Traders have reacted positively to news China has dropped import tariffs on some US goods with London's main indices trading positively mid-morning. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
Advanced Medical Solutions Group (AMS) shares tumbled 8 per cent in early trading as a slowdown in the woundcare specialist’s US LiquiBand range contributed to a fall in pre-tax profits. There was a 27 per cent decline in LiquiBand sales, which the company attributed to destocking, competitor activity and delayed product launches. Under review.
An increase in finance expenses wiped out profits at DP Eurasia (DPEU) during the first half. Operating profit was up 59 per cent to TRY 23.6m (£3.3m), but financial expense increased from TRY 16.8m to TRY 37.8m, leading to a pre-tax loss of TRY 10.5m. The increase in financial expense was due to interest rate increases in both Turkey and Russia, with 32.8 per cent of the group’s bank borrowings is denominated in Turkish Liras and 67.2 per cent is denominated in Roubles. Net debt increased due to the translation effect of the appreciation of the Russian Rouble against the Turkish Lira and capital expenditure. Shares were down 2 per cent in early trading. Sell.
KEY STORIES:
Hot on yesterday’s news that it was in discussions with Bovis Homes (BVS) over the sale of its house building operations, Galliford Try (GFRD) revealed an 18 per cent decline in pre-exceptional pre-tax profit for the year to June. Results for its construction business were hindered by contract write-downs and restructuring costs, reporting a pre-exceptional loss of £15m. Partnerships and regeneration put in a much stronger performance, with profits up almost half.
London Stock Exchange (LSE) shares were trading higher this morning after the bourse revealed that it had received a takeover offer from Hong Kong Exchanges and Clearing. The bid values LSE at £83.61 a share, based on an offer of 2,045p in cash and 2.495 newly issued HKEX shares. The board said it would consider the proposal and make a further announcement in due course and remained committed to its acquisition of Refinitiv.
It’s a crucial day for Sports Direct (SPD). The sportswear retailer is holding its AGM, and faces recommendations for shareholders to vote against the reappointment of chief executive Mike Ashley from shareholder advisers Glass Lewis and PIRC. Whats more, auditor Grant Thornton is not seeking reelection, and the company has yet to propose a replacement.
OTHER COMPANY NEWS:
Serco (SRP) has secured a two-year extension to its contract with the Australian department of home affairs providing onshore immigration detention facilities and detainee services. Originally scheduled to end later this year, the contract will now expire in December 2021, with scope to be lengthened by a further two years.
Mitie’s (MTO) chief financial officer, Paul Woolf, is to step down on 28 January 2020 to assume the same post at intellectual property management and technology group CPA Global. A successor has yet to be named. Shares are down over 1 per cent this morning.
Half year results from Charles Taylor (CTR) indicate a 15 per cent increase in revenue to £142m for the six months to 30 June whilst the statutory pre-tax loss has narrowed by 16 per cent to £2.1m. Claims services revenue has increased by a fifth to £87.3m with a significant increase from the ‘adjusting’ segment which provides expert assessment of complex claims. After a strategic review of the managing agency, a sale has been agreed, subject to regulatory approval. Shares are down 2 per cent this morning.
Chaarat Gold (CHG) has upped its borrowings after letting a $10m (£8.1m) loan mature last month without repayment. The company, which has a mine in Armenia and the Tulkubash gold project in Kyrgyzstan, has pushed back the due date for the $10m sum plus interest to March next year and added $7m. Executive chairman Martin Andersson has secured the updated loan through his company Labro, for a fee of $340,000. Chaarat is also looking for around $80m to fund construction of Tulkubash.
Inchcape (INCH) has made more disposals in Australia. The automotive distributor has agreed to sell three of its Australian retail sites to Sime Darby Motors for £63m. Inchcape has been working to streamline its Australian business recently, and these are merely the latest announced, with six total generating a cash inflow of £76m.
