LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Thursday.
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FTSE 100 - WINNERS
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Wm Morrison Supermarkets, up 4.0%. The supermarket chain reported a fall in total sales but growth in like-for-like sales in the first quarter of its financial year, as it warned it expects continued deflation in the UK grocery market. The company said total sales excluding fuel in the 13 weeks ended May fell by 1.8% year-on-year, while falling by 0.9% including fuel. On a like-for-like basis, sales excluding fuel grew by 0.7% and by 1.2% including fuel.
BT Group, up 3.3%. The communications company reported a rise in pretax profit for its most recently ended financial year, and set out its guidance for the next two years, as it outlined plans to invest around GBP6 billion in broadband and 4G coverage in the UK over the next three years. BT reported a pretax profit of GBP3.03 billion for the year to end-March, up from GBP2.65 billion the year before, as revenue rose to GBP19.04 billion from GBP17.98 billion. BT proposed a full-year dividend of 14.0 pence per share, up 13% from 12.4p the year before. It expects to grow its dividend by more than 10% in each of the next two financial years.
RSA Insurance Group, up 2.1%. The insurer said it saw good underwriting results in the first quarter, driving up operating profit, as it benefited from benign weather conditions and as underlying results continued to indicate an improving picture. The insurer said insurance market conditions in the first quarter, to the end of March, were broadly unchanged against the same period in 2015. Slow growth in the market and strong competition has driven sharp price-volume trade-offs, the group said, in line with its expectations. Group net written premiums in the quarter were flat year-on-year, reflecting the impact of the disposal of non-core operations RSA has undertaken.
National Grid, up 1.5%. The electricity network operator was upgraded to Overweight from Neutral by JPMorgan.
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FTSE 100 - LOSERS
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Centrica, down 9.3% at 211.10 pence. The British Gas parent company said it intends to issue shares to institutional investors to raise funds. Centrica said it plans to issue around 350.0 million shares, equating to around 7.0% of its current issued share capital. It will be conducted through a bookbuild process which will determine the price, but Centrica already hinted it wants to raise at least GBP750.0 million. At Centrica's closing price of 231.10p on Wednesday, 350.0 million shares would fetch GBP808.5 million, while at their current price Thursday, they would raise GBP738.9 million gross. Centrica said the placing will allow it to complete two acquisitions worth a total of GBP350.0 million and to lower net debt by GBP400.0 million, reducing the pressure on Centrica's investment-grade credit ratings. Jefferies said the share placing will leave Centrica in a "modestly stronger financial position", but highlighted issuing shares to lower net debt looks like "an expensive way of paying down debt".
Rolls-Royce Holdings, down 4.5%. The jet engine maker said trading in the first few months of 2016 has been in line with its expectations and its outlook for the full year is unchanged. The company said profit, before any financing charges, will be significantly weighted to the second half, in line with previous guidance. The outlook for the second half, Rolls-Royce said, reflects increased large-engine deliveries, good underlying growth in aftermarket revenue and incremental benefits from its restructuring programme.
Inmarsat, down 4.1%. The satellite company revised down its 2016 guidance for revenue after it amended its cooperation agreement in the US with Ligado Networks and reported a fall in pretax profit for the first quarter of the year. Inmarsat reported a pretax profit of USD58.5 million in the three months to end-March, down from USD96.3 million a year before, on revenue of USD298.6 million, down from USD304.8 million. The company said that the underlying trading environment in 2016 has continued to be tough, and demand weakened in the first quarter. Inmarsat has revised its revenue guidance, excluding revenue from Ligado, for 2016 downwards by USD50 million to USD1.18 billion to USD1.25 billion. All of its other financial guidance remains unchanged, Inmarsat said
Provident Financial, down 3.0%. The sub-prime lender said it made a good start to the year across its divisions, with good growth in its Vanquis credit-card arm and in its consumer credit unit. The group said receivables for Vanquis grew 13% year-on-year in the first quarter to the end of March, with profit slightly ahead of expectations thanks to robust margins and lower funding costs. Provident said it expects another good performance for the full year in 2016, with trading in line or ahead of internal expectations thus far and credit quality sound across the business. However Panmure Gordon said:"We are nervous about the expectations for growth the current share price implies and given the extended nature of the current credit cycle and incredibly fast growth in consumer credit, we are not sure that this is the correct time in the cycle to buy."
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FTSE 250 - WINNERS
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Greggs, up 6.5%. The bakery chain was initiated at Buy by Investec. The broker said Greggs's repositioning into the food-on-the-go market opens up a host of long-term growth opportunities,
"We see upside risk from successful execution on store recycling, IT upgrades and manufacturing modernisation, with scope for further capital returns," Investec said.
IMI, up 3.2%. The engineer said its outlook for the full year remains unchanged as the company reiterated its second half performance is still expected to be stronger than the first. "Based on year to date performance and current market conditions, we continue to expect organic revenues in the first half to show a similar percentage reduction to that experienced in the full year of 2015 with margins 250 basis points lower than the first half of 2015," said IMI. "We also continue to expect an improved performance in the second half, reflecting the benefits of business improvement and cost-reduction initiatives."
Esure Group, up 2.9%. The insurer said premiums grew across the business during the first quarter of the year whilst income at Gocompare.com has soared, as the company reiterated its guidance for the full year. The group said gross written premiums were 16% higher in the first quarter of 2016 at GBP151.0 million compared to the GBP130.7 million reported a year earlier whilst the volume of in-force policies in place was 1.7% higher in the quarter to over 2.0 million. Gross written motor premiums rose 17% in the quarter to GBP128.9 million from GBP110.1 million a year earlier and home premiums grew 7.3% at GBP22.1 million from GBP20.6 million.
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FTSE 250 - LOSERS
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Shawbrook Group, down 2.8%. The lender reported growth in profit in the first quarter of 2016, boosted by growth in loan originations, and said it is confident of delivering its near- to medium-term prospects. The company said its pretax profit in the three months ended March 31 grew to GBP19.6 million from GBP13.7 million in the first quarter of 2015, which it said was driven by increased origination and continued operational leverage. "There are a range of political, economic and interest rate uncertainties which may present some challenges. However the diversity within our business and the growth potential in our core markets give us confidence in our ambition to meet the needs of businesses and consumers who are less well served by the mainstream banks," the company said.
Polymetal International, down 1.8%. The stock went ex-dividend meaning new buyers no longer qualify fir the latest dividend payouts.
Lancashire Holdings, down 1.5%. The insurance company reported a drop in pretax profit in the first quarter of 2016 as gross premiums written also fell in a "tough" underwriting market. The company said pretax profit in the three months ended March 31 dropped to USD26.5 million from USD51.5 million in the same period the year before, as gross premiums written fell to USD230.8 million from USD244.3 million, in what Chief Executive Alex Maloney described as "a very tough underwriting environment".
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MAIN MARKET AND AIM - WINNERS
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Vitesse Media, up 45%. The media and events business said two directors have left its board following a shake-up in the wake of the appointment of its new executive chairman in February. The number of non-executive directors on the board has been reduced from five to three, Vitesse said, to reflect the more streamlined operations of the company. The group has shifted its focus to higher-margin events, eschewing lower margin business. Non-Executive Director Alan Mearns has resigned from the board with immediate effect under the shake-up, while fellow Non-Executive Director Andrew Brode will leave the board at the end of June. Vitesse has also created the new role of commercial director and has hired Tim Griffiths to take that role. He joins from Australian media company Croc Media.
Filtronic, up 23%. The wireless telecommunications components maker said it has received further "substantial" production orders for its new range of integrated antennas from an undisclosed European original equipment manufacturer, valued at around USD24.2 million. These orders are follow-ons to previously announced orders of USD13.8 million, Filtronic said, and it expects the new orders to be fulfilled in the year to end-May 2017. It noted that as these orders are being placed to put inventory into its customer's sales channels they may therefore not represent normal demand levels.
7digital Group, up 18%. The digital music and radio services company said it has signed a contract with social media platform musical.ly. Musical.ly is based around video and music content, 7digital said, adding the deal will contribute to its revenue in 2016. No specific financial details were disclosed. 7digital added its client i.am+, the technology company founded by musician and producer Will.i.am, is now taking pre-orders for its Dial wearable 'smartcuff' devices, ahead of its launch on May 13.
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MAIN MARKET AND AIM - LOSERS
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Falanx Group, off 29% at 4.24p. The cyber security company said it has agreed to acquire cyber security services firm Advanced Security Consulting Ltd and will raise money through a placing and loan notes issue. Falanx will pay GBP435,000 to acquire Advanced Security, a UK-based cyber security firm offering consulting, managed services, penetration testing and training. It made a GBP222,000 pretax profit in the year to the end of September 2015 on revenue of GBP348,000. Falanx will pay GBP150,000 in cash to acquire Advance Security and will issue 7.1 million shares to cover the balance of the consideration.
Robinson, down 14%. The plastic and paperboard packaging company said revenue was hit by lower resin prices in the first quarter of 2016, with business gains coming on stream slower than expected, but noted the build-up in contracts commencing in the latter part of the year was very encouraging. The company said revenue for the three months to 2016 was down 10% on the previous year, of which 4.0% was due to lower resin prices which were passed on to customers. Robinson reported lower volumes in the first quarter, coming from lower demand for its customers' products, which it said was a continuation of trends from the second half of 2015. Resin prices are increasing, Robinson said, adding that this will reduce margins in the short term before its customer prices are adjusted.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
Copyright 2016 Alliance News Limited. All Rights Reserved.
9 Nov 2015 09:25
