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News & Tips: LoopUp, Henry Boot, Ryanair & more

UK shares are on good form
January 18, 2019

Shares in London look set to end the week on a positive note with solid gains in early trading. Click here for The Trader Nicole Elliott's latest thoughts on the markets. 

IC TIP UPDATES:

LoopUp (LOOP), a provider of remote meetings software, has signed a material contract renewal with global law firm Clifford Chance. The minimum contract value is £2.34m, over a three-year term. Shares in LoopUp have fallen in recent months; but they were up 3 per cent this morning. Buy.

Henry Boot (BOOT) expects to meet full-year expectations despite a £1.5m pension provision. The Hallam Land division, which brings land through the planning process before selling to housebuilders, performed extremely well, while its own jointly owned builder Stonebridge Homes nearly doubled completions to 145. Buy.

KEY STORIES:

A profit warning from budget airline Ryanair (RYA) hasn’t overly damaged the share price this morning, despite being its second in four months. The group blamed intense competition for pushing fares lower this past winter, which means profits for the year ending 31 March will be €100m (£88m) lower than previous expectations, landing somewhere between €1bn and €1.1bn. Chief executive Michael O’Leary said he was “disappointed” to downgrade guidance, but  said over-supply in the short haul European market could lead to further price cuts.

Shares in Sophos (SOPH) plunged more than a fifth this morning, after the cyber-security group said constant-currency billings rose 2 per cent over its third-quarter and year-to-date to December - a “subdued performance” against a “challenging prior-year comparable”. Year-to-date revenues rose 14 per cent at constant currencies and on a reported basis, and year-to-date reported operating profits came in at $51m, from losses of $25m. But adjusted cash profits fell 8 per cent. Sophos now expects the third-quarter trends to “generally continue” into the fourth, meaning a “modest decline” in full-year constant-currency billings. Within November’s interim results, it had anticipated “a modest improvement in constant currency billings growth” in the second half of FY2019 against the first half.

Safety equipment manufacturer Halma (HLMA) announced the acquisition of Business Marketers Group Inc., trading as Rath Communications, which provides emergency communication systems for ‘Areas of Refuge’ in the USA. Wisconsin-based Rath, which was acquired for $42.4m (£32.8m) on a cash and debt free basis, will enter Halma’s Infrastructure Safety division. The move represents a significant rise on Halma’s recent expenditure on acquisitions - it only spent an aggregate £3m on three acquisitions over the previous half. Shares were unmoved by the announcement.

OTHER COMPANY NEWS:

A trading statement from Bakkavor (BAKK) failed to move the food company’s share price this morning. Group revenue rose by 2.2 per cent during the year ended 29 December 2018, and by 3.2 per cent on a like-for-like basis. Although bosses admit consumer confidence has continued to be weak in the UK, revenue on a like-for-like basis increased by 1.8 per cent over the same period. As such expectations for the full year are unchanged.

A year-end trading update from Eddie Stobart Logistics (ESL) has revealed that group revenues have grown by 35 per cent to £843m, ahead of market expectations. It reflects a slew of new contract wins, growth within the existing customer base and across subsidiary companies too. Margins are also said to have staged a second-half comeback, following higher costs in the first half relating to the implementation of new contracts.