Member Info for jange

Negative Points: Costs within the group's online business increased by 6%. Competition, particularly in the online arena, remains intense. The UK government announced in March that Machine Games Duty will be levied at a rate of 20% of gaming machine gross profit from 1 February 2013. An exceptionally unfavourable run of sporting results could depress revenue growth. The economic backdrop is currently challenging with austerity measures in place in many of the group's markets.

Financial Highlights: Group net revenue grew by 9% and was up 10% in the year to date, helped by good sporting results across all channels. Retail net revenue grew by 3% and was up 4% in the year to date. William Hill Online performed strongly and delivered 18% growth in net revenue with Online operating profit of £34.8 million, 42% higher than the prior year. Net debt for covenant purposes reduced by £12 million to £343 million at the end of the period.

Interim statement: William Hill declared today that group operating profit in its third quarter was up 26% and 17% higher in the year to date. The Group saw net revenue advance by 9%, with quarterly growth continuing broadly in line with that seen in the first half. Operating profit growth in the quarter further benefitted from favourable timings on Online marketing costs. The initial performance in the US was noted as encouraging, with integration successfully completed and trading in line with expectations, added management. William Hill added that it would seek a valuation for the 29% stake held by partner Playtech, taking steps towards full control of its online joint venture (believed to be worth in the region of £400 million). The bookmaker is already in talks to buy online gaming company Sportingbet in a £530 million deal with GVC Holdings.

Company overview William Hill is a major betting and gaming company, employing more than 15,000 personnel. Founded in 1934, it is now the UK's largest bookmaker with 2,370 licensed betting offices (LBOs). It offers bets on a wide range of sporting and non-sporting events, including gaming on machines and numbers-based products including lotteries. The company also has an online business William Hill Online It is listed on the London Stock Exchange and is a constituent in the FTSE-250 index.

Positive Points: The board noted that "overall, trading continues to run broadly in line with our expectations." International Power Projects' business revenues in the third quarter grew 15% excluding pass-through fuel and currency movements. The Local business delivered a better-than-expected performance in the third quarter, with revenues on a reported basis growing by 32%. A strategy of expanding the company's footprint in fast-growing markets is delivering strong growth. As of late March, the group entered into an agreement to acquire Poit Energia, a leading provider of temporary power solutions in South America. The company previously announced plans to substantially increase returns to shareholders. Group borrowings have increased, although over a conservative 2 to 3 year period. Management recommended a 10% increase in the dividend for the 2011 year as a whole. Diversity of both customer type and geographical location is enjoyed.

Negative Points: The board has lowered its forecast for profits during the current full year. Group customer bad debts are again bad on the increase. The company might have to make provisions going forward. Group net debt has risen marginally – plus £7 million. With much of the group's business conducted overseas, currency movements can (and have) impacted. Recent cautious comments from group supplier, US engine maker Cummins, have fuelled concerns that growth may be slowing. New entrants may be attracted into the market by Aggreko's high returns

Financial Highlights: On a reported basis, revenues grew by 22%, whilst on an adjusted underlying basis revenues grew by 13%. Net debt at £685 million has increased by £7 million in the three months to 30 September 2012. Management reduced current full year profit guidance.

Third quarter trading: Aggreko lowers profit expectation. Management outlook comments disappointed investors, with the share price declining by over 5% in early morning trade. At its International Power business, second half revenue growth rates are expected to be slightly lower than the board expected at the time of its half year results. Margins and returns for the year are forecast to be lower than 2011 due to the high mobilisation costs in Mozambique and an increase in customer bad debt provisions. In addition, exchange rates had also moved against the company. As such, anticipated profits for the current full year are expected to be down by about 2.5%. In all, whilst long term growth from increased power demands provides optimism, near term performance is currently being impacted.

Company overview Scottish company Aggreko plc is the global leader in the rental of power generation and temperature control equipment. Headquartered in Glasgow, Aggreko serves companies across a wide range of industries, with over 140 locations offering 24/7 services in many different countries. The group is organised around two lines of business: Local business and International Power Projects. The International Power Projects business sells power, which it delivers using temporary power plants owned and operated by the company. The Local business rents equipment to customers to respond to requirements for power and temperature control.

The deep value in Quintain's shares remains speculative, and the group remains burdened by debt. Most local councils don't share the Treasury's enthusiasm for construction, and Knight Dragon doesn't solve all the company's problems. But it's now easier to imagine how the company could get back on track, tipping the balance from risk towards reward...but adyor gl

Another advantage of the deal is that it validates Quintain's valuations to a degree. One reason the company's share price still languishes far below book value is that investors don't believe the book. Unlike most developers, Quintain does not hold its projects at cost as 'trading properties', but uses a discounted cash-flow model to revalue them as 'investment properties'. Keith Crawford, property analyst at broker Peel Hunt, has calculated that the Knight Dragon deal prices the Greenwich assets at a 13 per cent discount to Quintain's holding value. Using a 2010 sale to Brent Council to write down the development land at Wembley along similar lines, he comes up with a 91p "floor" to Quintain's net asset value (NAV). That's 19 per cent below the adjusted NAV of 112p that Quintain reported for March, but also implies that the shares trade at a 37 per cent discount. That gap looks too wide now that Quintain has more cash to spend at both Greenwich and Wembley, which, as residential-led schemes in well-connected London locations, have enormous potential. Residential land values have risen strongly in London and show no sign of stopping. The government is desperate to 'get Britain building', so local authorities may be willing to cut their demand for affordable homes, which has proved a major obstacle in Greenwich. Dr Cheng clearly believes in the opportunity.

Before the credit crunch, property prices in 'grotty' inner London were catching up with prices in the capital's core and investors raved about 'convergence'. Since the crunch, investors have cared only for quality, and property prices in central London have soared clear of prices in the rest of the city. The company to suffer most from this abrupt reversal is Quintain (QED), which owns two of London's largest regeneration sites, around the Millennium Dome in north Greenwich and beside Wembley Stadium in north-west London. It found itself cut off from the capital markets and, with limited cash flow to finance its ambitious schemes, has been living a hand-to-mouth existence. But that looks set to change. The share price has risen by nearly two-thirds since its June lows, thanks largely to a turn in Quintain's fortunes. On 18 June, it announced a joint venture to redevelop Greenwich peninsula with a Hong Kong company, Knight Dragon. The name implies a curious ambivalence, but the joint venture, Quintain Knight Dragon - which is headed by Dr Henry Cheng Kar-Shun, chairman of New World Development, a listed conglomerate with a market capitalisation of about £6.4bn - looks more white knight than fiery dragon. Yes, the UK developer is giving up much of its equity in Greenwich. Yet, in exchange, it has secured not just cash and management fees it can redeploy at Wembley, but - crucially - £300m in development finance for Greenwich. The peninsula's long-stalled regeneration can now finally move forward.

A large requirement for working capital and wafer-thin profit margins mean Interior Services will never cut the mustard for some investors, but we think it has a credible recovery story in place. The dividend yield is a genuine attraction, the share rating is rock bottom and the overseas expansion is encouraging. So even the glimmer of recovery in the UK economy could have quite an impact on the share price. .........but always do your research and good luck......

Let's start with the bad news, though. As chronicled by a series of profits warnings, demand for the group's services has collapsed in many of its traditional markets. For example, the public sector is reining in spending, new-build office fit-outs are scarce, and supermarkets are pulling plans for new stores. All this hurts the group. However, management feels demand has been bumping along the bottom for some time and is unlikely to deteriorate further. The company has been adjusting to the situation by cutting costs. Measures taken resulted in an exceptional restructuring charge of £3m last year and the benefits should be seen in 2013. In particular, management closed the company's affordable housing business in south-west England, which means last year's £2.1m loss will not be repeated. This alone should offset the impact of the end of jobs related to London's Olympic Games. Interior Services has also been investing in growth areas, such as fitting out data centres, 'innovative' office interiors and high-end residential property. The company's contract wins in these markets underpin hopes of underlying earnings growth this year, as does overseas expansion. Two acquisitions, one in Asia and one in Europe, helped quadruple international profits last year, which now account for just over a quarter of the total. Overseas orders are benefiting from moves by Interior's UK customers to expand into these markets. As well as taking hard decisions operationally, the company made the tough call to cut the dividend to 9p in 2012. This looks like a level from which Interior Services can now build. Even at the low point in the cycle, the payment was twice covered by underlying earnings...........

The best way to describe the investment case for Interior Services is as a 'deep value' opportunity. The ratios most commonly used to measure value look extremely attractive. The dividend yield is forecast to be close to 7 per cent this year, while the shares trade on less than seven times earnings forecasts by house broker Numis Securities, dropping to less than six times the forecast for 2013-14. What's more, the group has net cash. However, shares only enter 'deep value' territory if a company has serious problems, and Interior Services has had its share. Yet we think the fit-out and construction company's investment merits stack up pretty well and reckon that investors can enjoy a handsome dividend underpinned by stable earnings while waiting for a cyclical recovery to boost the share price. Encouragingly, it looks like more investors are warming to this view - the share price has risen 14 per cent since Interior Services reported full-year results a month ago.

Ladbrokes: Davy Research downgrades to neutral; Panmure Gordon keeps buy rating and 195p target.

Jardine Lloyd Thompson: Panmure Goron cuts target from 775p to 760p, hold rating kept.

Informa: Jefferies keeps buy rating and 474p target.

Hays: Espirito Santo initiates coverage with neutral rating.

Go-Ahead: Jefferies keeps hold rating and 1,220p target; Panmure Gordon keeps hold rating and 1,250p target.