Shares in the blue chip FTSE100 are flat while their mid-sized counterparts are in positive territory as another week of relative uncertainty heads towards a close. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
IC TIP UPDATES:
Smiths Group (SMIN) confirmed that the demerger of Smiths Medical is progressing well as it revealed a 13 per cent rise in adjusted pre-tax profits on the back of favourable currency translations and the impact of acquisitions. The board has proposed a final dividend of 31.8p, taking the full-year pay-out to 45.9p, against 44.55p in the previous financial year. Buy.
Shares in Statpro (SOG) jumped more than 50 per cent this morning following a 230p-a-share offer from US software group Confluence. The cloud analytic’s group’s chairman, Rory Curran, said the combined entity would offer “a more comprehensive range of support services and analytics on one platform”. Await documents.
KEY STORIES:
The Royal Bank of Scotland (RBS) has found a replacement for chief executive Ross McEwan. Alison Rose, currently deputy CEO of Natwest and head of RBS’ commercial and private banking division, will take over the top role on 1 November 2019 – having fended off external and internal competition. “I am confident that we have appointed the best person for the job,” said chairman Howard Davies, who also thanked Mr McEwan for returning the state-backed lender to profitability.
Shares in Thomas Cook (TCG) fell more than 20 per cent in early trading after the struggling travel company confirmed speculation that it requested £200m for a “seasonal standby facility” on top of the previously announced £900m. The recapitalisation is expected to result in existing shareholders' interests being significantly diluted, with significant risk of no recovery. It’s still in discussions with a range of stakeholders, including its largest shareholder Fosun Tourism Group, to agree to the terms of its recapitalisation and reorganisation of the company.
Hurricane Energy (HUR) revealed maiden revenues within its interim figures through to June. The top-line return was linked to a single cargo of crude oil sold through the period, which fed through to an operating profit of $1.2m against a loss of $4.7m last time around. Hold.
OTHER COMPANY NEWS:
An update from Keller (KLR) indicates trading momentum in the group’s largest market, North America, has started more slowly than expected in the second half of the year, and will have an increased weighting towards the fourth quarter. Performance in ‘EMEA’ has been described as “mixed”, with progress in key continental European businesses offset by challenging market conditions elsewhere. Chief executive Alain Michaelis will be stepping down on 30th September, with current chief financial officer (CFO) Michael Speakman assuming the role on an interim basis from 1st October. Shares are down 6 per cent in early trading.
Amerisur Resources (AMER) produced 1.2m barrels of oil equivalent (BOE) in 2019 to the end of July, with total proven reserves across its working interest in the Platanillo and CPO-5 assets estimated to be 15.04m BOE. Further drilling activity on CPO-5 is scheduled for the second half of the year, commencing with the 30-day Indico-2 appraisal well to increase production and reserves. An independent reserves report was produced as part of its ongoing formal sales process, in which multiple parties are said to be participating.
Two of SSE’s (SSE) offshore wind projects have been awarded contracts to produce low carbon power as part of the UK’s latest contract for difference (CfD) auction. Seagreen has secured a 15-year contract for 454 megawatts (MW) at a strike price of £41.61 per megawatt hour (MWh), representing 42 per cent of the total project capacity. Meanwhile, the Dogger Bank joint venture with Equinor has been awarded contracts totalling 3,600MW with a strike price range of £39.65/MWh to £41.61/MWh. RBC Capital Markets sees this as providing “significant avenues for further renewables growth”, but notes the prices are below market expectations which were nearer to £45-50/MWh.
Serco (SRP) has been selected as a preferred bidder to continue managing and operating ferry services for the Northern Isles in Scotland. The new contract is expected to start in the fourth quarter with a total estimated revenue value of approximately £450m over a six-year period. There is an option to extend the contract for a further two years, adding a further £160m.
Shares in Investec (INVP) are six per cent down this morning, after the financial services group said challenging market conditions would cause a drop in adjusted operating profits for the six months to September. As a result, adjusted earnings per share are expected to be 4 to 7 per cent down on the prior period, despite a rise in third-party assets under management and a low credit loss ratio.
Insolvency litigation financier Manolete Partners (MANO) has seen a 50 per cent rise in the number of cases completed in the financial year to date, underpinned by strong growth in the group’s pipeline of new cases. So far this financial year, the group has invested in 60 new cases, in line with last year on an absolute basis – though investors have not been provided with details on capital committed.
On the day of a global student-led strike to call for greater political action on climate change, Great Portland Estates (GPOR) has signed up to the Better Buildings Partnership, designed to deliver “net zero carbon real estate portfolios”. In so doing, Great Portland has vowed to disclose its progress towards net zero carbon emissions, publicly disclose the energy performance of its estate, and also develop a “comprehensive climate change resilience strategy”. By 2030 – by which point all new build developments are expected to be net zero sources of emissions – the group aims to reduce its portfolio’s energy intensity by 40 per cent and its carbon intensity by 69 per cent.
Shares in Applegreen (APGN) are up 4 per cent this morning following the release of the group’s half-year results. The roadside retailer reported a 70 per cent increase in revenues to €1.5bn (£1.32bn), due in large part to the integration of Welcome Break, which was acquired near the end of last year. Even discounting the impact of the acquisition, the group saw strong like-for-likes, sending cash profits up by 37 per cent to €26.5m.
