Shares in London are up only marginally as catalysts are thin on the ground. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
Shares in GVC Holdings (GVC) are up about 3 per cent this mornings after the gaming company released a trading update that showed a 13 per cent increase in group net gaming revenue to €244m (£219m), which management called “particularly pleasing” since the comparative period included the UEFA Euro 2016 tournament. Revenue from B2B and non-core brands fell by about a third, but this was because the company sold payments processing business Kalixa in May. Buy.
With three of the UK’s biggest listed recruiters reporting this week, investors might expect to have some clarity on what is happening in the UK jobs market. Unfortunately, following Robert Walters (RWA) reporting strong growth of 15 per cent and Pagegroup (PAGE) reporting a 7.6 decline, Hays (HAS) has today come straight down the middle with 1 per cent growth. As with the others though, the group reported a strong performance overall, seeing impressive growth in Europe and Asia Pacific, driving overall net fee income up 10 per cent to another record performance. Buy.
In the last three months, international media and events group Tarsus (TRS) held two of its largest exhibitions which - according to this morning’s tip update - reeled in 7 per cent more buyers than the last time they were held. Management has reiterated its guidance for the full year and is confident about a strong performance in the final three months, when its last major event of the year - the Dubai Airshow - will be held. Buy
Despite a rally in the share price this year, shares in N Brown (BWNG) actually fell more than 3 per cent this morning following the release of half-year numbers. Could that simply be an exercise in profit-taking? Half-year profits beat consensus expectations by around £3m, although margins took a hit thanks to a pre-flagged currency impact. But the planned closure of loss-making stores has prompted some analysts to put through full-year profit upgrades today. The interim dividend remained stable at 5.67p apiece. Our recommendation is under review.
KEY STORIES:
For those who expect Twenty First Century Fox’s acquisition of Sky (SKY) to go ahead, this trading update from the British media group means very little. Should the competition and markets authority (CMA) give the £11.7bn acquisition the green light, shareholders will receive their 10p dividend at the end of the year and 1075p a share when the deal completes in 2018. But for those who have their doubts about the merger, this first quarter update demonstrates the challenges that a lonesome Sky will be faced with in the coming years. Advertising declines across Europe have put pressure on the top-line, while the rising costs of football rights has hammered margins in Germany. That said, the group has managed to keep operating costs broadly in line and continues to see subscriber numbers tick in the right direction, albeit at a slower rate to years gone by.
Shares in Just Eat (JE.) leapt 5 per cent this morning on news that the group’s takeover of rival hungryhouse has been given provisional clearance by the Competition and Markets Authority (CMA). For now, the CMA has concluded the deal does not lessen competition, although a final decision isn’t due until November.
Plenty of Booker (BOK) shareholders will be biding their time to see if the group is successfully taken over as part of a planned merger with supermarket Tesco (TSCO). That probably explains why, despite a good set of interim numbers out today, the share price stayed pretty flat. Like-for-like sales rose by a steady 2.7 per cent (7.7 per cent excluding tobacco), helping to lift pre-tax profits by 9 per cent to £88m. The Tesco deal is currently undergoing an in-depth second-phase investigation by the CMA. Provisional findings are expected by the end of this month, ahead of a final report at the end of the year. The merger should then complete in early 2018, subject to the necessary shareholder approvals.
Under duress, Acacia Mining (ACA) managed to produce 191,203 ounces of gold in its third quarter, though managed to sell just 69 per cent of that figure. The North Mara and Bulyanhulu mines were impacted “as previously flagged, by work permit issues and moving to reduced operations respectively”, though better grades at Buzwagi meant output of 69,097 ounces exceeded expectations. Shares are off 1 per cent this morning at 188p.
OTHER COMPANY NEWS:
Jersey Oil & Gas (JOG) set the bar for oil multi-bagger stocks earlier this week, climbing more than six-fold on news that its part-owned Verbier side track well had discovered up to 130 million barrels of oil equivalent. Today it was the turn of Independent Oil & Gas (IOG), whose shares are up more than 70 per cent this morning. The excitement has been generated by a third-party competent person’s report, which suggests the group’s fields in the UK Southern North Sea could be worth £321m, around ten times’ the company’s market capitalisation.
Goals Soccer Centres (GOAL) announced that chief executive Mark Jones has notified the board of his intention to resign. He is moving to another role in the private sector. A search is currently underway for a successor.
Shares in WH Smith (SMWH) were largely stable this morning following the group’s preliminary results announcement. That’s because the numbers continued little by which to surprise investors with. In keeping with long term trends, the travel business performed well, helping to offset a weaker showing on the high street. Like-for-like sales from travel outlets across stations and airports rose 4 per cent compared to a 4 per cent decline across the shops. Profits from the travel business rose by a healthy 10 per cent, while good cost control kept high street profits flat. Overall, pre-tax profits rose 7 per cent to £140m.
