Shares in the main London indices gave up some of yesterday's gains in early trading after President Trump criticised the Federal Reserve's interest rate policy overnight. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
The half-year scorecard for Polymetal International (POLY) reads as follows: revenue, production, gold sales, group total cash costs, the interim dividend, net debt and net earnings all up; silver sales and all-in sustaining costs down slightly. On the latter point front, seasonally higher production and sales from Mayskoye and Svetloye are expected to bring down all-in costs, and in line with a $875-925 per gold-equivalent guidance range for 2018. With first gold from Kyzyl just shipped, we remain buyers.
Pre-tax profits jumped by more than half for Charter Court Financial Services (CCFS) during the first-half, to £93.1m. That was despite the net interest margin contracting slightly to 3.08 per cent. The cost-to-income ratio came down to 24.8 per cent, from 31 per cent the previous year, while the return on equity improved to 38.4 per cent from 34.1 per cent. Management also declared a maiden interim dividend of 2.8p a share. Buy.
A trading update from Tracsis (TRCS) lifted its shares 7 per cent this morning. The company, which provides software and services to the traffic data and transport industry, said revenues for the year to July were ahead of market expectations at around £40m - up 15.9 per cent year-on-year. Cash profits and adjusted profit are also expected to come in ahead of market expectations, and above the previous year. (For the year to July 2017, cash profits reached £8.5m and adjusted profit was £7.7m). The group remained debt-free, with cash balances of around £22m - up from £15.4m. Buy
Castleton Technology (CTP) has won a managed services contract with one of its existing customers, Circle Voluntary Housing Association. The group will provide Circle with a cloud managed desktop-as-a-service, offering business continuity and a managed service desk. The contract is worth £364,000, over five-and-a-half years. Castleton says the contract complements the six hosted software products that it already provides for Circle, which were bought in January this year on a 10-year contract. The shares remained flat this morning. Buy.
Shares in Hostelworld (HSW) fell more than 9 per cent in early trading after the hostel booking platform reported a 9 per cent decline in net revenue to €42.6m while adjusted cash profits fell 24 per cent to €9.8m. The results were impacted by the new accounting treatment of deferred revenues, and on an underlying basis sales increased by 6 per cent and cash profits were up 9 per cent. Free cancellations are now offered across Europe meaning that revenues of EUR4.2m were deferred during the period meaning that revenues of EUR4.2m were deferred during the period. We remain buyers.
KEY STORIES:
An 8 per cent increase in copper-equivalent growth, coupled with higher prices, meant BHP Billiton’s (BLT) free cash flow climbed to $12.5bn in the 12 months to June. Full-year numbers, out today, also show net debt down a third to $10.9bn, roughly equivalent to the sale value of the US shale portfolio. Encouragingly, the commodities giant expects iron ore costs to fall slightly this year, though lower copper grades at Escondida, higher strip ratios at Queensland coal and natural field decline within the conventional petroleum division all mean that unit costs will likely rise between now and June 2019.
Shares in Wood Group (WG.) are up nicely this morning, after the oil services outfit flagged recovery in its core oil and gas markets. Despite signs of margin compression, integration of the Amec deal is “ahead of schedule”, and a three-year cost synergy target has been increased from $170m to $210m.
OTHER COMPANY NEWS:
After a challenging first half, Nostrum Oil & Gas (NOG) chief executive officer Kai-Uwe Kessel set one goal for his company: stabilise production. On that count, there has been some success, after two wells came online in July. More encouraging, though long overdue, is a comment from Mr Kessel that the group is “now in the final stages to achieve completion of GTU3 before the end of 2018”.
Shares in Ceres Power Holdings (CWR) are up 10 per cent this morning. The group has secured a partnership with engineering and electronics company Robert Bosch. The two companies will develop Ceres’s SteelCell technology and begin low volume production at Bosch, allowing it to scale up for use in small power stations, factories and electric vehicle charge points.
