Shares in London rose again as traders shrugged off President Trump's withdrawal of the US from a nuclear deal with Iran, a move which bolstered the oil price further. Click here for the latest thoughts of the Trader Nicole Elliott.
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Vodafone (VOD) has agreed to buy some of Liberty Global’s European assets for €18.4bn including the group’s mobile networks in Germany, the Czech Republic, Hungary and Romania. Vodafone - which has been toying with this acquisition for several years - says the transaction will give it a strong footing to challenge the dominant incumbent in the German telecoms market. Buy
Shares in Imperial Brands (IMB) are up nearly 4 per cent this morning after the company reported “significant progress” in its line of next generation products, including the roll out of vaporiser myblu. The volume of cigarettes sold fell 2.1 per cent to 124bn sticks, but reported a 6.3 per cent improvement in sales volumes of what its identified as “growth brands”. Revenue over the six months to March was flat at £14.3bn, though operating profit fell by 7.6 per cent to £833m. Chief executive Alison Cooper said the company is aiming to generate around £2bn in the next 12 to 24 months by divesting from some operations. Proceeds are planned to be used to pay down debt, return money to shareholders, and invest in further opportunities for growth. Buy.
OneSavingsBank (OSB) reported 5 per cent net loan book growth during the first quarter, taking total balances to £7.7bn. Organic new lending of £638m was at attractive margins, according to management, while it had a total £1.5bn drawing from the Bank of England’s Term Funding Scheme at the closing date at end of February. Buy.
St Modwen Properties (SMP) has sold two retail assets in Birmingham and London, comprising 27 per cent of its retail property portfolio. It disposed of Longbridge Shopping Park in Birmingham for £53.6m and exchanged contracts for the sale of Wembley Central, which comprises an 118,000 sq ft shopping centre and 86-bed Travelodge. Buy.
Results from Vertu Motors (VTU) haven’t done much to inspire confidence in the group’s share price this morning, despite more encouraging data from the Society of Motor Manufacturers & Traders (SMMT) lately. Bosses are trying hard to strike an upbeat tone when it comes to the year ahead, but sales and profits were both held back during the year ended 28 February due to the “challenging trading environment”. Car retailers have been hard pressed to shift new vehicles, but Vertu says it’s eyeing up possible acquisition opportunities. Our recommendation is under review.
Shares in Renew Holdings (RNWH) are down 5 per cent this morning after the group announced it was acquiring Scottish rail contractor QTS Group and would be holding a share placing to part fund it. The placing is due to raise £45m towards the £80m deal. QTS will improve Renew’s positioning in the rail market. Analysts at Numis also note the deal is taking place ahead of a structural shift in rail spending which will lead to a 25 per cent increase in operating expenditure over the five years to 2024. Renew will now be well placed to capitalise on the uptick. Buy.
For most North Sea-based oil companies, Donald Trump’s decision to rip up the Iran nuclear deal may be seen as a tailwind to prices. Not for Serica Energy (SQZ), which today informed investors that it is reviewing the “implications of [Mr Trump’s] statements and how they relate to the Rhum field”, which is 50 per cent owned by the Iranian Oil Company, a subsidiary of Iran’s state oil company. With the shares off 10 per cent this morning, the missive appears to have caught the market offside, though we do not currently see a reason to change our buy call.
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Provident Financial (PFG) reported an improvement in customer collections at its home credit business during the first quarter, with the shortfall between its underlying performance against historic levels narrowing to 10 per cent, from 12 per cent at the end of December. Active customer numbers ended the first quarter at 491,000, down from 527,000 at December 2017, which management said reflected the typical seasonal reduction. At Vanquis Bank, new customer bookings were 87,000, 35,000 lower than the prior year’s comparable period, which benefited from its marketing programme being more heavily weighted towards the first half of the year. Meanwhile Satsuma reported a 70 per cent increase in lending. Shares were up 6 per cent in early morning trading.
Shares are down 4 per cent for security giant G4S (GFS) after it released its trading update for the first quarter of 2018. Organic revenue was 2 per cent lower than the same period last year due to a large contract mobilisation in the US last year, making for an unfavourable comparator. However, the group won another major contract in February this year, which should lead to future growth. The secure solutions business continued to perform strongly, though it was impacted by slowdowns in the Middle East and India in the second half of last year.
Shares in baker Greggs (GRG) plunged 15 per cent in early trading after the group blamed recent turbulent weather - specifically the “Beast from the East” - for weaker growth. Severe weather not only meant lower footfall, but some shops couldn’t open at all. Over the first 18 weeks of the financial year, sales rose 4.7 per cent, compared to a 7.4 per cent growth rate this time last year. On a like-for-like basis, sales rose 1.3 per cent, compared to last year’s rate of 3.5 per cent. Given the trading conditions to date, Greggs bosses say underlying profits for the year should report at a similar level to FY2017.
Here we go again. Just days after acquiring two separate stakes of 4.55 per cent in Petropavlovsk (POG), shareholders CABS Platform and Slevin are calling for the removal of the gold miner’s directors, and the re-installation of former directors Pavel Maslovskiy, Sir Roderic Lyne and Mr Robert Jenkins. Given the size of the activists’ holding, they will likely require the support of another investor. Kenges Rakishev, who acquired a 22.4 per cent stake at the end of last year, and who has previously called for the return of Dr Maslovskiy, said the requisition had “come as a surprise”, but declined to comment on his voting intentions regarding to the proposals. Pending board approval, the requisition could be heard at next month’s annual general meeting.
Like-for-like sales at JD Wetherspoon (JDW) increased by 3.5 per cent during the pub group’s third quarter, with comparable revenue up by 5.2 per cent year to date. Chairman Tim Martin continues to expect “significant cost increases” due to labour, business rates, and the sugar tax. Wetherspoons has sold 19 pubs so far this year and opened five, with one more set to open before the end of the financial year. Shares were flat in early trading.
Shares in Compass Group (CPG) were down 6 per cent this morning after the group released its results for the six months to March this year. On a statutory basis revenue and operating profit were down, impacted by adverse currency movements. On an underlying basis the figures looked healthier, though the operating margin declined 10 basis points to 7.5 per cent both free cash flow declined 7.4 per cent due to the combined impact of currency movements and increased capex.
