Equities have settled into a pattern of decent gains followed by minor retrenchments this week, and today is no different but the Trader Nicole Elliott is warning investors to beware thin markets.
IC TIP UPDATES:
Shares in broadcaster ITV (ITV) have been boosted by news that US media giant Liberty Media has snapped up a 6.4 per cent stake in the company worth £481m from BSkyB. We keep our buy recommendation.
IC Tip of the Year Anglo American (AAL) has updated on second quarter production in which strike action hampered its platinum output, leaving it 40 per cent lower than the previous year. Otherwise, half year production of iron ore rose 5 per cent, copper by 12 per cent, nickel by 35 per cent and metallurgical coal by 21 per cent. Buy.
Media group Entertainment One (ETO) has agreed to acquire North American television production company Paperny Entertainment in a deal worth C$29.2m in cash and shares. We maintain our buy rating.
Project management and technical consultancy business WYG (WYG) has been named preferred bidder by Polish authorities to support the development of Poland’s first nuclear power plant. The contract is worth a minimum £6.2m but could rise to £35m over the next ten years. Buy.
The recovering construction sector in the UK has played right into the hand of Breedon Aggregates (BREE) which has seen revenues for the six months to June soar by 25 per cent and underlying pre-tax profit grow by 77 per cent to £9.4m. We maintain our buy recommendation.
Finsbury Food (FIF) says it expects full year profits to beat market expectations after taking action in the first half of the year to boost sale and cut costs. Full year revenues are likely to be relatively flat on last year but higher margin sales will feed through to the expected profit improvements. Promisingly, the first half weakness in its UK bakery business was reversed in the second half. We keep our buy.
Recent buy tip Xaar (XAR) has reiterated that it expects first half revenues of £60m to be followed by higher second half sales, leading to forecast full year revenues of £130m.
Meat processing specialist Hilton Food Group (HFG) reports mixed recent trading with challenging trading conditions in some countries and currency movements likely to affect numbers reported in sterling. But overall the company has continued to grow volumes. Buy.
Property company McKay Securities (MCKS) has invested £47m of the £86.7m it raised in February in growing in acquiring new properties and improving existing properties in its London and South East-focused office portfolio. Total occupancy rate was 84.7 per cent at the 17 July, down from 85.9 per cent at the end of 2013, mainly due to acquisitions with vacancies. We keep our buy rating.
KEY STORIES:
Land Securities (LAND) has reported on its first quarter activity during which time it has advanced pre-lettings on its development at Ludgate in London to 61 per cent, nine months ahead of completion. It has signed £15.4m of development lettings since 1 April with £6.7m more in solicitors’ hands. Voids in its overall portfolio were 2.4 per cent at the end of the period, up slightly from 2.2 per cent.
Sports Direct (SPD) grew revenues by 23.8 per cent in the year to 27 April with underlying profits up by 19.8 per cent to £294.3m. Online revenue grew by 26.8 per cent and now accounts for 17.1 per cent of all sports retail.
Mothercare (MTC) says its international division returned to sales growth in the 15 weeks to 12 July with constant currency sales up by 14.7 per cent, although currency movements reduced this to marginal 0.8 per cent growth. Total group sales dipped by 1.8 per cent with UK sales down 1.2 per cent, primarily due to reduction in group space. Like for like sales in the UK rose by 0.9 per cent.
Ricardo (RCDO) says that strong recent trading meant that it ended the year to June with a record order book.
Appliances retailer AO World (AO.) reported like for like sales growth of 30 per cent in the three months to June.
OTHER COMPANY NEWS:
Recently listed student property company Empiric (ESP) has acquired a 106 bed student property in Birmingham for £12m.
Back up power specialist Alkane Energy (ALK) is spending £11.75m acquiring three back up power response companies, boosting its capacity by 49MW. It is raising £8m from investors towards the deal.
