WPP Share News (WPP)

LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices midday Thursday.
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FTSE 100 - WINNERS
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London Stock Exchange Group, up 2.4%. The group said its full-year revenue rose by 50% as it continued its diversification strategy, but it said pretax profit fell due to higher operating expenses due to the acquisition of clearing house LCH.Clearnet last year, for which it unveiled more ambitious cost-savings targets. The London Stock Exchange said revenue increased to GBP1.09 billion in the year to end-March, compared with GBP726.4 million a year earlier, driven by capital markets contributions from LCH.Clearnet. However, pretax profit fell to GBP284.3 million from GBP298.9 million, as a result of rising operating expenses, which rose by GBP333.7 million to GBP856.5 million. Operating costs relating to LCH.Clearnet amounted to GBP240.6 million.

HSBC Holdings, up 1.3%. The Independent newspaper has reported that HSBC has stepped back from its original bonus plans for Chairman Douglas Flint, cutting it to a one-off maximum payment of GBP1.0 million. HSBC had wanted to pay Flint a share-based bonus of up to the entire amount of his fixed pay due to his extra work on regulatory reform. According to the Independent, HSBC has cut the maximum bonus payable from the original GBP2.25 million sum to avoid a revolt over pay at its next AGM.

AstraZeneca, up 0.8%. The pharmaceutical giant has announced that it will be presenting over 40 scientific abstracts to "demonstrate the rapid progression of its oncology pipeline" at the 50th Annual Meeting of the American Society of Clinical Ongology at the end of May. AstraZeneca has been releasing a flurry of pipeline news over the last week, as it continued to rejected a GBP63 billion approach from US drugsmaker Pfizer Inc.
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FTSE 100 - LOSERS
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Aviva, down 3.1%. The company has reported an increase in its main measure of sales profitability, as growing European and Asian operations offset a 22% decline in the UK, where the government has initiated a shake-up of the pensions industry. However, "whilst the group has made commendable progress in dealing with its internal leverage, the external leverage remains very high relative to its quoted peers," says Shore Capital analyst Eamonn Flanagan. "We expect this to impinge the group's ability to accelerate the dividend pay-out," he adds.

Old Mutual, down 3.1%. The firm said its first-quarter gross sales increased by 12%, driven by its wealth arm more than offsetting currency woes for its emerging markets operations, while commenting that its wealth arm could benefit from recent pensions changes in the UK. However, while Shore Capital analyst Eamonn Flanagan believes that the firm has reported "excellent" first quarter sales and new business figures, it comes with "disappointing outflows from its US asset management business." This has particular relevance "given the group's ambition to seek a minority IPO of this business in 2014," says Flanagan.

Tullow Oil, down 2.7%. The oil and gas exploration company said its Ekunyuk-1 well and Twiga-2 wells have encountered further oil-bearing regions in Northern Kenya. It said its Ekunyuk-1 well has found a five-metre region of net oil pay, within a 150 metre region of reservoir quality water-bearing sandstone and an equal thickness region of oil shale after drilling to a total depth of 1,802 metres. However, this "looks like volumes will be at the bottom end of pre-drill expectations," says Numis Securities. Tullow also said it was informed by Africa Oil, its partner in the Kenyan Blocks 10BB and 13T, that the Twiga-2 appraisal well encountered an 18 metre region of limited reservoir quality net oil pay after drilling, and that a sidetrack has been set up on the well to explore an area north of its previous Twiga-1 discover, finding a 62 metre space of high quality net oil pay in the Auwerwer formation, similar to the Twiga-1 find.

Land Securities, down 2.6%. The real estate investment trust said it doesn't expect any changes in the supply and demand balance in the London office market in the next two years, but warned that the costs of developing new buildings was rising and any new developments will require pre-lettings. It said a lack of resilient space for businesses in London bodes well for the developments it is currently committed to, as it reported strong growth in its net asset value and profit in its last financial year. It said its pretax profit more than doubled to GBP1.11 billion in the year to end-March, from GBP533.0 million a year earlier, while its net asset value per share rose to 1,069 pence, from 959 pence, or to 1,013 pence, from 903 pence, on an adjusted diluted basis. The group's adjusted NAV was in line with consensus, but fell 2% short of Liberum Capital's estimate, Jon Stewart, an analyst at the brokerage says. Estimated rental value growth of just 1.8% in London offices also was disappointing, Stewart says. "Land Securities' London office yields now sit below their 20017 lows and new development starts are likely to be limited by the need to pre-let," he adds.

WPP, down 1.5%. The media buying giant said its marketing communications agency Grey has agreed to buy a majority stake in South African advertising and communications company The Volcano Group. WPP didn''t give any financial details for the deal, but said Volcano, which will be re-branded Grey Africa, made revenue of about ZAR61 million in the year to end-May.
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FTSE 250 - WINNERS
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Kier Group, up 4.3%. The firm's shares have risen sharply after it said its construction business was seeing more opportunities in the UK and overseas, its property unit had maintained its pipeline and won new contracts, and the business as a whole was "on course" in its current financial year. The company has also announced that it has been made preferred bidder on two new long-term contracts with Anglian Water worth up to GBP130 million in total. The share price gains follows a recent period of weakness. Shares in the construction and support services company closed at 1,646.00 pence on Wednesday, which represents a decline of 6.7% from its April high.
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FTSE 250 - LOSERS
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Thomas Cook Group, down 5.9%. Investors have reacted negatively to the group's interim results, sending the stock to the bottom of the mid-cap index. The holiday operator narrowed its pretax loss in the first-half of the year to GBP366 million, compared with a loss of GBP394 million the prior year. However, despite the improved numbers, and an increase in its cost cutting targets, Thomas Cook continues to see a negative impact on holiday bookings due to civil unrest in Egypt. Management noted that a quarter of a million fewer people travelled to the previously popular destination over the period. Summer trading in the UK, where bookings and yields are down, "gives cause for concern," says Investec analyst James Hollis. Market analysts also say that the stock may be coming under some pressure due to the recent combination of a weaker pound and higher oil prices. The price of oil in sterling terms has risen by about 3.5% in little over a week.

Dixons Retail, down 4%, and Carphone Warehouse Group, down 2.3%. After rising initially at the UK equity market open, the electronics retailer and mobile phone retailer are now amongst the biggest fallers in the mid-cap index after they said they had now agreed to merge in a GBP3.6 billion deal that will create the UK's biggest retailer of mobile phones and electrical goods. The two companies said the shareholders of both companies will have equal shares in the new company, which will be called Dixons Carphone. Carphone Warehouse Chairman Charles Dunstone will become the chairman of the combined company, while Dixons Chief Executive Sebastian James will become CEO. However, the equality of the deal - both companies have market capitalisations of about GBP1.8 billion - has led analysts to question who will take the driving seat in the integration process.

Premier Farnell, down 3%. The group has maintained its expectations for the full year, after it saw sales per day rise by 2.0% in its first quarter ended May 4. However, the sales per day growth lagged slightly behind Jefferies forecast for growth of 3%, and Kean Marden, an analyst at the investment bank notes that "momentum is a little softer than anticipated".

Centamin, down 2.7%. The miner said its pretax profit dropped by 71% in its first quarter as a slump in production and lower gold prices hit its revenues, while its cost of sales increased as on-going disputes with the Egyptian government over fuel costs continue. It said its pretax profit for the three months to end-March fell to to USD20.6 million from USD71.9 million the previous year as revenues dropped 26% to USD102.7 million from USD138.2 million.

SOCO International, down 1.8%. The oil and gas exploration and production company said that its production in the first four months of the year fell in comparison to the previous year. It said net production rates averaged 14,090 barrels of oil equivalent per day for the four months to the end of April, in line with company expectations, but down 24% on the same period the previous year.
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AIM ALL-SHARE - WINNERS
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Staffline Group, up 16%. Alongside a trading update, the recruitment and outsourcing company said that it has agreed to acquire Avanta Enterprise Limited, a provider of Welfare to Work and skills training training services across the UK, for GBP65.45 million. The net consideration, after retained cash, is GBP45 million, or which GBP20 million is deferred. Liberum Capital has increased its price target by more than 50% on the back of the news, to 966p from 630p. The deal creates the third largest Work Programme provider that will be well placed to convert a strong pipeline, says Liberum analyst William Shirley.

Range Resources, up 11%. The hydrocarbon exploration firm said it has secured USD12 million in financing through a subscription agreement with Abraham Ltd, a Hong Kong-based private investor. It said Abraham will subscribe the USD12 million in cash and will be issued with shares at a price of 1 pence per share, which it said is a 49% premium to the mid-market share price of the company at market close Wednesday. Range Resources shares are currently quoted at 0.77 pence.

Premier African Minerals, up 9.9%. The multi-commodity natural resource company said that Circum Minerals Ltd has bought its stake in the Danakil potash project in Ethiopia for cash and shares. It said Circum exercised its exclusive option to acquire the entire issued share capital of Mandalore Development Ltd, a company which holds a 30% interest in the Danakil project and which Premier African bought recently. Premier African Minerals said that it will now no longer have to repay a USD2.5 million net bridging loan from Circum and will be issued two million new shares in Circum with a present estimated value of USD1.4 million. The company also said that it will receive a further USD1 million payment in July, September, November And January 2014.

Kalibrate Technologies, up 9.8%. The company has announced a series of business wins and contract implementations across multiple geographies in the second half of its current financial year. The firm said that it is continuing to see see strong demand from existing and new customers, and that the contract wins underpin its expectations for the full year ended end-June.
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AIM ALL-SHARE - LOSERS
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SyQic, off 25%. The mobile video content provider said pretax profit declined in its maiden set of annual results, hit by the costs of its initial public offering on AIM last December. It posted a pretax profit of GBP100,000 in 2013, down from GBP625,000 in 2012, as AIM listing costs of GBP471,000 and higher administrative expenses offset a rise in revenue to GBP4.7 million from GBP3.9 million. The rise in administrative expenses were due to it upping head count and development costs as it rolled out its new Yoonic and YooMob products throughout the year. Revenue growth gained momentum throughout the year, with revenues in the second half of the year almost doubling those in the second half of 2013.

Tavistock Investments, down 7.4%. The firm said it has conditionally agreed to buy independent financial advisory County Life & Pensions Ltd and investment management business Blacksquare Ltd, in a reverse takeover that set to propel the former software company into the financial services industry. It said it has conditionally raised an additional GBP750,000 of working capital through a placing of 10.0 million shares at 7.5 pence each. Tavistock's shares are currently quoted at 0.0602 pence.
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OTHER AIM - LOSERS
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Bagir Group, down 69%. The formal wear tailoring company has seen its valuation tumble by over half after warning that it had been hit by an unexpected reduction in orders from its largest customer and was talking with its lenders about getting a waiver on its banking covenants. It said it had experienced an unexpected reduction in the volume of purchase orders and a reduction in margins on retained revenue from its largest customer, mainly from the fourth quarter of the year. At the time of its initial public offering in April, Bagir had said its largest UK customer was Marks & Spencer Group. However, a Bagir spokesman Thursday declined to comment on the identity of the customer that reduced its orders.
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By James Kemp; jameskemp@alliancenews.com; @jamespkemp

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