OEX.L Share News (OEX)

LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices midday Thursday.
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FTSE 100 - WINNERS
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Reed Elsevier, up 4.5%. The Anglo-Dutch publisher maintained its outlook for the full year, expecting to deliver another year of underlying revenue, profit and earnings growth in 2014 as it raised its dividend for the half year to end-June. It proposed a dividend of 7.00 pence, up 5% from 6.65 pence. The company posted a pretax profit, at constant currency and excluding acquisitions and disposals, of GBP791 million in the six months to June 30, up from GBP778 million, despite seeing revenue decline to GBP2.85 billion from GBP3.03 billion, as its operating margin improved to 30.2% from 28.8%.

International Consolidated Airlines Group, up 2%. The airline company, formed by the merger of British Airways and Spanish flag carrier Iberia Lineas Aereas de Espana SA, said Iberia and its trade unions have reached an agreement on collective redundancies for pilots and ground staff. It said that the agreement could lead to the reduction of up to 1,427 jobs at the airline. It said the agreement enables Iberia to continue with its transformation plan to introduce permanent structural changes across the airline and to facilitate profitable growth in the future.

Capita, up 0.7%. The outsourcing company is once again among the leading risers in the blue-chip index, having closed up 4.8% on Wednesday. Shares in the company ended at a record high closing price on Wednesday, after it raised its interim dividend and expressed confidence in its full-year performance, even though it saw its pretax profit for the half year to June 30 hit by exceptional costs. Adding to positive sentiment Thursday, Liberum Capital has increased its price target on the company to 1,175 pence from 1,100p, while Barclays has increased its price target to 1,280p from 1,050p.
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FTSE 100 - LOSERS
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Kingfisher, down 7.5%. Despite recording a 0.8% rise in sales in the 10 weeks to July, the home improvement retailer has reported a sharp deterioration in demand since June in its French and Polish operations. Total sales in France dropped 1.4%, and 2.2% on a like-for-like basis, but were up 1.1% year-to-date. Total sales in Poland were down 3.4%, 3.5% on a like-for-like basis, and up 4.5% for the year-to-dear. "The impact on profit expectations is limited for now, but future uncertainty will weigh," says Jefferies analyst James Grzinic. Investment bank Jefferies has lowered its price target on the company to 385 pence from 450p.

EasyJet, down 4.4%. Shares in low-cost airline easyJet have fallen sharply Thursday morning, after the company said its pretax profit for the 2014 full year is expected to be between GBP545 million and GBP570 million. While this represents a modest increase from the GBP478 recorded in the previous year, Liberum Capital analyst Gerald Khoo is not impressed. This is the first time easyJet has issued guidance on pretax profit for the 2014 full year, and it is "a little disappointing" relative to consensus and Liberum's top-end forecast, says Khoo. As a result, the analyst now anticipates cuts to consensus estimates for 2014 and possibly 2015. Ahead of Thursday's release, the consensus pretax profit estimate for the 2014 full year stood at GBP572 million, according to Bloomberg, Khoo says.

Hammerson, down 0.8%. The retail property developer's shares have fallen, even though it reported an increase in profit for the first half, as it benefited from valuation gains on its portfolio. The company posted pretax profit of GBP362.9 million for the six months to end-June, up from GBP80.8 million a year earlier. Hammerson was boosted by a GBP224.5 million revaluation gain on its property portfolio during the period after reporting a GBP20.0 million revaluation loss a year earlier. It said that gross rental income, which represents the group's revenue from its tenants, rose to GBP92.9 million from GBP87.4 million a year earlier, while net rental income, which is the principal profit measure used to determine the performance of each sector, rose to GBP146.9 million from GBP140.4 million.

SSE, down 0.7%. The UK power supplier, alongside distributor UK Power Networks, has been forced to pay out a further GBP3.3 million in compensation relating to performance during storms last Christmas, and the UK regulator Ofgem also raised the minimum power cut compensation payment per customer. Ofgem said that it has now secured a further GBP3.3 million in compensation from the two companies, bringing the total compensation payments to GBP8.0 million, following its investigation into their performance during the exceptional storms last Christmas in the south of England. Separately, the regulator is raising the minimum compensation payment per customer to GBP70 from GBP27 for those who go at least 24 hours without power, in an attempt to further strengthen incentives for companies to act quickly and reconnect customers as soon as possible. Ofgem said the new rules come into play in April 2015 and also include substantially increasing the cap for payments made to customers to GBP700 from GBP216. In addition, the UK Competition and Markets Authority published an issues statement for its investigation of the British energy market, which sets out the scope of the investigation and initial theories on what could be adversely affecting competition in the energy market.
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FTSE 250 - WINNERS
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Howden Joinery Group, up 6.7%. The kitchens and joinery products supplier has seen its shares surge after reporting an increase in profit and revenue for the first half, as improved trading conditions seen since last summer continued. It posted pretax profit of GBP57.2 million for the six months ended June 14, up from GBP41.6 million a year earlier, as revenue rose to GBP435.4 million from GBP390.8 million a year earlier. Howden attributed its strong performance to a number of factors including improved market conditions and price increases implemented early in the year. In addition, it said sales from its French depots increased by more than 5% on constant currency terms. It said gross profit margin rose to 63.2% from 61.5% a year earlier, reflecting the price increases.

Lancashire Holdings, up 5.8%. The specialist insurer's shares are the biggest gainers in the mid-cap index, even though the company reported a fall in second-quarter pretax profit due a rise in expenses. It said it made a USD41.5 million pretax profit in the quarter ended June 30, compared with a USD58.3 million pretax profit in the corresponding quarter last year. Net revenue increased by USD50.5 million to USD195.8 million, driven by a 52% increase in gross written premiums to USD318.4. Shore Capital analyst Eamonn Flanagan views this as a "solid outcome", which should arrest the poor performance of the stock in recent months. "A few more quarters like this and we should see the stock recover to more appropriate levels," he says. In the meantime, the brokerage has upgraded its dividend forecast for the year to 60 pence, which represents a payout ratio of approximately 90%, Flanagan says.

Halma, up 1.8%. The technology company's shares have risen after it said it is positioned for further progress in the year ahead, in line with its expectations. It said that market conditions had remained varied within its four sectors and major geographic regions, and noted that the appreciation of sterling has continued to cause it trouble. Halma said it has continued to achieve organic revenue growth at constant currency, with order intake at 103% of current revenue.

Close Brothers Group, up 1.4%. The merchant banking group said it is confident of reporting strong full-year earnings, leaving its outlook unchanged as it said that both its banking loan book and asset management division's assets under management increased during the five months to the end of June. It said its banking loan book grew to GBP5.2 billion from GBP4.9 billion in the five months to the end of June, due to improved demand in property and motor finance. Close Brothers said the division wants to maintain lending standards, and reported a slight decline in the net interest margin in the period, offset by continued strong credit performance. Elsewhere, assets under management grew to GBP9.7 billion from GBP9.3 billion during the five months, boosted by net inflows across its core distribution channels and positive market movements. The revenue margin remained stable on the first half. In addition, Close Brothers said that its securities division has enjoyed continued positive trading conditions and improved market sentiment.

Rathbone Brothers, up 1.3%. The wealth manager said its funds under management increased by 8.6% in the first half, boosted by organic growth and the acquisition of part of Deutsche Asset & Wealth Management's London-based private client investment management business. It said that funds under management increased to GBP23.9 billion from GBP22.0 billion in the six months to the end of June. It is awaiting a further increase when the acquisition of the private client and charity investment management business of Jupiter Asset Management completes. Pretax profit rose to GBP30.9 million in the half year from GBP23.2 million in the corresponding period a year ago. This arose from an increase in net interest income to GBP4.4 million from GBP4.2 million, as well as an increase in net fee and commission income to GBP91.3 million from GBP82.0 million. Operating expenses increased to GBP73.1 million from GBP64.9 million.
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FTSE 250 - LOSERS
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Eletrocomponents, down 6.1%. The company is the heaviest faller in the FTSE 250, even though it said it has seen a good sales performance in most of its markets in the first quarter to end-June. Adjusting for trading days and foreign exchange movements, the company saw sales growth of 3% in the first quarter, with 4% growth in May and June. However, group growth was dragged down by a weaker performance in Europe, led by the UK and France. While Shore Capital analyst Robin Speakman notes that the sales trend at the group level has strengthened in May and June, he believes that "significant currency exposure is set to have a translation impact on reported results in due course, with sterling showing little sign of giving up recent gains at present."

CSR, down 2.7%. The wireless technology company reported a drop in second quarter revenue to GBP193.7 million from USD262.5 million the year before, and said it expects third quarter revenue to be between USD200 million to USD220 million, which is at the lower end of current forecasts. The company did post a rise in pretax profit to USD60.8 million in the second quarter, up from USD27.0 million, thanks in part to its tight cost control. While revenue from previously core products such as cameras is on a long term decline, CSR, like many of its peers, is looking to new trends such as tech-wearables and the 'internet of things', as potential opportunities for its business.

Just Eat, down 2.4%. The online takeaway food delivery service has acquired additional shares in FBA Invest SaS, taking its total shareholding to 80% from 50% in a deal worth an initial EUR7.0 million. FBA owns 100% of the share capital of Eat On Line SaS, which trades under the brand alloresto.fr in France. Like Just Eat, the website provides an online takeaway food service. The stake was acquired from Just Eat's joint venture partners and will be financed from the company's existing cash resources.

Drax Group, down 2.2%. Shares in Drax Group have fallen as it continues to wrangle with the UK Department of Energy and Climate Change over a GBP1.3 billion subsidy it was originally awarded, before the DECC then deemed the company ineligible for the award back in April. In a further update after the market close Wednesday, Drax, which owns the UK's largest power station, said that the DECC has now been forced to award the subsidy following a High Court ruling earlier this month, but the DECC also will be taking the dispute one step further, to the Court of Appeal. "What a shambles this decision is turning into, not only for Drax which is seeing its share price move around like a ping pong ball, but also the government's so called energy policy, which is turning into a tug-of-war between the green lobby and the fossil fuel lobby," said CMC Markets chief market analyst Michael Hewson.
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AIM ALL-SHARE - WINNERS
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Oilex, up 9%. The oil and gas exploration and development company said in an end of quarter report that its net oil production in the second quarter more than doubled following lost time injuries the previous quarter. It said net oil production for the three months ended June 30 was 665 barrels, a substantial increase from 244 barrels in the first quarter when the company saw a lost time incident at its Cambay-77H drilling operations in India's Gujarat. The company said it received 355 barrels from its 45% owned Cambay field and 310 barrels from the Sabarmati field, which is also in Gujarat state.

Iomart Group, up 8.5%. Shares in the web hosting company have risen after it confirmed it had rejected two approaches from Host Europe Holdings Ltd. Host Europe had said Thursday it had approached Iomart with a possible cash offer for 285 pence per share. Iomart later Thursday morning confirmed that it had been approached on June 13 and June 27 with an offer of 275 pence and 285 pence, respectively. It said it had rejected both offers as undervaluing the company. Shares in Iomart are currently quoted at 255.00 pence.

Jarvis Securities, up 7.1%. The company has reported an 11% increase in its interim pretax profit, boosted by a rise in client numbers. It said that it made a GBP1.3 million pretax profit in the first six months of 2014, compared with GBP1.2 million in the corresponding period a year earlier. Revenue increased to GBP3.7 million, from GBP3.5 million, while administrative expenses edged up only slightly to GBP2.0 million.
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By James Kemp; jameskemp@alliancenews.com; @jamespkemp

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