Last checked at 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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Rolls-Royce Holdings, up 19%. The engineering group said it swung to a big loss in the first half even as revenue ticked up. The company said it made a GBP2.15 billion pretax loss in the half to the end of June, compared to a GBP310.0 million profit a year prior. Revenue edged up to GBP6.46 billion from GBP6.37 billion in the half but declined 5.0% in constant currencies. However, Rolls-Royce delivered a "strong beat" in first-half underlying earnings, according to UBS. The beat was driven by a better-than-expected performance in the civil aerospace which delivered underlying Ebit of GBP31.0 million, down from GBP248.0 million in the same period last year, ahead of UBS's estimate of a GBP104.0 million loss and market consensus forecast of a GBP71.0 million loss. The bank added investor attention will be on the tailwind to profits from sterling depreciation. Rolls-Royce said the weak pound "will enhance underlying full-year earnings in future years to the extent our effective hedge rate declines over time".
Sky, up 6.6%. The pay-TV company reported a rise in earnings and revenue for its most recently ended financial year and upped its total dividend payout. Sky reported a fall in pretax profit to GBP752 million for the year to end-June from GBP1.52 billion the year before, on revenue of GBP11.97 billion, up from GBP9.99 billion, as a result of one-off gains from its sales of stakes in ITV and the National Geographic Channel the previous year. Sky proposed a final dividend of 20.95 pence, taking its total dividend for the year to 33.5 pence, up from 32.80p the year before.
Anglo American, up 5.9%. The miner said it still expects to get net debt below USD10.00 billion by the end of this year after repaying substantial amounts in the first half as the multi-commodity miner reported a 23% fall in underlying earnings. The company lowered net debt to USD11.70 billion by the end of June from USD12.90 billion at the end of 2015. Anglo American still reported steep declines in underlying earnings in the recent half year, down 23% to USD698.0 million from USD904.0 million. Revenue fell 20% in the first half to USD10.61 billion from USD13.34 billion, and remained loss making at the pretax line, posting a loss of USD364.0 million compared to the USD1.92 billion loss reported a year ago. As guided in December, Anglo American did not pay a dividend for the first half. "Anglo American reported what we felt were reasonably good first half 2016 interim results, with revenues and EBIT somewhat head of our expectations, and that of consensus," Shore Capital said.
BT Group, up 3.1%. The telecommunications company said it had made a "good start" to its current financial year, and it is on track to deliver its outlook, as pretax profit rose in its first quarter. For the first quarter to end-June, the telecommunications company reported a pretax profit of GBP717 million, up from GBP632 million the year before, on revenue of GBP5.78 billion, up from GBP4.36 billion the year before.
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FTSE 100 - LOSERS
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Smith & Nephew, down 4.0%. The medical devices maker reported lower pretax profit for the first half despite some growth in revenue but raised its interim dividend. The group said pretax profit in the half to the end of June declined to USD327.0 million from USD411.0 million, hit by a weaker gross margin and higher administrative expenses. Revenue edged up to USD2.33 billion from USD2.27 billion a year prior, dragged back by currency effects but boosted by robust organic growth and acquisition contributions. Smith & Nephew said revenue growth was strong from its Sports Medicine Joint Repair and Knee Implant franchises in the half. Smith & Nephew will pay an interim dividend of 12.30 US cents per share, up from 11.80 cents a year prior.
Royal Dutch Shell 'B', down 3.7%, Shell 'A', down 2.7%. The oil major said earnings in the first half of 2016 plummeted by 87% compared to the previous year after revenue dropped and the oil and gas major booked a number of exceptional items. Shell said current cost of supply earnings in the first half of the year totalled USD1.05 billion compared to USD8.12 billion a year before. Excluding exceptional items, CCS earnings were down 65% year-on-year to USD2.59 billion from USD7.49 billion. Revenue in the half fell by 30% to USD110.00 billion from USD142.79 billion. The second quarter dividend remained flat from the first at USD0.94 per share.
Informa, down 3.0%. The publishing and events company reported lower pretax profit as it proposed an increased dividend for the first half of 2016 and reiterated confidence in meeting its full year targets. Informa reported a pretax profit of GBP98.9 million for the first half of 2016, down from GBP118.9 million the year before, as revenue rose to GBP647.7 million from GBP618.8 million the year before, due to higher operating expenses and exceptional costs. But on an adjusted basis, stripping out certain costs, pretax profit rose to GBP184.8 million from GBP178.2 million. The company proposed an interim dividend of 6.80 pence, up from 6.55 pence the year before.
Lloyds Banking Group, down 3.0%. The state-backed lender said its statutory pretax profit more than doubled in the first half as it affirmed its guidance for 2016 but said it will close branches and cut jobs in order to make more savings. Lloyds said its pretax profit for the six months to the end of June grew to GBP2.46 billion, up from GBP1.19 billion a year prior due to substantially lower regulatory provisions booked for the period. Underlying profit was down 5.0% year-on-year to GBP4.2 billion, with total income down 1.0% to GBP8.9 billion. The bank hiked its interim dividend 13% year-on-year to 0.85 pence per share and affirmed its guidance for 2016. Lloyds said it will close an additional 200 branches and a further 3,000 jobs by the end of 2017, on top of previously-announced cost savings plans.
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FTSE 250 - WINNERS
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Sports Direct International, up 15%. The sportswear retailer said it intends to commence a share buyback in order to reduce its share capital. The company said the buyback will be for up to a maximum of 29.9 million shares, representing 5% of its issued share capital, for a maximum consideration of GBP89.8 million. Citigroup Global Markets will undertake the buyback on Sports Direct's behalf, during the period leading up to its annual general meeting on September 7.
Thomas Cook Group, up 6.7%. The travel operator reported a wider pretax loss in the third quarter of its financial year as revenue took a hit from terrorist attacks in Belgium and political turmoil in Turkey. The company said its pretax loss in the three months ended June 30 widened to GBP64 million from GBP44 million in the same period the year before, as revenue fell to GBP1.85 billion from GBP1.95 billion. Thomas Cook said revenue took a hit from the political issues which have been plaguing Turkey of late as well as the terrorist attacks in Brussels in March. Shore viewed the results as better than feared and said with "the group’s new operating model delivering on owned-hotel performance and scope to materially reduce the interest charge over the medium term, we retain our positive stance on the stock, despite the obvious risks."
Sophos Group, up 6.2%. The network security services provider said the first quarter of its financial year saw strong trading, and it is placed well to deliver full-year mid-teens revenue growth. Sophos' first quarter, ended June 30, saw billings up 25% year-on-year across all major regions and product categories. There was a strong growth in European billings, up 35% from its first quarter last year, assisted by a material contract with an existing customer. Revenue grew by 12% year-on-year in the quarter to USD127.4 million from USD113.5 million. Cash earnings before interest, taxation, depreciation and amortisation was up by 55% to USD25.6 million from USD16.5 million in the first quarter of the previous financial year.
Kaz Minerals, up 4.4%. The miner reported huge lifts in production of copper and gold during the first half of 2016 thanks to meaningful contributions from three new mines in Kazakhstan. Copper cathode equivalent production in the first half of 2016 was 43% higher than last year, rising to 52,600 tonnes from only 36,700 tonnes a year ago and the miner remains on track to produce 130,000 to 155,000 tonnes over the course of this year. The guidance suggests production will continue to soar in the second half. KAZ would need to produce at least 47% more copper in the second half than it did in the first to meet the bottom of that guidance range and to hit the top end, production would need to rise by at least 94%. Gold bar equivalent production also rose considerably in the first half, coming in 2.4 times higher at 39,100 ounces compared to the 16,100 ounces produced a year ago.
Just Eat, up 3.7%. The online takeaway platform raised its full-year forecasts after reporting growth in profit in the first half of 2016. Just Eat said pretax profit in the first half more than doubled to GBP33.8 million from GBP14.0 million the year before, as revenue grew to GBP171.6 million from GBP107.8 million. Just Eat said orders grew by more than half to 64.9 million from 41.9 million, while active users grew to 15.9 million from 11.0 million. As a result of this, the company has raised its full-year forecasts above market consensus, with revenue now expected to be GBP368 million, up from its prior forecast of GBP358 million. Of this, GBP7 million is due to improved trading and the remaining GBP3 million is due to positive changes in foreign currency exchange rates.
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FTSE 250 - LOSERS
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International Personal Finance, down 19%. The home credit lender reported a fall in pretax profit for the first half of 2016, but maintained its interim dividend and said the UK's vote to leave the European Union is not expect to hit its business other than in terms of currency translation. IPF reported a pretax profit of GBP30.7 million, down from GBP43.3 million the year before, as a small rise in revenue to GBP261.6 million from GBP260.3 million was offset by higher administrative costs. The company said the fall in profit was broadly in line with its expectations, and is a result of a hit from the new price cap in Poland, the winding down of its business in Slovakia, mixed performance for its home credit business, and expected higher levels of investment in its IPF Digital business.
Weir Group, down 2.7%. The oilfield services company said its guidance for 2016 has remained unchanged, despite beating expectations in the first half of the year, as the oilfield services company also unveiled a new chief executive. Weir Chief Executive Keith Cochrane is stepping down from the start of October after a decade and is begin replaced by current Finance Director Jon Stanton, who joined Weir back in 2010. Weir reported its first-half results which showed pretax profit in the period declined by 35% to GBP25.4 million from GBP39.0 million a year ago, on a 12% fall in revenue to GBP866.1 million from GBP981.3 million. The operating margin was tighter in the half at 11.9% compared to 13.1% last year, and operating profit came in 20% lower year-on-year as a result. The pretax profit excluding exceptional items amounted to GBP82.0 million, down 25% from GBP108.0 million the year before.
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MAIN MARKET AND AIM - WINNERS
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Premier Farnell, up 17% at 192.25 pence. The technology products distributor's board said it has withdrawn its recommendation for a takeover offer from Datwyler Holding, after Datwyler's offer was trumped by a higher bid from US business-to-business technology firm Avnet. Avnet has made an offer for Premier Farnell at 185 pence per share, valuing the electronics distributor at around GBP691 million, a 12% premium to Datwyler's offer of 165p made in June. Premier Farnell's takeover by Swiss manufacturer Datwyler was approved by German regulators on Tuesday. Premier Farnell said it had considered various aspects of Avnet's offer, including valuation, transaction timing, and execution risk, and said it considered the Avnet offer as "superior" compared to Datwyler's.
Mortgage Advice Bureau (Holdings), up 19%. The financial services provider said revenue grew in the first half of 2016 thanks to growth in its adviser numbers and added it remains sanguine about the impact Brexit will have on the UK housing market. The mortgage intermediary said revenue for the six months to the end of June grew 38% year-on-year to GBP43.0 million, as adviser numbers rose 13% against the end of December to 891. Though still early days, Mortgage Advice Bureau said the UK housing market remains steady, underpinned by the fundamentals on supply and demand which have led its recovery in recent years.
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MAIN MARKET AND AIM - LOSERS
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Keras Resources, down 22%. The miner revealed its recent mining activity in Australia was unprofitable due to poor productivity, though Keras also said positive free cashflow is expected going forward as grades are set to improve and costs to fall. Keras has a series of deals in place to mine areas that are owned by other companies and taking a share of the profit, if any, that is derived from its operations. However, production from the small-scale open pits at Anomaly 22 and Accord in the last quarter delivered losses. Those two pits within the Grants Patch gold tribute lease area in Australia, and Keras is mining them on behalf of Norton Gold Fields. Keras mines the ore and sends it to Norton's Paddington processing plant and pays a 22% royalty to Norton. However, the average gold price in the quarter was AUD1,687 per ounce, lower than the miner's total operating cost post-royalty, which averaged AUD1,736, meaning Keras made a USD49 gross loss on every ounce produced in the quarter. Keras added productivity was lower than expected, pushing costs higher than it was anticipating.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
Copyright 2016 Alliance News Limited. All Rights Reserved.
10 May 2024 09:52
LONDON BROKER RATINGS: UBS raises Trainline, cuts Kingspan
(Alliance News) - The following London-listed shares received analyst recommendations Friday morning and Thursday:
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