Shares in London are ending the week with modest gains. Click here for The Trader Nicole Elliott's take on the markets.
IC TIP UPDATES:
Shares in sell tip Mitie (MTO) are down 4 per cent this morning following the release of its latest trading statement. The group revised up the expected cost of Project Helix - its cost cutting programme - to £35m from £24m, though the expected overall cost savings by the end of 2020 were revised up to £50m from £45m. Net debt is expected to increase £50-70m. The group noted the collapse of Carillion has raised “fundamental questions” about the outsourcing industry, but said it continued to be valued by clients. Sell.
The New York Public Service Comission has given final approval for National Grid’s (NG.) three year rate plan settlement for the Niagara Mohawk electricity and gas distribution facility. The plan includes capex of $2.5bn (£1.79bn) and return on equity of 9 per cent over the next three years. This is broadly in line with expectations. National Grid has two more plans to be approved. Buy
KEY STORIES:
Shares in Nex Group (NXG) jumped by a third in early trading after management confirmed after market-close yesterday that it had received a takeover approach from US futures exchange CME. Nex founder and chief executive Michael Spencer holds a 17 per cent stake in the group.
Like-for-like sales at JD Wetherspoon (JDW) were up 6.1 per cent to £830m during the first half of its financial year with pre-tax profits up 20.6 per cent to £62m. Three new pubs were opened during the period while 12 were closed. Free cash flow fell by more than the fifth, but the interim dividend was maintained at 4p. Management warned of rising costs coming through in the second half but still expect to meet expectations. Shares fell 2 per cent in early trading.
Shares in Berkeley Group (BKG) fell around 5 per cent after the London focused housebuilder warned that it is unable to increase production beyond the business plan levels. It blamed higher taxation, restriction on mortgage to income ratios, extra taxation on buy-to-let investors and high transaction costs. However, it reitererated that it will deliver at least £3.3bn of profits in the five years leading up to 30 April 2021.
Recruiter SThree (STHR) has traded well in the three months to February 28th. Gross profit was up 8 per cent on last year. The UK continued to struggle, down 3 per cent, but the group now makes 82 per cent of its gross profit elsewhere. Headcount grew 12 per cent over the year. It’s a positive statement, but management admit the first quarter of the year is the group’s least significant.
OTHER COMPANY NEWS:
Energean (ENOG), the oil and gas explorer focused on the Eastern Mediterranean, has today floated in London. The listing has raised £330m in new money in a 47.5 per cent sale of the company, and will principally put the proceeds towards the development of the Karish and Tanin gas fields, offshore Israel. At 455p a share, the offer is a fair drop on the 500-590p indicative offer price.
Domino’s Pizza (DOM) has begun its share repurchase programme. Between now and the end of the year the company will buy back up to £32m worth of shares to be cancelled in an aim to reduce the company’s share capital. Shares were flat in early trading.
SimplyBiz - a provider of compliance and business services to financial advisers in the UK - plans to float on the Alternative Investment Market (Aim) on 4 April. The group has conditionally raised £30m via an institutional placing of 17.6m shares at 170p each, while £34.6m was also raised for selling shareholders via an institutional placing of 20.4m shares at 170p each. On admission, the company will have a market cap of £130m.
