LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices midday Tuesday.
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FTSE 100 - WINNERS
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Barratt Developments, up 3.1%, and Persimmon, up 2.1%. The housebuilders have been boosted by an upbeat trading update from FTSE 250-listed rival Taylor Wimpey, which indicated higher margins and returns are likely in the medium term, given the strength of the UK housing market.
Melrose Industries, up 1.8%. The industrial investment company has expressed confidence in meeting full-year expectations, as it saw order intake up 3% in the year to date, compared to the previous year. It said it "continues to be confident of meeting expectations for the full year albeit with the order book suggesting a larger weighting towards the second half of the year."
BHP Billiton, up 1.6%, Glencore Xstrata, up 1.6%, and Anglo American, up 0.8%. The mining companies are up once again Tuesday, having moved sharply higher on Monday on the back of a "double upgrade" by JPMorgan Cazenove. Tuesday's gains, however, come on the back of some weaker-than-expected industrial production and retail sales data from China. "This is because, rather than exacerbating concerns about a slowing of the world's number two economy, data misses of late are being seen as increasing the likelihood that Beijing is forced into delivering more stimulus to keep the nation's growth around the rates it is targeting and the rest of the world is demanding," says Michael van Dulkan, head of research at Accendo Markets.
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FTSE 100 - LOSERS
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easyJet, down 4.5%, and TUI Travel, down 2.2%. easyJet is the biggest loser in the blue-chip index despite reporting that its pretax loss narrowed in the six months to the end of March as total revenue rose. It said the mild winter in the UK reduced the need for costly de-icing of its planes and reduced disruption. Meanwhile, TUI Travel is the index's second heaviest faller, even though it narrowed its pretax loss in the first half of its financial year. The improvement came despite the later timing of the key Easter trading period, as TUI was boosted by strong trading in the UK and Germany and demand for its all-inclusive packages, as well as cost reductions as it reined in losses from its French business. Numis Securities analyst Wyn Ellis said that both easyJet and TUI Travel's numbers were "fine", with both broadly in line with expectations. However, "there is nothing to say things are going to get better," Ellis added. With the improving UK economy, it may be that traders were looking for an upgrade that didn't come, the analyst said.
London Stock Exchange Group, down 1.9%. The group has announced that it is "evaluating the merits" of a potential acquisition of Frank Russell Co, saying that it is in discussions with the company's parent, The Northwestern Mutual Life Insurance Co, over a potential transaction. London Stock Exchange Group said that discussions remain ongoing, adding that there can be no certainty that any transaction will be forthcoming, but said if it were to proceed with the deal, it would intend to raise equity to part-fund the transaction. Russell was founded in 1936 and is the creator of the Russell Global Indexes, including the Russell 2000.
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FTSE 250- WINNERS
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Taylor Wimpey, up 7.4%. The housebuilder said it expects to deliver an operating margin increase of at least 300 basis points in 2014 and a return on net operating assets of at least 20% in the year, as it looks to exceed its key financial targets by the end of 2015. It said it is operating in a much improved housing market and the strength and quality of its landbank and strategic pipelines gives it the confidence to set additional challenging medium-term targets across each of its key financial objectives. It has now set targets for the period 2015 to 2017, which include achieving an average operating margin of 20% over the three year period, a return on net operating assets of at least 20% a year, and an average increase in net assets of 15% a year over the three year period. The company also hopes to achieve an average conversion of at least 65% of operating profit into operating cashflow over the three year period.
Enterprise Inns, up 1.8%. For the six months to end-March, the UK pubs operator posted a pretax profit of GBP47 million, up from GBP29 million the prior year, helped by lower exceptional property charges, and like-for-like net income across the whole estate growing 1.1%, having declined the prior year by 4.2%. Revenues for the period decreased slightly to GBP308 million from GBP312 million a year earlier, as a result of selling off pubs.
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FTSE 250- LOSERS
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Lonmin, down 2.7%. Lonmin is once again one of the biggest fallers in the mid-cap index, having fallen 4.2% on Monday. Shares in the platinum mining company are down Tuesday following a raft of negative price target revisions and broker recommendations. Deutsche Bank has lowered its price target on Lonmin to 330.00 pence from 350.00p, Exane BNP Paribas has cut its target to 290.00p from 300.00p, and HSBC has reduced its target to 307.00p from 477.00p. HSBC also has downgraded the company to Neutral from Overweight. Lonmin closed firmly lower on Monday after it said it swung to a significant pretax loss in its first half as the ongoing miners strike in South Africa continued to hit production at the company.
Brewin Dolphin, down 2.6%. The company said it expects to take an "exceptional" pretax impairment charge of about GBP32.0 million in the second-half of the year after deciding against implementing the Figaro software system into its discretionary wealth management business. Brewin has implemented the first stage of the software into its execution-only service, but said it is negotiating to vary and settle the original contracts its signed in relation to the software after it decided not to implement the system into its discretionary wealth management business. The contracts include payments of about GBP15.0 million before tax over the next decade, which, under the original contracts, would be payable following implementation of the software into the discretionary wealth management business.
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AIM ALL-SHARE - WINNERS
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Crawshaw Group, up 11%. The meat retailer has acquired 100% of the share capital of East Yorkshire Beef Ltd, a single-site high-end butcher. The company did not reveal any financial details of the acquisition, but said that the newly acquired business gives its a foothold in a completely different sector of the market, the premium segment. Stock brokerage WH Ireland understands that the cost of the acquisition is approximately GBP220,000. The broker has increased its price target to 45.00 pence from 40.00p following the deal to reflect "the progress being made across the business" and its "significant growth potential".
Egdon Resources, up 8.7%. The UK-focused oil and gas exploration and production company has confirmed a placing and open offer to raise up to GBP7 million and entered a sale and purchase deal with Alkane Energy regarding the previously announced transaction of Alkane's shale assets for Egdon shares. It said it has entered into a conditional agreement to purchase interests in 10 UK exploration and development licences from Alkane in return for 40 million Egdon shares. Egdon said the Alkane licences will then be split between the two companies, with Egdon acquiring the rights and interests over the deeper shale gas regions of the plays. Egdon also confirmed a conditional placing of 32 million shares at 20 pence each to raise roughly GBP6.4 million and an open offer to qualifying shareholders to raise up to a further GBP600,000 by the issue of 3.0 million shares at the placing price. Egdon's shares are currently quoted at 23.747 pence.
Hayward Tyler Group, up 8.1%. The specialist engineering firm said the strong momentum reported in its interim results has continued in the second-half, with new orders up 8% on the comparative period last year at GBP46 million, as at March 31, 2014. "We are encouraged particularly by the improving economic climate and the broad increase of capital investment into both the conventional and nuclear power generation markets and the subsea oil and gas exploration markets globally," said Chief Executive Ewan Lloyd-Baker. "We anticipate that our results for the year ended 31 March 2014 will be at least in line with current market expectations," he added.
Red Rock Resources, up 7.9%. The mining and exploration company has executed a binding letter of intent to sell its Colombian interests to Nicaragua Milling Company Ltd. It said it executed the letter of intent with Nicaragua Milling Co on Monday. Under the terms of the letter, Red Rock will sell its 100% stake in American Gold Mines Ltd, which owns a 50.002% interest in Four Points Mining SAS, the owner of the El Limon mine, as well as its loans to Four Points Mining, for a total consideration of USD5 million.
Lombard Risk Management, up 6.4%. The group has reported a 13% increase in full-year earnings, boosted by a strong second-half revenue showing, as increased regulatory activity enabled the integrated collateral management, regulatory compliance and reporting software provider to grow. It reported a GBP4.4 million pretax profit for the year to end-March, compared with GBP3.9 million a year earlier. Revenue grew by 22% to GBP20.4 million - with GBP13.1 million coming in the second-half - while administrative expenses increased by 25% to GBP15.8 million. Although the rate of increase in revenue was outpaced by that of administrative expenses, the cost of making sales fell by 18% to GBP164,000, resulting in a better gross profit margin. Finance expenses fell by almost half, to GBP44,000.
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AIM ALL-SHARE - LOSERS
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Strategic Natural Resources, off 15%. The company's shares have fallen sharply after it said it had secured an investment of GBP1.5 million in the company, secured a deal to pay off at least one creditor, and said it will appoint several new executives to run the company. The money will not be enough to pay off all the money it owes its current creditors, but the company said it was continuing talks about other funding options. Meanwhile, Strategic Natural said it had now signed a settlement deal with London Commodity Brokers. It will pay a cash settlement in two installments, the first from the proceeds of the initial subscription and the second by June 6. It will also allot London Commodity Brokers nearly 1.7 million new shares as long as the winding up petition is discharged.
Totally, down 13%. The digital healthcare products company said its pretax loss widened to GBP731,000 from GBP679,000, despite seeing revenue rise to GBP878,000 from GBP769,000, offset by higher sales costs and administrative expenses.
Tangiers Petroleum, down 8.4%. The exploration and development oil and gas company said it plans to raise AUD5 million through a private share placing to help drill the TAO-1 well in Morocco. It said it plans to place 31.25 million shares over two separate tranches to certain investors at AUD0.16 per share in order to raise AUD5 million. The company is dual listed in the UK and Australia and its current ASX share price is AUD0.18 with its current UK price at 10.65 pence.
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By James Kemp; jameskemp@alliancenews.com; @jamespkemp
Copyright 2014 Alliance News Limited. All Rights Reserved.
17 Sep 2014 12:34