LONDON (Alliance News) - The following stocks are the leading risers and fallers on the main London indices midday Monday.
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A deal reached in Geneva over the weekend concerning Iran's nuclear capabilities will see the county allow some facility inspections and give up some previously enriched uranium, as well as freezing construction on a plutonium reactor. In return, Iran will be have USD7 billion to USD10 billion of sanctions lifted, providing a huge boost to its crippled economy, as well as a boost to potential trading partners. The price of oil has dropped sharply since the deal was announced on Sunday, helping to lift airline stocks, and hitting oil producers. A barrel of Brent currently trades at USD109.11.
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FTSE 100 - WINNERS
International Consolidated Airlines, up 2.8%, and easyJet, up 1.7%, are two of the biggest gainers on the blue-chip index. As heavy fuel consumers, the companies are being lifted by the fall in oil prices as the Iran deal helps to stabilise international relations. Alongside this, Jefferies has raised IAG's price target to 410.00 pence from 355.00p, reiterating a Buy recommendation. The investment bank has increased easyJet to Buy from Hold, with a price target of 1,620.00p, as it believes that the company's recent strong performance can be sustained.
Petrofac climbs 1.6%. The company said its 50/50 joint venture with Korean Daelim Industrial Co. Ltd. has been awarded an Oman refinery improvement contract worth USD2.1 billion. Petrofac said that when complete, it is anticipated that the revamped facility will increase current output by more than 70%.
Diageo is up 1.2%. Competition regulator the Office of Fair Trading said its mulling an offer from the spirits and alcoholic drinks giant to sell most of its Whyte & Mackay business, in response to competition and pricing concerns for bottled blended Scotch whiskey after Diageo recently took a controlling stake in United Spirits Ltd.
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FTSE 100 - LOSERS
Babcock International Group is down 2.5% after the company confirmed that it is in exclusive discussions regarding the establishment of a joint venture with Avincis, a provider of aviation services for mission-critical operations. The fact that the shares are among the biggest blue-chip fallers suggests that there is a market feeling that Babcock may end up overpaying for Avincis or take on liabilities it shouldn't, says WH Ireland analyst Nick Spoliar. However, on the face of it, the potential partnership looks "very complementary," Spoliar added.
Tullow Oil, down 1.1%, BG Group, down 0.7%, BP, down 0.5%, and Royal Dutch Shell, off 0.3%, are all big fallers in the FTSE 100. The oil producers are falling on the back of the falling oil price.
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FTSE 250 - WINNERS
Chemring jumps 12% despite reporting a decline in revenues for the fourth quarter and fiscal 2013 as well as a decline in order book. The company said the board's expectations for fiscal 2013 trading performance remains in line with the previously given guidance. Further, Chemring has concluded that a number of business units do not form part of its longer term strategy, and that it has started a process to divest certain of these businesses which is expected to result in an improved financial position. Despite the adverse market backdrop, Chemring said it is making good progress with its strategic planning process, the majority of which is now complete. This provides a clearer view for each of its business units of their market environment, competitive dynamics and future prospects.
Cranswick is up 4.6%. The UK pork products supplier reported a 16% increase in its pretax profit of GBP26.1 million for the six months ended September 30, up from GBP22.4 million a year earlier. Rising input costs due to pig prices reaching record highs during the period was partially offset by on-going efficiency improvements, sales volume growth, and recent acquisitions. Revenues of GBP483.5 million in the first half were up 15% from GBP418.6 million a year earlier, driven by a combination of new products, new customers, and strong fresh pork and bacon sales. Cranswick increased its interim dividend by 6.4% to 10.0 pence per share, and said that it expects its full-year performance to be in line with expectations.
Oxford Instruments, up 3.6%. UBS has raised the company's price target to 1,600.00p from 1,560.00p, saying that it has turned a corner. "Although the interim results missed our forecasts, we had underestimated the first quarter's weakness and as such, the second quarter's momentum was actually better than expected," said Robbie Capp, an analyst at UBS. Capp is also confident that the indicative bid for Andor Technology is a good use of the company's balance sheet.
Thomas Cook Group climbs 2.7%. The travel operator is benefiting from the falling price of oil. Alongside this, the company has revealed that it is selling its specialist activity-tour operator Neilson Active Holidays Ltd to private equity firm Risk Capital Partners for GBP9.2 million. Thomas Cook said the sale is expected to be complete around December 10. Additionally, Numis has raised the company to Add from Hold, increasing its price target to 175.00 pence from 150.00p, following a period of consolidation on the back of the company's stellar rise through the first eight months of 2013. Further, investor interest may be wetted by preliminary results due Thursday and billed as "2013 Results and Strategy Update" the investment bank says.
JD Wetherspoon is up 2.2%. The company has exchanged contracts to buy its first bar in Ireland, the Irish Independent reported Monday, quoting the pub chain's founder and Chairman Tim Martin. The paper quotes Martin saying that the EUR3 million investment in a bar in Blackrock is part of a plan to invest up to EUR50 million in Ireland over the next five- to ten-years, with the pub chain targeting between 10 and 20 pubs over that period.
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FTSE 250 - LOSERS
Essar Energy falls 6.1% after its pretax loss widened in its first half as increased sales could not offset depreciation in the Indian rupee and increased costs. The company said its pretax loss widened to USD498.8 million for the six months ended September 30 from USD282.8 million the previous year. The majority of the company's losses came from a large increase in its foreign exchange losses, to USD482.7 million from USD134.0 million, due to the depreciation of the rupee, the majority of which are unrealised paper losses. Essar also was hit by a 2.9% increase in its cost of sales to USD12.81 billion from USD12.45 billion and an increase in selling and distribution charges to USD100.4 million from USD61.6 million the previous year. Essar is another company being hit by the falling price of oil.
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AIM - WINNERS
Armadale Capital jumps 18% after it said it got positive assay results from the Mpokoto Gold project in the Katanga Province in the Democratic Republic of Congo. The company said the results were returned from the final 20 holes of a drilling programme undertaken in 2011 by the previous operators at Mpokoto and not previously released. The company said 18 out of the 20 holes confirmed near surface mineralisation with strong potential to prove up future resource estimates. The project is anticipated to be a relatively low-cost heap leach operation with operating costs estimated at USD700-900 an ounce.
Top Level Domain Holdings is up 12% after it signed contracts for five new top-level domains, while its German unit has signed a contract for a German state domain. Top Level Domains said it has signed contracts for .horse, .cooking, .casa, .fishing, and .budapest. Its subsidiary Minds + Machines GmbH has signed a contract for .nrw, which will serve Germany's largest state, North-Rhine Westphalia.
Summit Corporation is up 11%. Summit has entered a strategic alliance with the University of Oxford that will strengthen its utrophin modulator programme for the treatment of the fatal muscle wasting disease, Duchenne Muscular Dystrophy. Under the deal, Summit will acquire exclusive commercial rights to a pipeline of novel, early-stage utrophin modulators and core biological screening technology, and an exclusive option to intellectual property that is related to the utrophin field generated during the alliance. Summit will also sponsor a drug discovery programme in the University research laboratories to identify and develop additional utrophin modulator drugs.
Reach4entertainment Enterprises climbs 11% after it said that it was confident in meeting market expectations for its full year, aftre performance across all of its operations improved its the second half. The company said its operations were trading profitably, and the focus on integrating its two events marketing businesses, Dewynters in London and SpotCo in New York, had continued to reap rewards.
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AIM - LOSERS
GEONG International is off 28% after it reported a lower order book, reiterated that it expects to report a loss for the six months to end-September and revenues of about GBP4.1 million, and said it expects its 2014 results to be in line with those it reported this year. The software company said its order book stood at GBP10 million at September 30, down from GBP11.5 million a year earlier.
Nature Group slides 22% after it warned that it expects its full-year results to be below market expectations after its maritime unit was hit by delays to the rebuild of a plant in Gibralter and higher costs in Rotterdam. The company said planning approval for rebuilding the Gibraltar plant, damaged by fire in May 2011, has been delayed due to the local planning authority requiring a limited Environmental Impact Assessment report over and above the work already carried out. On top of that, the company said it's experiencing difficult market conditions combined with higher costs at its Rotterdam operations after it had to comply with new legislation introduced in the Netherlands.
Hardide is down 17%. The company swung to a loss in its last financial year as it booked provisions for onerous lease and a writedown of assets, and revenues declined. Hardide reported a pretax loss of GBP900,000 for the 12 months to end-September compared with a profit of GBP300,000 a year earlier, as it booked a GBP400,000 provision for onerous lease and a GBP120,000 million impairment for its hibernated Houston facility. The surface coating technology said revenues fell to GBP2.4 million, from GBP2.9 million.
Surface Transforms drops 10% after it revealed that it has raised GBP327,000 through a placing of new shares, at a discounted price of 8.5 pence per share.
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By James Kemp; jameskemp@alliancenews.com; @jamespkemp
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