After opening up positively, equities have slipped back. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
It’s almost as if investors don’t like having their shares suspended, seemingly indefinitely. San Leon Energy (SLE) slumped 40 per cent yesterday, shortly after trading in the group resumed, as investors balked at a financial update detailing its painful working capital and solvency position. The group is owed $77.7m worth of loan notes and interest payments, having received just $18.5m to date; meanwhile two arbitration payments of €8m and €6.95m are looming in October and November, and the current cash position is less than €1m. Our speculative buy call is under review.
Chairman and founder of Redrow (RDW) Steve Morgan has sold 25.9m shares through his investment vehicle and charitable trust, raising £152.8m. The sale equates to around 7 per cent of the housebuilder’s share capital but leaves Mr Morgan and his associated interests with around one third of the share capital, and he remains fully committed to the business. Proceeds from the sale will be used to diversify the sellers’ investment portfolio.
Premier Technical Services Group (PTSG) Has bought UK Sprinklers Ltd, in a move aimed at strengthening its fire safety business. The support services group will spend £2.5m on the business, which installs and maintains sprinkler systems. Shares are up 2.4 per cent following the announcement. Buy.
Equiniti (EQN) has announced the terms of the rights issue it is undertaking to fund the acquisition of Wells Fargo’s share registration business. The group will issue 64,309,150 ordinary shares in a 3 for 14 rights issue at 190p a share and expects to raise £122m. The shares issued represent around 21.4 per cent of the existing issued share capital and 17.6 per cent of the enlarged issued share capital. Take up.
KEY STORIES:
Though it still has a lot of debt to clear, BP (BP.) is behind on its targeted asset disposals. Yesterday provided a sign that this is changing, as the oil major announced it will spin off its US Midstream business in an IPO in New York. As part of the offering, BP is disposing its ownership interests in one onshore crude oil pipeline system, one onshore refined products pipeline system, and one onshore diluent pipeline system, which carry shipments to or from BP’s Whiting Refinery in Indiana. Also up for sale are interests in four offshore crude oil pipeline systems and one offshore natural gas pipeline system connecting production areas in the Gulf of Mexico with the Gulf Coast refining and distribution hubs.
Even hurricanes have silver linings, it seems, equipment hire group Ashtead (AHT) said the recent storms to hit Texas and Florida “will result in an increase in demand for our fleet”. That aside, the company has traded well in the first quarter to July 2017, with rental revenue up 17 per cent on the same period in 2016. Adjusted pre-tax profit was up 21 per cent.
OTHER COMPANY NEWS:
As flagged at its half-year results, Premier Oil (PMO) has completed the sale of its Wytch Farm field to Verus Petroleum for $200m, plus additional letters of credit worth $75m. Under the terms of the deal, Verus will also assume the field’s abandonment liabilities and associated decommissioning security.
Hilton Food Group (HFG), the international meat packing specialist, reported 9.3 per cent revenue growth and 10.4 per cent pre-tax profit growth in the first half, with an improved net cash position. The company noted volume growth was led by Australia, Ireland, Sweden and Portugal, though the Central European market was “challenging”.
Shares in STM Group (STM), the small-cap financial services group, rose 13 per cent after the company reported 36 per cent revenue growth, 100 per cent pre-tax profit growth and a 20 per cent rise in the interim dividend. The company noted that a higher level of deferred income means better revenue visibility.
Shares in Goals Soccer Centres (GOAL) fell more than 10 per cent after the company reported slight revenue growth but a fall in pre-tax profits in the first half. The outdoor soccer centre operator said that “the overall turnaround to profitable growth is taking slightly longer than anticipated” but it had seen “good early signs of growth” from its investments in its Arena upgrade programme and Clubhouse 2020 sites.
Standard Chartered (STAN) has been invited to a meeting with the UK Financial Conduct Authority over allegations of misconduct at an Indonesian power plant owned by the bank’s private equity unit.
