3i Group Share News (III)

LONDON (Alliance News) - The following stocks are the leading risers and fallers on the main London indices midday Thursday.

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FTSE 100 - Winners

J Sainsbury, up 2.7%, continues to rise following a number of analyst houses increased the grocer's price target. S&P Capital IQ increased it to 365.00p from 335.00p, Barclays to 440.00p from 410.00p, Jefferies to 410.00p from 385.00p, and JP Morgan to 380.00p from 360.00p. Citigroup has upgraded the supermarket to Buy from Neutral, increasing its price target to 470.00p from 400.00, while Exane BNP raises Sainsbury to Neutral from Underperform, with its target price being put up to 430.00p from 360.00p. The grocer Wednesday said its market share of 16.8% for the year to October 13 is its highest for 10 years, as it kept outperforming its main rivals with strong sales and profit growth in the first half of the financial year. The company also raised its dividend to 5 pence, from 4.2p, reporting a 9.1% rise in pretax profit.

Prudential is up 2.1%. The life insurer said new business profit totalled GBP682 million over the third quarter ended September 30, compared with GBP597 million for the corresponding quarter the year prior. New business profits were buoyed by a strong performance in Asia, where Prudential has been focused on doubling new business profit from what was achieved in 2009. It amounted to GBP331 million in the third quarter, compared with GBP281 million for the corresponding period last year. New business profit in the US grew by 15% to GBP277 million.

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FTSE 100 - Losers

Centrica, down 4.2%, is the biggest faller on the blue-chip index. Centrica said it expects to report adjusted earnings per share at similar levels to last year. The figure had been up 2% at the half-year stage, so the outlook represents a deterioration in the second half. Margins are under pressure in its British Gas business-to-business unit as market conditions remain challenging and it decided to stop automatically rolling over contracts. Centrica's North American energy supply business also is seeing pressure on margins. It warned that its storage business will see a sharp drop in profitability in the second half of the year that will continue into 2014. It confirmed that it will take about GBP240 million in provisions for deciding not to proceed with an offshore gas storage project in Baird and to put the Caythorpe onshore project on hold indefinitely.

Rexam is down 1.5%. While the drinks can maker said it continues to expect full-year results to be above its results for last year, its markets remain mixed. Growth in West Europe has been partially offset by weakness in Russia and difficult trading in Egypt and Turkey, while good growth in speciality cans in South America was offset by weakness for standard cans.

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FTSE 250 - Winners

Ophir Energy jumps 16%. The company said it has sold a 20% interest in its Tanzania Blocks 1, 3 and 4 to Pavilion Energy. The deal, which is expected to complete during the first quarter of 2014, has a maximum consideration of USD1.288 billion. Ophir said it will remain a significant investor in Tanzania going forward, through its continued stake in the joint venture and exploration drilling in Block 7 and East Pande. In its interim management statement for the third quarter, released in tandem with the sale notice, the firm said its net cash balance was USD749.8 million at the end of September.

Taylor Wimpey is up 5.1% after it reported it had seen a "healthy" level of demand for its properties in the UK with sales rates in the second half ahead of the equivalent period in 2012. The company recorded an average net private reservation rate of 0.65 sales per outlet per week up from 0.57 in 2012, while cancellation rates dipped to 13% from 15% a year earlier. The firm also is building its order book for 2014 with over 30% forward sold for 2014 completions. The current total order book represents 7,557 homes worth GBP1.5 billion compared with 6,662 valued at GBP1.1 billion in the week ended 11 November 2012. The housebuilder said it had been encouraged by the UK government's flagship housing programme Help to Buy.

Amlin, up 4.7%, is expecting to beat its target return on equity for the full year, after delivering "excellent" overall underwriting returns in the third quarter, aided by low catastrophe losses and continued improvement by Amlin Europe. Return on equity is expected to exceed the full year cross-cycle target of 15%.

Ted Baker is up 4.6%. The company said that revenues rose significantly in the third quarter, driven by new space and a strong performance across the business. Ted Baker said that the brand continues to perform well across the business, and in line with board expectations. It said that international expansion continued during the period, with further concession openings in department stores in the US, the Netherlands, France, Spain, Germany, as well as a first concessions in China.

Great Portland Estates is up 3% following an increase in revenue and profit for the first half. The company said its portfolio was valued 6.7% higher on a like-for-like basis than in March at GBP2.5 billion. Pretax profit was GBP146.9 million for the period ended September 30, up from GBP76.7 million a year earlier, and revenue was GBP42.8 million, up from GBP33.4 million in 2012. The property firm remained optimistic and said the London commercial property market continued to be attractive for investment.

Electrocomponents climbs 2.9%. The firm posted increases in pretax profits and rising revenues as international sales offset declines in the UK. The electronics and maintenance products distributor posted a pretax profit of GBP44.6 million in the half year ended September 30, up 22% from GBP36.7 million in the previous year. Revenues were GBP635.4 million, up from GBP606.5 million in the previous year. In the UK sales declined 3% but were offset by 3% growth internationally.

SIG is up 2.8% after it reported that it is on track to meet its expectations in 2013. The company noted that group sales from continuing operations for the year to October increased by over 3%, having benefited from exchange rate movements .The improvement in the second-quarter sales trend continued into the second half of the year with like-for-like sales up by about 2% in the four months July to October. The firm noted that gross margin for the group continues to be slightly ahead of the same period last year.

WS Atkins climbs 2.6% after it said its full-year outlook is running ahead of expectations, after reporting strong revenue and profit growth in the first half, driven by UK projects like widening sections of the M25 and upgrading the rail network. Signalling its confidence, it raised its interim dividend to 10.5 pence, from 10p, after reporting a pretax profit of GBP54.8 million for the six months to end-September, up from GBP47.8 million a year earlier. Its revenues rose to GBP915.4 million, from GBP815.7 million.

Hansteen Holdings is up 2.6% after it said rental income has continued to rise since the first half as it made a number of acquisitions. The company said total annualised rental income stood at GBP136.9 million, including UK funds, compared with GBP93.5 million at the end of June. During the period, the company bought four properties worth GBP24.1 million and sold 13 properties totalling GBP12.3 million, GBP1.3 million above valuation. It also secured 401 lettings with annualised rental income of GBP10.4 million. Hansteen also acquired a 27.5% stake in Ashtenne Industrial Fund during the period for approximately GBP53 million. AIF owns almost 1.4 million square metres of multi-let industrial properties in the UK, with an annual rental income of GBP43.6.

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FTSE 250 - Losers

Perform Group falls 14%. Despite reporting that year-on-year revenue growth for the third quarter was up 31% to GBP51.8 million, the company revealed that the legacy technology and production division has seen weakness in its second-half performance. Subsequently EBITDA is expected to fall by GBP4 million, says Paul Richards, analyst at Numis. The investment bank has reduced its 2013 EBITDA forecasts to GBP50 million from GBP50 million. Although Numis anticipated an "adverse share price reaction this morning," it is confident about the group's future prospects in its core businesses.

Serco is down 13% after it warned that it has been hit by the UK government contract issues and the impact of October's US government shutdown, with margins under pressure as contract awards are delayed or lost. The company cut its full-year profit expectations and warned that profits in 2014 are set to be even lower. In a trading update, the outsourcing company said it still has a wide range of expectations for its full-year adjusted operating profit at constant currencies, but the mid-point of GBP307 million would be broadly similar to last year and well below current market consensus of about GBP325 million. It warned that 2014 profit is likely to down down on this year. After what it called an "awful statement," Liberum Capital has cut Serco's price target to 430.00p from 540.00p, as it expects further weakness.

Phoenix Group Holdings, down 6.8%, said, after the UK equity market close Wednesday, that it had terminated discussions with Swiss Reinsurance Company, regarding a possible combination of Phoenix and Swiss Reinsurance's UK Admin Reinsurance Business Unit, as neither parties were able to agree on terms of the transaction.

3i Group drops 5.4% despite saying it has swung to a half-year pretax profit after its portfolio gave good returns and its foreign exchange losses more than halved. 3i Group said it made a GBP143 million pretax profit for the six months to September 30, compared with a GBP165 million pretax loss for the corresponding period last year. 3i currently trades at a 15% premium to its 30 September 2013 net-asset value, "significantly ahead of the average 1.6% discount to NAV over the past 10 years," says Liberum. The brokerage believes that the company "does not yet warrant trading on a double-digit premium to net-asset-value."

BBA Aviation falls 4.8%. The airport support services and engine repair company said that although it still expects to make good progress in 2013, trading in the third quarter was slightly worse than expected due to further weakness in Europe. BBA said movements in its North American business and general aviation operations had grown 3% in the third quarter, but the same operations in Europe saw a 1% decline in movements, while North American commercial operations also reported a 1% decline in movements.

Pace is down 4.4%. The company said that its trading performance progressed well in the third quarter and analysts see no reason to adjust estimates on the back of the update. However, US peer Cisco posted a drop in first-quarter earnings overnight. The Silicon Valley company said that although revenue grew by 2.0% year-on-year, profits dropped 5.0% due to increased competition from competitors such as China's Huawei. "There's clearly a problem at Cisco, and it seems there's an unfortunate read across to Pace this morning", says Jefferies Technology analyst Lee Simpson.

Devro is off 1.4% after it reported that it now expects its full-year trading outcome to be at the lower end of market expectations, due to flat sales volumes and weakness in some developed markets in the third quarter. The group said trading slowed more than expected in the UK, Continental Europe, Australia and North America, and was below expectations.

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AIM - Winners

Atlantic Coal is up 25% after it entered into a joint venture and coal sale agreement with China-based CIC Brancepeth Coal Ltd. Atlantic Coal is hopeful that the deal will help it develop its anthracite coal mine in Pennsylvania, while at the same time giving it opportunities in China. Under the three-year deal, which may be extended if the parties agree, Atlantic Coal will provide coal mining and processing expertise to CIC-Coal and, in return, CIC-Coal will purchase coal mined and processed by Atlantic Coal. Atlantic Coal will sell a minimum of 100,000 tonnes of coal a year, and 20,000 tonnes a quarter, to CIC-Coal, at an agreed price that can be adjusted depending on market conditions.

21st Century Technology jumps 15%. The group has won a contract of GBP1.9 million within a UK rail franchise to supply closed-circuit television systems. The contract will last for three years, and the majority of income produced from it will accrue in 2014, 21st Century said.

Andes Energia is up 12% after it said it has discovered light oil in drilling tests at its Neuquen basin project in Argentina, news that potentially opens up another shale oil play beneath the discovery. The company said it had struck light oil in an exploration well at Mirador del Valle, a joint venture with YPF SA, after drilling down to 1,789 metres and producing an average rate of 535 barrels of oil a day. It said initial evaluations determined a potential of 15 million barrels of recoverable resource, of which 6 million barrels is attributable to Andes.

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AIM - Losers

Croma Security Solutions Group is off 20%. The company said it swung to an operating profit in its last financial year as revenues grew, but it said investments it made in revamping the business and some delays to orders meant its profit had fallen short of expectations. It reported an operating profit of GBP93,617 for the year to June 30, compared with a loss of GBP407,762 a year earlier, although the profit was below its hopes.

Minera IRL is down 11%. The mining company reported a sharp drop in revenues and profits in the third quarter as it was hit hard by the falling gold price and lower sales. The company said it sold 6,427 ounces of gold in the third quarter, down from 7,520 ounces a year earlier, at an average price of USD1,323 an ounce, down from USD1,667 an ounce. That caused a drop in gross profit to USD1.7 million in the three months to end-September, down from USD5.8 million a year earlier, wile revenues slid to USD8.5 million, from USD12.5 million.

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By James Kemp; jameskemp@alliancenews.com; @jamespkemp

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