(Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Monday.
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FTSE 100 - WINNERS
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International Consolidated Airlines, up 1.1%. The British Airways-parent has acquired Spanish airline Air Europa for EUR1 billion in cash from Globalia. Air Europa operates domestic and international flights to 69 destinations, including long-haul routes to Latin America, the US and North Africa. In 2018, Air Europa generated EUR67 million in pretax profit on revenue of EUR2.1 billion. IAG already owns Iberia and Vueling in Spain, as well as British Airways and Aer Lingus. The purchase will be funded from debt with the deal expected to complete in the second half of 2020. IAG has agreed to pay a EUR40 million break fee should the transaction fail to achieve regulatory approval, resulting in the acquisition being cancelled.
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FTSE 100 - LOSERS
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Hiscox, down 2.2%. The insurer said that premiums growth was "good" over the first nine months of 2019, but its combined ratio was hit by an active period for claims amid a trio of natural disasters. For the nine months ended September, gross written premiums grew 5.6% to USD3.21 billion from USD3.04 billion a year prior. On a constant currency basis, gross written premiums grew 7.3% on the year before. "The third quarter has been an active period for claims, with the market experiencing significant catastrophe losses from storms in the US, the Caribbean and Japan," Chief Executive Officer Bronke Masojada said. "Paying claims is what we are here for, and we have reserved USD165 million for claims from Hurricane Dorian and Typhoons Faxai and Hagibis. We expect an additional impact from lower fees and profit commissions." Hiscox came to the USD165 million claims reserve after assessing the insured market loss for Hurricane Dorian in August, Typhoon Faxai in late August and early September, and Typhoon Hagibis in October. Dorian struck Bermuda, Faxai affected Japan and Hagibis touched a number of countries including Japan and Russia. "Pricing momentum in the London market and reinsurance continues to be positive," Masojada said. "In Hiscox Retail, rates in the UK and Europe remain broadly flat across the portfolio. In the US, there are early signs that the market is responding to adverse claims trends in casualty business, where we are taking an increasingly cautious approach to reserving." For the full year, Hiscox expects its combined ratio of between 97% and 99%. Any combined ratio below 100% means an insurer made a profit from its underwriting. Over the medium term, the Hiscox is targeting a combined ratio of between 90% and 95%. Hiscox reported a combined operating ratio of 94.9% in 2018.
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FTSE 250 - WINNERS
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Pets at Home, up 3.5%. Liberum upgraded the stock to Buy from Hold.
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IWG, up 2.8%. The office space firm has entered into an agreement to sell its Swiss subsidiaries for CHF120 million, about USD121.5 million. The Regus brand owner will sell the assets to a venture jointly owned by the J Safra Sarasin Group, a Swiss private bank with over USD249 billion total assets under management, and investment holding firm P Peress Group. The firm explained: "IWG and the purchaser have also entered into a long-term master franchise agreement which provides the purchaser with exclusive rights to the use of IWG's brands in Switzerland. The purchaser will continue to operate the existing centres under IWG's brands and operating platform and has committed to a development plan which will add significantly to IWG's centre network in that country." The agreement is similar to deals struck with TKP Corp, which saw IWG sell its Japanese and Taiwanese operations.
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Energean Oil & Gas, up 2.1%. The exploration and production companyhas completed a successful appraisal at Karish North, boosting the discovered resource volumes at the asset in Israel. The appraisal confirmed best estimate recoverable resources of 0.9 trillion cubic feet of gas, or 25 billion cubic metres, plus 34 million barrels of light oil or condensate. Chief Executive Mathios Rigas said: "This is an excellent result from the Karish North appraisal sidetrack, confirming in place volumes in the top half of pre-drill estimates. Today's news delivers upon another commitment that we had made to our shareholders and the successful results allow us to continue our gas marketing efforts in the region."
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FTSE 250 - LOSERS
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GVC Holdings, down 3.3%. The sports-betting and gaming company has appointed the current chair of Homeserve as its new non-executive chair. HomeServe was 2.0% lower. John Michael Barry Gibson - also known as JM Barry Gibson - became chair of FTSE 250-listed emergency home assistance firm Homeserve in April 2010, having joined the board in April 2004. He succeeds Lee Feldman, who will depart February 27, 2020. Feldman has chaired GVC for 11 years and served on its board for 15. Gibson will join the board as a non-executive director with immediate effect before taking over from Feldman. GVC noted Gibson's "extensive experience" within the gambling sector, including as a non-executive director at William Hill PLC and senior independent director at bwin.party digital entertainment.
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OTHER MAIN MARKET AND AIM - WINNERS
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Amur Minerals, up 22%. The miner raised GBP1.2 million through a discounted share subscription in order to repay a loan and fund the business. Amur issued 70.6 million shares at 1.7 pence per share, with an unnamed asset manager specialising in natural resource investments subscribing to the entirety of the shares. Shares in Khabarovsk, Russia-based Amur were trading at 2.25p in London on Monday, having closed on Friday at 1.85p. Amur will use the funds to repay a GBP625,000 convertible loan owed to Riverfort Global Opportunities PCC Ltd and YA II PN Ltd, including interest. In addition, Amur has agreed not to make any further drawdowns under the convertible loan facility for at least three months and to seek additional financing options. The remainder of the funds raised will be used for general working capital purposes.
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Aukett Swanke, up 19%. The architectural firm confirmed it expects to deliver an annual profit following a strong end of the year, with it also reporting the sale of its Russian office. For the year ended September 30, the London-based firm confirmed it expects to deliver a profit. This was after the second half of the year was profitable, allowing it to recover from the loss reported in the first half of the year. Year end cash stood at GBP1.1 million, up from GBP710,000 the year prior. "The recovery from the large loss in 2018 is a tribute to the perseverance of the staff in all of our operations and in the internal rigours of reducing cost during a difficult trading period," Chief Executive Officer Nicholas Thompson said. Since the end of financial 2019, Aukett has sold its Moscow subsidiary Aukett Swanke OOO after deeming it would be better managed locally. The unit will continue to operate under the Aukett Swanke brand.
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OTHER MAIN MARKET AND AIM - LOSERS
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Woodford Patient Capital Trust, down 6.8%. The troubled investment company said a brace of asset revaluations will result in a fall in net asset value of 4.3 pence per share. Link Fund Solutions Ltd cut the value of the stake in IH Holdings International held by Woodford Patient Capital amid a "delay in operational progress" at the nuclear energy firm. This has resulted in the trust's NAV being cut by 5.0 pence per share. Meanwhile, Link upwardly revalued another asset which had been written down in September amid a "challenging fundraising environment". The unnamed firm has since secured funding, boosting Woodford Patient Capital's NAV per share by 0.7 pence. The two changes together result in a net change to NAV of negative 4.3p. At June 30, Woodford Patient Capital said net asset value per share stood at 72.00p compared to 97.61p at December 31, representing a 26% decline. In late October, the board of the trust announced Schroders will become portfolio manager from the end of 2019, and the trust will be subsequently renamed Schroder UK Public Private Trust.
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Lookers, down 4.6%. Liberum downgraded the car dealership to Hold from Buy following its profit warning on Friday last week.
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LightwaveRF, down 29%. The company said it expects its annual loss to be materially below market expectations but no less than the GBP2.5 million loss reported last year. LightwaveRF explained that a lack of access to funds resulted in its fourth quarter revenue being "significantly" below its own expectations. The company was able to raise capital during financial 2019 but it took place later than expected, which the company said it meant it was unable to invest in the business. "Revenue is expected to have increased by approximately 50% over last year's with overall underlying margins having been broadly maintained. The substantial progress made in annual revenue growth has nonetheless been held back by a number of one-off issues in the last quarter of the financial year," the company said.
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MyCelx Technologies, down 20%. The oil removal firm said recent events in Saudi Arabia have led to expectations of a loss for 2019. For 2019, MyCelx has forecast a loss before interest, taxes, depreciation and amortisation of USD1.3 million, on revenue of USD12.5 million. The company originally expected Ebitda to be USD2.5 million, on revenue of USD20 million. This still reflects a drop from 2018, when MyCelx reported Ebitda of USD5.6 million from revenue of USD27.0 million. MyCelx said that the reduced revenue expectations was due to adjustments in the second half of the year for customer maintenance schedules and disruption in production, following recent events. Although MyCelx did not specify what these events were, in September there were drone attacks on a Saudi Arabian oil facility and oilfield, denting the country's total output.
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Egdon Resources, down 15%. The company noted the UK government's decision to introduce a temporary moratorium on hydraulic fracturing for shale gas. Egdon said it has built a significant acreage position in UK unconventional resources. "Egdon along with the rest of the industry is fully committed to working closely with the OGA and other regulators to demonstrate that we can operate safely and in an environmentally responsible manner, and we are confident of doing so," the company said. Egdon Chief Executive Mark Abbott added: "Whilst growth of our unconventional resources asset base has formed an important and successful part of Egdon's strategy over recent years, it should be remembered that Egdon also has a broad range of conventional oil and gas assets within its diverse portfolio." Igas Energy noted the same decision, which was down 14%, saying it will not affect the company's existing onshore conventional exploration and production business. Igas noted its production and operating expenditure remains in line with expectations for the full year. Incremental projects recently announced remain on track, the company added.
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By Paul McGowan; paulmcgowan@alliancenews.com
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