IC TIP UPDATES:
Castings (CGS) revenues lifted 7 per cent to £73m over its half-year with profits up 27 per cent to £7.3m, as the iron castings and machining business experienced strong customer demand in its foundry operation in its first quarter, followed by a softening in sales. Its machining outfit, CNC Speedwell, returned to profit (albeit £0.1m) despite an 8.1 per cent contraction in sales, as the company targets efficiency improvements here. Castings noted a decline in schedules from the commercial vehicle sector in Europe, which accounts for 70 per cent of group revenue. The company struck a cautious tone, observing risk linked to the general election and Brexit. “There are a number of potential risks and uncertainties which could have a material impact on the group's performance over the remaining six months of the financial year,” it said, which “could cause actual results to differ materially from expected and historical results”. Sell.
There’s to be a change at the top of yet another FTSE 100 constituent. Phoenix Group (PHNX) has today announced that chief executive Clive Bannister will step down from the life insurer after the publication of its preliminary results in March, and nine years at the business. He will be succeeded by former Friends Life group chief Andy Briggs, who will join the board and management team from 1 January. During Mr Bannister’s tenure, Phoenix’s assets under management have risen 263 per cent, and its shares have delivered a 179 per cent total return. The shares are down slightly this morning, though we remain buyers.
Russian gold miner Petropavlovsk (POG) has had a shake-up among its sub-10 per cent shareholders this week. Entities connected to the DE Shaw Group have sold down their holdings from 7.8 per cent to below 5 per cent and the renamed CABS Platform entity, which helped reinstate Pavel Maslovskiy as chief executive last year, has upped its holding from 4.55 per cent to 7.5 per cent. It is now called Everest Alliance. Earlier in the week, a Cayman Islands-registered fund called the Russian Prosperity Fund bought up 4.9 per cent of the company, and last month Vladislav Sviblov bought 4.6 per cent through Cyprus-registered Fortiana Holdings. With the new POX plant upping production and the gold price stable around $1,500 (£1,170) per ounce, Petropavlovsk is trading at its highest point since its share price collapsed in 2013. Buy.
Games Workshop (GAW) shares were up by around 15 per cent in morning trading after the retailer announced that revenue for the six months to December would be not less than £140m, up from £125m the same time the prior year, and pre-tax profit would be not less than £55m, compared with £40.8m. Buy.
KEY STORIES:
Having outperformed its fellow London-listed bank peers this year, it’s somewhat odd that the news around Standard Chartered (STAN) has been dominated by questions of remuneration. Today, in response to shareholder objections raised at its annual general meeting, the emerging markets-focused lender has agreed to cut the pension allowances of chief executive Bill Winters and chief financial officer Andy Halford from 20 to 10 per cent. In both cases, this amounts to a fixed salary pay-cut of 8 per cent, to which the executives have agreed.
OTHER COMPANY NEWS:
The oil and gas industry is dominated by projects with piecemeal ownership, with everyone from microcaps to the supermajors sharing the load with competitors. Like any working relationship, there can be communication problems. Solo Oil (Aim:SOLO) said on Friday morning its partner at the Ruvuma project Aminex (AEX) did not inform it of the details of a $40m (£31m) works programme before it was published this week. “The board of Solo was not made aware of, or consulted on, the inclusion of the "fast-track" items in the firm 2020 work programmes and budgets presented to the Tanzanian authorities and the associated expenditure requirements,” Solo said. This could put 25 per cent-owner Solo on the hook for $10m. Solo said it would “seek to further understand in short order the background to [Aminex’s] actions”.
Shares in Charles Taylor (CTR) are up over 10 per cent this morning after the group announced that US private equity firm Lovell Minnick has increased its takeover offer from 315p a share to 345p a share. The move comes after the insurance services provider received a rival bid at a higher price than the original deal announced in September. The new offer represents a 47 per cent premium to the closing price on the day before the original offer was made on 18 September, valuing the group at £285m. Charles Taylor’s board is recommending shareholders vote to approve the revised all-cash offer on 22 November, considering the terms “fair and reasonable”.
