As the pound picked up slightly against the dollar, the FTSE 100 slipped 41 points in morning trade on New Year's Eve.
IC TIP UPDATES:
Regional REIT (RGL) has acquired a 43,676 square foot office asset in an Edinburgh business park for a total consideration of £10.3m. Currently let out to John Menzies (MNZS), the annual contracted rent of £880,000 provides a net initial yield of 8 per cent with 3.75 years until the lease expires. Stephen Inglis, chief executive of the trust’s manager, London & Scottish Property Investment Management, says that Brexit uncertainty has allowed the group to purchase an asset on a park “dominated by large institutional investors and a market that was simply not previously within our reach”. Buy.
OTHER COMPANY NEWS:
Eco Animal Health (EAH) has seen revenue fall by 4 per cent to £28.7m in the six months to 30 September, with sales in China plummeting by 53 per cent in the wake of African Swine Fever. Trade debtors have increased by £4.9m as the group continues to extend credit to Chinese customers to support sales. Amid trade war uncertainty and a more competitive domestic market, North American revenue dropped by more than a fifth to £3.7m. Lower US pork prices saw “meaningful” discounts offered to major pork producers to retain existing business squeezing overall gross margins by 6 percentage points to 43 per cent. The group has opted not to pay an interim dividend. Shares are down over 6 per cent this morning.
Petrofac (PFC) has secured $130m (£99m) worth of deals with Petroleum Development Oman (PDO). A new contract awarded under the 10-year framework signed in 2017 is for engineering, procurement and construction management services for the Mabrouk North East development project. The 34-month scheme involves developing 16 gas producing wells and exporting production to the Saih Rawl central processing plant. The group will also be providing further services for PDO’s Yibal Khuff project, with a 20-month contract to support the construction and commissioning of 9 additional wells.
