Join our community of smart investors

News & tips: Assura, Euromoney, WS Atkins & more

The FTSE is down this morning, perhaps due to a sell-off in Japanese equities. Meanwhile, the Aim reporting season continues.
September 24, 2015

Japanese traders have been selling stocks, taking the Nikkei index to a new low for the year and weighing on the FTSE 100 in morning trading. The Trader Nicole Elliott reports.

IC TIP UPDATES:

GP landlord Assura (AGR) announced a major share issue via a placing, open offer and offer for subscription at 50p per share - a discount to the share price but a premium to book value. The deal is expected to raise £300m net of fees to fund a pipeline of acquisitions and developments worth £125m, and to reduce borrowings. Assuming full take-up of the offer for subscription, the company's loan-to-value ratio will be 35 per cent. Buy.

Neil Woodford-backed pallet developer RM2 International (RM2) said it was having to change the coating on its new pallet from powder to gel following trials with potential customers. As a result it will not achieve the upswing in production anticipated for the third quarter, and numbers will be well below guidance. It now expects the upswing next year instead. The shares fell 19 per cent. Our buy tip is under review.

Mission Marketing (TMMG) continues to grow rapidly, with half-year revenues up 12 per cent to £29.5m and adjusted profit up a fifth to £2.4m. The umbrella group for small PR and advertising agencies added a number of big new clients, including companies as wide-ranging as Ask, Brewin Dolphin and British Airways, but growth also came from acquisitions. Net debt fell £1.5m to £7.9m. Buy.

WYG (WYG) reported a surge in orders, with the UK book up 15 per cent on the end-March figure and the international order book up 20 per cent. As a result, first-half numbers will be flat on last year, but the second half will be very strong. The UK business is benefitting from the increasing flow of infrastructure work, while the overseas arm is recovering from delays in the EU funding cycle. Buy.

Agriculture group NWF (NWF) said margins in its feeds business, which sells nutritional products to farmers, were under pressure as a result of low milk prices. But the board said overall trading was nonetheless ahead of the same period last year and in line with expectations. Buy.

WS Atkins (ATK) reported some first-half margin pressures in a fairly downbeat pre-close statement, but said the overall performance was still expected to be in line with expectations. Buy.

KEY STORIES:

Euromoney (ERM) shares fell 6 per cent on a trading statement that laid bare the problems facing publishing groups. Although subscription revenues continue to show underlying growth of 2 per cent, advertising - which is particularly dependent on the investment banking sector - is expected to show a 12 per cent decline for the quarter to 30 Sep. Weak commodity markets are also hitting its events business.

Thomas Cook (TCG) posted a positive trading update. The summer season is 91 per cent sold, with a very strong Northern European performance offsettting weakness elsewhere in Europe and in the UK. With Tunisia closed following the terrorist attack in June, Greece and Egypt have seen strong bookings. The winter season is 39 per cent sold so far.

OTHER COMPANY NEWS:

Park Group (PKG), which helps poorer consumers save for Christmas through vouchers, posted a benign AGM statement. Cash balances, including money held in trust - a good indication of how many consumers it is attracting - are running at £184m, £23m ahead of last year.

Niche software provider Scisys (SSY) announced poor first-half results that confirmed the bad news first revealed in a June profit warning. The income statement slipped into the red at the operating level as a result of "significant issues with one problematic fixed-price project" and the weakness of the euro.