Markets welcomed an easing in the US and North Korea tensions over the weekend. Nicole Elliott offers the trader's angle on the markets this morning.
IC TIP UPDATES:
John Menzies (MNZS) has terminated discussions with DX Group (DX) over the proposed combination of DX and Menzies distribution division. The companies had announced terms in early June, but following a trading update form DX in mid-July, “it became apparent to the John Menzies Board that the combination would be required to be effected on revised terms”. The two did not manage to agree revised terms. Buy.
The second quarter was a tricky one for Caledonia Mining (CMCL), with lower grades and some “logistical difficulties in underground material handling” curtailing cash generation. But investors can take courage that the Zimbabwe-focused gold miner remains “confident” it can hit its full-year guidance of 52,000 to 57,000 ounces. Our buy call is under review.
KEY STORIES:
Clarkson (CKN) delivered a strong set of interim results despite warning of difficult conditions in the offshore and shipping market. Revenue came in at £156.8m, up from £147.2m the same time the year before, helping to boost pre-tax profits by a quarter to £21.9m. The shipping business is now entirely debt free after it paid back loan notes in June. Net cash now stands at £71.4m, compared to £46.7m last year, so management is looking for ways to invest this back into the business. Shares were up nearly two per cent in early trading.
Telit Communications (TCM) announced that chief executive Oozi Cats has resigned with immediate effect. The company’s independent review found “the evidence shows that an indictment was issued against Oozi Cats in the US and that this fact was knowingly withheld from advisers”. Yosi Fait continues as interim chief executive. Telit’s board also responded to “additional speculation from third parties” regarding the company’s “financial condition, trading performance and business relationships”, stating that “there is no substance to the speculative and accusatory” articles published.
The merger between Standard Life (SLA) and Aberdeen Asset Management (ADN) has become effective, with Standard Life Aberdeen trading under the ticker SLA. Sir Gerry Grimstone remains as chairman and Keith Skeoch, co-chief executive, remains as an executive director. Meanwhile co-chief executive Martin Gilbert, chief investment officer Rod Paris and chief financial officer Bill Rattray have been appointed as executive directors of Standard Life Aberdeen.
OTHER COMPANY NEWS:
EVR Holdings (EVRH) announced that its main subsidiary, MelodyVR, has signed a music licensing agreement with ARESA GmbH, which is the Anglo-American Rights European Service Agency. This “multi-year” agreement covers various European territories and follows a number of agreements and partnerships signed by EVR in recent weeks. Shares rose 3 per cent.
Tracsis (TRCS) issued a trading update, noting trading for the year has been in line with market expectations. Revenues for the provider of software to the traffic data and transport industry have exceeded £34m, up from £32.6m in 2016. The second half of the financial year was “considerably stronger” than the first half. Shares rose very slightly.
