IC TIP UPDATES:
Gateley (GTLY) expects revenues for the first half to October to be “not less” than £46.4m, up 20 per cent year-on-year. GCL Solicitors and Kiddy & Partners – the acquisitions announced in May and July 2018 – accounted for around half of this increase. The legal services group said current activity levels are encouraging, notwithstanding broader political and economic uncertainty, and total staff number rose from 791 as at April to 928 as at October. Management now expects revenues of at least £102m for the year ending April 2019 with a cash profit margin in line with the prior year. The shares were up 2 per cent this morning. Buy.
Fuller, Smith & Turner (FSTA) reported a 6 per cent increase in sales to £222m during the first half, with cash profits up 2 per cent to £38.2m. Adjusted profit before tax fell 1 per cent to £23.6m due to heavy investment in refurbishing pubs during the period. This impacted profitability by £0.9m, and had the company chosen not to pursue this sending then profits would have been up. Chief executive Simon Emeny said this was the “right decision” to ensure the estate is in the best possible position to benefit from the busy Christmas period and beyond. Shares were flat in early trading. Buy.
Shares in Interserve (IRV) are once again down dramatically this morning. Prices dropped 7 per cent after the group announced net debt for the full year was expected to be around £625-650m, from £610m previously. The announcement is the latest in a run of bad news for the group, with shares crashing 20 per cent earlier this month following rumours the company was close to bankruptcy. Sell.
Yesterday, shares in Fresnillo (FRES) fell 12 per cent, and are down again today, after Morgan Stanley said looming changes to Mexico’s mining laws will lead the country’s miners to decouple from their fundamentals. The country’s new congress is planning as many as 11 bills or resolutions that could materially impact mining companies. Under review.
Shares in Ibstock (IBST) jumped nine per cent after the brick manufacturer announced the sale of itsUS brick manufacturing business Glen-Gery for $110m (£86m). The new owner, Brickworks, will also assume pension liabilities. Buy.
KEY STORIES:
Amerisur Resources (AMER) has entered into a farm-out agreement with Occidental Petroleum, to fund exploration across the Putumayo-9, Terecay, Tacacho and Mecaya blocks in southern Colombia. As part of the deal, for which Amerisur will be paid $93.3m, Occidental will acquire a 50 per cent stake in each block, in exchange for 85 per cent of the seismic cost expenditure and 100 per cent of the planned drilling programme.
OTHER COMPANY NEWS:
Just two days after healthcare group Indivior (INDV) revealed it had lost its legal challenge to prevent the market launch of a cheaper rival copy of one of its treatments, the group has announced that Health Canada - the Canadian regulator - has approved Sublocade, another injection-based treatment aimed at patients addicted to opiods. The patients must have been clinically stabilised already, and Sublocade can only be administered once a month, as part of a treatment plan which includes psychological support and counselling. The treatment should be available on the Canadian market from the second half of 2019.
Shares in Future (FUTR) were up 7 per cent this morning on strong full-year results to September. Revenues soared 48 per cent to £125m, buoyed by both 11 per cent organic growth and by acquisitions. The media business’s revenues rose 88 per cent to £64.2m, comprising 40 per cent organic growth. Media thus constituted more than half of group sales – exceeding revenues from the magazines business for the first time, which were up 20 per cent to £60.4m, largely supported by acquisitions. The group’s presence in the US expanded significantly, with revenues here up 109 per cent to £39.9m. Pre-tax profits came in at £4.4m, up from £0.2m.
