Last checked at LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Tuesday.
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FTSE 100 - WINNERS
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BG Group, up 1.3%, Royal Dutch Shell 'B', up 0.5%. Shell upgraded its outlook on cost synergies to be achieved from the BG Group takeover and said it has delivered a competitive underlying performance within the low oil price environment. Shell said it has upgraded its annual cost synergy target for the BG takeover to USD3.5 billion, a USD1.0 billion, or 40%, increase on its previous target of USD2.5 billion. It said the transaction remains on track to close in early 2016.
Direct Line Insurance Group, up 1.0%. The insurer reiterated guidance for its combined operating ratio, and reported growth in third-quarter premiums despite highly competitive motor and home insurance markets. Direct Line guided a combined operating ratio for 2015 in the range of 92% and 94% for ongoing operations. A ratio below 100% indicates an underwriting profit, while a ratio above that level indicates a loss. The insurer said it will first consider any return of capital to shareholders alongside its results for 2015, and will partly depend on capital requirements under new insurance rules coming into force across the European Union from January 1, 2016.
Imperial Tobacco Group, up 0.6%. The tobacco giant reported a rise in profit in its recently-ended financial year, although revenue was blown lower by currency headwinds and difficult trading in the Iraqi and Syrian markets, but Imperial said that while challenges will persist it is well-placed to meet expectations for the new year. Imperial said pretax profit in the year ended September 30 grew to GBP1.75 billion from GBP1.52 billion the year before, although revenue fell to GBP25.28 billion from GBP26.46 billion. At constant currency, tobacco net revenue would have grown 4.3%. Imperial Tobacco will pay a total dividend of 141.0 pence, up 10% on the 128.1p paid the year before.
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FTSE 100 - LOSERS
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Standard Chartered, down 8.2%. The emerging markets-focused bank said it will raise GBP3.3 billion in a rights issue and axe its final dividend for 2015 to strengthen its balance sheet, as the bank reported that it swung to a third-quarter loss on a jump in impairment charges. The two-for-seven rights issue is designed to increase the group's common equity tier one capital ratio, a key measure of financial strength, to 13.1% on June 30 levels from 11.5%. The issue price of the rights issue has been set at 465 pence, a 35% discount to the Monday's closing price of 713.60p. The news came as Chief Executive Bill Winters revealed the outcome of a strategic review that will aim to shift the group's focus more on affluent retail clients and less on asset-intensive corporate and institutional banking businesses.
Taylor Wimpey, down 3.0%, Barratt Developments, down 2.9%, Persimmon, down 1.9%. Liberum cut its ratings on the housebuilders to Sell from Hold on the belief valuations on the companies are currently too optimistic to withstand the gross margin pressure which will emerge in coming years as house price inflation is suppressed by greater regulation and as build cost inflation returns.
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FTSE 250 - WINNERS
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Stagecoach Group, up 6.7%, Go-Ahead Group, up 1.6%. The transport operators both welcomed the decision made by the Tyne and Wear Quality Contract Scheme Review Board that the bus franchising proposal tabled by the North East Combined Authority has failed to meet the necessary statutory tests. The transport executive for the authority had proposed that bus services should be franchised in Tyne and Wear through the letting of contracts, with local taxpayers taking on the risk of the local bus network. This would have replaced the current system whereby services are largely commercially-funded by bus operators.
Weir Group, up 5.4%. The engineer said its full-year results are set to be broadly in line with market expectations despite further weakness in its key markets in the third quarter. Weir said the challenges in its markets intensified in September and October, with further declines in work from the oil and gas industry amid project deferrals and cancellations continuing due to the low oil price. Overall order input fell 29% in the third quarter to the end of September and was down 8.0% from the second quarter, though the group did achieve some operational progress in its power and industrial division, where margins improved.
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FTSE 250 - LOSERS
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Just Eat, down 5.5%. The online takeaway operator increased its revenue guidance for 2015 following order growth that was ahead of management expectations in the third quarter. The online takeaway company said orders in the three months ended September 30 grew 64%, or 48% on a like-for-like basis, as its strategy of ongoing investment in technology and marketing delivered order growth ahead of expectations. As a result, Just Eat increased its revenue expectations for the full year to slightly above GBP240.0 million, up from the GBP230.0 million guidance issued in August.
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MAIN MARKET AND AIM - WINNERS
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Lansdowne Oil & Gas, up 26%. Lansdowne and partner Providence Resources said a two-year extension has been granted on the licence covering the Barryroe oil field in Ireland. Providence's Exola Ltd subsidiary has an 80% stake in the licence and is the operator, while Lansdowne owns a 20% stake. In addition, the size of the licence area has been extended to accommodate potential mapped extensions of the Barryroe prospect. Providence Resources shares were down 1.7%.
Kennedy Ventures, up 25%. The resources investment company said the process plant for the Tantalite Valley project in southern Namibia has been successfully commissioned. Kennedy said the mine is now nearly fully staffed and expects underground production to be available for processing by the end of this months. Plans have also been put in place to expedite output and the company expects the first offtake deliveries to start in November. Production is expected to ramp up to an initial target rate of 10,500 tonnes per month in the second quarter of 2016, the company said.
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MAIN MARKET AND AIM - LOSERS
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LGO Energy, down 19%. The oil and gas company said it has hired advisers to sound out potential strategic investors as it looks to bridge the funding gap it faces following the loss of the GY-678 well at the Goudron field in Trinidad. LGO said delays have now occurred in the settlement of the remaining capital costs for its recent drilling programme, amounting to around USD4.0 million. LGO said it will need BNP Paribas, its lender, to approve the release of specific funds previously drawn down by the company. LGO is considering a range of options to remedy its funding issues and said it has now hired Wellford Capital Markets and Height Securities to advise on strategic investments in the company.
Roxi Petroleum, down 15%. The Kazakhstan-focused oil and gas company said it had encountered further problems with drilling at the BNG project area. Roxi said the first side-track well drilled at the Deep Well A5 well at the BNG project area encountered similar problems to the first well drilled at the project, which was plugged and abandoned after suffering drilling difficulties and after equipment became stuck at the bottom of the well. The side-track well was hit by the same excess drilling fluids seen in the first, though a smaller side-track well stopped in the gross oil bearing zone. A prospective oil zone is now to be tested on an open-hole basis, Roxi said.
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By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
IN BRIEF: Lansdowne Oil & Gas shares up on ECT claim update
Lansdowne Oil & Gas - Exploration company with licences in the Irish offshore shelf areas - Says that shareholder will receive an economic benefit relating to their shareholder if the company is successful in its ongoing claim against the Irish government, following its refusal to grant the company a lease undertaking for the Barryoe gas field. In May, the company was informed by the Irish environmental department that the Barryroe lease undertaking would not be granted, after the company had invested USD20 million in the project. Lansdowne is pursuing a claim against the country through the Energy Charter Treaty, an international agreement permitting companies to sue national governments. Lansdowne says that the benefit will be taken from the net proceeds of the ECT claim, after legal and ancillary cost deductions, but notes that there is no guarantee of success.
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