LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Tuesday.
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FTSE 100 - WINNERS
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United Utilities, up 3.1%. Societe Generale upgraded the utility to Buy from Hold, saying the company is trading at a lower premium than rivals Severn Trent and Pennon Water, despite its strong balance sheet.
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FTSE 100 - LOSERS
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Whitbread, down 3.5%. The Premier Inn and Costa Coffee owner reported a rise in sales in the first half of its financial year, boosted by growth in both its Premier Inn and Costa businesses, and it said it is on track to meet expectations for the full year. However, the numbers were below analysts expectations, who said that the results revealed a modest slowdown in the second quarter. Investors also appeared to be concerned about the impact the group will face from the new UK National Living Wage. Chief Executive Andy Harrison said Whitbread is developing plans to adopt the new wage regulations and intends to mitigate the costs they will pose over time "with a combination of productivity improvements, boosted by investment in systems and training, efficiency savings and some selective price increases."
Sports Direct International, down 0.5%. The Financial Times reported institutional investor Royal London Asset Management is set to vote against the re-election of founder Mike Ashley as executive deputy chairman at the company's annual general meeting on Wednesday. Royal London said it has lost confidence in the company's board and would vote against Ashley's re-election for the first time. Ashley Hamilton Claxton, corporate governance manager at Royal London, one of the City's most prominent institutional investors, said the investment manager is "very concerned about the long list of corporate governance failings that have not been addressed."
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FTSE 250 - WINNERS
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Amlin, up 32%. The specialty insurer and reinsurer said it has agreed to be acquired by Mitsui Sumitomo Insurance in a deal valuing the insurer at about GBP3.47 billion, as the wave of mergers and acquisitions continues across the industry. Mitsui Sumitomo Insurance, which is owned by Japan's MS&AD Insurance Group Holdings, will pay 670 pence per Amlin share. In addition, Amlin shareholder will be able to receive the insurer's 8.4 pence interim dividend declared last month. The news lifted shares in other specialist insurers, including Lancashire Holdings, up 5.7%, Beazley, up 4.8%, and Hiscox, up 3.0%, on speculation that the wave of consolidation activity in the insurance industry will continue.
Ashmore Group, up 5.5%. The asset manager posted higher pretax profit for the financial year to the end of June and moved to defend the fundamentals of emerging markets following the rout this sector has faced in recent weeks. Ashmore said it made a GBP181.3 million pretax profit in the financial year ended June 30, compared with GBP171.6 million the prior year. Net revenue was up by 8% to GBP283.3 million as higher performance fees and the strength of the dollar more than offset lower management fees on a fall in assets under management to USD58.9 billion from USD75.0 billion over the course of the year.
Redrow, up 2.6%. The housebuilder posted big rises in pretax profit and revenue and doubled its dividend payout as its 2015 financial year saw it selling more houses at higher prices. Redrow said its pretax profit for the year to the end of June was GBP204.0 million, up from GBP133.0 million a year earlier, while revenue increased to GBP1.15 billion from GBP864.0 million. Redrow said its legal completions rose 12% in the year to 4,022, up from 3,597, with a boost coming from the UK government's Help to Buy mortgage guarantee scheme. In addition to selling more houses, the company said its average selling price rose by 13% to GBP269,800.
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MAIN MARKET AND AIM - WINNERS
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Conviviality Retail, up 21%. The off-licence and convenience store chain operator said it has struck a deal to fully acquire drinks supplier Matthew Clark for GBP200 million, of which it will pay just over half to fellow-listed Punch Taverns. The Matthew Clark business is a 50/50 joint venture between Punch Taverns and Hertford Cellars Ltd, a subsidiary of Accolade Wines Ltd. As part of the same transaction, Hertford Cellars will sell its 50% shareholding in Matthew Clark to Conviviality Brands.
Petards Group, up 12%. The security and surveillance systems developer said its pretax profit was higher in the first half thanks to gross margin improvements which offset a decline in revenue. Petards said its pretax profit increased to GBP356,000 in the six months to June 30 from GBP273,000 a year earlier, despite revenue falling to GBP6.1 million from GBP7.2 million. This fall in revenue was offset by a big decline in the group's cost of sales in the half to GBP3.9 million from GBP5.2 million, which slightly outpaced the sales decline. The group's gross margin in the half improved to 36.4% from 27.4% a year earlier.
ISG, up 10%. The construction services company said it swung to a loss in the year to the end of June following a tough start to the year and restructuring in its construction arm, but said conditions improved in the second half and it thinks the worst is now behind it. ISG said it made a pretax loss of GBP12.9 million in the year to the end of June, compared to a GBP6.8 million profit a year earlier, as it booked GBP19.9 million in costs related to the restructuring of its construction business and losses it made on contracts that division secured in 2012 and 2013. But the group said the turnaround of its construction business is now substantially complete and said conditions for the entire business improved significantly in the second half, with particularly good trading in its fit out, engineering services and retail businesses.
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MAIN MARKET AND AIM - LOSERS
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SQS Software Quality Systems, down 16%. The software testing company downgraded its expectations for the full year due to actions it is taking to mitigate margin pressures in its regular testing arm, even as revenue and its pretax profit both increased in the first half. SQS said it is facing margin pressures in its regular software testing business by reducing client numbers, its overhead costs and headcount. Due to those issues, it is taking a more cautious stance on its outlook for the full year and anticipates its profit will be slightly below its previous expectations. Despite that, the company said its pretax profit in the six months to the end of June was up to EUR5.2 million from EUR3.7 million, as its revenue rose to EUR150.3 million from EUR129.4 million.
Edenville Energy, down 11%. The coal company said it still aims to secure financing and secure an engineering, procurement and construction partner for the Rukwa coal to power project before the end of 2015, but said external factors beyond its control may cause delays. Edenville is trying to secure an EPC contractor and a financing partner simultaneously, as the EPC contractor will determine how much money is needed to construct the project.
Oxford Instruments, down 14%. The technology tools and systems company said its adjusted operating profit is ahead year-on-year and said it is benefiting from a reduction in costs following the restructuring it undertook last year, but it has cut its full year outlook due to tough trading conditions in some of its divisions. It added order volumes are lower year-on-year so far in its financial year, though it has seen an improvement in June and July.
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By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
8 Sep 2015 07:33
