LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices midday Wednesday.
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FTSE 100 - WINNERS
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Associated British Foods, up 8.9%. The food, ingredients and retail group reported an increase in profit for the first half of the year, driven primarily by sales at its low-cost fashion retail chain Primark, which more than offset a substantial hit to its sugar business. It posted a pretax profit of GBP434 million in the 24 weeks ended March 1, up from GBP411 million a year earlier, and raised its interim dividend by 4% to 9.70 pence per share. ABF continued to warn that weak sugar prices will "substantially" reduce its sugar profit for this year and that, if the current strength of the sterling against major currencies continues, it would wipe around GBP50 million off its full-year profit. However, it said that, with strong growth from Primark, and further store expansion planned for the remainder of the year, retail profits are expected to be well ahead.
AstraZeneca, up 2%, Shire, up 0.8%, and GlaxoSmithKline, up 0.3%. The pharmaceuticals companies are once again among the biggest risers in the blue-chip index on the back of the recent merger and acquisitions activity and speculation within the pharmaceuticals sector. On Tuesday, AstraZeneca closed up 4.7%, Shire closed up 7.6%, and Glaxo closed up 5.2%, making them the index's three biggest risers.
Hammerson, up 1.4%. The retail property developer said occupancy levels across its portfolio remains high at 96.6%, as economic recovery particularly in the UK generated confidence in its consumer markets. In an interim statement for the period January 1 to date, the firm said during the period it signed a total of 80 new leases across its portfolio, representing over GBP5 million per year. Leases were struck 8% above estimated rental value in the UK and 1% above in France.
Reed Elsevier, up 0.6%. The information and publishing company has reiterated its outlook for the full year after it saw underlying revenue growth rates in its first quarter to end-March in line with the full year 2013. It noted that it had completed GBP250 million of its planned GBP600 million of share buybacks in 2014. The remaining GBP350 million will be deployed by the end of the year.
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FTSE 100 - LOSERS
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Antofagasta, down 5.6%. The mining company is the biggest faller in the blue-chip index after going ex-dividend, meaning new buyers no longer qualify for the latest dividend payout.
ARM Holdings, down 3.4%. The semiconductor company is a big faller despite saying that, assuming the semiconductor industry improves in the second half as it expects, it is confident it would meet market expectations for dollar revenues in 2014. The group's first-quarter results were below expectations, mainly due to weaker-than-expected processor royalty revenues, says Liberum Capital. First quarter sales of GBP186.7 million was 4% below Liberum's forecast, while processor royalties were 5% below its expectations. Looking ahead, the brokerage believes that royalties are likely to continue to grow by slower than the market expects over the next five years due to an underlying shift to lower-end smartphones and tablets,
Sports Direct International, down 1.8%. The retailer is a heavy loser despite saying it delivered double-digit growth in its gross profit and sales in the last nine weeks of its financial year, driven by strong retail growth both in its stores and online. Numis analyst Andrew Wade cannot see any reason for the decline, but notes that a 2% is not a massive move for the stock that has recently seen high volatility.
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FTSE 250 - WINNERS
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Spirent Communications, up 7.3%. The communications technology company has reiterated its expectations of meeting high single-digit organic revenue growth for 2014, as it saw revenue rise in the quarter to end-March, boosted by revenues in its Service Assurance division that were delayed from 2013. For the quarter, it recorded a pretax profit of USD8.4 million, up from USD7.6 million a year before, as revenue rose to USD111.9 million from USD96.8 million. This was boosted by the USD12.0 million of delayed revenue.
Fenner, up 4.8%. The polymer products manufacturer is a big riser despite reporting a drop in pretax profit for the first half, as it was hurt by sterling's gains against all major currencies in which its revenues are generated. Pretax profit and earnings per share were down year-on-year, but "that was well flagged," says Jefferies analyst Andy Douglas. The divisional performance was largely as management had indicated and Jefferies was looking for, and overall the interims were slightly better-than-expected, says Douglas. Furthermore, the outlook statement that accompanied the update is "reasonably robust", and "will be better than some will have feared," the analyst adds.
Thomas Cook Group, up 4.5%. Barclays has upgraded the travel company to Overweight from Equal Weight and raised its price target to 230.00 pence from 100p. The bank believes Thomas Cook is a value stock that could re-rate, adding that it expects the group to start paying a dividend again in 2016.
Petra Diamonds, up 3.2%. The diamond mining company said that production rose in the third quarter, which boosted revenues in the period, and said that it is firmly on track to meet its full-year production target. It said that production in the third quarter ended March 31, increased 15% to 743,424 carats, up from 647,248 carats the prior year, boosted by a strong run rate and increased contribution from the Finsch mine. The company said it remains firmly on track to meet its production target for the full-year of around 3.0 million carats.
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FTSE 250 - LOSERS
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Drax Group, down 13%. The group's shares have plummeted after it commenced legal proceedings against the UK government after it overturned a decision advising that two generating units at Drax Power Station - the "second" and "third" unit conversions - were eligible for investment contracts under a new contracts for difference scheme. Drax said it has been notified by the UK government that the second unit conversion at the Drax Power Station is no longer eligible for an investment contract. In December, the government advised that two generating units at Drax Power Station - the "second" and "third" unit conversions - were eligible for conversion under the early contracts for difference mechanism, to support the conversion of coal units to sustainable biomass under a new subsidy scheme.
Tullett Prebon, down 4.9%, Balfour Beatty, down 3.1%, Man Group, down 2.5%, Vesuvius, down 2.4%, and Rathbone Brothers, down 1.8%. The companies are all big fallers after going ex-dividend.
MoneySupermarket.com Group, down 2.5%. The price comparison website said its overall expectations for the year are unchanged after reporting its quarterly results. Management announced that revenue grew by 8% in the first quarter, beating analyst expectations. However pretax earnings growth did not grow as strongly, up just 5%. This is largely due to the timing of an increased advertising spend, particularly on the current Snoop Dog campaign, explains Numis Securities analyst David McCann. While the company can now run the campaign for as long as it wants having suffered the cost upfront, Moneysupermarket is "not really a company showing underlying growth," says McCann. The stock has also been rallying into the print, "so expectations were high," says Jefferies analyst James Lockyer. "The team hasn't yet managed to strike the right balance when it comes to communicating their results and progress," says Lockyer.
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AIM ALL-SHARE - WINNERS
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Ironveld, up 26%. The pig iron developer said a recent definitive feasibility study reaffirmed the viability of its pig iron and ferro-vanadium project, and that it is on track to start construction of the project later this year, with production ready for late 2015. The pig iron and ferro-vanadium project in South Africa has a planned production of 41,966 tonnes of high purity iron, 415 tonnes of vanadium in slag, and 8,269 tonnes of titanium in slag per year from late 2015. Ironveld said the feasibility study confirmed the project's viability to deliver an exceptionally high grade iron product, at 99.5% Fe, called High Purity Iron, which commands a premium to the pig iron price.
Rare Earth Minerals, up 15%. The rare metals and minerals projects investment company said an independent third party has verified that its joint venture partner Bacanara Minerals Ltd can produce battery grade lithium carbonate from the Sonora Lithium Project in Mexico.
Biome Technologies, up 14%. The materials and electronic systems company posted revenues of GBP1.1 million in the quarter to end-March, up from GBP400,000 in the previous year and GBP500,000 in the previous quarter.
Landore Resources, up 9.1%. The junior mineral exploration and development company has identified new potential nickel sulphide mineralisation zones at its Junior Lake Nickel-Copper Property in Canada.
Fitbug Holdings, up 8.8%. The firm has appointed Bloomberg's former London head Malcolm Fried to succeed its departing Chief Executive David Turner with immediate effect. It also announced that it had signed an agreement with Griffin International Cos Inc to act as its exclusive US sales representative to retail chains Target Corp, Best Buy Co Inc and Wal-Mart Stores Inc.
Sable Mining, up 6.2%. The iron-ore exploration mining company has announced an increase in its resource at the Nimba Iron Ore Project in Guinea following expansion exploration drilling on a limited area of its Plateau 3 site.
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AIM ALL-SHARE - LOSERS
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Iofina, off 56%. The iodine producer has reduced its production forecasts for the year to "materially below current market expectations" due to its principal operator's planned fracking schedule. The schedule is expected to significantly reduce the group's brine supply and as a consequence, plant runtime for Iofina's IOsorb production plants, IO#3, IO#4, IO#5 and IO#6 will be affected. Numis Securities, which previously had a Buy recommendation on the, has placed its recommendation and forecasts on Iofina under review, following the disappointing production update.
Orogen Gold, down 16%. The group said its pretax loss for the full-year widened after it was hit by an impairment charge on the value of its Deli Jovan asset. Orogen reported a GBP4.18 million pretax loss for the year, widened from a GBP651,000 loss last year, including a GBP3.7 million impairment charge - a result of a review performed on the carrying value of the exploration and evaluation assets related to the Deli Jovan Gold Project. The company recorded no revenue for the full-year, compared to GBP7,000 last year.
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By James Kemp; jameskemp@alliancenews.com; @jamespkemp
Copyright 2014 Alliance News Limited. All Rights Reserved.
29 Jul 2014 07:50
