Last checked at LONDON (Alliance News) - The following stocks are amongst the biggest risers and fallers within the main London indices midday Monday.
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FTSE 100 WINNERS
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Diageo, up 6.8%. Shares in the company have risen sharply after reports in the press late Friday suggested that Brazil's richest man, Jorge Paulo Lemann, is weighing up a takeover bid for the drinks company. The Times, The Telegraph and Bloomberg all cited a report from columnist Lauro Jardim of Brazilian publication Veja that Lemann, who founded private equity firm 3G Capital, is in the early stages of preparing a potential offer for Diageo.
BT Group, up 1%. The company is set to become a takeover target for Germany's Deutsche Telekom AG according to senior industry executives and city analysts, the Telegraph reported Sunday. Deutsche Telekom is reportedly in talks to merge its American arm, T-Mobile US, with satellite pay TV operator Dish Networks. If a deal is struck, the sources claim, the likelihood of a potential takeover of BT will rise as this could be a route for Deustsche Telekom to exit the American market. It could then look to redeploy funds in Europe.
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FTSE 100 LOSERS
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Shire, down 2%. Shares in the pharmaceutical company have moved lower after The Sunday Times reported that it is understood to be preparing a GBP12 billion offer for Swiss peer Actelion. However, Shire could have a battle on its hands, The Times said, as Actelion is understood to have rebuffed an informal approach a few weeks ago. Shire may have to offer a sizeable premium.
Wm Morrison Supermarkets, down 1.6%. The supermarket chain has announced price reductions to a further 200 'everyday' items, as it continues with plans to slash prices in response to changing UK shopping habits and the challenge presented by discount grocers amidst a price war with its competitors in the supermarket sector. The grocer said it will cut prices of items such as bread, milk and butter by up to a third, the first set of price cuts made under the instruction of new Chief Executive David Potts.
Johnson Matthey, down 1.4%. Numis has lowered its price target on the speciality chemicals and metals company to 3,670 pence from 3,780p. Still, the brokerage has retained its Add recommendation on the stock saying that there is a buying opportunity for medium-term funds. Shares in the company are currently quoted at 3,266.00p.
GKN, down 1.1%. Airbus is considering throwing open GKN’s multimillion pound contract to supply parts for the A320 aircraft in a row over cost-cuts, The Sunday Times reported without saying where it got the information. The European aerospace giant is believed to be considering inviting other suppliers to pitch for GKN’s work on the short-haul workhorse as it attempts to transform the meagre profit margins it makes on planes by demanding cost-cuts from suppliers, The Times said. Last year Airbus earned margins of about 6% on commercial aircraft, compared with more than 12% in GKN’s aerospace division. Airbus wants GKN to cut costs by at least 10% but is believed to have run into opposition from the car and plane parts company, which employs thousands on Airbus work in Britain, the newspaper added.
Anglo American, down 1.4%, Rio Tinto, down 1.3%, and BHP Billiton, down 1.3%. Shares in the mining companies have fallen after Exane BNP Paribas revised its price targets on each of them. Exane has lowered its price target on Anglo American to 880 pence from 900p, it has cut its price target on Rio Tinto to 3,000p from 3,250p, and has reduced its price target on BHP to 1,050p from 1166p. Exane has also downgraded Rio Tinto to Neutral from Outperform, rating Anglo American and BHP at Underperform. Shares in Anglo American are currently quoted at 1,001.00p, while Rio Tinto's are quoted at 2,814.50p and BHP's at 1,310.10p.
EasyJet, down 0.8%. JP Morgan has cut its price target on the low cost airline company to 1,900 pence from 2,050p. EasyJet's shares are currently quoted at 1,576.25p.
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FTSE 250 WINNERS
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Entertainment One, up 3.3% at 338.80 pence. The company's shares are among the biggest risers in the mid-cap index after JP Morgan increased its price target on the company to 382 pence from 375p. JP Morgan has an Overweight rating on the company.
William Hill, up 2.2%. Shares in the bookmaker have risen after Citigroup increased its price target on the company to 500 pence from 425p. Citigroup has a Buy recommendation on the stock. Shares in William Hill are currently quoted at 431.30p.
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FTSE 250 LOSERS
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Foxtons Group, down 4.5%. London law firm Leigh Day is attempting to launch a class action against Foxtons on behalf of private landlords, alleging the estate agent group has been overcharging landlords when it let or managed their properties, The Guardian reported Sunday. The law firm, which is taking the case on a no-win-no-fee basis, is attempting to sign up landlords to its claim, according to the newspaper. Shares in the London-focused estate agency have now fallen everyday in June following a strong surge in the company's share price in the aftermath of the general election in May.
Tritax Big Box REIT, down 1.3% at 114.80 pence. The property investor said it intends to raise up to GBP125 million by placing shares at 113 pence each. It said its placing will make up the final tranche of its share issuance programme that's valid until July 7. There are still 86.1 million shares available for issue under the programme, and Tritax will combine that with its general authority to issue shares for a cash on a non-pre-emptive basis to hit its placing target. The placing size could be raised to about GBP148 million if demand exceeds the initial target. The placing price reflects a 2.8% discount to Friday's closing price of 116.25 pence a share. Separately, Tritax said it has signed contracts to provide forward funding for the development of a new distribution warehouse facility that has been fully pre-let to homewares retailer Dunelm Group.
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AIM ALL-SHARE WINNERS
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Armadale Capital's shares have more than doubled after it said it has signed a heads of terms agreement with the African Mining Contracting Services group to fund, develop, construct and operate the Mpokoto gold project in the Democratic Republic of Congo. The agreement, which is subject to a final definitive deal between the two companies, will lead to Africa Mining introducing investors to provide at minimum of USD20 million of debt financing to develop the project into production in the first-half of 2016 as a pre-condition. "This is the final big hurdle in terms of developing Mpokoto project," Executive Director Justin Lewis told Alliance News.
Range Resources, up 74% at 0.93 pence. Shares in the company have rocketed after the company resumed trading on AIM Monday after it received the first tranche of funds from the financing deal agreed with Beijing Sibo Management LP on Friday. Range received the first tranche of funding, totalling GBP5.2 million, resulting in Range issuing 650 million new shares to Beijing Sibo at the subscription price of GBP0.008 per share, which represents a premium of approximately 48% to the last traded share price of the company prior to the suspension of shares from trading on AIM on December 11, 2014. Beijing Sibo holds an 11.5% stake in Range following the transaction.
Trap Oil Group, up 56%. The company said that operations have started on the Niobe exploration prospect in the UK North Sea, providing some positive news after the company said back in April it was at risk of becoming insolvent. A well will be drilled using the ENSCO 100 jack up rig, and well operations are currently anticipated to last approximately 31 days. The rig is currently being towed to the prospect after leaving a shipyard in Dundee, Scotland, last Thursday. Trap Oil holds a 28% interest in the Niobe prospect with partners Suncor Energy UK Ltd holding a 49.5% stake as the operator and Norwegian Energy Co UK Ltd holding a 22.5% interest.
Beowulf Mining, up 29%. Shares in the company have risen after it said it has produced "super high grade" concentrates from the Kallak North prospect in northern Sweden that will benefit from higher prices. The "super" high-grade magnetite concentrate has over 71% iron content and "very low" levels of deleterious elements such as silica, alumina, phosphorous and sulphur. Beowulf said the characteristics of the concentrate are important for "key" target markets in Europe and the Middle East. It will also be used in the chemical industry, with higher-quality iron units benefiting from manufacturing productivity and from environmental benefits, it said in a statement. Beowulf said the test results support the case for the company to make a "Kallak super concentrate" which will achieve a "significant price premium" over benchmark iron ore prices.
Minera IRL, up 25%. The Peruvian mining company said it has agreed a USD70 million secured finance facility, in what is expected to be the first step toward securing a USD240 million senior project credit finance facility. It said the USD70 million deal is from the state-owned development and promotion bank, Corporación Financiera de Desarrollo SA, and was syndicated through Goldman Sachs Bank US. The bridge loan is expected to be the first step towards a senior project credit finance facility of up to USD240 million from the state-owned bank to build the company's Ollachea gold project in the Puno region in southern Peru. The USD240 million facility has been agreed under a mandate letter.
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AIM ALL-SHARE LOSERS
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Renewable Energy Holdings, off 23%. The investment company said its pretax loss was flat in 2014 and said its financial position is "dependent" on its application for planning permission for its Welsh wind farm being approved. The company, which does not currently generate any revenue, reported a pretax loss of GBP1.4 million in 2014, as administrative expenses fell to GBP458,000 from GBP695,000, partially offset by finance costs rising to GBP889,000 from GBP677,000.
Cyan Holdings, down 21%. The company said it has raised GBP4.1 million through a placing and subscription of 2.06 billion shares at 0.20 pence each, money it will use to fund staffing costs for projects it has won in India and for further product development work. The fundraising needs to be approved by shareholders at a meeting that will be held on June 30. Once the new shares are admitted to trading, Cyan will have 6.54 billion shares in issue. Shares in the company are currently quoted at 0.2058 pence.
Grafenia, down 14%. The printing services company reported a pretax profit for the year ending March 31 of GBP0.86 million, up 13.2% from the GBP0.76 million it made the prior year, despite revenue falling 13% to GBP17.0 million from GBP19.4 million. It said that while it expects sales to keep declining, it believes there is potential for its two new business lines Marqetspace and Nettl to improve performance.
Atlantic Coal, down 13%. The US-focused coal miner said its pretax loss widened in 2014 as revenue fell and its margin was squeezed, adding it was disappointed not to make a profit after it reached record levels of production at higher coal prices. The company reported a USD3.5 million pretax loss in 2014, widening from a USD1.5 million loss in 2013. Revenue totalled USD18.4 million with a cost of sales of USD18.0 million compared with revenue of USD19.7 million and cost of sales of USD16.0 million in 2013. It said gross margin narrowed to 2.23% in 2014 from 18.40% in 2013.
Sound Oil, down 13%. The company has completed further work on the second appraisal well at the Nervesa discovery in Italy, which has shown it is gas bearing but has low permeability and Sound is now deciding whether to initiate a well test directly or to utilize stimulation techniques. It has also entered into a farm-in agreement with the Moroccan Oil and Gas Investment Fund on the onshore Tendrara license to operate and acquire up to a 55% stake by funding exploration costs.
Enables IT Group, down 11%. The company reported a narrowed pretax loss for the first half of its financial year, but warned it is taking longer than expected to secure solid growth and whilst it has taken steps it hopes will lead to an improved performance it is "too early" to predict the outcome for the second half. It posted a pretax loss of GBP504,000 for the six months to end-March, narrowed from a pretax loss of GBP854,000 a year before, as a fall in revenue to GBP2.8 million from GBP3.6 million was offset by lower cost of sales, operating expenses and restructuring and redundancy costs.
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By James Kemp; jameskemp@alliancenews.com; @jamespkemp
Copyright 2015 Alliance News Limited. All Rights Reserved.
IN BRIEF: Armadale to raise GBP650,000 for Canyon silver project
Armadale Capital PLC - Africa-focused natural resource projects investor based in London - Agrees to a heads of terms to earn in over 50% in Africo American Inc, the holding company of the Canyon Silver lead, zinc and silver exploration asset based in northern Idaho, US. Announces a GBP650,000 share subscription to begin work on the silver project. Chief Executive Officer Matt Bull says: "The board believes that the Canyon Silver transaction creates a significant opportunity for Armadale in a safe and proven geographic, legislative and perhaps most of all a rich and proven geologic area of North America. Industries using silver, lead and zinc are well known and continuing to grow with exciting demand fundamentals. Concurrently, the silver, lead and zinc producing areas of North America have been in hibernation or shrinking since the early 1980's until now. Today they are turning to growth, with America's focus on local production and refining of these core strategic metals for energy and related technology. In addition, silver is invaluable in solar panels, certain batteries and electronic components and always as an alternative and complimentary money and store of value alongside gold."
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