Equities are off marginally and look set to end the week in negative territory. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
Frankie & Benny’s owner Restaurant Group (RTN) has given a frank assessment of what has been going wrong in the past couple of years. Above market price increases, the removal of value offers and popular dishes alongside waning levels of service have eroded customers’ passion for the aforementioned brand as well as some of its other names, such as Mexican eatery Chiquito. Non-executive chairman Debbie Hewitt said a new executive team had now been hired and Andy McCue, formerly of Paddy Power, would head this up from next month. The review means 33 underperforming sites will close while a £17.8m non-cash impairment has als been taken as part of an asset value write-down on 29 other sites. The concessions business, which runs restaurants in airports and other travel hubs, is performing strongly and has helped maintain profitability for the group. The dividend is being maintained at 6.8p a share. Buy.
Marshalls (MSLH) grew sales just 2 per cent during the first half of the year, as revenue for its core public sector and commercial end business was flat. However, pre-tax profits were up a fifth as management’s focus on improving margins bore fruit. The shares are up just 1 per cent on our tip but we think there is plenty more room to go. For the reasons why, look out for our full results write up later today.
Shares in Lavendon (LVD) leapt 8 per cent after the equipment hire group grew sales by 13 per cent in the first half of 2016. Strong rental demand in the UK, France and the Middle East, combined with management’s efficiency drive, pushed underlying pre-tax profits up a tenth to £15.9m. Under review.
Computacenter (CCC) grew adjusted sales by close to 3 per cent in the first half of 2016, but adjusted pre-tax profits slid 13 per cent to £25.3m. The IT infrastructure and services group revealed good growth in Germany and a better profit performance in France, but lower service volumes weighed on the UK business. Under review.
Brisk digital growth at Irish Independent publisher Independent News & Media (INM) pushed revenue up about 3 per cent in the first half of 2016, driving adjusted pre-tax profits up 23 per cent to €18.5m (£15.8m). Under review.
The good news from half-year results for Beetaloo Basin-focused Falcon Oil & Gas (FOG) is that the cash position remains robust, with $11.1m on the balance sheet and no debt, though concerns around a shift in the regulatory landscape again weighed on the shares and caused a 9 per cent drop in the stock. Our recommendation is under review.
KEY STORIES:
Speedy Hire (SDY) has sold its large mechanical plant fleet for £14.4m, as the tool hire group seeks to concentrate on its core operations. Speedy has agreed a five-year hire deal with the buyer of the equipment Ardent Hire Solutions for large plant hire, with the option to extend another two years. Management expects the deal to boost the group’s full-year return on capital.
OTHER COMPANY NEWS:
Sales dropped by 17 per cent at palm oil and rubber plantation owner Anglo-Eastern Plantations (AEP) thanks in part to a $50 per metric tonne tax imposed by the Indonesian government in July 2015, which impacted this half-year set of results but not the comparative period. The levy more than offset the higher average price per tonne of palm oil. Production levels of palm oil dropped marginally to 378,400 metric tonnes while rubber production dropped nearly a fifth to 371 metric tonnes.
