London shares start the week with positive intent. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
Renew Holdings (RNWH) issued a brief but positive trading update this morning, indicating it had traded in line with expectations for the year to September 2017. It increased revenue, operating profit and operating margin, as well as moving into a net cash position. Shares are up 5 per cent on the news. The shares are down on our buy tip, but this update indicates the business is continuing to improve. Buy.
Macfarlane (MACF) announced that, following Graeme Bissett’s decision to step down from the board of directors by the end of 2017, they have appointed Stuart Paterson to replace him as chairman. This came into effect as of last Friday, 29 September. Mr Paterson joined the packaging distribution and manufacturing group’s board in January 2013, and is currently chairman of its audit committee, as well as a member of the remuneration and nominations committees. Buy.
Michael Bennett, non-executive director at Amino Technologies (AMO), has announced that he intends to step down from his role on 4 October 2017. The nomination committee is searching for a replacement. Buy.
RM (RM.) announced that Lord Andrew Adonis has retired as a non-executive director, having served for six years. Buy.
KEY STORIES:
Shares in Blancco Technology (BLTG) fell 17 per cent in early trading, after the software services group announced that “because of the ongoing review of matters” of which the market was notified in July and September, its full-year results for the year ending 30 June will not be released on 3 October. These have been delayed, and the company will be able to publish its results “as soon as this review has concluded”. On 4 September, Blancco announced that management planned to reverse £2.9m of sales booked for two contracts during the 12 months to 30 June, and had consequently revised down sales expectations and adjusted cash profit expectations for that year. Chief executive Pat Clawson also resigned.
A recovery in London equity markets helped push Numis’s (NUM) revenue up 15 per cent year-on-year during the six months to the end of September. Management anticipates profits to have risen by a similar proportion. Its corporate broking and advisory business completed 98 transactions in total, compared with 86 during the same time last year. Equity issuance was up more than a third to £2.5bn.
Shares in Nex Group (NXG) dropped 7 per cent during early morning trading after the electronic trading group announced increased investment in its post-trade and risk and information business would result in a reduction in this business’s first-half operating profit margin to 20 per cent, from 29 per cent at the end of March. The investment will be required to make the business more client-centric, as well as sales and marketing
OTHER COMPANY NEWS:
Results from beleaguered stamp and collectibles business Stanley Gibbons (SGI) have sent the shares plummeting today. Trading losses accelerated to £8.8m following a clear contraction at the top line. To be frank, things look bleak despite an ongoing effort to restructure the business and offload unnecessary divisions. Chairman Harry Wilson said the group’s bank had been instrumental in keeping the business afloat in the past year although, given the low number of assets and the qualified nature of the audit report, the company is in default of its banking facilities. There is no guarantee such facilities will extend beyond May next year, so the bank continued support will prove critical to the group’s survival.
Monarch Airlines has gone into administration and cancelled all scheduled bookings with immediate effect. This could prove to be good news for its UK-listed peers since overcapacity in the airline industry has forced many to push down fares and carefully manage costs. Shares in easyJet (EZJ) are up more than 4 per cent this morning, while International Consolidated Airlines (IAG) are up around 2 per cent. Ryanair (RYA) shareholders might be relieved that headlines about flight cancellations aren’t associated with the budget airline, as shares rose nearly 3 per cent. Fellow tour operators On the Beach (OTB), Thomas Cook (TCG), and Tui (TUI) saw shares rise around 1 per cent, 3 per cent, and 2 per cent respectively.
