Last checked at LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices midday Friday.
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FTSE 100 - WINNERS
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Imperial Tobacco, up 3.1%. The cigarettes and tobacco company has confirmed it is in talks with US tobacco firms Reynolds American Inc and Lorillard Inc to potentially buy some of their assets. The confirmation from the UK tobacco group follows reports overnight that a merger between the two US names is imminent, with a deal set to be announced as early as next week. A ten-year standstill agreement between British American Tobacco and Reynolds is set to expire in July 2014, when BAT can make an unsolicited offer for the Reynolds shares it does not already own. Bloomberg has reported that expiration of the agreement could pave the way for the two companies to work closer together amid a broad push for industry consolidation. In order to assuage any anti-trust concerns that the US government may have, Imperial Tobacco will buy some brands from Reynolds and Lorillard, and is lining up about USD7 billion for the purpose, Bloomberg reported. BAT shares are up 0.3%.
EasyJet, up 1.7%, and International Consolidated Airlines Group, up 1%. The airlines are outperforming Friday, in a rare positive move after a four-week period that has seen both the stocks fall by more than 20% amid a number of profit warnings from European rivals. Investment bank Jefferies has lowered its price targets on both stocks to reflect the recent weakness, but has also reiterated Buy ratings on both, saying that the sell-off has been overdone. A key part of the recent warning from Air-France-KLM was the issue of over-capacity on its long-haul routes. As a low-cost, short-haul carrier, easyJet should be somewhat protected against this, and, although not immune, IAG should also be better placed than its European rivals, Jefferies says. One reason for IAG to outperform is that Heathrow, IAG's main airport, is less reliant on transfer traffic than the Lufthansa and Air France-KLM hubs, respectively, Jefferies says.
Friends Life Group, up 0.9%. The insurer said it has sold high-end wealth manager Lombard to funds managed by investment and advisory firm Blackstone for up to GBP356 million, and intends to return GBP261 million of the proceeds to shareholders through a share buyback. It said it will get GBP317 million initially for Lombard International Assurance SA and Insurance Development Holdings AG, including GBP254 million in cash up front, about GBP7 million interest equivalent, and a GBP56 million deferred payment in the form of a vendor loan note. The vendor loan note could then increase or decrease by up to GBP39 million depending on criteria linked to Lombard's future assets under administration, it said.
Experian, up 0.8%. The information services provider, which provides services such as credit checking and financial risk analysis, said its revenue grew 4% in its fiscal first quarter as growth in UK, North America and the rest of the world offset a slowdown in Latin America as customers there took time out to watch the football World Cup. The company had previously warned that it expected a slowdown in Latin America due to the football World Cup being held in Brazil and also due to a brand strengthening plan it is conducting in its North America consumer services business. The overall revenue growth of 3% at constant exchange rates in the three months to June 30 represented a marked slowdown from the 7% growth at constant rates the company reported for the whole of its last financial year.
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FTSE 100 - LOSERS
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Randgold Resources, down 3.3%, and Fresnillo, down 2.5%. The precious metals miners have reversed solid gains posted on Thursday. Both Randgold and Fresnillo saw their shares jump Thursday following a steep rise in precious metal prices. Gold peaked at USD1,345.28 per ounce on Thursday, while silver peaked at USD21.57 per ounce. Both metals have consolidated a little and stabilised since then, currently quoted at USD1,336.73 and USD21.414, respectively.
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FTSE 250 - WINNERS
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Moneysupermarket.com Group, up 1.3%. The price comparison website said revenue and operating profit for the first half of 2014 rose by about 9% compared with the year-earlier period, as it had expected. In a short trading statement, the company said revenue in the six months to end-June is expected to be about GBP122 million, while adjusted earnings before interest, tax, depreciation and amortisation is also expected to be up 9% on the year. Trading growth was a little stronger in the second quarter than the first quarter, it said. In April, the company has said revenue in the first quarter was 8% up on the year and Ebitda was up 5% on the year.
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FTSE 250 - LOSERS
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Synthomer, down 2.1%. The speciality chemical company said it now expects full-year 2014 pretax profit to be broadly in line with 2013, as strong competition in Asia and the strengthening of sterling continues to hamper its performance. It said strong competition between glove manufacturers had continued in its Asia and Rest of the World segment, which has caused margin pressure in its nitrile business, further exacerbated by weak pricing of Butadiene and customer de-stocking. As a result, it said its operating profit in Asia for the first half of the year will be around GBP4 million behind its previous-year result of GBP11.5 million. Sterling continued to strengthen during the period, which Synthomer expects to lead to a GBP5 million hit to operating profit in the full year, GBP1 million more than it originally expected.
Hays, down 2%. The recruiter is again among the biggest losers in the mid-cap index, having fallen sharply on Thursday. Shares in the company are down following a raft of negative price target revisions. Keller Cheuvreux has cut its price target on the company to 145 pence from 160p, JPMorgan Cazenove has lowered its target it 121p from 137p, Deutsche Bank has cut its target to 120p from 122p, and Goldman Sachs has decreased its target to 187p from 195p. Canaccord, however, has raised its price target on the company to 170 pence from 130p. Hays' shares fell steeply on Thursday after it said net fee income was flat in its fiscal fourth quarter, as the strength of sterling against the euro and Australian dollar wiped out strong growth in the UK during the period.
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AIM ALL-SHARE - WINNERS
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Alba Mineral Resources has seen its share price more than double, while Regency Mines is up 11%. The companies have signed deals to each acquire 5% stakes in Horse Hill Developments Ltd, which operates in the UK Weald Basin just south of London, for a cash payment of GBP300,000 each. Both of the companies, which are making their first investments in oil and gas, have signed binding heads of agreement with initial deposits of GBP10,000 and a payment of GBP40,000 on completion, before GBP250,000 each is paid in line with the cash calls linked to drilling of the Horse Hill-1 well. The Horse Hill-1 well is scheduled to be completed by the end of August, testing several conventional stacked oil and gas targets in the proven productive Portland Sandstone, Corallian Sandstone and Great Oolite Limestone levels of the prospect. Regency Mines holds a 14.87% stake in Alba.
Ilika, up 8.9%. The company said it has won a proof-of-concept contract with an existing, undisclosed original equipment manufacturer to provide solid state batteries in wireless sensor network applications. It said that, with the addition of this contract, its level of committed revenue for the current year is over GBP600,000, ahead of GBP215,000 in the previous year. Financial details of the contract were not disclosed.
Tertiary Minerals, up 7.5%. The company has raised GBP420,000 through the placing of 7.3 million shares at 5.75 pence with institutional investors. The company said it will use the funds to continue evaluation of its fluorspar projects, and for working capital purposes. "This fund-raising will allow the company to maintain momentum on its key fluorspar projects and in particular to continue with drilling on our exciting MB Fluorspar project in Nevada where we have already defined a large maiden Mineral Resource," said Chairman Patrick Cheetham. Shares in Tertiary Minerals are quoted up at 6.45 pence.
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AIM ALL-SHARE - LOSERS
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Leyshon Resources, off 17%. The company has seen its shares slide after it said its shares listed on the Australian Securities Exchange would likely be suspended from July 14 because it hadn't yet found a new operating business in which to invest or been able to activate its current main asset. Leyshon Resources demerged its energy assets into a new company, Leyshon Energy PLC, in late January. That left it with a single asset, the Mt Leyshon gold mining licenses in northern Queensland. However, it is reviewing what to do with the asset, which is on care and maintenance, and is actively looking for new investments. Under Australian listing rules, a company has six months after disposing of the main operating businesses to prove it has a sufficient level of operations to justify a continued listing on the ASX. Its AIM shares will keep trading for the time being. Under AIM rules, it has 12 months to find a new investment or implement an investing policy that satisfies AIM-listing rules.
CSF Group, down 13%. The data centre facility provider has appointed Michael Leong as acting chief executive and has delayed the announcement of its full-year results to September. It said that it had decided the search for a permanent chief executive should be a longer-term objective, and the appointment of Leong will provide operational continuity for customers and employees. In order to provide time for its to finalise its year-end audit, CSF will delay its full-year results announcement from the week started July 21 to the end of September.
Greatland Gold, down 12%. The mineral exploration and development company said it has raised GBP500,000 through a placing of 153.8 million shares at a price of 0.325 pence per share. It said the funds raised would provide additional working capital for the company. Greatland's shares are currently quoted at 0.40 pence.
Thalassa Holdings, down 8.9%. Shares in the marine seismic-operations investment company are down, even though it said it has seen good trading in the year so far and that it expects a "satisfactory" performance in 2014. "We continue to be encouraged by the level of order enquiries that we are experiencing for our disruptive PMSS technology," Chairman Duncan Soukup said in a statement. The company's Portable Modular Source System is a portable seismic unit which can be quickly installed temporarily on vessels and platforms.
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By James Kemp; jameskemp@alliancenews.com; @jamespkemp
Copyright 2014 Alliance News Limited. All Rights Reserved.
12 Jun 2015 11:54
