LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Wednesday.
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FTSE 100 - WINNERS
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Barclays, up 2.9%. The bank said its first-quarter results showed a core business in rude health even as the bank saw a 25% drop in pretax profit. Pretax profit fell to GBP793 million in the three months ended March 31, Barclays said, down from GBP1.06 billion the corresponding quarter a year earlier, with income net of insurance claims down 11% to GBP5.04 billion and credit impairment charges up 15% to GBP443 million. However, Barclays' first-quarter results came in ahead of analyst expectations, reflecting a strong performance in the bank's core business and resilience in its investment banking business. "In our view, the results reflect relative resilience, with notable outperformance versus peers in investment banking where revenues fell just 6% Q1/Q1," said Investec. Moreover, "Barclays' 1Q16 is uncontroversial in our view. The overall message is that the new CEO is executing well on plans and we do not see consensus estimates moving either way," Jefferies added.
Worldpay Group, up 2.6%. The payments processing company were upgraded to Buy from Neutral by UBS. The Swiss bank said Worldpay's exposure to online transactions and significant investment in new value-added services will enable the company to outgrow its peers. "We view Worldpay as a high quality business with strong structural growth linked to the growth of electronic payments with around 90% of its revenues linked to fees charged per transaction," UBS said.
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FTSE 100 - LOSERS
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Standard Chartered, down 2.4%. The emerging markets-focused bank was cut to Sell from Hold by Deutsche Bank. Deutsche said the current valuation on the bank demands either higher revenue or lower impairments, adding it thinks the stock should be driven by 2018 returns rather than near-term improvements in credit quality.
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FTSE 250 - WINNERS
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Amec Foster Wheeler, up 3.2%. The oilfield services company appointed Jonathan Lewis, who has held several senior roles at US giant Halliburton, as its new chief executive as the company reported a drop in revenue in the first quarter of 2016. Amec said Lewis will takeover as chief executive from the start of June. Current interim Chief Executive Ian McHoul will step down from his role but remain as Amec Foster Wheeler's chief financial officer. Amec Foster Wheeler said its financial guidance for the full year remains unchanged, and said it is still expecting a "slight like-for-like revenue decline" in 2016. The company is also expecting the decline in trading margins to be "significantly less" this year compared to the declines experienced in 2015.
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FTSE 250 - LOSERS
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McCarthy & Stone, down 5.4% at 236.90 pence. Investors in the retirement housebuilder sold 85.0 million shares in the company, increased from the 75.0 million they had initially planned to sell. Funds managed by Anchorage Capital, TPG Special Situations Partners, Goldman Sachs European Special Situations Group and Strategic Value Partners sold an aggregate 85.0 million shares, or around 16%, of the company for 235.00 pence per share. The gross proceeds from the sale to the selling investors were around GBP200.0 million. Following the sale, Anchorage holds a 7.6% stake, TPG a 3.9% stake, Goldman Sachs a 3.9% stake and Strategic Value Partners a 4.2% stake.
Stagecoach Group, down 3.5%. The transport company said like-for-like revenue grew in the first 48 weeks of its financial year in most of its operations, with only its North American arm suffering a decline. The group said like-for-like sales in its UK regional bus business grew 0.2% in the 48 weeks to April 2, while like-for-like sales in its London bus arm rose 1.1%. Like-for-like UK rail sales were up 2.5%, while like-for-like sales for its Virgin Rail Group venture were up 4.6%. Broker Liberum was less convinced. "Although revenue growth trends at the other divisions appear similar to the last update, we see downside risk to 2017 estimates. Combined with bus re-regulation risk and looming rail franchise renewals, caution is still warranted," the broker said.
Elementis, down 1.5%. The speciality chemicals company said it was working to manage its margins to keep its performance in line for 2016 following a mixed start to the year. The company said sales for its coatings and personal care segments in its Specialty Products division were "satisfactory" in the first quarter to the end of March, but total sales were down 7.0% amid a slump in oilfield revenue. Oilfield sales were down 37% year-on-year in the quarter, broadly in line with the run-rate seen in the second half of 2015. This offset 4.0% growth in personal care sales, though coatings additives sales were mixed, rising modestly in Europe but down in Latin America and Asia.
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MAIN MARKET AND AIM - WINNERS
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Outsourcery, up 58%. The cloud computing company said it has agreed new terms on its working capital facility with Vodafone Group.The company said it has agreed terms on a new conditional drawdown working capital facility with Vodafone, the telecommunications giant and Outsourcery's principal lender. No specific details on the facility were provided, but Outsourcery said the agreement will provide sufficient additional funding to allow the company realise its principal assets in the immediate term. Vodafone were down 0.4%.
Hargreaves Services, up 12%. The solid fuels supplier and bulk material logistics group outlined plans for its new structure and said trading across the group remains mixed. Hargreaves said it will structure itself to focus on its core long-term operations, develop and realise the value of its property and energy projects and realise its legacy assets into cash. The long-term operations will cover a simplified and UK-focused coal distribution business, a specialist earthworks and infrastructure services arm, an industrial services business, and a transport and logistics services division.
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MAIN MARKET AND AIM - LOSERS
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Sepura, off 31%. The critical communications services company said it is holding talks with its lenders as order delays have hurt its working capital position and put short-term constraints on cash, leading it to consider raising fresh equity. Sepura said it expects revenue for the year to the end of March to be EUR191.0 million, up 45% year-on-year thanks to 10% organic growth and a contribution from the Teltronic business it acquired. However, as previously flagged by the company, purchase orders on two big deals were not secured in time to be booked in the 2016 financial year results, hitting both group revenue and adjusted earnings. It also has started talks with shareholders to raise around GBP50.0 million through an equity fundraising to reduce leverage and provide further working capital.
Pressure Technologies, down 23%. The high-pressure engineering company said orders continued to decline in the second quarter of its financial year from the oil and gas industry, driving it to issue a profit warning. Pressure said it anticipates results for the year to the end of October will be substantially below current market expectations, as the difficult trading in the oil and gas industry deteriorated further in the second quarter to the end of April. The company said that despite a marginal recovery in oil prices, the outlook is for a slow recovery as capital expenditure by oil and gas operators remains under pressure, meaning any pick up in the market is unlikely to materialise until at least 2017.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
Copyright 2016 Alliance News Limited. All Rights Reserved.
6 Jan 2016 12:09
