Equities have dipped again following yesterday’s retreat from recent highs after mixed economic news from Asia. Click here to find out what The Trader Nicole Elliott thinks of the latest market moves.
IC TIP UPDATES:
Final results from emerging markets focused bank Standard Chartered (STAN) reflected what has been a tough year with pre-tax profits falling by a quarter to $5.2bn, prompting its recently announced management changes and cost cutting programme which should slice $1.8bn off costs over the next three years. The dividend is maintained at $0.86 per share. Our recommendation is under review.
Broadcaster ITV (ITV) has recorded another strong year of growth for 2014 during which time cash earnings rose by 18 per cent to £730m and adjusted profits by 23 per cent to £712m, boosted by strong growth in both its broadcast and studios businesses. As well as boosting the full year dividend by 34 per cent to 4.7p, management is also proposing a special dividend of £250m or 6.25p a share. We keep our buy rating.
Carillion (CLLN) has celebrated a strong set of full year results by announcing a landmark facilities management framework contract with the government owned built environment specialist Scape which could be worth £1.5bn over the coming six years. This means any public sector body in the UK can procure facilities management services from Carillion via Scape. Meanwhile, full year results showed flat revenues of £4.1bn with reported profits up by 29 per cent. Forward orders and probable orders are at £18.6bn with a pipeline worth £39.2bn. Buy.
Specialist insurer Novae (NVA) secured gross written premiums of £638.5m in 2014, up from £590.3m the previous year at a combined ratio of 91 per cent, which was only marginally less profitable than the previous year. The company is topping up its final dividend of 18.2p with another special dividend of 20p a share. We keep our buy rating.
Property group CLS Holdings (CLI) has enjoyed a major uplift in valuation on its portfolio over the past year, benefiting from a strong focus on up and coming areas such as London’s Vauxhall. Its portfolio rose in value by 15 per cent to £1.31bn and net assets per share grew by almost 40 per cent while post tax profits tripled to £194.9m. CLS is proposing a tender offer to buy back 1 in 80 shares from investors at 1,950p a share, which is equivalent to 24.4p a share. Buy.
Simon Thompson recommendation Vislink (VLK) has reported that better than expected trading in its higher margin software business means adjusted operating profits are likely to come in ahead of market expectations.
KEY STORIES:
Legal & General (LGEN) grew operating profits by 10 per cent in 2014 to £1.275bn, allowing management to boost the final dividend by 21 per cent to 11.25p a share. Among its highlights, over the year annuity assets rose by 28 per cent to £44.2bn and Legal & General Investment Management total assets rose 16 per cent to £708.5bn.
Motor retailer Lookers (LOOK) is enjoying the boom conditions with a 23 per cent rise in revenues to £3.04bn for 2014 and profit growth of 35 per cent to £65m. Management thinks market conditions will ‘stabilise’ after three years of strong growth.
Melrose Industries (MRO) grew headline profits by 21 per cent to £213m in 2014, bolstered by a strong performance from its Elster business, which has grown profits by two thirds since it was bought two years ago.
Baker Greggs (GRG) grew total sales by 5.5 per cent in 2014 with like for like sales growth of 4.5 per cent and pre-tax profit growth of 41 per cent to £58.3m. The company closed 71 shops during the year, opened 50 new ones and refitted 213 shops and was trading from 1,650 outlets at the turn of the year.
Aviation services specialist BBA Aviation (BBA) grew underlying revenues and profits marginally in 2014 with reported pre-tax profits coming in 5 per cent higher at $152.4m.
Funerals business Dignity (DTY) enjoyed another year of solid growth in 2014 with revenues up 5 per cent at £268.9m and underlying profits 11 per cent higher at £58.5m.
OTHER COMPANY NEWS:
Troubled oil and gas explorer Afren (AFR) has decided not to pay $15m of interest due on a portion of its bonds, effectively defaulting with the tacit support of a number of bond holders who have agreed not to take immediate action. Discussions are ongoing with lenders over a refinancing which is likely to ‘substantially dilute’ existing shareholders.
US focused marketing business 4Imprint (FOUR) grew revenues by 25 per cent to $415.8m for 2014 with profits surging by 61 per cent to £23.3m. The company is planning to invest $9m in its US infrastructure to take advantage of buoyant conditions.
Woundcare specialist Advanced Medical Solutions (AMS) posted 6 per cent revenue growth to £63m for 2014 with pre-tax profits rising by 16 per cent to £15.2m.
PVC window, door and roofing products business Eurocell (ECEL) has announced pricing for its initial public offering with 100m shares to be offered at 175p a share as conditional trading began this morning.
