The FTSE 100 was off 1.5 per cent in morning trading as traders further digested yesterday's comments from European Central Bank chief Mario Draghi, who said volatility was here to stay. Meanwhile, economists the world over seem to be reining back the austerity rhetoric. The Trader Nicole Elliott reports.
IC TIP UPDATES:
EasyJet (EZJ) posted strong passenger statistics for May. The number of "earned seats flown" - those paid for - was 6.5m, 7.2 per cent higher than in May 2014 and representing 91.6 per cent of total capacity, up from 89.4 per cent. The budget airline's gamble on expanding capacity seems to be paying off. Buy.
As hoped, Wincanton (WIN) showed signs of financial recovery with 23 per cent growth in underlying pre-tax profits for the year to March. That was driven largely by lower finance charges, with operating profits up just 3.5 per cent on modest top-line growth. The shares fell 3 per cent in morning trading, but we see no reason to downgrade our recovery tip. Buy.
Pets at Home (PETS) posted solid maiden annual results, with underlying cash profits up 10 per cent to £121m. Top-line growth was driven above all by the company's vet practices, but the dog and cat food retailing operation also delivered decent like-for-like growth of 3.7 per cent. The company opened 25 stores in the year to March. Buy.
Sirius Real Estate (SRE) announced an acquisition and capital restructuring. It has raised €50m of equity capital from a private placement and is opening a €56m (£37m) variable-rate debt facility, which together will fund the early repayment of two expensive loans from Macquarie bank and the acquisition of five mixed-use business parks in its German heartlands of Stuttgart and North-Rhine Westphalia. The combined effect will reduce the company's loan-to-value, boost the dividend but also reduce book value by 2.5 per cent. Buy.
KEY STORIES:
Moneysupermarket.com (MONY) shares fell 9 per cent on news that it is providing information to energy regulator Ofgem in support of an "investigation into whether two or more companies providing a supporting service for the energy industry have breached competition law". Zoopla (ZPLA), which completed the acquisition of price-comparison website uSwitch on Monday, also saw its stock fall 7 per cent, but made no announcement to the stock exchange.
Odey Asset Management made a statement to the stock exchange to the effect that Playtech's (PTEC) bid for Plus500 (PLUS) at 400p "materially undervalues" the embattled spread-betting company. Odey believes Playtech's move is "an opportunistic bid exploiting current regulatory issues and risks". It will not vote in favour "at this price".
Catalytic converters remain the growth engine at chemical giant Johnson Matthey (JMAT). Its Emission Control Technologies division posted profit growth of 21 per cent, making up for a poor showing from the precious metals unit. Overall, pre-tax profits rose 7 per cent at constant exchange rates.
VP (VP.) shares leapt 7 per cent in early trading following a bullish set of annual results from the equipment rental group. With pre-tax profits up a third, management commentary was unusually confident, including the observation that the "economic environment is both the UK and globally is more positive than for some time".
OTHER COMPANIES NEWS:
Audioboom (BOOM), which provides a platform for spoken audio, reported strong growth in performance indicators such as registered users and app downloads. Management said the March to May quarter was "comfortably our best to date" and guided analyst numbers higher. The shares rose 8 per cent in morning trading.
SCISYS (SSY) shares plunged by a third following a profit warning. The software provider said it was "experiencing difficulties" with a major fixed-price contract in its Enterprise Solution and Defence division, and would have to take a provision to account for the extra costs required to complete it. It also cited the strength of sterling against the euro as a problem that would contribute to a "substantial shortfall in profits" compared to March guidance.
NextEnergy European Solar Utility, a new investment company focused on solar assets, put out an intention to float document. The concept is to provide dividends and some capital growth to shareholders by owning and operating solar plants, initially in Spain and Italy.
