London shares started the week with decent gains in morning trading. Click here for The Trader Nicole Elliott's latest thoughts.
IC TIP UPDATES:
Shares in Babcock (BAB) are up 2 per cent this morning after the group issued a statement on the introduction of IFRS 15, saying the introduction of the new accounting rule “will not require a change in contract revenue or profit recognition”. The introduction of IFRS 15 - which changes the ways in which companies recognise revenues on long term contracts - has already led companies such as Utilitywise (UTW) and Capita (CPI) to announce an impact on revenues and profits, so Babcock’s announcement is likely to be welcomed by investors. Buy.
KEY STORIES:
Polar Capital (POLR) continued its recovery during the six months to September, gaining net fund inflows of £820m. Together with £510m of fund returns, this took assets under management up to £10.6bn. This had risen to £11.4bn at the end of November. The shares were up 2 per cent in early trading and by almost two-thirds during the past 12 months.
Hurricane Energy (HUR) is trading 12 per cent to the good this morning, after the North Sea explorer published an update to its resource estimates for the Halifax and Lincoln fields. Probable and contingent resources have more than tripled to 2.6bn barrels of oil equivalent.
Shares in Hollywood Bowl (BOWL) are up nearly 10 per cent this morning after the company reported that revenue in the year to September was up 8.8 per cent to £114m with a 54 per cent increase in operating profit to £22.2m. Around 13m games were played over the year, a8.5 per cent increase on the year before, with average spend per game up 0.8 per cent to £8.70. The bowling operator also announced 3.33p special dividend, bringing the total dividend for the year to 9.08p.
OTHER COMPANY NEWS:
Mercia Technologies (MERC) announced that it has invested £2.5m a part of a £3.8m funding round in Medherant, which is a spinout company from the University of Warwick focused on developing a transdermal drug delivery patch technology. As a result of this investment, Mercia’s equity stake in Medherant has risen from 11.3 per cent to 32.4 per cent. Shares in Mercia were up 3 per cent in morning trading.
First Derivatives (FDP) announced this morning that it has acquired Telconomics, a private company providing telco analytics software for a total consideration of up to €2.5m (£2.2m), payable in cash and new shares. This is expected to be earnings enhancing in the first full year post-acquisition. The group says the purchase ties into its strategy to target the telco market using its Kx technology. Telconomics is based in Madrid.
