After a brief sell off in early trading, London shares were up mid morning. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
Charles Stanley (CAY) reported an 8 per cent increase in discretionary assets, to £12.3bn. It gained overall net inflows of £1.5bn, over half of which were in discretionary mandates. Advisory managed funds continued to decline, down by a quarter to just £1.8bn, in line with the wealth manager’s strategic shift towards discretionary management. However, management were cautious on the outlook for future returns, citing the risk of market volatility and macroeconomic threats to growth. We place our buy recommendation under review.
Shares in secure payments provider Eckoh (ECK) fell more than 6 per cent in early trading after sales in the UK, its largest market by proportion of revenue, fell by 2 per cent to £18.8m during the year to March. The UK sales team is in the middle of a restructure to address the “disappointing” performance. Focus has shifted to growth in the US, where sales increased by 14 per cent to £11.1m. Overall, group revenue increased by 3 per cent to £30m with pre-tax profits up 61 per cent to £2.4m. Buy.
KEY STORIES:
Shares in Biffa (BIFF) have dropped almost 5 per cent this morning on release of its full year results. The business seems to be moving in the right direction, with adjusted pre tax profits up 32.2 per cent and margins remaining steady, but investors have been spooked by the sudden departure of Ian Wakelin, who has been chief executive since 2010 and oversaw the group’s initial public offering. Finance director Michael Topham will take over and the group is looking for his replacement.
Dixons Carphone (DC.) has revealed a huge data breach, involving close to 6m customers’ payment cards. The group has launched an investigation, but has already concluded that there is no evidence of any fraudulent use of these card details - most of which are protected by chip and pin. Separately, the investigation also found 1.2m records containing non-financial personal data, such as name, address or email address, were accessed by the hackers, although there is no evidence of fraud on this front either. Shares fell in early trading.
OTHER COMPANY NEWS:
News of falling sales in the UK has weighed on Mulberry (MUL) shares this morning, despite news of a further push into Asia. The group has announced a new business entity in South Korea - effectively a joint venture - with SHK Holdings. Mulberry will own 60 per cent of the new company and will, together with SHK, invest £4.6m to “purchase assets and to develop the business”. Mulberry Korea will be headquartered in Seoul and will manage all retail distribution and digital fulfillment for the market. It will be operational from Autumn 2018.
Flooring manufacturer Victoria (VCP) has decided to close its manufacturing site in Melbourne after the lease expires next year. The company focus all its Australian production at the location in Sydney and spend around AUS$2.1m (£1.2m) on upgrades at the site. This investment is expected to complete in the second half of 2019. Victoria acquired the two Australian sites when it bought Dunlop Flooring in January 2017. During the first two months of the current financial year group like-for-like sales are up more than 3 per cent. Shares were up more than 1 per cent in early trading.
