Equities in London have started the week on the back foot after yet more weak data from China. Click here to find out what The Trader Nicole Elliott makes of the current markets.
IC TIP UPDATES:
Housebuilder and strategic land specialist MJ Gleeson (GLE) continues to thrive in favourable market conditions. Both its house building business, which is focused on the North, and its land development operation, which trades primarily in the South, performed well in the year to June. This helped revenues rise by 44 per cent while pre-exceptional profits more than doubled and the full year dividend is hiked by two thirds to 10p a share. We maintain our buy rating.
Water and waste specialist Pennon (PNN) reports that its trading remains on track and half year results to be reported at the end of November should meet expectations, which will allow the company to meet its objective of growing dividends at 4 per cent above retail price inflation. We keep our buy recommendation.
Oil and gas explorer Rockhopper (RKH) suffered contrasting news as a proposed acquisition in Egypt appears to have fallen through as a third party has exercised its pre-emption rights but drilling results a side-track at the Guendalina in the Mediterranean, which Rockhopper has a 20 per cent interest in, has encountered gas. Buy.
Sticking with oil and gas, South American-focused producer Amerisur Resources (AMER) has been hit by the oil price fall, first half revenues more than halved to $40.3m while profits of $50.8m last year turned into a loss of $5.8m. Management has focused on cash flow exceeding costs as it bunkers down during the oil price trough. Our recommendation is under review.
Sell recommendation Shanks (SKS) has seen an improvement in trading conditions in the Netherlands although its hazardous waste business continues to suffer from weak conditions in the oil and gas markets. Meanwhile, its municipal division has been hit by the bankruptcy of a supplier.
KEY STORIES:
Telecoms giant Vodafone (VOD) has seen its shares reverse by 4 per cent after reporting that discussions with Liberty Global over possible asset swaps have been broken off.
Tool hire specialist Speedy Hire (SDY) has seen its shares slump by 13 per cent after management said that despite remedial action to address issues that were hampering the business the legacy issues are taking longer than expected to resolve. Revenues are expected to be down 10 per cent and profitability will be ‘materially below’ expectations.
Microwave products specialist Filtronic (FTC) has reported on a ‘challenging and difficult’ year in which its revenues almost halved to £17.5m and losses widened from £3.7m to £11m. Management maintains that market conditions now look positive.
OTHER COMPANY NEWS:
Rail monitoring and scheduling technology specialist Tracsis (TRCS) has agreed to acquire traffic planning and management services business SEP.
Cameroon focused oil and gas business Bowleven (BLVN) has encountered hydrocarbons at the Moambe exploration well in Cameroon.
Indian-focused wind power specialist Mytrah Energy (MYT) has commissioned the first phase of its wind farm project at Bhesada in Rajasthan, adding 16.8MW to its portfolio, taking its total to 560MW. This is part of an additional 200MW of new wind power expected to be commissioned before the end of 2016.
