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LONDON (Alliance News) - The following stocks are the leading risers and fallers on the main London indices midday Friday.
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FTSE 100 - Winners
Vodafone, up 2.9%, is the biggest gainer on the blue-chip index. AT&T is laying the groundwork internally for a potential takeover of the British telecoms giant next year, though the companies haven't entered formal negotiations, Bloomberg reported, citing people familiar with the matter. The US phone company is intensifying work on which Vodafone assets it would retain after a deal and who could buy others, the report said.
HSBC is up 0.7% after it appointed its Chief Risk Officer as an executive director, in a move that emphasises the importance of risk management to the banking sector in the post-financial crisis climate. Marc Moses, who also has additional responsibility for operations and infrastructure in Global Banking & Markets, HSBC's business for the provision of financial services and products to corporates, governments and institutions, will take on the role from January 1, 2014.
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FTSE 100 - Losers
Meggitt, down 10%, is the biggest faller on the FTSE 100. The company cut its full-year revenue outlook after warning that trading in the third quarter had been slightly below expectations due to production problems at its sensing unit and due to the timing of contracts in its energy business. The company said it now expects 2013 revenue growth to be in the low-single digits, compared to its previous guidance for mid-single-digit growth. Meggitt, the largest provider of wheels and brakes for military aircraft, generated 24% of first-half group sales from the US defense budget. Those budgets are coming under increasing pressure, with the ongoing sequestration of US government spending effective from January 15. There is "increasing concern that the military draw down could be worse than even the (sequestration) caps imply", says Liberum analyst Ben Bourne. Overall Meggitt's third quarter was below Liberum's expectations, and the broker cuts its full year earnings per share forecast by 4%, to 37p.
Royal Bank of Scotland Group is down 6.8% after bank reported its third quarter trading update, along with the details of its plan to deal with toxic assets and a potential IPO of its US subsidiary bank Citizens. The bank slid back in to the red in the third quarter, with attributable losses of GBP826 million, as it announced a further GBP250 million provision for payment protection insurance and ended speculation over plans of how to deal with its "toxic assets". The bank will internally ring-fence GBP38 billion of its troubled assets with a plan to run them down over three years. The speed of the run-down is faster than many had anticipated. Alongside this, RBS has been contacted by regulatory authorities investigating possible manipulation of foregin exchange rates by multiple financial instituions. RBS has suspended two traders in its foreign exchange division, according to Friday's edition of the Financial Times. The bank is also amongst nine others being sued by US mortgage giant Fannie Mae over losses relating to the Libor scandal, the BBC reported. The mortgage financier is seeking more than USD800 million in damages.
Barclays shares, down 1.5%, have come under pressure as the BBC reports that it is another bank being sued by Fannie Mae.
Experian is down 1.3% after it said it has divested the Colombia document-outsourcing business of Experian Computec S.A. to Hermes Documentos S.A.S., a Columbian investor. The company said document-outsourcing revenues for the year ended March 31, were USD40 million and had been reported as part of the Latin America business. It didn't provide financial details of the agreement with Hermes Documentos.
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FTSE 250 - Winners
IP Group climbs 3% after it reported a GBP52.7 million fair value increase over the last four months, driven by a GBP33.3 million fair value gain from Oxford Nanopore Technologies Ltd's October financing and GBP19.1 million due to share price increase among some of the stocks in its portfolio. It said the fair value of its portfolio stood at GBP258.2 million at the end of October compared with GBP191.9 million at the end of June. Charles Weston, analyst at Numis, believes that IP's GBP5 million investment for an 8% stake in Cambridge Innovation Capital is positive. Encouragingly, IP has also entered into a Memorandum of Understanding with the company to "share information on investment and co-investment opportunities in the Cambridge Cluster and, where practicable and alongside other co-investors, to provide each other with access to such co-investment opportunities," adds Weston.
Direct Line Insurance Group is up 1.6%. The company reported reported higher operating profits for the third quarter and first nine months of the year. The insurer said operating profit, excluding one-off and restructuring costs, rose 6.1% in the third quarter to GBP131.2 million, compared with GBP123.7 million a year earlier. The figure for the first nine-months of the year was GBP417.8 million, up from GBP347.9 million. Third-quarter net profit rose to GBP91.3 million, up from GBP59 million.
Carillion climbs 1.6% after it was awarded a GBP70 million contract by the Highways Agency to improve a section of the M6, bringing the total value of highway contracts won by the firm in recent weeks to around GBP180 million. Carillion will convert a section of the M6 in the West Midlands between Junctions 10A and 13, into a "smart motorway", installing variable mandatory speed limits and opening up the hard shoulder to traffic to reduce congestion.
Berendsen is up 1% after it said reported revenue for the three months ended September 30 was up 9% compared with the same period last year. Excluding the benefit of foreign currency exchange translation and the acquisitions it made last year, underlying revenue for the period was ahead by 4%. Berendsen said it delivered an improved operating margin during the period and lower interest costs due to a strong cash flow, while pretax profit for the quarter was "well ahead" of last year. Oriel raises its price target to 1,060 pence from 960p, maintaining a Buy recommendation.
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FTSE 250 - Losers
F&C Asset Management is down 1.8%. The company's assets under management declined 2.4% to GBP90.09 billion on September 30 from three months earlier. The decline was put down to net outflows of GBP2.18 billion, largely down to strategic partner withdrawals, as well as a foreign exchange movements that pulled net flows down by GBP1.47 billion. The asset manager's investment performance remained strong, generating GBP1.42 billion over the three months to September 30, somewhat offsetting the negative impact of forex movements and strategic partner withdrawals.
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AIM - Winners
Corero Network Security is up 9.2% after it decided to repay USD5 million in loan notes and accrued interest of USD1.16 million in full, ahead of the March 2014 maturity date for the notes.
MDM Engineering Group climbs 6.1%. The company said it continues to have a successful year despite difficult market conditions, with its results for the full-year ended March 31, 2014 expected to be in line with expectations. In an trading statement, the company which focuses on the mining industry, said it continues to see new awards in both studies and projects.
Falcon Oil & Gas is up 9.5% after it said its Australian subsidiary will buy a 4% overriding royalty interest in exploration permits on its Beetaloo Basin lands from CR Innovations AG, a move it hopes will help further its ongoing farm-out talks. It will pay USD999,000 initially, followed by a second payment of the same amount once the farm-out deal is completed, to acquire the first 3% of the royalty interest. It then has a five-year call option to buy the other 1% for USD5 million. Falcon will cancel the overriding royalty interests it buys. "We are delighted to have negotiated this reduction in the Overriding Royalty on our Australian assets. This transaction should help to further progress our farm-out negotiations, which are at an advanced stage," Falcon Chief Executive Philip O'Quigley said in a statement.
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AIM - Losers
Invu falls 41% after saying it intends to get shareholder permission to cease trading on AIM because it doesn't see any further need to raise money through equity markets. The company has restructured and shrunk in recent years, part of a move to improve its profits and cash flow. However, that's left it too small to consider any acquisitions, while the cash flow improvements mean it doesn't need to raise money by issuing equity to cover funding, the company said in a statement. It also cited the high costs of maintaining a listing relative to the size of its operating profits, as well as the lack of liquidity in its shares.
Sareum Holdings is down 16%. The cancer drug company said it has raised GBP1.67 million in a placing of 278.5 million shares to fund a recently-announced collaboration deal to advance a potential treatment to clinical trials and to give it working capital through to early 2015. The company in September signed a collaboration deal with the Cancer Research Technology Pioneer Fund & BACIT to advance the Checkpoint Kinase 1 inhibitor candidate through further pre-clinical development and get it ready for approval for Phase 1 clinical trials.
Escher Group Holdings drops 11%. The company warned that it has pushed back its expectations of when it will book about USD6 million of license revenues because it has delivered software to a customer, but that client won't have deployed it to enough workstations to trigger a payment this year. The software provider for the postal industry said it now expects to book the license revenue in the first half of 2014 instead, but said the rest of its business is still trading in line with its expectations.
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By James Kemp; jameskemp@alliancenews.com; @jamespkemp
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