London shares are flat in morning trading as Traders sit on their hands ahead of an expected announcement from the Federal Reserve in the US. Click here for The Trader Nicole Elliott's latest thoughts.
IC TIP UPDATES:
Shares in Character Group (CCT) fell more than six per cent after the company revealed that it was unsure how the bankruptcy protection filing at Toys R Us, one of its major customers, will affect the business. The toy distributor also said that it does not have “reliable visibility” on the upcoming Christmas period and its effect on the current financial year to August 2018. On a more positive note, earlier this month Character Group was appointed master toy distributor of the Pokémon brand in the UK and Ireland, and in July won a three year extension to its Teletubbies master toy licence. Buy.
The late timing of Chinese New Year along with the ban on selling alcohol near highways in India is expected to impact organic net sales growth for Diageo (DGE) in the first half. The alcoholic beverages company also anticipated that expansion to its organic operating margin will be weighted towards the second half due to its increased investment in US spirits and scotch. Chief executive Ivan Menezes still expects mid-single digit top line growth and a 175 basis point improvement to its organic operating margin. Shares fell just over 2 per cent in early trading. Buy.
Science in Sport (SIS), the sports nutrition company, reported 28 per cent revenue growth to £8.27m with good international performance in the first half of 2017. The wider underlying operating loss of £1.14m (against a loss of £370,000 a year earlier) was attributed to accelerated investment across the business and in all markets, in line with management’s expectations. Shares fell by 8 per cent in early trading, and were down 1.6 per cent at the time of writing. Recommendation under review.
KEY STORIES:
Domino’s Pizza Group (DOM) announced a £15m share buyback programme with the aim to reduce the company’s share capital. Analysts at Stifel called this a “step in the right direction” after the intention to repurchase shares was originally announced in March. They reckon this is an indication that there has been no deterioration in trading. Shares were up more than four per cent in early trading.
Shares in Kingfisher (KGF) are up more than 6 per cent this morning after the home improvement retailer announced that group revenue was up 4.5 per cent to £6bn, though foreign exchange acted as a tailwind as revenue at constant currency fell 1.3 per cent. Performance in France continued to be a weak spot for the Kingfisher, but growth in Screwfix and in Poland helped to offset falling French sales. Kingfisher is continuing its efforts to have the whole business under one IT system and supply chain. Management stated that they are comfortable with expectations, through remain cautious of the UK and France in the second half.
OTHER COMPANY NEWS:
Accesso Technology (ACSO) reported 17 per cent revenue growth in the first half, helped by momentum on its Passport platform and wins in other parts of the business. The group, which provides ticketing and queuing software, notes that full-year performance is second half weighted. Pre-tax profits fell by 30 per cent, due to expenses relating to the acquisition of the Ingresso business and higher IFRS3 charges.
Mercia Technologies (MERC) announced that it has invested £1.9m into Warwick Audio, a business which originated at the University of Warwick. This is part of a £3.1m syndicated round.
Revolution Bars (RBG) has reached an agreement on a cash offer from Stonegate Pub Company. Shareholders will vote on the deal on 17 October, and if it goes through the arrangement would be effective from 23 October.
