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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Resolution, up 1%. The firm said its insurance and pensions provider Friends Life is scrapping active member discounts, just two weeks after the UK Department for Work & Pensions described the charges as "unfair" to deferred members. Resolution said Friends Life will offer all its active member discount schemes the chance to move to a single charge at the current active member rate, with immediate effect.
Royal Bank of Scotland Group, up 0.4%. The bank said late on Wednesday that it has reached an agreement with the UK government over the future retirement of the dividend access share, in a move that marks an important step on its path to resume paying dividends and return to private ownership. Under the agreement, RBS will pay the Treasury an initial GBP320 million in 2014 in order to remove the dividend access share, a key part of the government's GBP25.5 billion capital injection in 2009. A further GBP1.18 billion payment will be required to retire the dividend access share, RBS said. It will be payable in one or more dividends.
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FTSE 100 - LOSERS
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Marks & Spencer, down 1.8%. The retailer's shares jumped sharply in early trading, but are now among the biggest blue-chip fallers. The company said clothing sales are improving, while its international offering and online sales are growing. However, Shore Capital analyst Clive Black believes that trade in UK general merchandise remains distinctly dull and that the trading update was "frankly quite mellow". M&S has made improvements to its food, international, internal infrastructure and online capabilities, but the "heart beat" of the retailer is womenswear, says Black. While the update is encouraging, "there is clearly a lot more to do for M&S to stem market share decline in womenswear in the UK on a sustained basis," he warns.
Centrica, down 1%. British Gas, which is owned by Centrica, has been forced to make GBP5.6 million in payments following errors in its small business switching and renewal process. The UK energy regulator Ofgem found that the energy supplier wrongly blocked businesses from switching and failed to give some businesses notice that their contract was due to end. Ofgem said that British Gas has already paid back nearly GBP1.3 million to affected customers and will now pay back a further GBP3.5 million into an energy efficiency fund and a GBP800,000 penalty.
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FTSE 250 - WINNERS
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Hays, up 5.6%. The recruitment company expects its full-year operating profit to be towards the top of the current GBP130 million to GBP141 million range of market estimates, based on a good start to the second half overall and strong performances in key markets such as the UK and Germany. Third quarter trading was impressive, says Jefferies analyst Kean Marden. Net fees increased 8% in the quarter, well ahead of Jefferies' 4% forecast and company-compiled consensus expectations of 5% growth.
Ashmore Group, up 4.2%. The asset manager said its assets under management fell to an estimated USD70.1 billion in the quarter to March 31, compared with USD75.3 billion at the end of 2013. While AuM missed estimates, the miss was down to USD4 billion in currency overlay, says Numis Securities analyst Davis McCann. Excluding low margin currency overlay, AuM was USD66.1 billion at the end of the quarter. This is 2% higher than Numis' estimate, reflecting a modest yet unexpected net inflow to external debt and equities, says McCann. Edison Investment Research analyst Neil Shah adds that Ashmore has given further signs that smart equity investors are returning to emerging markets, adding that investors will be buoyed by USD1.00 billion of positive investment performance driven by equities.
RPS Group, up 3.9%. The firm has acquired UK-based wastewater consultancy Clear Environmental Consultants for up to GBP8.3 million, in a deal aimed at developing its European business. RPS said it has paid about GBP6.8 million in cash for Clear, with an additional amount of up to GBP1.5 million due no later than May 31, 2017, depending on some operational conditions being met.
Evraz, up 2.5%. Shares in the steel maker have jumped again after Barclays upgraded its recommendation on the company to Equal Weight from Underweight. The rise comes after Evraz rose 3.8% on Wednesday, despite the company reporting a wider net loss for 2013. The loss was broadly as expected, following a period of under-performance against its sector, while Evraz also said it may pay special dividends from disposal proceeds and further cut costs.
PZ Cussons, up 2.3%. The company, which owns brands including Imperial Leather and Original Source, said it has been trading in line with management expectations over the past few months, boosted by its personal care brands in Europe, and despite challenging trading conditions in many of its markets.
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FTSE 250 - LOSERS
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Cairn Energy, down 2%. The oil and gas exploration company said that its Deputy Chief Executive Mike Watts and Managing Director and Chief Financial Officer Jann Brown will not seek re-election to the board at its annual general meeting in May. It said that the decisions come as part of its "long term succession planning". Detailing the changes, Cairn will have two Executive Directors on its Board: Simon Thomson, Chief Executive and James Smith, Finance Director. They will be supported by the Director of Exploration, Richard Heaton and Chief Operating Officer, Paul Mayland.
Oxford Instruments, down 1.8%. The electronics equipment company said its performance over the full year to the end of March was in line with the previous year. Following the update that was typically light on detail, Jefferies analyst Andy Douglas said that he continues to believe that consensus full year 2015 expectations are too high and that consensus downgrades should be forthcoming given the flat performance.
WH Smith, down 1.2%. WH Smith shares also rose in early trading before dropping. The group raised its interim dividend by 15% as it grew profits in the first half of its financial year despite a continued decline in high-street sales. The retailer said profit margins improved as it continued to keep a tight lid on costs across the business, while sales in airports and train stations increased.
Greene King, down 1.2%. The pub and restaurant operator said its Chief Financial Officer Matthew Fearn has taken a temporary leave of absence to undergo urgent and important medical treatment. Fearn's responsibilities will be taken on by corporate finance director David Brown in his absence, reporting to Chief Executive Rooney Anand.
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AIM ALL-SHARE - WINNERS
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Faroe Petroleum, up 8.4%. The oil and gas company has made a new gas discovery at its Solberg site and has successfully drill stem tested an exploration well at its Njord production facility in the Norwegian Sea. It said its Solberg exploration well 6407/1-7 and its sidetrack have encountered gas and condensate in its main target lower Cretaceous Lange formation. The company said the main well was drilled to a depth of 3,345 metres below sea level and encountered two hydrocarbon bearing sandstone layers in a reservoir estimated to be 16 metres with a total net interval of 12 metres. The firm said the quality of the reservoir was better than expected. It separately said that it completed a successful drill stem test on its initial 6406/12-3S Pil exploration well in the Njord production facility, which flowed at a stable rate of 6,710 barrels of oil per day.
Frontera Resources Corporation, up 8.4%. The oil and gas exploration and production company said it has signed an agreement with Varang Exploration Ltd to sell up to a 50% interest in its Taribani Field Complex in Georgia for up to USD36 million in return for a drilling programme at the site. It said its subsidiary Frontera Resources Georgia Corp penned the so-called farmout deal, under which it will receive the money for the costs associated with drilling seven wells over three phases. The Taribani Field complex is an area that encompasses approximately 1,400 square kilometres, where internal preliminary analysis suggests that there could be as much as 18 billion barrels of oil in place.
Physiomics, up 8%. The company said it will be demonstrating a new validation of its Virtual Tumour Clinical Platform at a workshop in France, with a study that shows the platform can be used to make accurate predictions of clinical outcomes. The Virtual Tumour Clinical platform is a technology that uses a mathematical model to predict the growth of tumours. The study will demonstrate this using a phase II clinical trial of Docetaxel compared to a Docetaxel/Selumetinib treatment for metastatic melanoma, where the Virtual Tumour Clinical was able to accurately predict the change on tumour lesion diameter in both sides of the study.
Mariana Resources, up 7.8%. The exploration and development company has received a USD600,000 value added tax refund from the Argentinian Tax Authorities, and will use the money to to advance its gold and silver exploration, with its main focus in 2014 being to complete drill target definition at its Los Cisnes project.
TrakM8 Holdings, up 7.3%. The telematics hardware and software company said pretax profit in its last financial year, excluding costs related to the acquisition of BOX Telematics Ltd, will be above its previous expectations after new projects boosted the margin in its engineering services business in the final quarter of the year. Orders, excluding the BOX business, were up 46% compared with the previous year, while like-for-like revenue was up 13%. Total revenue, including BOX, was below expectations because the BOX acquisition was delayed by a month, and the it had to reorganise and invest in BOX to prepare it for a telematics contract with a UK insurance company.
Motive Television, up 7.1%. The firm said that testing of its technology for Freeview Tablet TV will begin April 28. The Digital Technology Group testing the technology next month needs to approve it to be certified as Freeview compliant. Motive said it is seeking to have testing and approval completed in time to have the product on the store shelves in time for the World Cup in June.
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AIM ALL-SHARE - LOSERS
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Strategic Minerals, off 20%. The magnetite iron-ore producer and exploration company said that it has raised roughly GBP1 million from new investors through a share subscription, issued shares to mining giant Glencore AG to pay off an obligation, and had identified about GBP650,000 of annual cost cuts.
Reach4Entertainment Enterprises, down 8.8%. The media, marketing and event management company is a big loser despite expressing confidence for further progress in 2014 and beyond, as it saw pretax profit nearly double in 2013. The company posted a pretax profit of GBP308,000 in 2013, up from GBP162,000 in 2012, as revenue rose to GBP75.7 million from GBP69.3 million. Revenue growth was stronger in the second half than the first, the company said, and gross margin stayed broadly flat at 25.6%.
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By James Kemp; jameskemp@alliancenews.com; @jamespkemp
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