After an uncertain start to the day's trading, shares in London were in positive territory late morning. Click here for The Trader Nicole Elliott's latest take on the markets.
IC TIP UPDATES:
Will Sirius Minerals’ (SXX) potash project go ahead, as planned? The share price in recent weeks highlights considerable doubt about the current trajectory, though the group today announced a big development: the award of the Teesside port handling facility procurement contract to McLaughlin & Harvey. As part of the agreement, McLaughlin will design and build the port handling facilities for 250,000 tonnes of products, ship loading equipment, screening equipment and associated infrastructure. Under review.
Peter Dilnot, chief executive of Renewi (RWI) is resigning. He will leave at the end of the financial year to take up the chief operating officer role at Melrose Industries (MRO). He will be replaced by Otto de Bont, managing director of Renewi’s Netherlands commercial division, in April 2019. Shares are down 1 per cent. Buy.
WANdisco (WAND) has won a contract with the leading information and communications technology provider in China for its source code management product. The deal is worth $1m, was won directly by WANdisco and entails an expansion of an existing relationship with a key client. Some of the resultant revenues will be recurring. Shares in the group were up 4 per cent in morning trading. Buy.
KEY STORIES:
Shares in Hiscox (HSX) fell nearly eight per cent after the insurer warned that growth is expected to moderate over the year. Gross written premiums grew by 14.3 per cent in the nine months to September, but trading conditions remain a challenge, and new business growth will be constrained by its decision to maintain underwriting discipline rather than chasing unprofitable business. Hold
Draper Esprit (GROW) more than doubled pre-tax operating profit during the first-half, compared with the same time the prior year, driven by an 80 per cent rise in unrealised fair value gains. The net asset value of the core portfolio was up a fifth in line with management’s target.
Micro Focus (MCRO) has appointed Brian McArthur-Muscroft as chief financial officer. Previous roles include chief financial officer at Paysafe and TeleCity. As separately announced today, current chief financial officer Chris Kennedy will leave in the first quarter of 2019 to join ITV (ITV). Micro Focus said trading has continued in keeping with management’s expectations – with “an improved revenue trajectory” in the second half. Constant currency sales will reach the better end of guidance of -6 per cent to -9 per cent for the year to October 2018. Trading has also been in line with adjusted cash profit margin guidance of around 37 per cent at the midpoint of that revenue range. And the company plans to extend its share buy-back programme. The shares were up around 2 per cent this morning.
OTHER COMPANY NEWS:
There are two important announcements for Serica Energy (SQZ) today. First, the North Sea oil and gas firm has acquired BHP Billiton’s (BLT) interests in the Bruce and Keith fields on the same terms as Serica’s deals with BP (BP.) and Total. That gives Serica 94 and 92 per cent stake in the fields respectively, with completion of the deal scheduled for the end of this month. Second, the conditions of the US OFAC licence for the acquisition of BP’s stake in the Rhum field have been met, meaning Serica can share the field with a subsidiary of Iran’s state oil company.
Shares in Kosmos Energy (KOS) are unmoved this morning, despite the US oil company posting a third-quarter net loss of $126m after it wrote-off $58m for the sub-commercial Akasa and Wawa discoveries in Ghana.
Ryanair (RYA) reported an 11 per cent increase in traffic to 13.1m passengers during October, including 500,000 travellers from its stake in Austrian airline Lauda. Overall load factor was 96 per cent, with Lauda reporting load factor of 89 per cent. The budget airline cancelled 300 flights during the month due to airport handler strikes in Brussels, bad weather, and air traffic controller strikes. Shares were up 1 per cent in early trading.
Idox (IDOX) has announced the sale of its digital division to Fat Media Limited, a digital marketing solution provider, for a nominal cash consideration of £1.00. The digital division focuses on providing consultancy services to private sector clients. For the year ending October 2017, it saw pre-tax losses of £3.2m. As at 30 September 2018, it had (unaudited) gross assets of £0.9m and net liabilities of £0.02m. Idox says the disposal allows for greater focus on its core operations.
Versarien (VRS) has provided an update on its plans to establish a graphene manufacturing centre in Shandong Province, China. The materials engineering group has signed a framework agreement with the Qingdao Municipal Bureau of Commerce, which will aid the company in setting up a cooperative venture in a deal that may include capital contributions from the Chinese partner.
