Another day when London traders are struggling to find any meaningful direction with the FTSE100 only up marginally in morning trading. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
OneSavings Bank (OSB) reported 11 per cent net loan book growth for the first-half, with buy-to-let and SME lending up 15 per cent to £6.5bn. That helped push pre-tax profits up 17 per cent to £91.8m. However, the net interest margin fell to 3.01 per cent, from 3.24 per cent, reflecting lower yields on the front book. Buy.
Phoenix Group (PHNX) has upgraded its cash generation guidance for the full-year, which it expects to come in at the upper-end of £1bn to 1.2bn target range. The life assurer generated £349m of cash during the first-half, with management declaring a 22.6p dividend per share, after a rebasement to take into account the recent rights issue. The Axa Wealth and Abbey Life integration completed, while management expects the purchase of Standard Life Aberdeen’s (SLA) insurance business to close next week. Buy.
Stobart Group (STOB) has made a number of board appointments in an effort to improve its corporate governance. Nick Dilworth has been appointed to the board as an executive director and promoted from group commercial director to chief operating officer. Ginny Pulbrook will join the board as a non-executive director. Michael Williamson has been appointed as interim chief financial officer but will not be joining the board. Shares in Stobart were up more than 3 per cent in early trading. Buy.
Ahead of its AGM Fulham Shore (FUL) said there have been “encouraging revenue increases” during the first 21 weeks of its financial year. Two Franco Manca locations have opened in Bath and Cambridge, while one closed in Brighton. Further location openings will be funded “largely” through internal cash flow. Management said tough times for the restaurant market have meant that a number of potential properties have become available. Shares were up more than 8 per cent in early trading, but we’re still not convinced that Fulham Shore’s growth is sustainable. Sell.
Just the four announcements from South32 (S32) this morning. Three are fairly insignificant: the calendar for the full-year dividend, a presentation, and the addition of a 43 Mt addition to ore reserves in the Worsley alumina business; the main event is full-year results, which echo several themes in year-end numbers for BHP Billiton, out of which South32 was spun in 2015. Stronger commodity prices helped mitigate inflationary pressures, though lower volumes nulled the effect on the bottom line. Net cash rose, though the acquisition of Arizona Mining at the end of the period has rendered that metric somewhat outdated. Under review.
Shares in Anglo Pacific (APF) ran up 18 per cent in the three days prior to this morning’s half-year numbers, but are off today – perhaps because income-seekers were expecting a rise in the quarterly dividend. That remains unchanged at 1.625p per share, despite a 15 per cent rise in adjusted earnings per share, and a 20 per cent rise in overall income. We remain buyers.
A day after announcing its full-year results, Costain (COST) has won a contract with Network Rail. The engineering group did not give details of the potential value of the deal but said it would develop “enhanced warning technology” to make footpath and bridleway rail crossings safer. The first units are expected to be installed in the next 12 months. The contract demonstrates the group’s ongoing push into more technologically advanced areas, as it tries to establish itself as a “smart infrastructure” company. Buy.
OTHER COMPANY NEWS:
Though aided in part by better-than-expected crude prices, Premier Oil (PMO) is doing what it said it would. Half-year numbers re-iterate full-year targets for both production and capital expenditure, and while net debt is flat year-on-year, gearing is falling, and the North Sea-based operator expects to trim its net borrowings by as much as $400m in the second half.
AstraZeneca (AZN) has updated the market on its phase IIIb trial for using Bevespi Aerosphere to treat chronic obstructive pulmonary disease. The drug demonstrated non-inferiority to umeclidinium and vilanterol, two drugs already used to treat the condition, on one-second peak forced expiratory volume. However, it failed to show both superiority on peak FEV or non-inferiority on trough FEV1. The did not react much to the announcement.
On ice or off entirely? Yesterday, Reuters reported that Saudi Arabia has aborted its grand plan for a 5 per cent listing of state oil giant Saudi Aramco, in what might have been the biggest initial public offering in history. Financial advisers on the deal, for which London was a front-runner, have reportedly been “disbanded”, though other reports suggest that the deal has only been stalled as Aramco moves (or is forced) to buy the state’s holding in chemicals group Sabic.
Shares in Rosenblatt Group (RBGP), which joined Aim in May, fell more than a tenth this morning after the small-cap law firm said finance director Patrick Firebrace was stepping down for personal reasons. He will leave the company on 31 August, and will be replaced by Robert Parker until a permanent replacement has been appointed. Mr Parker won’t become a board member. He has more than 20 years’ experience with international businesses and was most recently interim chief financial officer at Newlyn Plc, Tantalum Corp and CLA Limited. Rosenblatt also announced the appointment of Victoria Hull to the board as non-executive director.
Shares in Playtech (PTEC) are up 12 per cent this morning after the gaming software company reported a 6 per cent increase in sales at constant currency to €437m during the first half, but strip out the Asia business and total revenue was up 35 per cent. Around 69 per cent of group revenue now comes from regulated markets, compared to half last year, and management expect this to be 80 per cent by the full year. The acquisition of Snaitech completed in June and has been wholly owned since August.
