IC TIP UPDATES:
Debenhams (DEB) shares were back in ascendence this morning after its largest shareholder Sports Direct (SPD) addressed press speculation that it has offered to underwrite a £150m equity issuance by the struggling department store chain. The offer is still conditional on Mike Ashley being appointed Debenhams’ new chief executive and on the company’s lenders writing off £148m-worth of debt. In Sports Direct’s view, the equity issuance would “form part of a comprehensive refinancing” of the company. The sports chain is still deliberating a potential takeover offer for Debenhams – first mooted at the end of March – although it has until 22 April to make a firm offer for the company. We remain sellers of Debenhams.
Impax Asset Management (IPX) gained £529m in new inflows during the first three months of the year, which together with £1.17bn in market and currency-related movements, took assets under management up 15 per cent to £13.3bn. Shares were up 2 per cent in early trading. Buy.
In a trading update this morning, Castleton Technology (CTP) said results for the year to March 2019 are anticipated to be in line with expectations – with revenues of not less than £26.3m, and adjusted cash profits of no less than £6.3m, “representing continued good organic growth”. Operating cash conversion is expected to be not less than 95 per cent of adjusted cash profits, helping to reduce net debt year-on-year. Buy.
A new study by opioid addiction specialist Indivior (INDV) has revealed that patients who were treated with higher doses of the group’s product Sublocade were more likely to abstain from drug use for longer than those on the lower dose. The latest guidance from the company points to potential sales of Sublocade – a once-monthly injection that provides a sustained level of buprenorphine, Suboxone's active ingredient, in the bloodstream throughout the month – to be between $50m and $70m this year. We remain sellers.
Keywords Studios’ (KWS) revenues rose 66 per cent to €251m during 2018, and were up 10.1 per cent on a like-for-like basis, or 14.9 per cent “without the expected drag in the year from the VMC acquisition”. VMC has now been integrated across four service lines and five studio locations ahead of schedule. Like-for-like growth was also impacted by the ‘Fortnite effect’ – denoting the disruption caused to other games supported by Keywords by the success of the ‘Fortnite’ game. Still, six out of the group’s seven service lines enjoyed a strong underlying performance. Localisation testing was the exception; some projects expected at the end of last year were delayed into 2019. Overall, the first quarter of the current year was in line with bosses’ expectations. Recommendation under review.
KEY STORIES:
Kurdistan-focused oil producer Genel Energy (GENL) has appointed chief operating officer Bill Higgs as its chief executive, succeeding Murat Özgül. The latter will remain with the company as an adviser until early 2020, with a particular focus on progressing plans to develop the Bina Bawi gas field. Mr Higgs, alongside chief financial officer Esa Ikaheimonen, has been appointed to the Genel board.
OTHER COMPANY NEWS:
Aerospace and defence technology specialist Cobham (COB) has announced that non-executive director Alison Wood will step down from the board towards the end of 2019, after it was disclosed that she will join the Cairns Energy board as a non-executive director in July 2019.
Gordon Dadds (GOR) has acquired Rampart Corporate Advisors Limited (‘Ramparts’), a Gibraltar-based legal services business which specialises in matters relating to e-gaming, financial services and financial technology, distributed ledger technology and crypto-currency. Gordon Dadds is spending up to £1.34m in performance-related consideration, payable quarterly over three years. The shares were down by around 1.5 per cent this morning.
Taptica’s (TAP) board intends to change the name of the company to ‘Tremor International Ltd.’ – to “better reflect” its “ongoing strategic and operational focus following the transformational merger with RhythmOne”. The group says its name change will allow it to “leverage the existing positive brand value” tied to its Tremor Video business, particularly in the US. A special resolution to approve the change will be proposed at the AGM – scheduled for 13 June 2019. The shares were up 2 per cent this morning.
Shares in SDX Energy (SDX) are off 8 per cent this morning, after the North African explorer-producer told the market that gas production at South Disouq could face delay. Initially, the group had hoped to start producing by mid-year 2019, but investors have now been told this was contingent on an agreement to lease an early production facility. This has not yet been signed, ad so the start-up date for gas production has been pushed back to the fourth quarter, a development which SDX president and chief executive Paul Welch described as “disappointing”.
Eastern Mediterranean-focused explorer-producer Energean Oil & Gas (ENOG) has started to produce oil from its Epsilon field, at a rate of 1,000 barrels per day.
