Shares in London started off struggling for momentum amid disappointing China data. Click here for The Trader Nicole Elliott's latest thoughts.
IC TIP UPDATES:
It was not the reported interim numbers which sent Next’s (NXT) shares up 12 per cent in early trading, but the hugely improved outlook. Management has upgraded its guidance for the full year after a solid three months of trading at the start of the second half. Moreover, the group now expects to generate £310m of surplus cash in the full year: £257m of that will be paid out via a special dividends and the remainder used for more share buybacks. Buy.
Like Next, Spire’s (SPI) interim results were not particularly emphatic, but it was the outlook statement which got investors squirming. Shares dropped 14 per cent in early trading after management revealed a slowdown in NHS outsourcing revenues at the start of the second half which has resulted in trimmed full year guidance. With sentiment already damaged by the £27m exceptional charge used to compensate the victims of rogue surgeon Ian Patterson, Spire could be in for a difficult few months. We place our recommendation under review
Shares in Earthport (EPO) rose 2 per cent, after the cross-border electronics payments company announced a partnership with Cross River, a US-based bank. This agreement allows Earthport to provide inbound cross-border payments in the US market, enhancing its current capabilities in the US. Buy.
Amino Technologies (AMO) announced that it is now providing DNA, a Finland-based operator, with mobile and set-top box service delivery for multiscreen TV. DNA is using Amino’s ‘MOVE’ cloud TV product to support its newly launched Android TV 4K UHD (ultra-high definition) device, ‘TV-hubi’, in the home. Essentially, customers in Finland can access all national channels and PayTV content among other services. Buy.
Shares in GVC (GVC) climbed 4 per cent after the online gambling company reported double-digit revenue growth - reported and at constant currencies - in the first half, smaller pre-tax losses and net debt reduced to €150.7m (£135.6m) from €165.1m at 30 June last year. Buy.
GKN’s (GKN) chief executive Nigel Stein has announced that he will step down at the end of 2017, while finance director Adam Walker will also leave before the year-end. Mr Stein will be succeeded by Kevin Cummings, currently the chief executive of GKN's Aerospace unit, from the beginning of 2018. This continuity played well with the market, sending the shares up 3.4 per cent on early trading. Buy.
Ricardo (RCDO) revealed a record order book for it June year-end, in a period in which profits were held in check due to exceptional charges, while revenues edged up slightly on a constant currency basis. There were strong performances in the rail and environmental consultancies, along with the performance products arm. The dividend to be paid for the full year was increased by 7 per cent to 19.3p per share – capping a pleasing result in the face of deferred automotive orders due to Brexit and ‘diesel-gate’ anxieties. Buy.
KEY STORIES:
Shares in Interserve (IRV) were wiped out this morning, falling 45 per cent after the support services company warned disappointing UK trading in July and August across both the construction and support services division would mean “outturn for the year will be significantly below previous expectations”. In addition, cost of exiting the energy from Waste business would be significantly higher than the £160m currently provisioned. Sell.
Shares in WM Morrison Supermarkets (MRW) dipped 4 per cent during early morning trading, despite the grocery chain growing like-for-like sales by 3 per cent, excluding fuel, during the six months to the end of July. The majority of this was achieved by Morrison’s retail divisions, including its supermarkets and online distribution channels. This helped lift pre-tax profits by 40 per cent. However, the 2.6 per cent increase in like-for-like sales during the second quarter was a miss to analyst forecasts.
OTHER COMPANY NEWS:
Shares in accesso Technology (acso) rose 8 per cent in early trading, after the ticketing solutions company announced a five year agreement with Village Roadshow Theme Parks. This is Australia’s largest theme park operator. Under the agreement, the accesso Passport ecommerce platform will launch next spring in various Australian parks, including Warner Bros. Movie World and Sea World (Australia).
Aim-listed Corero Network Security (CNS) reported good new customer acquisition and 177 per cent growth in recurring revenue for its ‘SmartWall’ threat defence technology product. Pre-tax losses widened to $4.8m from $4.1m a year earlier, and net cash fell to $5.1m from $8.7m. The company also announced a contract win for SmartWall with a global pharmaceutical company. The initial order value is $0.2m, with an expected $1.5m global implementation “over the next few quarters”.
