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WINNERS & LOSERS SUMMARY: Sweett Group Soars On Canadian Takeover

Wed, 25th May 2016 09:50

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



FTSE 100 - WINNERS



Dixons Carphone, up 1.3%. The electronics and mobile phone retailer said it anticipates to report headline pretax profit at the upper end of its previous guidance in its recent financial year, following solid like-for-like revenue growth. The company said headline pretax profit for the year to the end of April was between GBP445.0 million and GBP450.0 million, at the upper end of its previous guidance. Group like-for-like revenue for the recent year rose 5.0% and grew by the same percentage in the four quarter, Dixons Carphone said.

Royal Mail Group, up 0.7%. UK media and communications regulator Ofcom said it will not impose new price controls on the postal operator and will leave the current regulatory framework on the postal services provider intact. Ofcom said that, given the declining letters market in the UK and increased competition in the parcels market, it has not proposed any new price controls on wholesale or retail products sold by Royal Mail. The regulator added it intends to leave in place the framework introduced on Royal Mail in 2012, which provided it with greater commercial freedom. This includes a safeguard cap placed on stamp prices.



FTSE 100 - LOSERS



Marks & Spencer Group, down 7.3%. The food, clothing and homewares retailer reported a fall in pretax profit in its recently-ended financial year as new Chief Executive Steve Rowe said his focus in his new role will be to try to bring the struggling clothing and homewares division back to growth. The group said its pretax profit in the year ended April 2 fell to GBP488.8 million from GBP600.0 million the year before, despite revenue rising slightly to GBP10.56 billion from GBP10.31 billion. M&S will pay total dividend of 18.7 pence, which is up 3.9% on the prior year, and a special dividend of 4.6p for the first half of the new financial year. Fellow retailer Next was down 2.1%

Intertek Group, down 3.6%. The testing, inspection and certification company said it achieved good revenue growth in the first four months of 2016, though its resource industry-facing businesses continued to see challenging market conditions. Intertek said group revenue for the four months to the end of April was GBP774.0 million, up 13% year-on-year and growing 11% in constant currencies. Organic revenue, stripping out acquisition contributions, grew 2.3% in the period, while constant currency growth was 0.5%. Shore Capital reiterated its Sell rating.

Babcock International Group, down 1.7%, The defence and engineering support services said profit and revenue grew in the year to the end of March, and the company said it is confident on its outlook for the new year. Babcock said its pretax profit for the financial year to March 31 was GBP330.1 million, up 5.0% on the GBP313.1 million the group made a year earlier. Revenue grew to GBP4.16 billion, up 4.0% year-on-year from GBP4.0 billion. Babcock will pay a final dividend of 19.75 pence for financial 2016, up from 18.1p, meaning its total payout rises to 25.8p from 23.6p. Liberum reiterated its Hold rating. "Reasons remain for a degree of caution, including the wider challenges in the outsourcing industry, concerns around the quality of earnings, the high level of leverage and risks around the leadership change," the broker said.



FTSE 250 - WINNERS



Serco Group, up 11%. The outsourcer said it anticipates underlying trading profit for 2016 will be ahead of current market expectations. Serco said its financial performance in the first four months of 2016 has been stronger than anticipated, primarily due to good outcomes on a number of commercial negotiations. The group said the outcome of those talks will sharply increase first half profit, though this will not repeat in the future. Serco said it now expects underlying trading profit for 2016 to be no less than GBP65.0 million, compared to the GBP50.0 million the group had previously guided. Revenue will also be higher than expected, at GBP2.9 billion against the GBP2.8 billion previously anticipated.

Paysafe Group, up 7.6%. The online payments company said its full year revenue and earnings are set to outpace market expectations as the good momentum seen in the early months of 2016 has continued. Paysafe said revenue for 2016 is now expected to be USD950 million to USD670 million, ahead of the current market consensus of USD911 million. Adjusted earnings before interest, taxation, depreciation and amortisation, stripping out one-offs, are also set to beat the market view at USD270 million to USD276 million, compared to the current market forecast of USD260 million. The group said the good momentum it saw in the first few months of the year has continued and said the integration of Skrill, acquired in 2015, is on track to be substantially complete by the third quarter of 2016.

Zoopla Property Group, up 4.5%. The property portal said its revenue more than doubled in its first half, largely thanks to the additional revenue stream coming from its Comparison Services division, which was not part of the group a year earlier. Zoopla, which owns consumer brands focused around property including uSwitch and PrimeLocation, reported revenue of GBP96.4 million for the six months ended March 31, more than double the GBP42.0 million it posted for the same period a year earlier, on the back of an additional GBP57.7 million coming from its Comparison Services division. Zoopla posted a pretax profit of GBP28.1 million, up from GBP18.4 million a year earlier, and said it saw strong traffic over the year, with more than 300 million visits to its website.

Pennon Group, up 3.2%. The water company said its pretax profit grew thanks to efficiencies in the business which offset a slight decline in revenue, while the group hiked its annual payout. Pennon, which owns South West Water and waste management business Viridor, along with the recently-acquired Bournemouth Water unit, said pretax profit for the year to the end of March grew to GBP206.3 million from GBP197.0 million a year earlier, despite revenue dipping to GBP1.35 billion from GBP1.36 billion.



FTSE 250 - LOSERS



Stagecoach Group, down 4.4%. JPMorgan downgraded the transport company to Neutral from Overweight.

Great Portland Estates, down 1.9%. The property investment and development company said London's property market fundamentals remain supportive, though it is "too early to tell" what impact the upcoming UK referendum on EU membership will have on the market, as it saw profit and revenue grow in its financial year. Great Portland Estates posted a rise in pretax profit for its financial year ended March 31, to GBP555.1 million from GBP507.4 million, after revenue grew to GBP128.8 million from GBP88.8 million.



MAIN MARKET AND AIM - WINNERS



Sweett Group, up 49% at 34.25 pence. Canadian engineering consultant WSP Global said it has agreed to acquire the London-listed construction consultancy for GBP24.0 million in cash. WSP will pay 35.00 pence per share in cash, a 52% premium to Sweett's closing price on Tuesday. WSP said the acquisition will boost its position in the global professional services market. "This transaction supports the realisation of both companies' strategic aims and provides a strong global platform for growth. It provides Sweett shareholders with cash at an offer price that recognises Sweett's underlying value, whilst enabling Sweett's business to accelerate its growth potential with the support of WSP's financial strength," said John Dodds, Sweett's chairman.

Forbidden Technologies, up 11%. The cloud-based video technology company said it has signed a deal for its video social network eva with energy drink brand Rich Energy. Under the deal Rich Energy will use the eva network to record user-generated content, and eva will initially be used as a research tool to acquire video-based consumer feedback on Rich Energy. The recorded content will then be available for use as a part of future marketing campaigns. Financial details of the deal were not disclosed.

Igas Energy, up 9.2%. The oil and gas company said said its production guidance for the year remains intact as it continues to develop its projects. Igas said production in 2016 to date has been stable, leaving it on track to hit its guidance for 2,500 to 2,700 barrels of oil equivalent per day for the full year. The group has made planning applications to the South Down's National Park Authority for new wells at its Singleton project. Igas expects a final decision on its Springs Road project in the third quarter and said a planning application for the Tinker Lane project was submitted to Nottinghamshire County Council this month.



MAIN MARKET AND AIM - LOSERS



Judges Scientific, down 23%. The scientific instruments developer said order bookings for the first 20 weeks into its current financial year had been low. "This will negatively impact our interim results and, should the trend continue, has the potential to affect the group's performance for the year as a whole," the company said.

Imaginatik, down 8.8% at 2.85p. The software and consultancy services company said it will raise GBP2.1 million through a placing and open offer of shares to boost its finances and back its growth plans. The company said it will issue 63.3 million shares through a placing and up to 21.3 million via an open offer to raise the funds, all at 2.5 pence per share. The proceeds will be used to strengthen the company's balance sheet and fund business development investments, it said.



By Arvind Bhunjun; arvindbhunjun@alliancenews.com; @ArvindBhunjun

Copyright 2016 Alliance News Limited. All Rights Reserved.

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