Shares in London have enjoyed a positive week and are up again in morning trading. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
Oxford Metrics’ (OMG) Vicon business has agreed a strategic partnership with Sandbox VR targeting the location-based virtual reality (LBVR) market. Sandbox VR is a market leader in LBVR with seven active locations. Their latest experience – ‘Amber Sky 2088’ – will be enabled by Vicon Evoke, part of Vicon’s ‘Origin’ offering. Sandbox has initially bought five systems from Vicon. As it expands into new locations, there could be scope to extend the partnership. Shares in Oxford Metrics were up 3 per cent this morning. Buy.
Shares in SThree (STHR) have risen three per cent this morning on the back of a strong trading update. Gross profit was up eight per cent in the first quarter of the year, when compared to the same period in 2018. Headcount rose by five per cent. Chief executive Gary Elden will be leaving the group on 24th April, and will be replaced in his role by Mark Dorman from 18th March. The shares have some way to go to recover the ground lost since late last year, but this update is reassuring. Buy.
Steve Ingham, chief executive of Pagegroup (PAGE), has suffered a severe back injury in a skiing accident. Mr Ingham will be laid up for a few weeks, dring which time finance director Kelvin Stagg will take the reins. Buy.
KEY STORIES:
JD Wetherspoons (JDW) shares held firm after half-year results that revealed like-for-like sales growth of 6.3 per cent, comprised of increased growth across bar sales, food, fruit and slot machines and hotel rooms. Bar sales made up 61 per cent of total sales, followed by food with 36 per cent. Operating profits fell by 14.2 per cent to £63.5m - rising labour costs, repairs, utilities, interest and depreciation all contributed.
Fast-fashion e-tailer Boohoo (BOO) has a new chief executive. John Lyttle joins the board after eight years as chief operating officer of Primark - a division of Associated British Foods (ABF) and coincides with Mahmud Kamani and Carol Kane - previously joint chief executives - assuming the roles of executive chairman and co-founder and executive director, respectively. As previously announced, Peter Williams has stepped down from his role as non-executive chairman with immediate effect.
Restaurant Group (RTN) shares have jumped this morning, even though analysts’ fears over the group’s recent acquisition Wagamama could be well-founded. The stricken restaurant chain owner has held forecasts this morning, even though like-for-like sales fell 2 per cent in 2018 and operating margins contracted by 120 basis points. Including Wagamama’s, like-for-like sales rose strongly over the 12 weeks to 3 February, although sales across the Asian-fusion chain are slowing, according to analysts at Peel Hunt, with current forecasts leaving precious room for error.
QinetiQ’s (QQ.) North America division has won a seven-year, $164m (£124m) contract with the US Army to provide small ground robots. The CRS(I) robot is designed to be carried by backpack for dismounted forces. The contract will begin with a ‘low rate initial production phase’ taking place over the first one to two years, worth around $20m, followed by a series of annual production releases. Shares were unmoved by news of the contract win.
Eurocell (ECEL) shares were static following full-year results which revealed that the roof, window and PVC products manufacturer is now the largest supplier of rigid PVC profile in the UK. Adjusted cash profits fell 4 per cent, however, as a combination of strong sales growth and larger than expected mix changes led to volumes above Eurocell’s manufacturing capacity. This harmed the efficiency of the group’s manufacturing operations, leading to increased costs, and on customer service, thereby delaying Eurocell’s ability to offset the effects input cost inflation with price rises. Management claims that it has begun to take measures to address these issues, with more to follow over 2019.
Law firm DWF’s (DWF) entire issued ordinary share capital of 300m shares has today been admitted to the main market of the London Stock Exchange, further to its announcement of the offer price for its IPO on 11 March.
