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News & Tips: Prudential, Sirius Real Estate, Stock Spirits & more

Markets are being hit by Middle East conflict fears
January 6, 2020

Shares across the board in London slammed into reverse at the open this morning as investors reacted to US aggression in the Middle East and fears of Iranian reprisals which have, in turn, sent oil and gold prices soaring. Click here for The Trader Nicole Elliott's latest thoughts on the markets. 

IC TIP UPDATES: 

Prudential (PRU) has partnered with Vietnamese lender SeABank to sign an exclusive 20-year partnership to provide life insurance to BRG, a Vietnam-based conglomerate with 10 million customers. The deal will come into effect in April 2020. Under review.

Sirius Real Estate (SRE) has acquired two business parks in the Brandenburg region and near Düsseldorf for a combined €33.4m, reflecting an aggregate EPRA net initial yield of 6.8 per cent. The former consists of 22,400 sq/m of net lettable space and is let to a single tenant, ESE GmbH, a European manufacturer of temporary storage systems for waste and recyclables. Meanwhile the Neus II site provides a total of 34,000 sq/m of net lettable space and is 81.5 per cent let to 16 tenants. Buy

Knights Group Holdings (KGH) has acquired commercial litigation law firm ERT Law Limited for a total of £1.8m. Half the consideration will be paid in cash alongside the issue of 262,899 new ordinary Knights shares worth £0.9m. The deal is expected to complete on 17 January. The acquisition extends Knights’ presence in Birmingham and adds a further 24 fee earners, bringing the group’s total to 633. ERT services a number of blue-chip and FTSE-listed companies and is expected to enhance group earnings in the first financial year post acquisition. Buy.

KEY STORIES: 

Stock Spirits (STCK) is having trouble with an activist investor. Western Gate, an investor representing the private family office of Portugese businessman Luis Amaral, has raised concerns over governance at the alcohol group. Western Gate proposed a resolution calling for a special dividend at the group’s upcoming AGM, but management responded in late December saying “even if the resolution is passed, it would have no legal effect”. Francisco Santos, director of Western Gate has called the reaction “a red flag for investors”. STCK has not yet issued a response.

OTHER COMPANY NEWS:

Tremor International (TRMR) has reached an agreement with News Corp to acquire Unruly – News Corp’s programmatic video marketplace. The deal will be satisfied through the issue of around 6.91 per cent of Tremor’s issued voting share capital to News Corp. News Corp will be subject to an 18-month lock-up period. Tremor has also entered a global partnership with News Corp, giving Tremor the right to sell outstream video on over 50 News Corp titles in the UK, US and Australia. Tremor has committed to an ad spend of £30m with News Corp, over three years. 

Avation (AVAP) has announced a strategic review in which it will consider its merger and acquisitions activity, evaluate its portfolio of 49 aircraft and potentially sell the company itself. Having commenced a formal sales process, the group is in preliminary discussions with one interested party concerning a potential takeover. Shares are up 8 per cent. 

Spreadbetting firm Plus500 (PLUS) expects full-year revenues to hit $354m following a “much improved second half”. Earnings before interest, tax, depreciation and amortisation are also expected to come in at $190m, less than half the figure booked in 2018.

Wealth management business Mattioli Woods (MTW) saw both revenue and adjusted pre-tax profits grow in the six months to November, as a restructure of the group’s operating business boosted margins. However, net inflows to the group’s investment services were down year on year, amid what chief executive Ian Mattioli described as “continued market and political uncertainty”.

Urban Logistics (SHED) has revealed that it is in advanced negotiations to acquire units worth an aggregate £146m and in preliminary talks for those worth an additional £150m. The group, which provides ‘last mile’ delivery space for third parties, is considering an equity fundraising, alongside debt finance to complete the purchase of that pipeline. 

The former deputy chair of the government’s independent review into HS2 has produced a ‘dissenting report’ which claims the cost of the rail project could spiral to as much as £107bn. Back in 2011 the project was given a price tag of £32bn (excluding rolling stock), with estimates rising to £88bn last year. Lord Tony Berkeley claims parliament has been “seriously misled” regarding the cost of the high-speed rail link and believes the project is the “wrong and expensive solution” to improving North-South intercity services. 

Compass (CPG) has announced that chairman Paul Walsh is to step down after six years with the group. Mr Walsh will remain in the post until a successor is appointed with senior independent director John Bason leading the search.