IC TIP UPDATES:
Kainos’s (KNOS) revenues rose 56 per cent to £151m over the year to March 2019, buoyed by a 69 per cent improvement in digital services sales to £133m. In turn, this momentum was underpinned by growth within both digital transformation and Workday implementation. Elsewhere, revenues for digital platforms edged up by 3 per cent. An increase in sales for the ‘Smart’ platform here was tempered by a decline in ‘Evolve Electronic Medical Record’ (EMR) revenues, amidst ongoing funding constraints within the NHS. Overall, pre-tax profits climbed 48 per cent to £21m. The shares were up by around 5 per cent this morning. Buy.
Renold (RNO) shares rose 9 per cent in morning trading following a near-threefold rise in statutory operating profits for the precision engineering products group’s full year to March 2019. Renold, which is set to move to the Alternative Investment Market (Aim) in June, revealed strong performance in its chain division, which posted underlying revenue growth of 7.5 per cent. The group has managed to grow margins in spite of labour cost inflation and the relocation of its Chinese chain manufacturing facility, “which will take time to ramp up to targeted output and productivity levels”, according to chief executive Robert Purcell. Buy.
Bunzl (BNZL) has announced the appointment of Peter Ventress as a non-executive director and chairman designate, succeeding current chairman, Philip Rogerson. Mr. Ventress, presently the chairman of Galliford Try (GFRD), is due to join the company on 1 June, assuming the role of chairman following the group’s AGM in April 2020. Shares were flat in early trading. Buy.
KEY STORIES:
On Friday afternoon, Old Mutual (OMU) revealed more details about the “material breakdown in trust and confidence” between board and chief executive Peter Moyo which had led to the latter’s firing. According to the pan-African financial services group, the two parties fell out over the handling of third party conflicts of interest which pre-dated Mr Moyo’s appointment as CEO, but were previously considered manageable. Old Mutual added that the decision to terminate Mr Moyo’s employment was “neither the result of performance or financial misconduct”, but purely related to the conflict of interest. However, current trading looks rather choppy, as a first quarter trading update made plain: negative “results from operations” in 2018 mean a three-year target to boost growth by two percentage appoints above GDP “will become increasingly challenging to achieve”.
OTHER COMPANY NEWS:
Airtel Africa has announced its intention to publish a registration document, and its potential intention to float on the London Stock Exchange. The company is a leading provider of telecoms and mobile money services across 14 countries in Africa; primarily in East, Central and West Africa. At the end of 2018, it was the second-largest mobile operator in Africa by number of active subscribers, according to research house Ovum. If Airtel Africa proceeds with its plans to IPO, the offer would comprise new shares issued by the company. Any net proceeds from the issue of new shares would be used to reduce net debt. It intends to have a free-float of at least 25 per cent upon admission. The company is also considering a listing of its shares on the Nigerian Stock Exchange.
M&G Investments is the latest shareholder to throw itself behind Provident Financial (PFG) and declare its intention to reject Non-Standard Finance’s (NSF) hostile takeover bid. M&G, which owns 1.7 per cent of Provident’s issued share capital, said it supported the sub-prime lender’s current strategy “and does not believe that a combination with NSF and subsequent break-up of the enlarged group will create value for Provident shareholders.
Guarantor loans lender Amigo Holdings (AMGO) smashed expectations for its final dividend in its first set of full-year results since listing. If approved, shareholders will receive a final pay-out of 7.45p per share on 31 July, bringing the full distribution in line with 50 per cent of statutory profit for the year to March. With the shares up three per cent in early trading, the higher dividend appears to have compensated for the below-forecast rise in the loan book, net debt which now sits at almost two times’ shareholder equity, and a reminder from chairman Stephan Wilcke that a bigger profile for Amigo’s product has “fuelled some urban myths about us and our customers”.
Half-year numbers for AFH Financial (AFHP) highlighted further expansion of the wealth management firm’s mini-empire of independent financial advisers. Revenue in the six months to April rose 61 per cent thanks to a raft of acquisitions in the period and towards the tail-end of FY2018, though the underlying Ebitda margin still held up, increasing to 21 per cent. Perhaps most impressive was the performance of AFH’s protection broking division, which management views as a diversified income stream, and boasted a 115 per cent rise in Ebitda year-on-year, to £2.8m.
National Grid (NG.), Drax (DRX) and Equinor (EQNR), have announced a new “zero-carbon UK partnership” exploring how a large-scale carbon capture, usage and storage network and hydrogen production facility could be constructed in the Humber region in the mid-2020s. A pilot project at the Drax power station in North Yorkshire already captures a tonne of carbon dioxide a day – scaled up it could become the world’s first “carbon-negative” power station, potentially capturing millions of tonnes of carbon each year from nearby industrial emitters. The project could also serve as a launch pad for wider decarbonisation in the UK as it targets a “net-zero carbon economy”.
SDX Energy (SDX) is now solely an AIM-listed company after pulling its TSX-V shares on Friday and moving them to London on Tuesday. The oil and gas company said Canadian domiciling made little sense with its projects in North Africa and most directors based in London. The move is expected to save at least $500,000 (£395,000) a year. The producer-explorer has had a tough 12 months, after failing to complete a purchase of BP assets in Egypt, and is trading at its lowest level since 2016.
Sports Direct (SPD) has disposed of five freehold units north of Mansfield for £120m. The group will take a 15-year lease of the property on completion of the deal, and plans to continue to use it as a distribution centre, offices and retail outlet. It will put the proceeds towards working capital and group operations.
