UK WINNERS & LOSERS SUMMARY: AVEVA Rises After Strong Annual Results

Tue, 09th Jun 2020 10:51

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

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FTSE 100 - WINNERS

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AVEVA Group, up 4.2%. The industrial software maker reported a sharp spike in annual profit, driven in large part by a rise in Subscription revenue. The Cambridge-headquartered firm posted a GBP92.0 million pretax profit for its year ended March 31. This is almost twice the prior year's GBP46.7 million profit figure. This resulted primarily from an 8.8% increase in AVEVA's revenue to GBP833.8 million from GBP766.6 million, thanks largely to a 45% increase in Subscription revenue to GBP316.8 million from GBP218.2 million. Maintenance revenue was up 3.8% at GBP201.7 million. These increases in Subscription and Maintenance revenue, which make up AVEVA's recurring revenue, offset a 15% drop in Perpetual Licences revenue to GBP179.3 million and 4.5% drop in Services revenue to GBP136.0 million. AVEVA has declared a final dividend per share of 29.0 pence, maintained from financial 2019.

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Fresnillo, up 2.6%, Polymetal International, up 0.1%. The gold miners were tracking spot gold prices higher, quoted at USD1,707.70 Tuesday morning, up from USD1,691.14 late Monday.

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FTSE 100 - LOSERS

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British American Tobacco, down 3.8%. The tobacco firm said earnings are likely to grow more slowly than previously expected due to the effects of the coronavirus pandemic in emerging markets and from a lack of airport duty-free sales. In emerging markets, BAT noted the coronavirus pandemic has had a "more pronounced" negative effect than in the US and other developed markets. The company pointed to the South African government's ban on tobacco sales continuing longer than expected as hurting sales. As a result, BAT now expects about a 3% headwind to constant currency revenue in 2020 from the pandemic. The Rothmans and Dunhill cigarette maker is now guiding for constant currency adjusted revenue growth between 1% to 3%, down from previous guidance of 3% to 5% growth. "Longer-term, British American Tobacco still needs to deal with the fact that an increasing number of investors around the world are no longer interested in backing businesses that are harmful to society. The company may be adopting lots of ESG principles in how it does business, but that doesn't get over the fact its end products are harmful to people's health," said AJ Bell's Russ Mould.

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FTSE 250 - WINNERS

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Oxford Instruments, up 2.5%. The scientific and medical equipment provider reported a higher annual profit due to a substantially higher share of profit from an associate company, adding that revenue is ahead so far in its new financial year. The Abingdon, England-headquartered company, which makes products, systems and tools for research and industry, posted a GBP38.8 million pretax profit for its financial year ended March 31, up 13% from GBP34.3 million the previous year. Revenue was 1.1% higher at GBP317.4 million compared to GBP314.0 million, however cost of sales increased 2.8% to GBP159.0 million, meaning gross profit was actually lower at GBP158.4 million compared to GBP159.3 million. Nonetheless, pretax profit rose thanks largely to Oxford Instruments' GBP7.2 million share of profit of an associate net of tax, far higher than the GB500,000 share of associate profit in financial 2019.

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FTSE 250 - LOSERS

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Helios Towers, down 4.5%. The telecom tower infrastructure provider terminated its tender offer to buy back up to USD325 million of its 9.125% senior notes due 2022 and will instead issue a notice of conditional redemption for all outstanding existing 2022 notes. On Monday, Helios launched an offer of USD425 million senior notes due 2025, alongside a tender offer for up to USD325 million of its 2022 notes. Proceeds from the new 2025 notes, along with Helios's USD7 million of cash on hand, were to be used to finance the purchase of the 2022 notes as well as to repay a USD125 million term loan facility and cover fees and expenses from the refinancing and tender offer. However, proceeds from the new notes offering are now likely to be enough to allow for the redemption of all outstanding existing notes. London-headquartered Helios had said on Monday that the outstanding principal amount of the notes is USD600.0 million. Given this, the tender offer will be cancelled and telecom tower infrastructure company Helios will issue a notice of conditional redemption to redeem all existing notes.

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OTHER MAIN MARKET AND AIM - WINNERS

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City of London Investment Group, up 6.0%. The fund manager said it plans to buy US investment firm Karpus Management Inc in an all-share merger that will see the owners of Karpus take a 48% stake in CLIG. The deal will see CLIG issue 24.1 million shares to Karpus for 325 pence per share, worth GBP78.4 million. Karpus shareholders also are entitled to a cash payment of up to USD550,000 based on the net working capital of Karpus upon the completion of the deal. The owners of Karpus, which at May 31 had USD3.4 billion in funds under management for 2,273 client accounts, will hold 47.6% of the enlarged company. CLIG also said Karpus will "reinforce" its presence in the US and has the potential to be earnings enhancing for the first full financial year following completion.

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OTHER MAIN MARKET AND AIM - LOSERS

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Boohoo Group, down 1.0%. Credit Suisse downgraded the online fashion retailer to Neutral from Outperform.

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By Arvind Bhunjun; arvindbhunjun@alliancenews.com