Shares in London are down again as rumbling geo-political concerns refuse to go away. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
In yet another blow to Kier (KIE), a report in The Times indicates that trade credit insurers Euler Hermes and Tokyo Marine HCC have withdrawn cover insuring the group’s suppliers from any potential losses. It is understood that other insurers are continuing to provide coverage. The move heightens the possibility suppliers will tighten contract terms, further increasing the group’s financial pressures. This comes amidst speculation the embattled contractor is seeking to offload its housebuilding division, reaching out to advisers regarding a prospective sale. Shares are down almost 20 per cent in early trading. With everything resting on the conclusions of the strategic review due on 30 July, we remain sellers.
A half-year trading update from SThree (STHR) indicates that group net fees have increased by 9 per cent year-on-year to £163m driven by 13 per cent growth in Continental Europe and the USA. However, in the UK and Ireland net fees have fallen by 9 per cent to £23.8m with a stronger decline in the second quarter. Whilst contract net fees rose by 12 per cent, permanent net fees have dipped slightly by 1 per cent. The group now generates 86 per cent of net fees from outside of the UK and Ireland (up from 82 per cent). Shares were up over 3 per cent this morning. Buy.
RM (RM) has acquired SoNET – a provider of software-as-a-service (SaaS) platforms to the education and government sectors – for £7.3m. SoNET’s e-testing software enhances RM’s existing e-marking capability, and should open new market opportunities within the RM Results business. The business generated revenues of £3m for the year to April 2019, and brings RM new customers in the Asia-Pacific and Europe regions. Buy.
Scisys (SSY) has received a £78.9m takeover offer from CGI – an IT and business consulting services firm based in Canada. Under the terms of the acquisition, Scisys’s shareholders will be entitled to receive 254.15p in cash – representing a 24.6 per cent premium to the group’s closing price yesterday. Scisys’s board is unanimously recommending the deal. Simon Thompson will publish an update on this news today.
Wizz Air (WIZZ) called itself the “greenest airline in Europe” as it operates at the lowest CO2 emissions per passenger of any of its competitors. The airline will include emissions figures in its monthly statistics in an effort to improve transparency. Shares were flat in early trading. Buy.
KEY STORIES:
ReAssure confirmed its intention to float on London’s main market, as part of a spin out from insurer Swiss Re. It is hoped the IPO, expected to take place in July, will increase the close-book consolidator’s flexibility and appetite for growth as it will no longer be subject to Swiss Re specific constraints.
OTHER COMPANY NEWS:
SSE (SSE) has announced that its last coal-fired power station, Fiddler’s Ferry, will close by the end of March 2020. With the UK committing to ending unabated coal-fired electricity generation by 2025, the economics of coal-fired stations have become increasingly challenged – the almost 50-year old station is unable to compete with more efficient and modern gas and renewable plants. Producing losses of around £40m in FY2019, further losses are projected in future years. The group also announced that its Peterhead gas-fired power station failed to secure a conditional market agreement for October 2019 to September 2020 (although it holds a capacity agreement for 2021-2022).
Fintech investment group Augmentum Fintech (AUGM) has confirmed it is raising £30m in an equity placing at 112p a share, a 0.9 per cent discount to yesterday’s closing price, and a 2.2 per cent premium to the group’s audited net asset value of 110p per share, at the end of March. The group said it could increase the offering to up to £50m, all of which will be put towards the £450m-worth of investment opportunities the group has currently identified.
Glen Crawford has resigned as chief executive of guarantor loans group Amigo Holdings (AMGO) with “immediate effect” owing to previously disclosed ill-health. He will continue to advise Hamish Paton, his designated replacement, though the group now counts only Nayan Kisnadwala as executive director.
Ahead of the palm oil producer’s annual general meeting, MP Evans (MPE) stated that it has produced 5 per cent more fresh fruit bunches during the first five months of its financial year at 238,600 tonnes. Some of the company’s plantations saw volumes fall, but this was in smaller cooperatives and those that saw exceptional growth following rainy weather patterns. The group produced 78,800 tonnes of crude palm oil, compare to 77,500 over the same period last year. Shares fell nearly 1 per cent in early trading.
Walker Greenbank (WGB) called market conditions in the UK “continue to be challenging”, but said sales have improved since the beginning of the financial year. Brand sales internationally, excluding the US, are ahead on a like-for-like basis at constant currency. Meanwhile the US experienced a slight decline owing to the deterioration in Clarke & Clarke's US sales. Shares were up nearly 2 per cent in early trading.
Taptica’s (TAP) shares were marked up on the news that it has approved a further share buy-back programme for an aggregate price of up to $10m. The group said this programme forms part of its broader strategy to deliver shareholder value. It started today and will continue until 31 August 2019.
