LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices midday Monday.
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FTSE 100 - WINNERS
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Rio Tinto, up 3.6%, BHP Billiton, up 2.4%, Antofagasta, up 2.4%, Anglo American, up 1.6%, and Glencore Xstrata, up 1.1%. The European mining sector has been upgraded to Overweight from Underweight by JPMorgan Cazenove. JPMorgan has been structurally bearish on the sector for over two years, but now highlights several key triggers that have prompted the upgrade. There are signs that activity is rebounding, with a strong move in China's steel purchasing managers' index, strong Chinese commodity import data, and, given that the latest Chinese consumer price inflation reading printed just 1.8% year-on-year, Chinese "policy-makers have free hands to focus on growth supportive measures, if needed," JPMorgan says. The sector also has been boosted by a falling capital expenditure and cost-cutting, it says. Furthermore, the sector has performed poorly in the last few years, trading at similar levels to those seen in December 2008, while commodity prices are double December 2008 levels.
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FTSE 100 - LOSERS
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British Sky Broadcasting Group, down 2.3%. The media giant said it is working on the potential acquisition of 21st Century Fox's interests in Sky Deutschland and Sky Italia. It said it "believes at the right value, this combination would have the potential to create a world-class multinational pay TV group." However, Berenberg analyst Sarah Simon says that, with limited synergies among the UK, German and Italian businesses, any transaction would, at least in the medium term, be very dilutive to BSkyB's earnings per share.
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FTSE 250 - WINNERS
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Polymetal International, up 5%. The gold, silver and copper-mining exploration and production company has announced the completion of its Reserves and Resources Audit for the Svetloye Gold Deposit. It said Snowden Mining Industry Consultants estimates total ore reserves at 7.3 million tonnes at an average grade of 2.8 grams per tonne of gold, for a total of 700,000 ounces of gold contained. The consultants also found total mineral resources at 1.1 million tonnes of ore at an average grade of 2.3 grams per tonne of gold, for a total of 100,000 ounces of gold. Polymetal also said its pre-feasibility study is based on the results expects a 1.0 million tonnes per year open-pit heap leach operation at the site, giving it an initial mine life of eight years, which should mean it can produce an annual average of 70,000 ounces of gold.
Just Retirement, up 2.7%. The specialist life insurer has unveiled a reorganisation to cut costs as it grapples with the fall in demand for individual annuities since government plans were unveiled in March to give people in the UK more freedom over how they invest their pension pots. It said its reorganisation will produce annual cost savings of GBP14.0 million in its next financial year, but will result in "one-off costs" of GBP5.0 million in the current one. For the three month period to end-March, the company said individual underwritten annuity sales increased to GBP287.5 million, from GBP214.3 million in the corresponding quarter of 2013. However, Chief Executive Rodney Cook said "operating trading conditions have become much tougher since the Budget, with sales at around half of pre-Budget levels."
WS Atkins, up 2.4%. Numis Securities has upgraded the group to Buy, from Add, saying that it sees the company's current share price as an "attractive entry point", following a sharp decline from the end of February. The investment bank also says that it believes that the "financials stack up" for the firm to buy Balfour Beatty's professional services division, which has recently been put up for sale. Numis expects that WS Atkins would have to pay around GBP600 million for the division, funded partly internally and partly by a GBP420 million rights issue. If the deal were to be completed, the investment bank estimates a 13% earnings per share accretion for the year to March 2016.
Interserve, up 2.2%. The firm said that its subsidiary, Landmarc Support Services, has won a GBP322 million contract with the Ministry of Defence to manage the MoD National Training Estate Prime contract. The contract has an initial five year term with an option to extend for up to a further five years.
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FTSE 250 - LOSERS
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Dignity, down 1%. The funeral services provider said it is currently assuming there will be fewer deaths in 2014 than in the prior year. Its current assumption is that there will be 550,000 deaths in 2014, approximately 2.0% below the prior year and broadly in line with 2012. It said deaths in the first quarter were 7.5% lower than in the same period in 2013, when reported deaths rose by 6.7%. Nevertheless, it is keeping its overall expectations for the year unchanged. For the 13 weeks ended March 28, the company said revenue grew to GBP69.1 million, up from the GBP67.8 million posted in the corresponding period a year earlier. Underlying operating profit, which excludes profit or loss on fixed asset sales, external transaction costs and so-called exceptional items, rose by GBP400,000 to GBP25.8 million.
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AIM ALL-SHARE - WINNERS
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Bahamas Petroleum, up 14%. The oil and gas exploration company said its pretax loss narrowed in 2013 as a result of a range of lower expenses during the period. The company, which is yet to produce any revenue, said its pretax loss narrowed to USD5.2 million, from USD6.3 million the previous year. It said the majority of its improved finances came from lower operating losses due to 17% lower employee benefit expenses, 44% lower depreciation expenses and 16% lower other expenses during the period.
Leni Gas & Oil, up 7.8%. The oil and gas exploration and development group said that it has further increased the size of its GY-664 well find in Trinidad and that it has now sold a total of over 100,000 barrels of Goudron oil since taking over operations in the region in October 2012. It said the GY-664 well drilling has now found over 1,000 feet of gross oil bearing sands after drilling a further 720 feet in its Gros Morne formation at the Goudron Field site. The GY-664 site had earlier been drilled to a depth of 1,680 feet and found a 350-foot region of oil bearing sands, which has now been expanded significantly. The company said drilling is now continuing at the site and has reached the third reservoir target for the well, heading towards its planned total depth of 2,800 feet.
Conygar Investment Company, up 7.5%. The group has sold its 9.6 acre development site at Haverfordwest, Pembrokeshire to Sainsbury's Supermarkets Ltd, part of J Sainsbury PLC, in a deal worth GBP13.8 million. Last year, the property investment and development group said Pembrokeshire County Council granted permission for 729 residential properties and a 60,000 square foot Sainsbury's retail food store with car park and petrol filling station to be constructed on the site. Conygar said the work to construct the residential properties will commence this summer costing around GBP7.8 million.
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AIM ALL-SHARE - LOSERS
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Blur Group, off 40%. The company said that revenues from a project with a value of around USD3.6 million will now be delayed into 2014, leading it to reduce its revenue estimate for 2013 for a second time. It now expects 2013 revenues in the region of USD4.8 million, a further 10% reduction from the numbers that were already almost cut in half less than a month ago.
BrainJuicer, down 21%. The marketing research agency said it expects to post a much higher share based payment charge for 2014 due to a sharp rise in its share price during 2013 and early 2014. It now expects a total charge of around GBP1 million in share-based payments for the year and related national insurance payments, compared to GBP300,000 in 2013. The company also expects to post "somewhat higher" costs from the second quarter of the year onwards, as it continues to invest in its business and expand its client account management teams.
Wessex Exploration, down 19%. The energy company has announced details of a planned acquisition in order to solve some of its financial woes, signing a Heads of Agreement to acquire Hague and London Oil BV. It said that the consideration of the acquisition will be made by the issuance of 241 million shares in the company, or roughly 25% of its enlarged share capital and additional cash resources of USD1 million to be provided to cover the company's contracted drilling obligations. The company said that as part of the deal Andrew Cochran and Bill Phelps, former directors of Coastal Energy Co, will join its board from Hague and London Oil.
African Potash, down 18%. The potash exploration and development company has secured roughly USD2 million in investment resources through a share placing and technical support agreement in order to start Phase 1 drilling at its Lac Dinga Potash Project in the Republic of Congo. It said it has raised USD1.7 million through a conditional placing of 53.8 million shares at 1.9 pence each to new and existing shareholders. It also said it has entered into a camp build, logistics support, and operations management deal valued at USD300,000 with Hedgestone Advisory Ltd in order to support an initial exploration project at the Lac Dinga project in an "equity for services" agreement. Shares in African Potash are currently quoted at 1.95 pence.
Tavistock Investments, down 13%. The group's shares are big fallers despite reporting that losses narrowed to GBP516,000 in 2013, from GBP1.5 million a year earlier. The company has appointed a new chief executive and two non-executive directors as it looks to move on from the difficulties it has endured after last year raising new funds and disposing of its loss-making software business. It said new Chief Executive Brian Raven, who is the chairman of discretionary fund manager Blacksquare Ltd, will take the reins as the company looks to either acquire or invest in businesses within the UK financial services sector.
Strategic Natural Resources, down 11%. The natural resources development company said it has agreed with London Commodity Brokers to adjourn its winding up hearing, which was supposed to take place Monday, for one week. It said it continues to hold discussions with London Commodity Brokers after, in March, the group asked for Strategic Natural Resources to be wound up amid disputes and claims which have led to two separate legal battles. The winding up petition claims USD1.15 million for what London Commodity Brokers claims are unpaid contractual agreements.
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By James Kemp; jameskemp@alliancenews.com; @jamespkemp
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