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IC TIP UPDATES:
Matthew Dunn, previously chief financial officer at beverages group Britvic, is joining online fashion company Asos (ASC). Mr Dunn will take up his role there as chief financial officer in Spring next year, although the exact date is yet to be confirmed. We remain buyers.
StatPro (SOG) has won a five-year contract worth around £1m with a large South African financial institution for its Infovest service. The financial institution is already a client of StatPro’s, and this is the first Infovest product it has purchased. The client will use Infostore to provide a consolidated view of all its positions in the market each day, and will also gain business intelligence and analytics. Shares in StatPro were up 3 per cent this morning. We’re still buyers.
Shares in St James’s Place (STJ) fell more than 4 per cent despite an upbeat statement covering the first nine months of the year. Net inflows grew by 15 per cent to £7.68bn, pushing total funds under management over the £100bn mark. Buy.
Whitbread (WTB) chief executive Alison Brittain said that the sale of Costa to The Coca Cola Company for £3.9bn received “overwhelming approval” from shareholders, but has not yet given any more details about how much of the proceeds will be returned to shareholders. During the first half, group sales were up 2.6 per cent to £1.08bn, with a 2.9 per cent increase in underlying operating profit to £286m. Total UK accommodation sales from Premier Inn grew 4.8 per cent, but were flat on a like-for-like basis due to “weak consumer demand” over the summer. That hasn’t stopped Whitbread’s plans to expand Premier Inn. Management believe there’s capacity for around 100,000 rooms in the UK, up from 74,000 now. Shares fell 2 per cent in early trading. Buy.
Communisis (CMS) has agreed to a £154m cash takeover offer from OSG Bidco Limited, a wholly-owned indirect subsidiary of New York-based payment solutions firm OSG Group Holdings Inc. Investors in Communisis are being offered 71p per share in cash, representing a premium of approximately 40 per cent to Monday’s closing price of 50.8p. Offer under review.
KEY STORIES:
Intu Properties (INTU) boosted occupancy to 97 per cent in the three months to 23 October, and secured 84 long-term leases at rental levels eight per cent above previous passing rent. However, adjusted net asset value fell by 12p to 297p per share following a 3 per cent fall in like-for-like property valuations. A consortium comprising the Peel Group, the Olayan Group and Brookfield Property Group recently announced that they were considering making a cash offer for Intu, valuing the shares at around 210p. It has until 1 November to make a firm offer.
Shares in Anglo American (AAL) are off 3 per cent this morning, after the commodity group said production at its key De Beers division fell 5 per cent in the three months to September. The group’s iron ore division has also taken a hit, with Kumba output down 9 per cent and Minas-Rio still suspended.
OTHER COMPANY NEWS:
First quarter sales growth might have been just the ticket for McBride (MCB) investors this morning, but higher than anticipated raw material costs still weighed on the share price. First quarter sales at constant currency were 15.4 per cent higher than the prior year, but management warned that “there is increased volatility and uncertainty around future raw material and packaging cost levels” and whilst the group “will always seek to recover or mitigate any increased input inflation”, the timing of these actions “typically lag” their impact. That suggests there could be further pain to come this year, although management has maintained full-year guidance for now.
Camellia (CAM) announced that volumes of all its core tea, avocado and macadamia nut crops are expected to be “at or near record highs” during 2018, but added that this has been accompanied by volatile prices. Still, the board expects pre-tax profits to be “substantially above” market expectations. Shares were up nearly 5 per cent in early trading.
Like-for-like third quarter sales grew by 4.1 per cent at Travis Perkins (TPK), reflecting a solid performance in the plumbing and heating divisions, where sales grew by 7 per cent. This was enough to offset tough trading conditions in the DIY market which resulted in volume declines at DIY store chain Wickes.
