A sharp 21 per cent contraction in Chinese exports has hammered sentiment this morning. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
It turns out Sports Direct (SPD) wants Debenhams (DEB) to appoint Mike Ashley to its board, and has called on the department store chain to call a general meeting of its shareholders. But that’s not all. Sports Direct - which holds a 30 per cent stake in Debenhams - is also seeking the removal of all other board members, with the exception of Rachel Osborne who was only appointed as a director in September 2018. It also wants Mr Ashley to receive an executive role and if granted, he would step down from current management duties at Sports Direct. Debenhams said it was “disappointed” in Sports Direct’s course of action. But before anything is confirmed, we remain sellers.
Pharma giant GlaxoSmithKline (GSK) has announced positive results from two third phase trials, which were designed to test the efficacy of injectable HIV treatments. Overall, the results showed that a monthly, two-drug injection had similar effects to the currently prescribed regimen which sees HIV-1 patients take three pills daily. Patient preference data also showed nearly all participants favoured the new monthly injection over the oral treatment. We remain buyers.
In 2018, Polymetal International (POLY) expanded its proved and probable ore reserves by 15 per cent on a gold-equivalent basis, thanks to a two-fold increase in reserves at Nezhda, life-of-mine extension at Mayskoye and a certified discovery at Prognoz. Mineral resources – which groups measured, indicated and inferred ore – also grew 44 per cent, thanks to an 8 per cent bump in average resource grade, and a surge in silver ounces. We remain buyers, ahead of the publication of full-year results on Monday.
KEY STORIES:
The takeover saga at RPC (RPC) has taken another turn, as US packaging group Berry Global Group has had a £3.3bn offer for the group accepted by RPC’s board. Berry has offered 793p per share, above the bid of 782p per share tabled and accepted by RPC from private equity group Apollo Global Management in January. RPC has now proposed to adjourn a shareholder meeting that was scheduled to take place on 20 March in order to consider the Apollo offer. Shares were flat on the announcement.
Non-Standard Finance (NSF) have released their 2018 figures ahead of schedule, reporting loan book growth of more than a quarter and a 47 per cent jump in revenue. Pre-tax losses narrowed to £1.6m, while the annual dividend was raised 18 per cent to 2.6p a share.
Following a tough start to the year, building products distributor SIG (SHI) has bounced back as its turnaround plan has begun to take effect. Sales were down 1.2 per cent in the year thanks to tough market conditions - a slight recovery from the four per cent decline seen in the first half. However, the gross margin expanded 50 basis points to 26.7 per cent and adjusted pre-tax profits were up by a quarter. While impressive, these results are in line with management’s expectations. It’s a testament to how nervous investors were, then, that the shares jumped up nine per cent on the news.
Bodycote (BOY) shares rose 7 per cent in morning trading after full-year results from the specialist heat treatment engineer revealed margin improvement and a special dividend of 20p.Tight pricing discipline helped to offset labour cost inflation, particularly in Eastern Europe. The group has now paid a special dividend in four of the past five years.
OTHER COMPANY NEWS:
Computacenter (CCC) has announced the appointment of Peter Ryan as non-executive chairman. Subject to shareholder approval, he will become chairman after the AGM on 16 May 2019, when Greg Lock will retire from his role. Mr Ryan joined the board in February last year as an independent non-executive director. He has had a 37-year career in technology – spanning software, services, systems integration, outsourcing and infrastructure. In the past 11 years, he has held roles including chief sales officer with Hewlett Packard Enterprise, chief client officer at Logica and executive vice president, global sales and services with Sun Microsystems.
Diversified Gas & Oil (DGOC) has signed a 15-year agreement with Pennsylvania to manage its decommissioning programme for the 23,000 wells it operates in the stated. The deal, which follows similar arrangements in Ohio, Kentucky and West Virginia, covers almost 40 per cent of DGO’s portfolio, and requires the group to plug at least 20 wells a year and either plug or return to production a further 30. Within the next month, DGO will need to post a $7m bond, refundable on completion of the agreement’s terms.
Serco (SRP) has signed a $200m (£153m) contract to provide field office support to the US Pension Guaranty Corporation. The contract has a one-year base period with four option years and a total potential value of $200m if all option years are exercised. The first task order has been issued with a five-year value up to $112m. The contract is not hugely material to the group on its own, but is evidence of the group’s growing turnaround momentum.
Clipper Logistics (CLG) announced that Stephen Robertson will become senior independent director. He’s been a non-executive director at Clipper since the logistics company went public in 2014, and is also currently chairman of Retail Economics, and other non-executive directorships include Timpson Group and Hargreaves Lansdown.
Strix Group (KETL) shares were flat on the news that the kettle safety controls designer has acquired “specified assets” relating to clean water technology company HaloSource's HaloPure division and its Astrea product, for total consideration of $1.3m (£1m).
