Shares in London started the day brightly on news of a weaker pound. Click here for The Trader Nicole Elliott's latest thoughts.
IC TIP UPDATES:
Composite insurer Aviva (AV.) is to sell its holding in its Italian joint venture Avipop Assicurazioni, which includes its wholly owned subsidiary Avipop Vita to Banco BPM for £233m payable in cash on completion. The news came after Banco decided not to renew its distribution agreement with Aviva, and under the original agreement Aviva exercised it option to sell its part of the joint venture. Buy
Purplebricks (PURP) has indicated that first half revenue generated in the UK is likely to be around double the previous year, while revenue in Australia is expected to be many times ahead. The US launch has been well received, with progress well ahead of the UK and Australian launch after the same period. Buy
After a year consistent positive updates from Hutchison China Meditech’s (HCM) clinical pipeline, it seems the market will no longer be moved by the small news. Shares were flat after the specialist biotech company reported that two of its drugs had reported good safety, tolerability and efficacy data from a late stage cancer trial. Full results will be presented at the World Conference on Lung Cancer in October. Buy
Today is the last day companies with a December year-end can file their half-year financial results. Predictably, a large number of Aim-listed resources stocks have left it until the last minute, including Argentinian oil and gas producer President Energy (PPC). In his summary of the interims, Chairman Peter Levine said the numbers bear “little relation to the group’s current position and outlook”, given current production of 2,300-2,400 barrels of oil equivalent per day is more than three times the average output in the first half. The period ended with $4.7m of cash on the balance sheet. We remain buyers.
Shares in OPG Power Ventures (OPG) are up this morning after the group released a positive set of full-year numbers. Post-tax profits were up 24 per cent to £23.1m and EPS was up 59 per cent to 8.43p, helped by a 30 per cent rise in electricity generated. In the near term, management are reviewing options should an expected drop in the coal price next year fail to materialise. Buy.
Pennon (PNN) and John Laing (JLG) look close to leaving their troubled Greater Manchester contract behind. An agreement has been signed relating to the Viridor Laing (Greater Manchester), passing ownership to the Greater Manchester Waste Disposal Authority. Pennon anticipates a “one-off non-material impact” to the income statement for 2017/18, while John Laing continues to anticipate a £25.5m reduction in the value of its Manchester Waste investment relative to their value at December 31 2016.
KEY STORIES:
Shares in Carillion (CLLN) took another dive this morning after the group updated the market on its progress for the six months to June 2017. Revenues will be flat at £2.5bn, while adjusted pre tax profit will take a 40 per cent hit due to the phasing of public private partnership equity disposals and some contracts trading at zero margin. The company has completed its contracts review and while its £845m provision against construction contracts will remain the same, an additional £200m provision for support services has been announced. In addition, £134m of goodwill will be impaired for the UK and Canadian construction businesses
The transformation of Tissue Regenix (TRX) continues. The medical devices company reported that revenue in the first half was up 118 per cent to £1.38m driven by sales of DermaPure in the US, though group pre-tax profits fell by £5.43m. A £40m share placing earlier this year helped to fund the acquisition of CellRight Technologies, and a new processing facility was opened in Austin, Texas. Jesus Hernandez, founder and chief execuitve of CellRight, has been appointed chief scientific office. Management reiterated the goal of becoming profitable by 2020.
Might a Chinese white knight still save San Leon Energy (SLE)? Just days after finally publishing its full-year numbers for 2016, the Nigeria-focused oil and gas firm has met the deadline to post interim numbers, which contained some encouraging developments. As of 27 September, the group had €1.7m cash and cash equivalents, which remains a worry if other payments are received. But shares are up 18 per cent this morning after San Leon said it remains in dialogue with potential acquirer China Great United, whose due diligence has been delayed by discussions to bring in a large engineering contractor for OML 18.
OTHER COMPANY NEWS:
Daily Mail and General Trust (DGMT) has sold part of its education administration business for an undisclosed sum. Trimming the portfolio to focus on just the best bits of the business - including the Daily Mail online which is the most popular site for news in the country - has been a key strategy at DGMT in the last few years.
