London equities have found some favour with investors in early trading. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
Shares in Charles Stanley (CAY) dipped 5 per cent in early morning trading despite the wealth manager reporting a jump in pre-tax profits of more than half during the first six months of the year. That decline may be because commission income was lower than expected, therefore the group will need to generate greater revenue during the second-half or an increased level of trading. We place our buy recommendation under review.
Shares in United Utilities (UU.) got a boost early this morning following the release of the group’s half year results. Adjusted pre-tax and operating profits were ahead of expectations thanks to a £23m increase in revenues, a £16m decrease in costs and £3m in additional profits from joint ventures. The interim dividend was up 2 per cent to 13.24p. Buy.
KEY STORIES:
A 35 per cent rise in revenues and a 31 per cent improvement in adjusted pre-tax profits. Now, guess the retailer. No it’s not Asos (ASC), Amazon (US:AMZ) or even boohoo.com (BOO). In fact, it’s 2017 market newcomer Quiz (QUIZ), which this morning debuted an interim set of numbers. The clothing chain, which specialises in upmarket fast-fashion said there was strong growth across all parts of the business, including online, international and the UK store and concession estate. Crucially, the number of active online customers increased 85.8 per cent to 262,000 by the end of the period. The Aim listing in July - costs from which weighed on reported profits - also generated cash of £10.3m which will be put towards developing its online reach.
OTHER COMPANY NEWS:
Shares in Biffa (BIFF) ticked up slightly this morning following the release of the group’s half year results. The shares have performed well since their initial public offering late last year, with the latest growth being delivered by the industrial & commercial and resource recovery and treatement, which saw adjusted operating profits climb 16 and 45 per cent, respectively. Potential problems are lurking on the horizon, however, as HMRC has taken issue with a second aspect of the group’s landfill tax treatment - this time the way it treated naturally occurring soild that contain low levels of asbestos between 2012-2015. The group will appeal against paying any additional tax, but faces a potential charge of around £9.2m. Hold
Eckoh (ECK) reported a 10 per cent rise in revenue to £14.8m in the first half, with pre-tax profits of £1.5m - up from a pre-tax loss a year earlier of £0.2m. The specialist in secure payment products also swung to a net cash position of £1.7m, from net debt of £2.1m. During the six months, the group made more progress in expanding its presence in the US, and bosses maintain their belief that this business will ultimately surpass the UK. Revenue for the UK business was down by 1 per cent, with a 2 per cent increase in gross profit. Management has restructured the UK sales team and now has an improved business pipeline. Meanwhile, US revenues rose 28 per cent. Here, Eckoh recently received approval for two 20-year patents for Callguard - its contact centre security product.
Sage (SGE) reported a 19 per cent increase in revenues to £1.7bn for the year ending 30 September, with a 6.6 per cent rise in organic sales growth, and recurring revenue growth of 9 per cent. Net debt was £813m at the period end, up from £398m a year earlier. This was attributed to increased cash spend on acquisitions, offset by sale proceeds and exchange differences. Activity during the year included the acquisition of Intacct, which has surpassed $100m annual recurring revenues and has continued to grow in excess of 30 per cent. Bosses note that the financial year 2017 marks the completion of the transformation laid out by Sage in June 2015.
appScatter (APPS) announced the launch of the public version of its platform today. The company, which listed on Aim in September this year, allows paying users to manage their apps across multiple app stores globally. Pre-launch, 10,000 businesses and individuals had registered interest in using the platform. The company gives users access to up to 50 app stores.
dotDigital (DOTD) announced it has completed the acquisition of Comapi - a fast-growing business which concentrates on omni-channel messaging and cloud communications - for £11m in cash. This may lead to further potential payments of up to £1.2m in share options to Comapi’s management team, based on specific performance targets being achieved over the next two years. Shares were up 5 per cent at the time of writing.
