Equities remain in circumspect mood as the prospect of an end to the Greek crisis in one form or another inches ever closer. Click here to find out what The Trader Nicole Elliott thinks of the latest market moves.
IC TIP UPDATES:
Interserve’s (IRV) joint venture with China State Construction Engineering Corporation has been named preferred bidder by Chinese developer Dalian Wanda for the One Nine Elms scheme in Battersea, valued at £550m. It will build two residential towers comprising 494 apartments, a hotel and associated outdoor space. We maintain our buy rating.
Dixons Carphone (DC.) has enjoyed strong trading conditions of late with like for like sales surging by 13 per cent in the UK and Ireland and 9 per cent across the group in the fourth quarter of its financial year. Full year like for like group revenues rose by 6 per cent and group pro forma headline profits are likely to exceed the previously indicated range of £355m-£375m. Buy.
Property group Workspace (WKP) grew its net asset value by 42 per cent to 703p a share during the year to March while profits rose by 43 per cent to £360m as rental income grew and the company disposed of non-core industrial properties. Meanwhile, the company has also announced the acquisition of Angel House in Islington for £33.95m. We keep our buy recommendation.
Construction specialist Costain (COST) announces that its joint venture with Skanska has been awarded a contract by the Highways Agency for improvements to the A14 in Cambridgeshire. The two phases of the project are worth £600m. Buy.
German property specialist Summit Gernany (SMGT) has bought a complex of office buildings in Stuttgart for €55m on an average net yield of 7.5 per cent. Buy.
Online payments specialist Safecharge (SCH) has entered into a partnership with German business FinTech Group which will see it supply its mobile and online banking and payments services to FinTech’s subsidiary BIW Bank. Safecharge is investing €10m for a 5 per cent equity interest in FinTech. We keep our buy rating.
Simon Thompson recommendation Globo (GBO) says it has seen a ‘strong’ start to trading in 2015 with group revenues rising 36 per cent year on year to €23.7m and earnings up by one third to €13.4m.
KEY STORIES:
WH Smith’s (SMWH) travel business continues to grow strongly with total sales up by 8 per cent and like for like sales 4 per cent higher in the 13 weeks to 30 May. This mitigated ongoing weakness in the high street estate where sales dipped by 4 per cent, giving overall group like for like sales growth of 1 per cent.
Royal Mail (RMG) has announced the appointement of currenty Tui joint chief executive Peter Long as its chairman-designate. He is expected to step down at Tui and become chairman of its supervisory board.
Irish house builder Cairn Homes has announced its intention to float in London with a view to raising €350m-€400m to help accelerate its building plans. First sales from a site in Dublin are expected this month and the company has a pipeline of potential sites close to Dublin as well as in Galway and Cork and other Irish cities.
Mears Group (MER) says trading remains on track although bidding opportunities in its building division have slowed in recent months. The company has continued to grow its care business with the acquisition earlier this week of the Care at Home division of Care UK. In total the company has secured 93 per cent visibility of consensus revenue forecasts of £881m for this year and 82 per cent visibility of next year’s revenues.
OTHER COMPANY NEWS:
Home safety products specialist Sprue Aegis (SPRP) says it is expecting another period of record sales and operating profit for the first half of 2015 despite headwinds from currency movements. Sales into France have been strong, helping continental European sales to outperform last year’s ‘significantly’. But the second half is expected to come in lower than the first.
Alternative Networks (AN.) has announced that chief executive Edward Spurrier is stepping down and will be replaced by Edward Quartermaine, who is currently chief operating officer. Meanwhile results showed a strong performance with in the six months to March with revenues up 17 per cent and profits 22 per cent higher at £5.6m.
Cloud and network security specialist Sophos has announced its intention to float on the main market in London. The group, which generated billings of $476m in the year to March, wants to raise $100m, principally to reduce debt but also to invest in the business.
