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LONDON (Alliance News) - The following stocks are the leading risers and fallers on the main London indices midday Tuesday.
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FTSE 100 - Winners
Reckitt Benckiser Group, up 5.2%, is the biggest riser on the blue-chip index, after the consumer goods company reported a 5% rise in revenues in the third quarter, boosted by a strong sales performance from its health business, and launched a strategic review of its underperforming pharmaceuticals business. Like-for-like sales, excluding the pharma, were up 5% on a constant exchange rate basis, but only up 3% including RBP. Shareholders have been pressuring Reckitt to make a decision on the pharma business for several years.
BHP Billiton climbs 3.3% after production increased 11% in its third quarter on strong production rates across the majority of its metals and minerals. It said it was maintaining its full-year production guidance for petroleum, copper and coal, while raising its guidance for iron ore. Liberum Capital believes that the company is trading at an "irregular discount" to its peers and is likely to outperform the mining sector over the next 12-36 months. Since the middle of the year BHP has lagged behind Rio Tinto by 9%, Anglo American by 11% and Glencore Xstrata by 12%. The brokerage has reiterated its Buy rating for BHP.
Whitbread is up 2.2% after it reported double-digit growth in sales and dividends in the first half of the year, with profits driven higher by Premier Inn hotels and Costa Coffee, mainly in London. Chief Executive Andy Harrison said Whitbread is on plan to meet expectations for the full-year and the first half results are a good guide to how the group is likely to trade in the second half. The board declared an interim dividend of 21.8 pence per share, an increase of 12%, and revenue growth of 12% to GBP1.14 billion, from GBP1.02 billion. Like-for-like sales were up 2.8% in the period. Pretax profit rose to GBP200.7 million, from GBP185.2 million, driven from the strong like-for-like sales growth and organic network expansion across Premier Inn and Costa Coffee.
GKN, up 2.1%, as profits and sales rose strongly in the third quarter. Pretax profit jumped to GBP131 million, from GBP98 million, as margins rose strongly, while sales for the three months to end-September rose to GBP1.87 billion, from GBP1.60 billion, as increased aerospace and automotive sales offsett a slight decline for the land business.
Royal Bank of Scotland Group, up 0.7%, is re-bounding having been the biggest faller on the FTSE 100 Monday. RBS shares were hit after JP Morgan reached a tentative deal with US regulators for a USD13 billion settlement of a series of investigations into mortgage-backed securities. RBS has a USD30 billion exposure to the issue, just a little less than JPMorgan Chase, and is expected to be in line for a fine. In an article published in Monday's Telegraph, Chancellor George Osborne also saids there is no chance RBS will be left in its current form, and the go-ahead for a split into a 'good' bank and a 'bad' bank will be given within weeks. RBS has a long way to rise to reach pre-announcement levels, having fallen 5.3% Monday.
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FTSE 100 - Losers
EasyJet, down 2.8%, International Consolidated Airlines, down 1.3%, and TUI Travel, down 0.5%, are three of the biggest fallers on the FTSE 100. The airline stocks have been hit after German airline Lufthansa disappointed investors by revising its operating profit expectations to be in the range of EUR600 million to EUR700 million for 2013, including one-off restructuring costs of 200 million euros and project costs of 100 million euros.
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FTSE 250 - Winners
Grainger, up 2.7%, is the biggest gainer on the FTSE 250. The company's share price has been lifted after JPMorgan Cazenove upgraded it to Overweight from Neutral, raising its target price to 225 pence from 195p.
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FTSE 250 - Losers
UBM falls 5.7% after it lowered its expectations for full-year revenue growth, saying it now expects it to be at or slightly below the bottom of its guidance range of 3% to 5%, after weaker market conditions in Brazil and India caused it to scale back the number of launch events planned for its fourth quarter. This will mean that underlying growth and earnings per share will be at the bottom of the forecast range, says Numis analyst Gareth Davies. Davies is not expecting to make any material change to Numis's already conservative estimates and reiterates a Hold rating, pointing out a preference for Daily Mail & General Trust and Informa, where the bank sees better value.
Kenmare Resources, down 4.2%, continues to fall Tuesday after it Monday said it had suspended operations in part of its titanium minerals Moma mine after a fire. The company said the fire occurred in the trommels section of Wet Concentrator Plant A at the mine in Mozambique. No injuries were suffered as a result of the incident, the fire was extinguished and damage was contained to the trommels section of the plant.
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AIM - Winners
John Lewis of Hungerford jumps 85% after the bespoke kitchens and furniture maker said it expects to report a small underlying operating profit for its last financial year after it continued to trade strongly in the second half of the year, while orders in the current year are also looking strong. The company, which has just launched a new bedroom range that is says is so far trading as well as it had hoped, said it made revenues of about GBP6.5 million in the year to end-August, while orders and dispatched sales in the first quarter of the new year are up 13% at GBP1.7 million. The company was hit hard by the economic crisis and related downturn in home improvements, but is now showing signs of a turnaround.
Alpha Returns Group is up 33% after it made its first investment, buying a 37.5% stake in unlisted Singapore IT services company Telistar Solutions Pte. Ltd. for about GBP511,500, payable over the next two years. "We believe our investment in Telistar to be an exciting first step for Alpha Returns with significant upside potential and a strong long-term sales pipeline into 2014 and beyond and we look forward to announce further investments within the Asia-Pacific area," Alpha Returns Executive Director Christopher Neo said in a statement. Telistar has expanded its product offering over the last three years, taking it from being a pure IT hardware distributor to encompass higher margin IT services and software, Alpha said. It made a pretax profit of SGD128,000 on revenues of just over SGD3 million in 2012, and had net assets of SGD379,000 at the end of that year.
DekelOil Public Limited, up 11%. The construction of its 60 tonne an hour crude palm oil extraction mill in Ivory Coast by Malaysian engineering company Modipalm Engineering SDN BHD is progressing, and the plant is on course to become fully operational and generate first revenues in January 2013, at which point it should produce 70,000 tonnes of oil a year, the company said.
Pan European Terminals climbs 11% after it said that it was considering a possible cash offer from Belphar at a price of 22 pence each. The company urged shareholders to take no action. In a separate statement, Belphar Limited said that it had unconditionally agreed to acquire a 15.8% interest in Pan European. As a result, it now holds 29.9% of the company's shares.
Aurum Mining is up 8.2% after it said that Plymouth Minerals Limited has exercised its option to acquire a majority stake in the company's Morille Tungsten Project. The company said on October 7 that it signed a letter of intent for Plymouth Minerals Limited to buy 80% of the project in north-western Spain. As part of the deal, Australia's Plymouth will pay EUR300,000 in cash and shares for the 80% stake with a non-refundable EUR25,000 paid for the thirty-day exclusivity period it started October 7 and a further EUR225,000 cash payable now that Plymouth has opted to go ahead with the acquisition. Aurum also will receive EUR50,000 in new shares of Sydney-listed Plymouth after 12 months. Plymouth will retain the right to buy the remaining 20% in the project from Aurum at a price of GBP2.5 million.
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AIM - Losers
Clear Leisure, down 43%, is the biggest faller on the AIM index, after its Italy-based travel operator unit temporarily suspended operations after running into financial difficulties. Its African holidays were hit by the terrorist attack in Kenya and tourist killings in Madagascar, and new management also found financial irregularities at the unit. The company said the new management of Italy-based ORH SpA, appointed in July, had found "a number of financial irregularities within the African subsidiaries", which are now being investigated by external consultants. Clear Leisure said the irregularities were found after ORH's new management were looking at the heavy financial commitment of pre-booked charter flight seats and the cost of running five of its hotels. It said the decision to suspend operations came after demand for ORH's holidays sank and prices came under pressure after the recent terrorist attack on a shopping mall in Kenya and the killing of French and Italian tourists in Madagascar. It is also being hit by what it described as a "continuous" deterioration in the Italian economy and a reduction in consumer spending.
Daily Internet, down 38%, after it bought a UK-based internet infrastructure company, launched a share placing to fund the deal, and strengthened its balance sheet by conducting a debt-for-equity swap with some directors and shareholders. The company said it would buy Netplan Internet Solutions Ltd for at least GBP2.5 million and launched a GBP3 million placing to help fund the deal. Additionally, it said it certain directors had agreed to swap GBP170,966 worth of loans for equity, Hawkstone Capital Ltd agreed to swap a GBP503,660 loan and existing shareholder John Thompson agreed to swap GBP65,000. All the swaps will be done at the proposed placing price of 1.5 pence a share. The dilution in capital caused by the placing, which represents about 54.1% of the company's existing share capital, and the debt-for-equity swap, meant the company is one of the biggest fallers on AIM. The placing is expected to raise GBP2.7 million net of costs.
Dart Group, down 11%, as it warned that it expects to post an increased second-half loss as its leisure travel operations become increasingly seasonal. Pretax profit for the first half of the year were about 37% ahead of last year, but it expects increased losses in the second half." For the full financial year, Dart said it remains "cautiously optimistic" for profit growth, with much depending on the crucial winter booking period.
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By James Kemp; jameskemp@alliancenews.com; @jamespkemp
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