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News & tips: Poundland, Safestore, Aga & more

The FTSE 100 is now at its lowest level since mid January - and still falling.
June 18, 2015

As European leaders meet to hammer out a last-minute deal for Greece, UK shares continue to plunge. The FTSE 100 index is now at its lowest level since mid January. The Trader Nicole Elliott reports.

IC TIP UPDATES:

Self-storage leader Safestore (SAFE) posted strong first-half numbers, with like-for-like revenues up 13 per cent in the UK, and 6 per cent in France, at constant exchange rates. The average store is now 69 per cent full, up almost four point. Buy.

Miner Paragon Diamonds (PRG) announced a £500,000 unsecured short-term loan at a monthly interest of 1.25 per cent to support working capital, while it awaits approval from the Lesotho Ministry of Mines for last month's acquisition of the Mothae Diamond Project. The shares rose 10 per cent on news that management expects the government to grant approval "promptly". Buy.

Aga Rangemaster (AGA) shares soared 30 per cent yesterday after it admitted it was in discussions with the Middleby Corporation regarding a cash offer for the high-end cooker maker.

Premier Farnell (PFL) shares fell 4 per cent in morning trading following a trading statement guiding investors to expect a year-on-year decline in first-half operating profits. The Leeds-based electronics distributor is posting solid top-line growth, but its gross margins are still suffering from the weak euro and efforts to update the customer proposition. We are reviewing our buy call.

Real Estate Investors (RLE) announced that it has made six acquisitions since a £45m placing in April. The Midlands-oriented property investor spent almost £25m on five let properties yielding 8.9 per cent, and one vacant building. Buy

Shares in shower maker Norcros (NXR) rose 3 per cent on news of a sixth consecutive year of revenue and profit growth. Debt almost halved to £14.2m, and the return on capital employed rose above the 12-15 per cent target range. Buy.

Playtech (PTEC) announced a placing to fund acquisitions, notably that of Plus500. The move will increase its share capital by just under 10 per cent. The company also noted that it has bought more shares in Plus500, taking its stake to 9.4 per cent. Buy.

KEY STORIES:

Poundland (PLND) saw its shares dip 4 per cent in morning trading after posting 2.4 per cent like-for-like sales growth for the year to March - its first as a listed company. Total sales were up nearly 12 per cent thanks to 60 net new stores.

Home-shopping and education group Findel (FDL) delivered 20 per cent growth in underlying operating profits to £36.6m, but this gain was wiped out by an impairment of intangible assets within the education business. Management admitted that the schools suppliers has been losing customers and market share.

Model rail specialist Hornby (HRN) announced a £15m placing to support its recovery alongside annual results showing underlying pre-tax profits of £1.6m. It has also renegotiated its banking facilities and asked to move from the main market to Aim. We recommended investors take profits last month.

OTHER COMPANY NEWS:

UK retail fund manager Liontrust Asset Management (LIO) posted full-year results, with adjusted pre-tax profits rising 45 per cent to £12.1m, well ahead of consensus at £10.7m. Assets under management were up by almost a quarter at £4.5bn.

Charles Stanley (CAY) posted a 1 per cent increase in sales, but its profits were hit by the underperforming securities division. It has now agreed to sell the business to Panmure Gordon.

Estate agency franchise group Hunters announced its intention to float on Aim.