Shares in London are rising again. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
Experian (EXPN) has issued a trading update this morning. Shares in the information services giant are flat following the announcement, largely because there were no surprises. Trading is in line with expectations, with North America and EMEA/Asia Pacific led the group with 11 per cent organic revenue growth apiece. Buy.
Shares in Hays (HAS) are up 5 per cent this morning following a strong trading statement from the group. As with rival Pagegroup (PAGE) earlier in the week, the recruiter has delivered record net fee income (the recruiter term for gross profit) based on strong international growth, while the UK market has continued to lag behind. The group now expects to beat expectations for full-year operating profit, while net cash climbed to £123m, leading management to say they will “consider increasing shareholder returns significantly”. Buy.
Shares in Marlowe (MRL) dropped 9 per cent this morning. The price movement followed the announcement of plans to place 4,210,000 new ordinary shares with the intention of raising £20m. The proceeds will be used to fund its acquisition-led growth strategy. The share price drop most likely reflects the discounted price at which the shares will be issued, 475p versus a closing mid market price of 523p on the 12th of July. Buy.
Shares in International Personal Finance (IPF) jumped over five per cent after the sub-prime lender revealed that profits for 2018 are likely to be 10 per cent ahead of previous expectations. European home credit saw a modest contraction but this was more than offset by growth in the mexican market and IPF Digital. Expectations for 2019 remain in line with current expectations. Sell.
Lorraine Woodhouse has been announced as Halfords’ (HFD) new chief financial officer, replacing Jonny Mason, who is leaving the group at the end of this month to join electricals retailer Dixons Carphone. Ms Woodhouse won’t take up the post until 1 November 2018, having served as the finance director at supermarket chain Waitrose since 2015. Sell.
Workspace (WKP) saw good customer demand in the three months to June, with enquiries for office space averaging 1,021 per month. Three refurbishment and redevelopment projects were completed, with a further six due to complete by March 2019. Disposals generated £52m which helped to pay for the Camden purchase that cost £77m. A placing in June also raised £179m. Buy
For the fourth time in 15 months, there has been a fatal accident at Caledonia Mining’s (CMCL) Blanket mine in Zimbabwe. Chief executive Steve Curtis, whom we quizzed about Caledonia’s safety record in April, said “this is a very disappointing setback to our efforts to improve safety at Blanket which has been a key focus area for the business in 2018”. Under review.
Payments company SafeCharge (SCH) said first-half trading was strong, with “good momentum” in revenues and transaction processing volumes. This was driven by new customer wins. Management is confident that full-year trading will be in line with market expectations. Buy.
KEY STORIES:
Shares in Ashmore (ASHM) rose by over two per cent despite news that assets under management fell by $2.6bn (£1.98bn) in the three months to June. The emerging markets asset manager saw net inflows of $2.6bn, but this was wiped out by a $5.2bn negative investment performance.
Rio Tinto (RIO) has signed a non-binding agreement with Indonesia’s state owned miner, Inalum, to sell its production stake in the Grasberg mine to for $3.5bn. The deal, which is expected to complete by the end of 2018, removes a key source of uncertainty and capital risk for the commodities giant.
OTHER COMPANY NEWS:
DP Eurasia (DPEU) reported a 28 per cent increase in system sales to TRY510m (£80m) during the six months to June after it opened 79 new stores, bringing the total to 672. Russia was the fastest growing region with system sales up 69 per cent to TRY153m, and online sales in the country more than doubled. Full-year adjusted cash profits are expected to be in line with expectations.
RhythmOne’s (RTHM) performance for the first quarter was in line with management’s expectations, comprising quarter-on-quarter growth for revenue and cash profits. This was buoyed by momentum in programmatic advertising revenues. The group continued to “ramp up” RhythmMax, its unified programmatic platform, integrating new programmatic partners and establishing relationships with companies to establish new capabilities for connected TV measurement. The shares were up 7 per cent in morning trading.
Telit Communications (TCM) has agreed to sell its automotive division to Hong Kong-listed TUS International for $105m. The transaction is expected to be finalised by the end of 2018. Telit had previously said it was considering the future of various of its product lines which might not be in keeping with its long-term strategy; selling the automotive division should help it to focus on its industrial internet-of-things business. Cash proceeds from the sale will help to reduce Telit’s debt and strengthen its cash position. As at June 2018, net debt was $25m. The shares were up 5 per cent in morning trading.
