IC TIP UPDATES:
Shares in Greene King (GNK) are up more than 8 per cent in early trading after the pub group reported a 2.8 per cent increase in like-for-like sales during the first quarter, compared to 1.2 per cent across the wider market. Management said the performance was aided by the World Cup and good weather. Trading was particularly strong in pubs, with comparable sales up 5.5 per cent. During England’s seven World Cup matches 3.7m pints of beer were sold, and on the day of the semi-final like-for-like sales were up 61 per cent. Buy.
EI Group (EIG) reported a 1.3 per cent increase in net income from its leased and tenanted estate during the 47 weeks to August, up from 0.6 per cent during the first half. This was aided by the good weather and World Cup football. At managed pubs like-for-like sales were up 6.6 per cent. The company has been transitioning some leased pubs into managed sites, and are on track to meet the goal of 365 managed pubs by the end of the year, compared to 354 now. Shares were up 2 per cent in early trading. Buy.
KEY STORIES:
It’s a busy day for North Sea operator EnQuest (ENQ). In addition to publishing interim numbers – whose highlights included a 133 per cent rise in cash generation, and falls in operating and gross costs – the group has exercised an option to acquire from BP the remaining 75 per cent of the Magnus field it does not own. That deal is for a base consideration of $300m, and will be funded by a £107m, three-for-seven rights issue at a price of 21p. EnQuest chief executive Amjad Bseisuw called the opportunity “compelling”, and said the deal could add $500m to the company’s net present value.
Ashmore (ASHM) gained record net inflows of $16.9bn during the first-half, offsetting $1.4bn negative investment performance and boosting assets under management by more than a quarter to $73.9bn. However, management said the “very strong net flows delivered in 2018 may not be repeated in the near term” and also announced plans to open a new office in Ireland “to ensure continued access to EU-based institutional clients”.
Playtech (PTEC) has announced that it has sold its entire holding in Plus500 (PLUS), representing 10 per cent of the spread-betting specialist’s issued share capital. The gambling software group realised gross proceeds of £176m, which it said would be used for “general corporate purposes and debt reduction”. However, the sale comes just a day after five of Plus500’s founders revealed they had sold shares worth an aggregate £154m, representing an 8 per cent holding.
Telit Communications (TCM) has received a letter from Davide Serra, a shareholder in the group and head of Algebris Investments, along with a requisition notice from shareholders holding over 5 per cent of Telit’s voting capital, to call a general meeting. At this meeting, resolutions will be proposed to remove chief executive Yosi Fait and senior independent non-executive director Simon Duffy as directors of the company, and to appoint four new directors - Suvi Linden, Jonny Bourne, Anders Torstensson and Adam Power. At the time of writing, Telit’s shares were down 1.4 per cent.
OTHER COMPANY NEWS:
Glencore (GLEN) has completed the sale of a 14.2 per cent stake in Russian major Rosneft, to a subsidiary of Qatar’s sovereign wealth fund. The London-listed commodities group has retained a 0.57 per cent equity stake in the business.
