Shares in London are down marginally in a generally subdued atmosphere. Click here for the latest thoughts of The Trader Nicole Elliott.
IC TIP UPDATES:
National Express Group (NEX) has become the largest transport operator in Morocco after it won its fifth contract in the country. The contract will see 500 buses operate in the cities of Rabat, Salé and Temara and is expected to carry 109m passengers a year across 61 routes. It is initially for 15 years, with an option of a further seven-year extension. The deal will operate as a joint venture with CityBus, a local transport company. It’s expected to secure €1bn (£880m) of revenue over the life of the contract. Shares were fat in early trading. Buy.
Imperial Brands (IMB) announced that David Haines, non-executive director and chairman of the remuneration committee, will step down from the board. Mr Haines recently took up the role as chief executive of Upfield Group, the Amsterdam-based parent company of Unilever's former global spreads business, which was purchased by private equity group KKR. He will be replaced by Malcolm Wyman, who will also remain a senior independent director. Shares were flat in early trading. Buy.
Shares in Churchill China (CHH) were marked up following a period-end update, which highlighted “better than expected levels of growth in Europe”, leading to a trading performance “ahead of earlier expectations for the full year”. Buy.
KEY STORIES:
A first-quarter statement from J Sainsbury (SBRY) perhaps explains why the supermarket chain is pursuing a tie-up with rival group Asda. Grocery sales were weak during the period, up just 0.5 per cent (compared to a growth rate of 3 per cent this time last year). Overall, like-for-like sales rose just 0.2 per cent, although online sales jumped by more than 7 per cent. The company also confirmed a financing package worth £3.5bn, which it said would fund the proposed merger with Asda.
Mattioli Woods (MTW) reported a 10 per cent increase in assets under management, administration and advice to £8.7bn at the end of May. Gross discretionary assets under management increased to more than £2.3bn. Organic revenue was up more than 15 per cent, while the adjusted cash profit margin was maintained ahead of the 20 per cent target.
OTHER COMPANY NEWS:
A third-quarter update from Topps Tiles (TPT) revealed a continued decline in underlying top line growth. The group got off to a good start in the first quarter, growing sales by 3.4 per cent, but this reversed into a 2.2 per cent decline in the second period and a 2.3 per cent slump in the third. Management says this reflects a weaker consumer environment, but compared with last year’s 4.7 per cent decline over the same period, bosses are inclined to call today’s numbers “resilient”.
Compass Group (CPG) announced that its group finance director Johnny Thomson will leave the role by the end of December after nine years at the company. The search for a successor is now underway. Shares fell more than 1 per cent in early trading.
Shares in Staffline (STAF) were up 5 per cent this morning following a trading statement. The recruiter is trading in line with expectations, but noted growing demand and strong performance in the recruitment division, aided by four acquisitions made in the year. Most interesting is the group’s customer experience strategy, which engages with workers to gain insight into different sites. The data generated through this strategy will be used to improve employee and customer retention, and could eventually lead to a new business line.
In a neat piece of horse-trading, BP (BP.) has acquired from ConocoPhillips a further 16.5 per cent stake in the Clair field, west of Shetland. In exchange, Conoco has agreed to sell off its entire interest in the Greater Kuparuk area in Alaska. The oil major said it expected the deals to be ‘cash-neutral’.
