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UK WINNERS & LOSERS SUMMARY: RBS Plummets As Dividend Lags Consensus

Fri, 14th Feb 2020 10:41

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



FTSE 100 - WINNERS



SEGRO, up 0.7%. 2019 was another year of "strong" financial and operational performance for SEGRO, it said, supported by rental growth and additional income generated from its development pipeline. The real estate investment trust upped its dividend payment for the year and added that it has made a strong start to 2020 due to continuation of the earnings momentum. For 2019, SEGRO recorded pretax profit of GBP902.0 million, down 18% from GBP1.09 billion in 2018, mainly due to lower realised and unrealised gains in its wholly-owned portfolio. Adjusted pretax profit, however, jumped 11% to GBPP267.5 million from GBP241.5 million due to a record year of development completions, high customer retention rates, like-for-like rental growth and a low vacancy rate. SEGRO raised its final payout for 2019 by 8.7% to 14.4p, giving a total payout of 20.7p, up 10%.



FTSE 100 - LOSERS



Royal Bank of Scotland Group, down 6.2%. RBS saw profit and net interest income beat expectations in 2019, but declared a final ordinary dividend of 3p, down 32% or 1.4p, versus consensus expectations. The bank is also paying a 5p special dividend, taking its total 2019 distribution to 22.0p. The lender intends to maintain dividends around 40% of attributable profit, while consensus stands at 42%. RBS said it expects 2020 to "challenge" its ability to generate income, with its own economic forecasts predicting a base rate cut in the short term. In 2019, the state-backed lender's operating pretax profit increased 26% to GBP4.23 billion from GBP3.36 billion in 2018. Operating pretax profit, according to company-compiled consensus, was forecast at GBP3.77 billion. The bank's attributable profit for 2019 came in at GBP3.13 billion, compared to consensus of GBP2.52 billion. In 2018, when RBS reported its second profit in a decade, the figure was GBP1.62 billion. Total income was GBP14.25 billion, compared to 2018's GBP13.40 billion and the market expectation of GBP13.66 billion.



FTSE 250 - WINNERS



Pennon Group, up 0.5%. The water utility and waste management firm's South West Water business has accepted water regulator Ofwat's final determination for the period from 2020 to 2025. Pennon confirmed it will not refer the decision to the UK Competition & Market Authority. "Importantly for customers, by 2025 South West Water bills will be lower than they are today and lower than they were 15 years earlier," Pennon added. In December, Ofwat completed its price review for the period from 2020 to 2025, unveiling a GBP51 billion investment programme by UK utilities for the improvement of services and the environment.



OTHER MAIN MARKET AND AIM - WINNERS



Active Energy, up 23%. The London-based renewable energy company has agreed with all of its bondholders to revise the terms and conditions of its 2022 outstanding convertible bond. The convertible bond was issued in 2017 with a maturity date of mid-March 2022 and an interest coupon of 8% per annum, payable quarterly in arrears. All of the bondholders have now agreed that payment of these cash coupon payments will not be required for the 12-month period to the end of September. This will allow the company to focus its capital on current activities at its Lumberton site in North Carolina, it said.



Verona Pharma, up 3.2%. The clinical-stage biopharmaceutical company reported phase 2b clinical trial results for ensifentrine as a maintenance treatment for chronic obstructive pulmonary

disease. The study met its primary endpoint demonstrating that ensifentrine produced clinically and statistically significant improvements in lung function at all doses. Also, clinically relevant secondary endpoints were met including significant progressive improvements in chronic obstructive pulmonary disease symptoms.



SDX Energy, up 2.9%. The Mediterranean and North Africa-focused oil and gas company said drilling at the SD-6X well at the South Disouq project in Egypt has commenced. SDX has a 55% working interest in South Disouq, which is on the country's northern coast. The well, also known as Salah, is to be drilled to around 9,000 feet by late March or early April. It is targeted a resource of around 71 billion cubic feet equivalent of gas. The main targets of the well are in the same formations as London-based SDX's four producing wells, Kafr el Sheikh and Abu Madi. If the wells are successful, SDX said they would require tie-ins to the South Disouq central processing facility, which would cost SDX USD4.4 million combined.



OTHER MAIN MARKET AND AIM - LOSERS



Mosman Oil & Gas, down 40%. The exploration company said it has been considering its corporate strategy and priorities, particularly given the "success" at the Stanley project in Texas, US. In order to capture the growth opportunity, the company said it has established a funding plan, which includes an equity placing and non-core assets sale. Thus, Mosman said it will sell its Welch and Arkoma projects and launch a GBP300,000 fundraising. Mosman intends to issue 200.0 million shares at a price of 0.15 pence each. The proceeds will be used for the near term drilling programme at Stanley, the company said and expansion into new projects in Texas. Turning to production, the company reported a 13% increase in net output to 54,987 barrels of oil equivalent.



Ascent Resources, down 37%. The oil & gas exploration and production company proposed a corporate restructuring, with James Parsons joining the company as executive chair. He is currently executive chair of Regency Mines and non-executive chair of Echo Energy and Coro Energy. Ascent said its shares are currently trading at below nominal value, which does not allow it to issue any further shares. The company, therefore, proposed a capital reorganisation, whereby each existing ordinary share of 0.2p nominal value is subdivided into one redenominated ordinary share of 0.005p and a deferred share of 0.195p, and a consolidation of the redenominated shares by a factor of 100 to 1. Upon completion, the company said it plans to propose a fundraising to raise GBP800,000 through a 16.0 million shares placing at a price of 5 pence each.



By Evelina Grecenko; evelinagrecenko@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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