London shares are up on improved Chinese economic data. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
Johnson Service Group (JSG) reassured investors this morning, announcing trading for the full year was likely to remain in line with expectations. While somewhat muted, the 3 per cent share price increase that accompanied the announcement goes some way to illustrating how much fear has surrounded the company’s prospects in recent months. The group also completed a £3.3m investment in its London Linen unit, and has signed a contract with a developer to build and lease a new laundry in the North of England, slated for early 2020. Buy.
Central Asia Metals (CAML) has refinanced its debt, consolidating its borrowings into one single facility. After repaying $36m since its acquisition of the Sasa mine, and extending its facility with off-take partner Traxys by $60m, the base metals miner has now paid off accrued interest and local bank working capital facility, and remove all cash sweeps from its loan terms. The company has also committed to amortise the $151m on its balance sheet on a straight-line basis over four years. Buy.
KEY STORIES:
Shares in Gear4Music (G4M) have collapsed close to 50 per cent this morning, after management warned capacity problems at its York distribution centre meant cash profits for 2019 were likely to be below last year’s £3.46m. This has led to swingeing cuts to forecasts, with analyst Peel Hunt now expecting pre-tax profit of £800,000 for the year, from £2.6m previously, and EPS of 3p, from 10.3p before. We move to hold.
OTHER COMPANY NEWS:
Despite urging investors not to sell their holdings in the open market, Faroe Petroleum (FPM) has seen a further 2.8 million shares snapped up by potential acquirer DNO. The latest dealings - ranging between 147p and 152p - bring DNO's total ownership to 30.6 per cent, before the 13.2 per cent of shares which have accepted DNO's all-cash offer. The encirclement is set to continue.
Cambria Automobiles (CAMB) is holding its AGM today, but ahead of the meeting has confirmed that trading during the three months to November 2018 remained in line with the board’s expectations and the prior year’s figures, both on a like-for-like and total basis. The introduction of the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) in September led to further turmoil for new car sales in the UK towards the end of last year, but Cambria said improved gross profit from this segment helped offset a disappointing top-line performance. Used cars continued to perform well.
