The market gave up its early mining-led gains in the last two hours of trading yesterday, and this morning the mood was also fairly sombre to begin with. The Trader Nicole Elliott points out that a "blistering" $21bn Treasury Bill auction priced US paper at a maximum yield of 2.066 per cent - the lowest since February.
IC TIP UPDATES:
Recent IC buy tip Mondi (MNDI) posted decent third-quarter numbers, with underlying operating profit of €221m 27 per cent up on last year but 13 per cent lower than in the second quarter. That reflects the impact of maintenance shut-downs that are expected to cost €90m in underlying profit for the full year. Buy.
Hays (HAS) saw strong growth offset by currency effects in the third quarter. Like-for-like growth in net fees totalled 8 per cent, reflecting a strong recovery in continental Europe (+11 per cent) offset slightly by more routine growth in the UK and Ireland (+6 per cent) and Asia Pacific (+6 per cent), which has benefitted from a recovery in the non-mining areas of Australia. But the market was disappointed, sending the shares down 5 per cent. Buy.
Galliford Try (GFRD) said it had been appointed as preferred supply chain partner for the £150m redevelopment of Luton and Dunstable University Hospital. The project will finish in 2019.
Homeware retailer Dunelm (DNLM) posted first-quarter numbers showing strong, albeit slowing, like-for-like sales growth. For the 13 weeks to 3 October same-store sales were 4.4 per cent higher than in the comparable period of 2014, while home delivery sales were 26 per cent higher. Overall growth was 12 per cent, but that marked a slowdown from the 17 per cent rate reported this time last year. Buy.
Emerging markets fund manager City of London Investment Group (CLIG) saw its shares fall 11 per cent on news that its funds under management had fallen 14 per cent in the third quarter to $3.6bn. However, this was less severe than the decline in the MSCI Emerging Markets Index, which was down 18 per cent. Buy.
Internet-of-things specialist Telit Communications (TCM) confirmed the cancellation of its share premium account. This increases retained earnings and paves the way for higher dividends.
KEY COMPANY STORIES:
A supposedly "in line" trading statement from Tate & Lyle (TATE) failed to impress the market, with the shares down 2 per cent in morning trading. For the six months to 30 September, Splenda Sucralose volumes were ahead of the comparative period, heralding a return to growth in the speciality food ingredients division. But the bulk ingredients division continued to be dragged down by weak ethanol margins in the US.
Furniture retailer DFS (DFS) posted strong growth figures for its maiden final results, with adjusted cash profits up 8 per cent to £89.2m. It opened five new big stores, and is planning to open small-format stores following a successful trial in London. But the underlying growth profile is obscured by an extra week of trading in the prior period, and - worryingly - the company does not give like-for-like growth figures.
High-end chemical supplier Victrex (VCT) said full-year sales were 4 per cent ahead at £264m in a pre-close update. Volumes rose 19 per cent, with growth in aerospace, automotive, industrial and consumer electronics markets offsetting the weak oil and gas sector, but currency effects dulled this performance.
OTHER COMPANY NEWS:
Online gambling group GVC (GVC) released a third-quarter trading update showing strong growth in gaming revenues - up 11 per cent for the nine months to 30 Sep to €670,000 a day, on average. There was no significant news on its takeover of bwin.party digital entertainment, which is expected to complete in early 2016.
Dart (DTG) called the summer holiday season "exceptional" and said its performance for the year to March would "materially exceed current market expectations". Oddly, the shares failed to react, rising just 1 per cent in morning trading. First-half operating profits should be at least 60 per cent ahead of last year's, but increased losses are expected in the second half as a result of expansion plans.
