UK WINNERS & LOSERS: M&S Dips But Aeorema Jumps As It Recommends First Dividend

LONDON (Alliance News) - The following stocks are the leading risers and fallers on the main London indices Tuesday morning.

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FTSE 100 - Losers

Marks and Spencer Group, down 1.8%, is one of the biggest fallers on the blue-chip index after Bernstein downgraded it to Underperform from Market-perform, lowering its price target to 420 pence from 445p. Bernstein believes that the market is overconfident about M&S's new Autumn/Winter collection, saying its own survey of groups of women from the retailer's core customer age bracket of 50-70 found that the higher price of the new collection will not go down well with shoppers that have been trained to buy at discount and are therefore likely to buy less. Alongside this, a focus group consisting of the women that M&S are hoping to attract, aged 30-39, had a lack of product awareness and a perception that M&S clothes are generally a bad fit. With the market apparently believing the new clothing range will bring a dramatic turnaround for the retailer, Bernstein expects investors to be disappointed over the next 12-18 months.

Fresnillo, down 1.8%. Having gained on Monday on the back of UBS upgrading it to Buy, and adding it to "most preferred mining shares," the mining company has seen share price fall back Tuesday.

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FTSE 250 - Winners

Telecom Plus, up 5.2% is one of the biggest risers on the FTSE 250. The utility supplier which trades as Utility Warehouse, said the strong growth in customer and service numbers that it saw in its fiscal first quarter had accelerated in the second quarter, with customer numbers up 17% and the number of services provided up 24% with large numbers of new clients taking at least four of its services. The company announced that it had added 20,536 customers in the three months to end-September, while the number of services it provides was up 101,447. That meant it added 33,908 customers over the first half of the year, compared with 22,657 a year earlier, and service numbers were 165,714 up from 107,722. It predicted that it would post a modest rise in first-half pretax profit and earnings per share as costs are up due to its growth and new regulation, but will raise its interim dividend over 20% to 16 pence a share.

Victrex is up 1.3% after it said that overall sales volumes and its Biomaterial Solutions business sales have increased slightly in its full year to September 30, after a recovery in the second half of the year. Sales volumes had increased 10% in the second-half compared to its first. Lower sales in the electronics market was offset by improvements in industrial and transport markets. Jefferies reiterated a Hold rating on the stock with a price target of 1,760p.

WS Atkins, up 0.9%, after it was awarded a GBP75 million contract to be a lead designer for the largest public-transportation project in the world. The company will lead a design joint venture with Spanish consultancy Typsa, to design three of the six lines of the planned Riyadh Metro in the Saudi Arabian capital.

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FTSE 250 - Losers

Ferrexpo, down 1.9%, is a big faller on the FTSE 250 index, despite reporting that it has increased production levels at almost all its operations in its third quarter. Cailey Barker, analyst at Numis Securities, can not see any obvious reason as to why the company is such a big faller, but believes that the results were no better than in-line with expectations.

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AIM - Winners

Aeorema Communications jumps 38% after it said it was recommending its first ever dividend after it swung back to a pretax profit in its last financial year thanks to a jump in revenues. The screen media and events company said it is proposing an "enhanced" maiden dividend of 1.5 pence a share, although it thinks dividends will be "normalised" in the future. The company posted a pretax profit of GBP358,864 for the 12 months to June 30, compared with a GBP36,272 loss a year earlier, as revenues jumped 41% to just under GBP4 million, from GBP2.8 million.

All Asia Asset Capital climbs 17% after buying a minority stake in Andaman Power and Utility Company Ltd for USD1.25 million in cash, its first investment. Andaman Power is a private electricity producer based in Thailand and Myanmar which plans to develop a power plant deploying combined cycle gas turbine technology to generate up to 500 megawatts of electricity, and will be helped by the Myanmar government which has agreed to commission a feasibility study, provide gas supply, arrange land acquisition, give it preferential treatment on duties and taxation, and finally buy the electricity generated by the utility plant and supply it to the regional and national grid.

Somero Enterprise Inc, up 15%, after it said orders have been better-than-expected since it published its interim results last month and it now expects profitability in the second half to exceed the first, reversing its previous guidance. Somero said it expects full-year profit to be 10% to 20% above the latest market estimates. If trading conditions in October and November continue as they have in September, EBITDA could be 20% ahead.

Serabi Gold, up 14%. The gold exploration company revealed that its latest results from its drilling test at its Sao Chico gold deposit in Brazil has returned more high-grade gold results of more than 100 grammes a tonne. It said the remaining results from an infill and step-out definition drilling programme showed high-grade gold intersections, including 114.74 grammes a tonne and 175.19 grammes a tonne, and a consistent high grade zone within the main vein, which is now double the length of the previous strike distance. It said there's also the potential for further significant strike and depth extensions.

Herencia Resources, up 12%, after the company said it achieved high-grade copper results in tests at its Picachos Project in Chile. The company said that sampling of both shallow, surface and stockpile ore returned numerous high-grade results including one ore stockpile study which saw grades at 9.3%, 16.4% and 25.2% of copper. Results also returned some levels of silver and molybdenum, increasing the geological value of the site. Alongside this, analysts at WH Ireland believe that the presence of private mining operations in the immediate vicinity has the potential to add further potential to the project.

Starcom is up 11% after it signed a non-exclusive distribution agreement with South American telecoms distributor MAM Objects SL for distribution of its WatchLock device in Central and South America, starting with Ecuador and Colombia. WatchLock attaches to fixed and mobile property in the same way as a normal padlock, but has the added functionality of real time location services and tracking. It sends a report to its owner if there is any attempted tampering while simultaneously transmitting its location to an on line web portal.

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AIM - Losers

Savannah Resources drops 13% as investors react negatively to the news that it has completed the acquisition of an 80% shareholding in Matilda Minerals Limitada.

SolGold is down 10% despite announcing that it has intersected copper mineralisation at its Cascabel project in Ecuador. The copper and gold focused mining company with operations in Ecuador, Australia and the Solomon Islands said drilling at CSD-13-002 on its Alpala prospect at the Cascabel site showed several zones of visually identified porphyry copper mineralisation.

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LSE MAIN MARKET - WINNERS

Trakm8 Holdings, up 48%, is the biggest riser on the London market. The company has said it will acquire BOX Telematics Ltd for GBP3.5 million in cash, paid for partly from a new GBP2.5 million debt facility, partly from cash reserves, and the rest by issuing shares to raise GBP720,000. The company, which makes GPRS hardware and software for vehicle tracing and security, said the deal will give it more manufacturing fire-power, increase its customer base and offer cross-selling opportunities. It also sees "substantial" synergy opportunities. Trakm8 said its share placing will raise GBP1.35 million in total so that it has additional working capital left after paying for the deal, which is a reverse takeover and therefore needs shareholder approval.

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By James Kemp; jameskemp@alliancenews.com; @jamespkemp

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