Shares in London are up marginally with the FTSE100 leading the way, but progress is muted at best. Click here for The Trader Nicole Elliott's latest thoughts on the markets.
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Liontrust Asset Management’s (LIO) acquisition of Neptune Investment Management completed at the start of this month, adding some £2.7bn of assets under management. But net organic new business wins remained steady in the three months to September, as net inflows came in at £642m – above the 18-month average. The performance of its funds also remains strong. On a three-year basis, Liontrust Income ranks second among its UK peers, with Liontrust Global Alpha first and Liontrust Global Dividend second. Buy.
In a somewhat scatter-gun announcement, office and industrial property-focused Regional REIT (RGL), has updated investors on “a number of successful regional lettings across its portfolio”, which when taken together are some 10.9 per cent ahead of their expected rental value. Stephen Inglis, chief executive of the asset manager which oversees the REIT, said the “quality and diversity of our customer base…remains a key differentiator” for the group’s investment case. Buy.
After a difficult FY2018, full-year results for building ventilation specialist Volution (FAN) show a return to form. A raft of new acquisitions, coupled with 3.5 per cent like-for-like growth at constant currencies, resulted in a 38 per cent rise in reported profits before tax, while the profit margin gradually improved throughout the 12 months to July. With hopes to lift profitability further, executives are now focused on “operational excellence” for the year ahead. We remain long-term buyers.
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Shares in GVC (GVC) were up more than 3 per cent in early trading after the gambling company increased its full-year cash profits guidance to £670m to £680m, from £650m to £670m previously. So far trading in UK retail betting shops has been ahead of initial guidance following the maximum stake cut on fixed-odds betting terminals from £100 to £2, with like-for-like net gaming revenue down 18 per cent. Online continued to trade well, with net gaming revenue up 12 per cent despite the comparative period including part of the Football World Cup. The US gambling market has been “encouraging” following the launch of the BetMGM mobile app in New Jersey.
Codemasters’ (CDM) sales were flat in the first half of the year, coming in at £39.8m. Digital sales accounted for an increased proportion of the total at 61.7 per cent, pushing the margin up 80 basis points to 89.3 per cent. This week the group will launch GRiD, which will also feature on the launch of Google’s Stadia streaming product. Broker Peel Hunt predicts this will lead to a “strong and exciting second half”. Buy.
Small cap oil and gas company Solo Oil (SOLO) has announced a €32.1m (£29m) takeover deal for a package of non-operated gas fields in the Dutch sector of the North Sea. This is a shift in focus from onshore and offshore oil and gas in Tanzania. The deal with ONE-Dyas will be funded by an €18m loan from trading company Mercuria and an equity raise of £20m, which is greater than its current market capitalisation of £15m. The transaction constitutes a reverse takeover and Solo’s shares have been suspended from AIM. Panmure Gordon analyst Colin Smith said the deal looked “attractive” but would rely on the ability of the operator to “convert 2C resource into producing reserves”.
In a first half trading update, Scapa (SCPA) said that statutory group trading profits are expected to come in around 17 per cent below last year, reflecting the loss of the adhesive specialist’s contract with ConvaTec (CTEC), which it is legally contesting. Overall reported revenues are up 14.3 per cent for the first half, however.
Vertu Motors (VTU) has posted a resilient performance in the six months to August 2019, with operating profits rising 9 per cent to £20.3m, on a 5.6 per cent increase in sales. Cash generation was up considerably in the period, reaching £14.6m from just £1.9m last year. This was driven by a decrease in capital expenditure. Shares are up 2 per cent this morning.
Redcentric’s (RCN) trading for the half-year to September was in line with management’s expectations. The group said in an update that it remains focused on its new and existing customers in both the public and private sectors. Its net debt was £16.5m, against £17.6m at the March year-end and £22.6m in September 2018 – notwithstanding £1.5m in dividend payments and an acceleration of network and infrastructure capital expenditure. The group started a share buyback, as announced in September.
Asset management consultancy Alpha FMC (AFM) said its half-year to September saw a rise in like-for-like numbers compared with the six months to March, while the integration of Axxsys – the business it acquired in June – is “largely complete and the business is performing to expectations”.
