Shares in London's main indices are up only marginally in early trading. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
Brewin Dolphin (BRW) confirmed press speculation that it was in talks with Investec (INVP) over the purchase of its wealth management business in Ireland. Discussions are ongoing and there can be no certainty that a deal will be agreed. Buy.
In the first three months of 2019, Atalaya Mining’s (ATYM) copper production inched up 8 per cent year-on-year, but decreased 9 per cent quarter-on-quarter, “as a result of slightly lower throughput and head grade”, in line with the company’s expectations. The Spanish miner has maintained its guidance for 45,000 to 46,500 tonnes of copper this year, and now believes its plant expansion at Riotinto will take its production to between 50,000 and 55,000 tonnes in 2020. Buy.
KEY STORIES:
Kier (KIE) has confirmed that Andrew Davies has been appointed as chief executive and that he will launch a strategic review and consider ways of further simplifying operations to create a more focused group, the allocation of capital resources and additional steps to improve cash generation and reduce leverage. The conclusion will be announced in July.
Shares in Energean Oil & Gas (ENOG) are up 11 per cent this morning, after the Eastern Mediterranean-focused group announced it had made “a significant gas discovery” at the Karish North exploration well. Preliminary analysis indicates that there is between one trillion and 1.5tn cubic feet of gas in place, compared with a pre-drill estimate of 1.3tncf.
XP Power (XPP) shares dropped as much as 5 per cent in morning trading following a first-quarter update that disclosed a 12 per cent decline in like-for-like revenues on last year’s comparable period. The semiconductor manufacturing equipment segment was chiefly responsible, with order intake and revenue down on Q12018. The board has declared a first-quarter dividend of 17p per share, up 6 per cent on the prior year.
Payments group Network International (NETW) has been admitted to trading on the London Stock Exchange. This follows its announcement on 10 April 2019 of the offer price for its IPO at 435p.
Carr’s Group (CARR) reported a 3 per cent rise in sales to £206m during the six months to March, but a 2.6 per cent decline in pre-tax profits to £10.3m. This performance was against a backdrop of “challenging market conditions” as warmer weather in the UK and US compared to the same time the year before impacted volumes of agricultural goods sold. The integration of Animax is “progressing well”, with progress in new product development. Shares fell around 4 per cent in early trading.
Shares in IWG (IWG) have rocketed up by a fifth this morning after the group announced it was divesting its Japanese operations to TKP Corporation, a Japanese conference room and banquet hall group. IWG will receive a gross consideration of £320m in the deal, which is expected to complete in May. The two groups have entered into a long-term master franchise agreement, which gives TKP exclusive rights to use the Regus, Spaces and OpenOffice brands in Japan, while IWG will provide ongoing services and support.
OTHER COMPANY NEWS:
Presumably confident that more than six years of environmental reviews will result in a favourable decision, Rio Tinto (RIO) has committed a further $302m to its Resolution copper project in Arizona, USA. The mining giant said the capital will fund “additional drilling, ore-body studies, infrastructure improvements and permitting activities” ahead of final regulatory assent.
A third quarter production report from Petra Diamonds (PDL) suggests the turnaround is not yet guaranteed. Production for the nine months to 31 March has increased by 4 per cent, and full-year output of 3.8-4 million carats has been maintained, though third quarter sales dropped 6 per cent and rough diamond prices are flat. As a result, net debt has barely moved, with the period-end figure of $553.1m excluding $46.4m “relating to diamond debtors”.
First quarter production for embattled Tanzania-based Acacia Mining (ACA) fell by 13 per cent year-on-year to 104,899 ounces of gold, following unanticipated production issues at the North Mara mine, and lower output at Buzwagi. Interim chief executive Petre Geleta said steps to revise the mining plan had been taken, and that full-year production guidance of 500,000 to 550,000 ounces was still realistic.
Trading has remained strong at Robert Walters (RWA), despite fears of a global economic slowdown. The recruiter recorded net fee income up by a tenth in the first quarter of the year, thanks in part to a surprisingly strong performance in the UK, despite Brexit-related uncertainty. Headcount was up 4 per cent in the first three months of the year, compared with 10 per cent for the whole of last year. However, management said the first quarter of the year was typically the strongest for hiring and they expect full-year growth to be broadly the same as last year.
