London's FTSE 100 rose this morning and the pound was up as UK labour data beats expectations. Nicole Elliott offers the latest view on the markets.
IC TIP UPDATES:
Prudential (PRU) has agreed the sale of its US broker-dealer network to the country’s largest independent broker-dealer LPL Financial. The deal includes all the business of the network, for an initial consideration of $325m (£252m), rising to $448m if certain conditions are met. The deal is set to complete at the end of the first quarter of 2018. Buy.
KEY STORIES:
Around 1:30pm yesterday Laura Ashley (ALY) issued a profit warning. The high street homewares and clothing chain said that, with results due in a week’s time, annual net pre-tax profits would fall short of market expectations as a result of an exceptional £2.8m impairment charge. The one-off cost relates to the revaluation of a freehold property owned by the group. Bosses also said that wider trading conditions have continued to be challenging.
Continuing on from Marshall Motor Holdings (MMH) yesterday, car retailer Lookers (LOOK) has issued a set of interim numbers, showing a considerable outperformance on new car sales relative to the wider market decline. However, break it down quarter by quarter and the company admits the second period was considerably harder, particularly in the wake of new vehicle excise duties. Management expects conditions for new car sales to be difficult in the second half too, which perhaps explains the share price drop this morning. Elsewhere, used car sales also grew, as did the higher-margin aftersales business, which accounts for a decent chunk of Lookers’ earnings.
By now, Sirius Minerals (SXX) shareholders are used to focusing on operational progress, rather than financial metrics, within the prospective potash miner’s statutory numbers. Half-year results published this morning told us little that we did not already know, but confirmation that the shaft sinking contract has been awarded, and that development remains “on time and on budget”.
Investors in Hochschild Mining (HOC) are looking at a 15 per cent loss in the value of their shares this morning, after half-year numbers for the silver miner revealed a 10 per cent hike in all-in sustaining costs to $12 per silver equivalent ounce. That was still below the guided range of $12.20-$12.70, which remains Hochschild’s forecast for 2017. The other issue was pre-tax profit, which declined by a third to $39.9m. Still, debt dropped, cash and cash equivalents grew, and a brownfield drilling programme is soon set to expand.
OTHER COMPANY NEWS:
Following an announcement on 8 August that it had received an approach from an unnamed bidder “worthy of due consideration”, illustrated book publisher Quarto Group (QRT) has now reported that these discussions “were not progressing to the satisfaction of the Board”. By mutual agreement, the Board has terminated discussions with its potential acquirer. While management is still confident of Quarto’s prospects as an independent company, shares fell 24 per cent on the news.
Hunting (HTG) has picked chief operating officer Jim Johnson to succeed chief executive Dennis Proctor, who steps down next month. Mr Johnson, who joined the company in 1992, is based in Houston, Texas, and has previously managed the day-to-day running of the oil services group’s global operations.
