London shares were mixed but largely flat in morning trading on Friday as a week full of intrigue both on the equity markets and in the wider political sphere looks set to end a little more quietly.
IC TIP UPDATES:
SolGold (SOLG) says the prospect of a regional vote on its massive Alpala project is now over. The company’s share price climbed 25 per cent in early trading after a court in Ecuador “unanimously and definitively rejected the petition heard on 5 June 2019” that could have seen its hopes of building a copper mine dashed through a ban on mining in four parishes in the region. SolGold’s junior partner in the project, Cornerstone Capital Resources, said the case was dismissed because those looking for a ban had failed on satisfying “constitutional requirements” to even have the case heard. Buy.
Sky News reported that Domino’s Pizza Group (DOM) is in advanced discussions to replace its current chief executive David Wild with Andrew Rennie, the current chief executive of Europe. The news sent shares up around 10 per cent yesterday afternoon. In March it was revealed that the company had succession plans underway for its three top board members. Domino’s has faced upheaval from its franchisees as they demand a greater share of profits, and the share price has declined by more than a fifth over the past 12 months. Shares were down 4 per cent in early trading this morning. Sell.
Shares in quantum dots group Nanoco (NANO) have plummeted by around 80 per cent this morning. In January, it announced a 12-month contract extension to its initial agreement with its anonymous US customer. The customer has now said the project won’t continue beyond the current contract (to December 2019), “for reasons wholly unconnected to the performance of [Nanoco’s] materials and [its] service delivery”. The customer’s decision doesn’t affect the current contract, and Nanoco still expects to deliver a cash breakeven position for the year to December. For the next financial year to July 2020, revenues and associated cash flows under contract currently sit at around £4m. Move to sell.
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Shares in IQE (IQE) plunged this morning after it warned that 2019 revenues are expected to land between £140m and £160m – below consensus estimates of £175m. It expects to remain profitable in 2019 but with an adjusted operating margin “significantly below” previous guidance of over 10 per cent. The group has seen a larger impact than the previously-guided risk relating to Chinese company Huawei, “due to the far-reaching impacts on other companies and supply chains that are now becoming evident” as a result of US trade restrictions. It said it is operating in an increasingly cautious marketplace, and has very recently seen a fall in forecasts from a number of chip customers, in its wireless and photonics businesses.
Transport booking website Trainline (TRN) went public this morning at an offer price of 350p, giving it an initial valuation of £1.7bn. The offer is made up of 32m newly issued shares to raise £110m in addition to 240m share sold by existing shareholders, bringing the total offer to £951m or 56.5 per cent of issued share capital. Trainline was bought by private equity firm KKR in 2015 for around £500m. Shares were up by as much as a quarter this morning to trade at a peak of 436p.
Sports Direct’s (SPD) spat with the directors of Goals Soccer Centres (GOAL) has led the former to announce it will vote against the reappointment of Goals’ entire board at the AGM later this month. The retailer has complained that Goals has not appointed independent advisers to examine its historical treatment of VAT, instead appointing a division of its existing auditors. Sports Direct requested the group appoint Kroll to carry out an independent report, and to make it available to all shareholders.
Singaporean media group Reliance Big Entertainment has sold 20,000,000 ordinary shares in Codemasters (CDM) for 220p a share. The secondary placing was announced late yesterday afternoon, with Liberum and Jefferies carrying out an accelerated bookbuild to institutional investors. The placing represents 14.3 per cent of Codemasters’ issued share capital, leaving Reliance with a 14.2 per cent stake in the group. Shares in the developer are down 11 per cent this morning in response.
OTHER COMPANY NEWS:
FairFX (FFX) has been granted permission by the FCA to provide credit facilities acting as a broker. This allows it to offer a wide range of loan products to business and retail customers. Having achieved this regulatory status and after significant investment in its digital banking platform last year and this year, FairFX expects to launch a "highly digitised" revolving credit product in partnership with iwoca, a specialist lender to small and medium sized enterprises (SMEs) in the coming months.
S4 Capital (SFOR) has announced that its global content wing MediaMonks has conditionally agreed a merger with BizTech - a leading marketing transformation and customer-experience company based in Melbourne, Australia. BizTech has revenues of around A$15m. The merger will be funded from S4 Capital's cash resources, payable in cash and shares on a 50/50 basis with lock-up restrictions.
Halma (HLMA) announced the acquisition of Australian and New Zealand fire safety and infrastructure supplier Ampac. The acquisition, which will be funded on a cash and debt free basis to the tune of A$135m will become part of Halma’s infrastructure safety division. The deal is expected to close no later than mid-August 2019, and Ampac’s management team will remain in place.
Meggitt (MGGT) has secured a “multi-million dollar” fixed price contract by a General Dynamics to support the development of cooling systems for military combat vehicles. General Dynamics Land Systems was awarded a contract to provide over 2,100 of such systems to the US government, in a deal worth over $250m.
PureCircle (PURE) announced that Rosemarie Andolino, currently an independent non-executive director, will become advisor to the chief executive in July. Ms Andolino will remain on the board as a non-executive director, as she will no longer be “independent” under the UK Corporate Governance Code.
