LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Wednesday.
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FTSE 100 - LOSERS
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Hikma Pharmaceuticals, down 16%. The pharmaceutical company said it agreed a lower price for its acquisition of Roxane Laboratories and Boehringer Ingelheim Roxane from German pharmaceutical company Boehringer Ingelheim. This is as a result of new information having been received from Hikma in relation to the financial performance of Roxane in 2015, following the publication of Hikma's prospectus regarding the acquisition in January. However, Hikma said that, following further due diligence, it now expects Roxane's revenue for 2015 to come in lower than it had previously anticipated, which it attributed to higher-than-expected rebates. It now expects Roxane's revenue for 2015 to only be slightly higher than 2014, and for 2016 to be lower than in 2015. As a result, Hikma now expects the acquisition to be slightly dilutive to its adjusted earnings per share in 2016.
ARM Holdings, down 0.5%. The chip-designer reported a rise in pretax profit in 2015, as it saw a strong performance in its fourth quarter with revenue up 19%. ARM reported a pretax profit of GBP414.8 million for 2015, up from GBP316.5 million in 2014, as revenue rose to GBP968.3 million from GBP795.2 million, more than offsetting increases in research and development costs. However, Liberum said ARM Holdings' fourth quarter underlying earnings before interest and taxes missed consensus estimates, and the company's outlook for 2016 was cautious. ARM said that whilst economic uncertainty "may influence consumer and enterprise spending, potentially impacting semiconductor revenues and industry confidence", based on current conditions in the semiconductor market, it expects 2016 dollar revenues "broadly in line" with market expectations.
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FTSE 250 - WINNERS
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Dominos Pizza Group, up 8.1%. The pizza delivery company were upgraded to Buy from Neutral by Credit Suisse.
Dunelm Group, up 7.1%. The homewares retailer reported growth in profit in the first half of its financial year, as sales grew and it benefited from six extra days of winter price promotion. Pretax profit in the 26 weeks ended January 2 grew by 11% to GBP75.5 million from GBP68.2 million in the same period the year before, as sales rose by 10% to GBP448.1 million from GBP406.4 million. Total like-for-like sales, meanwhile, were up 4.6% to GBP404.9 million from GBP387.0 million. Dunelm said it made solid progress in like-for-like store sales, underpinned by a strong performance from curtains and bedding, particularly in its new 'kids' range.
Virgin Money Holdings, up 6.4%. Nomura started coverage on the lender with a Buy rating.
Synthomer, up 4.4%. The specialty chemicals company was upgraded to Buy from Hold by Numis.
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FTSE 250 - LOSERS
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Tullow Oil, down 7.4%. The oil and gas company reported a narrower pretax loss in 2015 despite reporting a steep drop in revenue due to the fall in oil prices, as the company said it remains focused on reducing costs and getting the TEN development in Ghana producing. Tullow had already guided last month that its earnings would be considerably lower year-on-year after lower oil prices hampered results, as a fall in net production from Europe offset a rise from its flagship operations in West Africa. Tullow, reported a USD1.29 billion pretax loss from continuing activities in 2015 compared to a USD2.04 billion loss in 2014. Tullow stuck to its guidance to have a USD1.10 billion capital expenditure budget in 2016, but said this could fall to USD900.0 million. Importantly, with TEN almost finished, the company believes capital expenditure could be as low as USD300.0 million per year from 2017 onwards.
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MAIN MARKET AND AIM - WINNERS
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Tangent Communications, up 73%. The printing and digital marketing comapny said three of its executive directors made a takeover offer for the company that values it at around GBP6.7 million. Chief Executive Officer Timothy Green, Chief Financial Officer Jamie Beaumont and Executive Director Nicholas Green are making the offer at 2.25 pence per share, a 64% premium to the company's closing share price of 1.38 pence on Tuesday. The directors of the company who are independent from the bid, Kevin Cameron and Nigel Kissack, intend to unanimously recommend shareholders accept the offer. The offer has received acceptances in relation to 154.1 million shares, or around 55.51% of the company's issued share capital.
88 Energy, up 59%. The oil and gas explorer said it further de-risked the HRZ shale formation play at the Icewine-1 exploration well in Alaska as samples showed better than expected permeability and porosity in line with expectations. 88 Energy has been evaluating the core of the HRZ shale formation intersected in the Icewine-1 well after revealing last month that initial observations of oil/condensate leaching from the core indicated the presence of liquid hydrocarbons in the HRZ shale. 88 Energy said core sample evaluation has met or beaten expectations concerning porosity and permeability, which are both absolutely necessary to make a productive oil or gas well.
Eden Research, up 22%. The agricultural chemicals company said its partner K&N Efthymiadis SA, part of the Redestos Group, has placed its first order for botrytis treatment Mevalone in Greece. Mevalone is the trade named used for Eden's fungicidal agrochemical product 3AEY, used to cure botrytis - or grey mould- on table and wine grapes. Eden Research said plans are also underway in Greece to submit label extensions to allow the use of the treatment on a wider range of crops such as kiwi, aubergine, green onion and pomegranate. It expects these label extensions to be received by 2016. Under their partnership agreement, Eden will receive royalties based on the net sales of Mevalone by Redestos.
Pinewood Group, up 16%. The film production company said it increased its expectations for its full year results and said it has launched a strategic review of the business which could lead to the sale of the film studio operator. Pinewood, in whose studios west of London many 'Star Wars' and James Bond films have been made, said it has appointed Rothschild to assist with the strategic review which could lead to the sale of the company. Pinewood conducted a placing last year that raised GBP30.0 million to part fund phase one of the Pinewood Studios development framework expansion, which will add five new large sound stages and additional facilities totalling 300,000 square feet.
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MAIN MARKET AND AIM - LOSERS
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Leed Resources, down 51%. The investment company admitted it is unlikely to make a reverse takeover in time to avoid its shares being suspended under AIM rules, but said it is confident it can avoid having its shares cancelled. It has until Friday to make an acquisition that would constitute as a reverse takeover to avoid its shares being suspended. Under AIM rules, an investment company must implement its investing policy within 12 months from the policy being approved by shareholders, and although Leed Resources has made investments, none of them satisfy this requirement.
Hornby, down 48%. The train set maker said it will suffer a "substantially wider" trading loss than previously forecast in its financial year after experiencing lower-than-expected sales in both the UK and internationally. The group said a strong sales performance in the UK in November and December, when it saw like-for-likes grow 17%, was reversed by a disappointing response to January product promotions, combined with poor underlying sales.
Renold, down 29%. The supplier of industrial chains and related power transmission products said underlying sales and adjusted operating profit for its full financial year to the end of March will be lower than the prior year following a weak start to the second half. Renold said most of the territories it operates in saw significant volatility in the period from October 1 to January 31 in both the Chain and Torque Transmission divisions. This volatility extended to the North American markets which experienced a flat first half, it added, and while January did improve on a particularly weak December, the overall trend for sales and orders in the second half is still negative.
WANDisco, down 29%. The software provider said it expects to report revenue for 2015 "slightly below" analysts expectations, although it expects cost reductions to help result in a smaller adjusted loss before interest, tax, depreciation and amortisation than expected.
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By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun
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7 Mar 2016 12:20