Blur Group (BLUR) has announced first half new project bookings totalled $16m, up from $5.2m last year.