US shares took a beating overnight on uncertainty over whether the US and China will actually agree a trade truce and London shares have followed suit this morning. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
Joules (JOUL) has, like so many other retailers, suffered from a sharp downturn in investor appetite - exacerbated by continued political and economic uncertainty for British consumers ahead of a confirmed Brexit deal. But today, as part of a pre-close trading update ahead of results at the end of January, the group has revealed a near-18 per cent sales surge over the 26-week period ended 25 November 2018. Bosses say the performance reflects the flexibility of the group's ‘total retail' model as well as the rapid growth of its international business - which now represents approximately 16 per cent of total revenues, up from 11.3 per cent this time last year. We remain buyers.
Its market capitalisation may be small, but Shanta Gold (SHG) could be producing over 100,000 ounces of gold a year by 2020, if the company secures funding for the development of the Singida project. Today, the Tanzanian miner unveiled its project economics for the development, which promise an internal rate of return of 67 per cent, based on a life of project cash cost of $794 an ounce, just above the all-in cost base for Shanta's main asset, New Luika. Chief executive Eric Zurrin said funding for Singida will be completed "at the asset level and not through Shanta Gold shareholders". We remain buyers.
KEY STORIES:
Stagecoach (SGC) reported a 32 per cent fall in revenue to £1.23bn during the six months to October and fell into a £22.6m pre-tax loss, compared to a £96.7m profit last year. A £84.5m non-cash impairment of North American goodwill was taken “to reflect a revised view on long-term profitability” in the US. The transport company is now considering selling some or all of its US bus business. Management said the UK bus division benefitted from the sunny weather over the summer, with like-for-like revenue per vehicle mile up 4.4 per cent. Chief executive Martin Griffiths said the group is “well positioned” in UK rail as it is currently bidding for three new rail contracts. Shares were up 7 per cent in early trading.
Faroe Petroleum (FPM) has entered into a binding, cashless agreement with Norwegian supermajor Equinor, to swap its interests in the Njord, Hyme and Bauge development assets, in exchange for a series of producing assets on the Norwegian Continental Shelf. Faroe said the acquired assets would boost production by 7-8,000boepd next year, and help the group achieve a better balance between production and exploration.
Patisserie Holdings (CAKE) has appointed Nick Perrin as interim chief financial officer, after its previous CFO Chris Marsh resigned over accusations of accounting irregularities that prompted an investigation by the Serious Fraud Office. Mr Perrin was previously finance director at veterinary service provider CVS Group (CVS). Shares have been suspended at 429.5p since October.
OTHER COMPANY NEWS:
Stock Spirits (STCK) shares have had a pretty poor run this year, but held up on the release of preliminary results this morning. Annual revenues climbed 9 per cent higher on a 3 per cent volume increase, leading to an 8 per cent improvement in cash profits. The group has seen continued good growth in Poland, driven mainly by its premium brands, while simultaneously keeping a tight grip on costs. Analysts at Numis were so impressed, they put through forecast upgrades, and now expect sales growth of 4 per cent this year (versus 2 per cent previously) with adjusted EPS rising 5 per cent (previously 2 per cent).
Following its acquisition of an equity stake in the Magnus field, EnQuest (ENQ) expects average daily production to grow by 20 per cent to between 63,000 and 70,000 barrels of oil-equivalent (boepd) in 2019, up from the 54-56,000boepd expected this year. Gross output from Kraken, which encountered difficulties when it first came online, is expected to range between 30-35,000boepd.
Petropavlovsk (POG) has produced its first refractory ore from its long-awaited POX Hub project, one month ahead of schedule. Dr Pavel Maslovskiy, who was brought back to head the company and oversee the POX project, said recoveries of 93 per cent were "testament to the many years of hard work, research and partnerships", though the plant's projected design recovery is 98 per cent.
Hargreaves Services (HSP) will report results in line with expectations for the six months to November, the group announced this morning. Sales and adjusted operating profits are expected to have grown, though the industrial services group will record an exceptional charge of £8m for the insolvency of Wolf Minerals and a £4m gain on disposal from the sale of Brockwell Energy.
Midwich (MIDW) has announced the acquisition of video, broadcast and photography distributor Blonde Robot. The deal expands the audio-visual group’s services across Australia, New Zealand, Malaysia, Singapore and Thailand, and follows on from its acquisition of German distributor New Media in August 2018.
