Shares in London are struggling to make much headway amid ongoing uncertainty over the global economy. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
Half year results from Bunzl (BNZL) indicate revenue increased by just 1.2 per cent at constant currencies to £4.53bn for the six months to 30 June, with a 0.8 per cent rise in adjusted pre-tax profit to £262m. In the group’s largest market, North America, sales went up by just 0.7 per cent to £2.6bn owing to slowing underlying organic revenue growth – this is set to deteriorate further due to lower sales to a large grocery customer. Meanwhile adjusted operating profit in the UK and Ireland fell by 10.3 per cent to £35.6m on the back of a 0.4 percentage point margin decline, adversely impacted by a business disposal last year and Brexit-related uncertainty. Shares are down over 2 per cent this morning. Under review.
Shares in Puretech Health (PRTC) are up 2 per cent this morning. The biotechnology group entered a collaboration agreement with Boehringer Ingelheim to explore the use of its targeting technology for immuno-oncology product candidates. The group recently expanded to new headquarters in Boston’s Seaport District, and is exploring a potential listing on Nasdaq. Buy.
KEY STORIES:
Renold (RNO) has concluded an investigation into an “intentional mis-reporting of financial information at a local level” in the precision engineering products group’s gears unit, which had overstated asset values and profits by around £1.8m and forced the postponement of Renold’s AGM last month. Renold’s subsequent investigation confirmed this overstatement, along with further errors which principally impacted full-year 2017 profits. The cumulative effect of these misstatements resulted in net assets at 31 March 2019 being overstated by £2.5m, and adjusted operating profit in the year to 31 March 2019 being overstated by £1m.
Shareholder advisor Pirc has recommended investors oppose the re-election of Mike Ashley as chief executive of Sports Direct (SPD), along with its chairman and several other directors. Pirc said “shareholders of the company are faced with [declining] profitability, loss of value for their shares, no dividend [distribution] and a further potential loss when the tax evasion case conclude[s]”.
Oil and gas producer Jadestone Energy (JSE) has swung into profit, its earnings climbing on increased production. The company operates assets in Australia and Vietnam. Its before tax profit for the first half of 2019 was $45m (£37m), compared to a $19m loss a year ago. Jadestone chief executive Paul Blakeley floated a dividend, saying forecasts for organic cash flow for the year would likely be hit, and a return for investors could come in the future after “re-investment plans” are paid for. The company was down 2 per cent on the news to 54.5p.
OTHER COMPANY NEWS:
Diversified Gas and Oil (DGOC) has yet again added to its holdings in the Appalachian basin in the US. The unconventional hydrocarbon producer paid $7.5m (£6.1m) for 1,700 miles of pipelines and other midstream assets. The infrastructure already transports around 65,000 million British thermal units (mmbtu) per day of DGO’s production in Pennsylvania and West Virginia. The company said the “small” acquisition would help the company with routes to market and “improved pricing”.
The Daily Mail and General Trust (DMGT) has agreed the sale of Genscape, its energy information business, to Verisk (US: VRSK) – a leading data analytics provider – for $364m. Genscape will become part of Wood Mackenzie, a Verisk business. The sale is expected to complete in the coming weeks.
