Shares in London are consolidating yesterday's sharp gains with more modest rises this morning. Click here for The Trader Nicole Elliott's latest views on the markets and the charges being faced by Barclays executives.
IC TIP UPDATES:
The Serious Fraud Office (SFO) has charged Barclays (BARC) and its ex-chief executive John Varley, along with three other ex-senior executives, with conspiracy to commit fraud. John Varley, Roger Jenkins and Barclays have also been charged with the provision of unlawful financial assistance contrary to the Companies Act 1985. The charges relate to capital raisings with Qatar Holdings and Challenger Universal in 2008 and a $3bn loan available to Qatar. The defendants will appear before Westminster Magistrates Court on 3 July. More to follow, our buy tip is also under review.
GP landlord Assura (AGR) is planning to raise up to £98.4m to fund its development pipeline that stood at £153m at the March 2017 year end. The placing is equivalent to 9.9 per cent of the existing share capital and at 58-60p a share will represent a 6-9 per cent discount to the share price before the announcement and an 18-22 per cent premium to net asset value. The new shares are expected to be admitted for dealing from 23 June. Buy
Shares in N Brown (BWNG) were up more than 8 per cent in early trading after the fashion retailer announced that revenue was up 5.6 per cent in its first quarter, 71 per cent of which was generated online where traffic increased by 34 per cent. Simply Be and JD Williams were the best performing brands, contributing to the 10.2 per cent increase in the group’s product revenue. But revenue from financial services fell 4.9 per cent year-on-year on the back of lower interest revenue, but this was in line with expectations. Our sell recommendation is under review.
Shares in Morses Club (MCL) were up 2 per cent after the sub-prime lender revealed the net loan book and customer numbers were up between 26 February and 19 June. Impairments also remained within management’s guidance range. Buy.
Serco (SRP) has been awarded the £1.5bn contract to operate the New Grafton Correctional Centre in New South Wales, Australia. The contract is one of the 6 “Elephants” chief executive Rupert Soames mentioned in the company’s pipeline In February. Shares are up more than 2 per cent on the news. Buy.
KEY STORIES:
Another real estate investment trust (REIT) is coming to the market; this one is called Supermarket Income REIT. The plan is to raise £200m through a placing and offer for subscription, with a view to buying selected supermarket freeholds, principally in the big four, Asda, Tesco, J Sainsbury and William Morrison. The company will look to acquiring assets with leases of around 15 years to expiry or first break, with annual RPI linked increases in rent. Assets are likely to be within highly populated residential areas which should offer good potential for change of use, potentially to residential in the longer term. Await documents.
Shawbrook (SHAW) majority shareholder Pollen Street Capital received 75.6 per cent acceptances of its revised 340p a share takeover offer, after bidding for the challenger bank as part of a consortium. It is now likely the shares will be cancelled and group de-list. The board has now advised remaining shareholders that have not yet done so, to accept the bid vehicle’s offer, or else remain a minority shareholder in a private company.
OTHER COMPANY NEWS:
Wolseley (WOS) saw revenue up by 16.7 per cent in the third quarter to 30 April 2017, with the US heating and plumbing business Ferguson generating trading profits of £227m, up £23m from a year earlier. With this side of the business accounting for more than two-thirds of group revenue, Wolseley will be changing its name to Ferguson on 31 July 2017. Hold
Super yacht maintenance company GYG is looking to raise around £6.9m by listing on AIM at 100p per share, giving the company a £46.6m market cap on admission. The money raised will be used to settle shareholder loans and pay the fees and expenses it will incur through listing. Management said that admission to AIM will also improve the reputation and profile of the company and its ability to incentivise key talent. It aims to pay an initial dividend equal to 3.2 per cent dividend yield, and of 6.4 per cent the year after.
Chemical technology specialist Accsys Technologies (AXS) made further progress in the year to 31 March 2017 towards accelerating its production capacity for its two main processes that prevent the ingress of water into softwood and chipboard. An agreement has been signed to build and operate a new 30,000 metric tonne Tricoya plant in Hull, with completion due in 2019. Underlying cash losses halved to €1.2m, and the group has a net cash balance of €20.1m.
