Shares in London are just in positive territory after hopes of a step forward in Brexit talks stalled yesterday, sending the pound southwards. Click here for The Trader Nicole Elliott's latest thoughts.
IC TIP UPDATES:
In a trading statement, Amino Technologies (AMO) said it expects to report a full-year performance demonstrating continued customer traction for its IP and cloud video software solutions, even with the impact of “industry-wide memory cost headwinds”. Gross profits and adjusted pre-tax profits are forecast to be in keeping with market expectations. Revenue is likely to be in keeping with FY2016 “due to product mix”. Net cash as at 30 November was £13m, up from £6.2m. Non-executive chairman Keith Todd noted the group’s “strong operational performance”, “good profit margins and excellent cash generation”. Buy.
Iomart (IOM) reported 12 per cent revenue growth to £47m for the six months to 30 September, with pre-tax profits up 9 per cent to £7.8m. Acquisitions during the period included Dediserve, purchased in May for €7.9m (£6.7m), Tier 9 (which trades as ‘Simple Servers’), and - post-period end - Sonassi, which provides cloud solutions for the Magento eCommerce application. The group also announced its maiden interim dividend of 2.25p per share to be paid in January. Buy.
Engineering consultancy WYG (WYG) fell into a £2.78m loss before tax in the six months to September 2017. Clearly, this was better than the market was expecting following the original profit warning in August that knocked 40 per cent off the share price, as the share price improved 2 per cent following the release of the half year report. Brexit-related uncertainty caused the initial downgrade, though profitability in the period was also impacted by an increase in the provision for contract liabilities. The order book strengthened 17 per cent to £170m in the period, but we are still staying away. Sell.
The order book has continued to grow at Fulcrum (FCRM), increasing confidence in its continuing growth. It now stands at £33.7m, an increase of 11.2%. Revenues and cash profits also grew steadily, up 8.2 and 15.9 per cent respectively. The group was recently granted an Independent Network Operator Licence to adopt and own electrical assets, which should accelerate growth once it has completed the qualification process in early 2018. Buy
Shares in Mears (MER) were again down 8 per cent following a trading update warning of “further softening” of revenues in the housing division, adding to the existing delays in the way of the Grenfell tragedy. The care division looks to be moving into profitability in the second half and for the full year overall. The group announced it would also have to take a £16.5m exceptional item related to contingent liabilities on the performance of its mechanical and electrical division.We move to hold.
KEY STORIES:
Savannah Petroleum (SAVP) has announced plans to raise $250m in an equity placing, at an undetermined price, to acquire stakes in two onshore producing Nigerian oil and gas fields, as well as the Accugas midstream business. The proposed purchase, from Seven Uquo Gas, will give Savannah sufficient funds to fund the business for 12 months and expand a drilling campaign planned in Niger.
Cinema operator Cineworld (CINE) has agreed terms for a £2.7bn takeover of US-listed group Regal Entertainment (US:RGC). The deal will be part funded by a £1.7bn rights issue - it’s second in three years - while the remainder will be funded via the company’s existing debt facilities. The board of Regal has unanimously agreed to recommend the acquisition to its shareholders, while Cineworld’s largest shareholder Global City Holdings has agreed to take up its rights. A full prospectus is due in January, with a completion deadline set for the first quarter of 2018.
Beverage maker Fevertree (FEVR) has established its own North American office, and appointed a new, local chief executive, Charles Gibb. That means severing ties with its current local distribution agent in the region, Brands of Britain, and directly managing operations there from the second quarter of 2018.
Shares in sub-prime lender Provident Financial (PFG) fell over 14 per cent after revealing that the Financial Conduct Authority has started an investigation into the group’s Moneybarn operation. The inquiry relates to the processes applied to customer affordability assessments for vehicle finance and the treatment of customers in financial difficulties. Sell
OTHER COMPANY NEWS:
Vantiv and Worldpay (WPG) have announced the executive leadership team for their combined company. As previously disclosed, current president and chief executive of Vantiv, Charles Drucker, will lead the company as executive chairman and co-chief executive. Philip Jansen, Worldpay’s chief executive, will take the role of co-chief executive. Stephanie Ferris, who is currently Vantiv ‘s chief financial officer, will become global chief financial officer. Steve Newton, Worldpay’s interim chief operating officer, will become executive vice president, head of the UK and European region. Various other roles were also published. The new company’s name will be ‘Worldpay Inc’ and both parties expect the deal to close on16 January. Shares were down just over 2 per cent in morning trading.
Character Group (CCT) reported a 4.7 per cent drop in revenues to £115.3m for the 12 months ending 31 August, with pre-tax profits down 6.8 per cent to £12.2m. The group notes that - as indicated previously - conditions in their market remain challenging, and the sales reduction can be attributed completely to performance in international sales. But, they are optimistic about trading from the second half of 2018, into 2019, thanks to their “exciting new products” - many of which have been developed inhouse. This might amount to their “strongest ever product line up”.
Peter Egan has been appointed as chief operating officer of Johnson Service Group (JSG). Mr Egan has been moved from his role as head of the Apparelmaster workwear business, ahead of becoming chief executive.
