UK WINNERS & LOSERS: Centamin Encouraged By New Egyptian Law

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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Anglo American, up 3.2%. The mining company said production has broadly increased across its major operations in its first quarter. It said its iron ore production increased 10% to 11.3 million tonnes for the three months ended March 31 from 10.3 million tonnes the previous year, while its export metallurgical coal production increased 31% to 6.1 million tonnes from 4.6 million tonnes. The company also said that its copper production increased by 18% to 202,000 tonnes from 170,500 tonnes, and that its diamond production increased by 18% to 7.5 million carats from 6.4 million carats. However, it did note that its platinum equivalent refined production decreased by 39% to 357,000 ounces from 583,000 ounces, as a result of ongoing industrial action at its Rustenburg, Amandelbult and Union mines in South Africa.

AstraZeneca, up 2.8%. The pharmaceutical giant has seen its share price jump recently amid speculation that US giant Pfizer Inc is set to return with an improved takeover and is once again among the biggest blue-chip risers Thursday. The group's shares have risen sharply after it maintained its full-year guidance for 2014, despite reporting a drop in pretax profit in the first quarter to end-March. It posted a pretax profit of GBP638 million, down from GBP1.30 billion in the previous year, as revenue rose to GBP6.42 billion from GBP6.39 billion, damped partly by the weakening of the yen against the dollar. At constant exchange rates, revenue rose 3%. Profit was hit by the write-down of USD257 million on the sale of its research and development site at Alderley Park site in Cheshire, and its acquisition of Bristol-Myers Squibb's share of the US diabetes alliance for USD2.7 billion in February.

Standard Life, up 2.3%, St. James's Place, up 1.2%, and Resolution, up 1%. The members of FTSE 350 life insurance sector index are all big gainers after Goldman Sachs revised its position on the companies. The investment bank has upgraded Standard Life to Neutral from Sell, it has raised Resolution to Buy from Neutral, and added wealth manager St. James's Place to its Conviction Buy List.
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FTSE 100 - LOSERS
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Unilever, down 1.9%. The Anglo-Dutch consumer goods company has reported another drop in revenues in the first quarter, as currency movements and weakness in emerging markets continued to weigh on its performance. The group reported a 6.3% fall in revenue for the first quarter to EUR11.40 billion, down from EUR12.16 billion a year earlier, a slightly larger decline than analysts had been expecting, which was for a 6% decline, on both a slowdown in emerging markets and weaknesses in developed markets. Unilever also said that currency movements wiped 8.9% off its revenue in the first quarter, as foreign-exchange rates continued to go against the firm during the period. The company did report growth in sales and volumes helped by price increases, innovation and slight improvements in its food and refreshments businesses, but it said it faced slowing markets and a tough competitive environment in the first quarter.

Associated British Foods, down 1.3%. The food, ingredients and retail group, which jumped sharply on Wednesday, is down despite a raft of positive price target revisions. JPMorgan, Canaccord, Credit Suisse, Exane BNP, Deutsche Bank, Societe Generale, and Barclays have all increased their price targets for the company. However, this has not been enough to lift the company's share price after it jumped 8.8% on Wednesday on the back of a positive half yearly report.
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FTSE 250 - WINNERS
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Centamin, up 11%. The metals and minerals producer has announced that a new investment law which came into effect in Egypt on Wednesday could help in its ongoing court appeal against claims made against it. It said the new law will restrict the capacity for third parties to challenge any contractual agreement between the Egyptian government and an investor, which could result in a legal case against it being dismissed. In 2012, the company launched an appeal against a court ruling which questioned its rights to operate the Sukari Gold Mine, its only producing mine. Centamin said the new law appears to cover all currently pending lawsuits and challenges, noting that it is in discussions with its advisers over how the original claim against it, which was brought by a third party, private individual Engineer Hamdy El Fakharany, may be dismissed under the new law.

Imagination Technologies Group, up 9.1%. The company, which supplies processing chips to Apple Inc, is a big riser after the US tech giant released a strong second-quarter earnings report. Apple said its second quarter-profit rose 7% from last year, as sales surged and margins improved amid strong sales of its iPhones.

African Barrick Gold, up 3%. The gold production company said its gold production increased in its first quarter, and it has begun a major operation to further increase production. It said its gold production increased 18% to 168,375 ounces from 142,759 ounces, with increased production across all of its operations. Nevertheless, pretax profits and revenues fell due to the decline in gold prices during the last year. African Barrick also said that it has now approved the next step in its development of the Bulyanhulu site through the acceleration of mining at its Upper East Zone.

Cobham, up 2.5%. The service provider for commercial, defence, and security markets said that trading for the first quarter has been in line with the board's expectations and it continues to plan for organic revenue to decline by low-to-mid single digits during the course of the year. Liberum Capital says that the balance sheet remains strong, with an estimated GBP600 million available to spend on areas such as civil communications and aviation services. Liberum expects the group to begin spending on merger and acquisition activity, and in the interim points out that the stock yields a solid 4.0%.

Pace, up 2.2%. The company has reiterated its confidence in its full-year outlook, as despite seeing lower revenue, it improved margins during the year to date. It said that its revenues so far in 2014 were lower than in same period in 2013, as its Media Servers and Gateway product revenues were hit by a customer dual-sourcing component parts for their products from both Pace and another manufacturer. However, gross margins are well ahead of 2013, Pace said, as it improved its revenue mix and integrated its acquisition Aurora Networks Inc. Operating costs, excluding Aurora, continued to decline, while profitability has been in line with the group's expectations for the period.
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FTSE 250 - LOSERS
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Spirent Communications, down 1.6%. The communications technology company's shares are among the biggest fallers in the mid-cap index, following some strong gains made on Wednesday. The group jumped 7.7% on Wednesday on the back of a positive trading update on Wednesday, but these gains have been somewhat pared Thursday. Additionally, Deutsche Bank has lowered Spirent's price target to 105.00 pence from 106.00p.

Croda International, down 1.6%. The speciality chemicals company has seen its shares drop after reporting a 3.2% decline in revenue for the first quarter. Management said revenue fell to GBP274.0 million from GBP283.1 million last year, hit by adverse currency translation of 6.1% dragging reported sales in sterling lower. On a constant currency basis, group revenue was up 2.9% with acquisitions contributing 1.6% to this total. Pretax profit rose fractionally to GBP65.2 million, up from the GBP65.1 million recorded last year. The company said the mixed results follow disruption caused by the severe weather in North America and difficult economic conditions in South America.
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AIM ALL-SHARE - WINNERS
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Bahamas Petroleum Co, up 105%. The oil and gas exploration company has announced changes to its board as developments in oil drilling legislation in the country and increased activity in ongoing farm-out discussions help the company. It said it has appointed former BP director Bill Schrader as its non-executive chairman and Bahamas Senator James Smith as its non-executive deputy chairman. Bahamas Petroleum said the board changes come at a time when the company is seeing increasing activity in its data room as part of ongoing farm-out discussions for its exploration sites, as well as positive developments in oil drilling legislation. These changes - along with lower drill costs expected for the area, a government mandate to proceed with exploration drilling, and a term extension for the five licences held by the company - demonstrate positive developments for the oil and gas junior, it said.

ServicePower Technologies, up 8.4%. The firm has entered into a partnership with Bosch Software Innovations Corp to enhance its connected services products with Bosh Software's intellectual property.

Leni Gas & Oil, up 7.8%. The oil and gas exploration and development company has decided not to appeal the recent UK court ruling against it in the case it brought against Mediterranean Oil and Gas. In March, the company was informed that its fraudulent misrepresentation action against Mediterranean Oil & Gas had not been upheld. The dispute dates back to July 2012, when Leni Gas & Oil sold 10% of its interest in a Malta prospect license to Mediterranean Gas & Oil.

GB Group, up 7.5%. The identity intelligence company said it has raised GBP11 million in a share placing and has agreed to acquire Australian fraud detection and risk management company DecTech Solutions Pty Ltd for GBP20.5 million. GB Group also raised its guidance, saying that it now expects to see adjusted operating profit of around GBP7.2 million for the year to March 31, ahead of GBP5.5 million in the previous year, as its results had outperformed market consensus.

DDD Group, up 7.3%. The firm licensed its Tridef 3D Mobile content technology to Chinese manufacturer Dongguan Longfar Optoelectronics Technology Co Ltd for its glasses-free 3D tablets. Dongguan will use the technology on its new range of tablets to convert photos, videos and games into 3D. The tablets are expected to launch in the second quarter of 2014. DDD will receive quarterly royalty revenues based on the volume of tablets shipped.
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AIM ALL-SHARE - LOSERS
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EU Supply, off 18%. The group has reported a widened pretax loss after making "significant investment" in its software and operations. It said its pretax loss for 2013 widened to GBP3.5 million from a GBP1.0 million loss in 2012 after it made significant investment in its software and operations through increasing staff and administrative costs after its initial public offering last year. Revenue for the year rose 11% to GBP1.8 million from GBP1.6 million last year.
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By James Kemp; jameskemp@alliancenews.com; @jamespkemp

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