Member Info for mulledwine

http://www.edisoninvestmentresearch.co.uk/researchreports/Centaur200912update.pdf

United Utilities, the UK’s largest listed water group, saw its shares soar ahead of yesterday’s trading update as takeover rumours resurfaced once again. Yesterday’s trading statement did not have any mention of the chatter, and the shares edged lower. Bank of America Merrill Lynch said that a bid seemed “plausible”. JP Morgan Cazenove doubts that the statement will quash the bid talk but did not “see a bid emerging in the next six months as likely.” Of course, assets such as water companies are attractive for investors seeking relatively solid, long-term returns. United Utilities has around 7m customers in its catchment area - and this year is expected to make a pre-tax profit of more than £350m. That’s why these utility groups are attractive for income investors. However, a share should never be bought on bid hopes alone. It is the fundamental prospects for the business that matters. Questor continues to believe that the best way to structure a portfolio is have the core as income shares, which provide dividends that can be reinvested. This compounding effect boosts returns significantly, although the strategy takes time. United Utilities shares are trading on a 2013 earnings multiple of 17.8 falling to 16.4 times. They were last tipped as a buy at 609p in February and they are up 20% since then. They remain a buy, Questor says.

The City gets back from holiday, a handful of bids pop up, and the spivs start to look around for the next takeover stock. United Utilities was on the rack again, a long-term candidate in the fast-shrinking water sector ever since Hong Kong tycoon Li Ka-Shing bought Northumbrian Water in the summer of last year. Yesterday’s trading update from United made no mention of the bid rumours, and rightly so. It was a steady-as-you-go statement from a company that is never going to startle the market, though it has to be said that in its earlier, more racey incarnation as an “all things to all men” utility services provider it gave investors enough shocks. Trading is in line with expectations. Revenue will be higher than last year, though depressed by the effect of customers’ switching to meters, which concentrates the mind on water saving, and continuing lower demand from commercial users. Those bid rumours, which incidentally neither I nor most analysts believe, have helped shift the shares from 616p at the start of the year to 730p, up another 3p yesterday. The dividend is pledged to grow by inflation plus 2%, which puts them on a yield for this year of about 5%. Reason enough to hold, without any bid premium, Tempus believes.

Investors were concerned about trading at Imperial Tobacco over the last month, with the shares being down around 4% in the year to date. However, yesterday’s update reassured, The Telegraph´s Questor team says, propelling the shares to near the top of the FTSE leader board. In the recent past there was much talk about equity markets not performing in the first decade of this century, as major indices were little changed. However, the MSCI World Tobacco Index had the highest return out of 67 groupings in the MSCI World Index in the 10 years to 2011. Investing in sin is a strategy that pays off, although -of course- past performance is no guide to the future, Questor explains. There are moves by western governments that aim to discourage smoking. Last month, Australia’s highest court upheld a new government law on mandatory packaging for cigarettes that removes brand colours and logos from packaging. The UK government is considering something similar. However, growth in emerging markets should keep sales relatively buoyant - and the UK is proving resilient. Imperial shares are trading on a September 2014 earnings multiple of 11.1, which is a discount to British American Tobacco on 14.2. However, Imperial has a higher debt profile. The shares yield a prospective 4.9%. Questor last said hold in July when the shares were at £24.49. Following yesterday’s statement, they are once again a buy for income it says.

Martin Deboo, analyst at Investec Securities, raises two interesting points about Imperial Tobacco. One, it is the lowest rated across a range of 30 consumer goods producers, the shares, as the graph shows, having lost 200p of their value, or approaching 8 per cent, since July. To be fair, the comparators include the posh Swiss chocolates maker Lindt, which is in a different galaxy to the makers of Golden Virginia tobacco, favourite of the “roll-your-own” brigade. But the shares underperformed its only quoted rival in the UK, British American Tobacco, which has lost a little more than 4 per cent over that period. There are reasons why the two should be in retreat: a ruling by Australia’s highest court in August moved forward the introduction of plain packaging laws. This is widely expected to be followed elsewhere; the UK has yet to adopt a firm view, but South Africa has said it will follow suit. However, plain packaging in the UK would benefit makers of cheaper brands, such as Imperial, Mr Deboo believes, because it erodes the value of more expensive ones. The second interesting fact is that Imperial shares have over the past couple of years tended to rise over the last four months of the year, probably because the company’s September financial year-end means the shares go ex-dividend in January. Imperial shares have suffered from the decision in 2007 to pay £11bn for the Franco-Spanish firm Altadis, increasing its exposure to the Spanish market at quite the wrong time, and the corresponding rise in debt. The shares at present yield about 5 per cent for the year about to begin, but the real attraction is an eventual takeout, which has long been in prospect. A strong hold, then, says The Times´ Tempus column.

mylastquid - howdy - no, not here at present. I thought she might drop to 105 - 110 but it didnt quite so I missed the rise from 115. Nice broker note from Brewin although they should always be read with interest and not as a 'guaranteed ' price destination !

WH Ireland retained its "buy" stance on Marston's (MARS), with a 130p target price. The pub chain achieved like-for-like sales growth of 3.6% in the half year ended 31st March, which the broker attributed to increased volumes, rather than prices. WH Ireland noted that the company plans to build between 20 and 25 pub restaurants per year and switch its business model to focus more on franchising agreements rather than management. The broker added that the firm may benefit from supplying locally brewed beers, which have tax advantages for brewing in small quantities

Panmure Gordon maintained its "buy" rating for Imperial Tobacco (IMT) with a target price of 2,900p. The cigarette company will issue a pre-close trading statement on 21st September, and the broker forecasts a 2% decline in stick equivalent volumes, offset by price increases. Panmure noted that the shares have fallen by around 8% since August, putting them on a 20% discount to peers on an earnings basis. The broker added that the stock offers a dividend yield of 4.3%.

N+1 Brewin reiterated its "buy" recommendation for Goals Soccer Centres (GOAL) with a 155p target price. The broker expects the 5-a-side football company's successful VAT appeal to enhance earnings per share by around 10% over the next three years. Brewin said there may be some lurking disappointment over the failed takeover bid by the Ontario Teachers' Pension Plan, but maintained that the 144p per share offer undervalued the business. On the broker's forecasts, the shares trade on a prospective multiple of 8.8 times for 2012, falling to 8 times in 2013.

Gerry Madden, CEO of Kedco, commented: "As recently reported to Kedco shareholders, we have been examining a potential acquisition which we believe has an attractive and diverse portfolio of complimentary projects as well as a strong and experienced management team. We are delighted today to be able to announce the proposed acquisition of Reforce Energy Limited. Kedco has a clear strategy to become one of the UK & Irelands largest independent renewable energy companies. This Acquisition would add both breadth to the pipeline and available technologies as well as depth to the management team."

Steve Dalton was previously head of UIster Bank's / RBS project finance business in Ireland with specific responsibility for the financing of renewable energy projects. For over six years he led the financing of 35 renewable energy projects with a combined capacity in excess of 500MWs including the Kedco 4MW Newry Biomass project. Steve is also currently a director of Mexican Renewable Energy Limited, a development company with 250MWs of wind and solar projects under development in Mexico. Tim O'Keeffe is an experienced senior executive with a successful track record spanning 30 years across many different businesses and industries including renewable energy, dairy and media. From 1986 to 2009 he was the financial controller of Lee Strand Co-op, based in Co. Kerry, Ireland. Throughout his time with Lee Strand he played a key role in a number of acquisitions and investments made by the Co-op including the development of a 15MW wind farm. The Company will make further announcements in respect of the Acquisition in due course.

Proposed acquisition of Reforce Energy Limited Kedco plc, (AIM:KED) the renewable energy group focusing on the production of clean energy in the UK and Ireland, announces that it has signed a heads of agreement with Reforce Energy Limited ("Reforce") in relation to the acquisition of its entire share capital (the "Acquisition"). Both parties are now proceeding to final legal contracts and the completion of all pre-conditions relating to the Acquisition. The consideration for the Acquisition, if completed, would be satisfied by the issue of new Kedco ordinary shares and would not involve cash consideration. Reforce is a renewable energy development company focused on small-scale renewable projects across various technologies. The company's key markets are the UK, Ireland and Northern Ireland where it already has an active pipeline of over 60 projects with a capacity of in excess of 40MWs at various stages of development. Reforce was founded by Steve Dalton and Tim O'Keeffe in 2011.

http://www.investegate.co.uk/Article.aspx?id=201209180700054657M

End of Formal Sale Process On 1 March 2012, following approaches received by the Board, the Company announced the commencement of a formal sale process in order to explore whether an offer for the issued and to be issued shares of the Company was in the best interests of shareholders and the business as a whole. An update to the formal sale process was given on 31 July 2012, stating that the Company continued to hold discussions with a number of potential offerors. Before and during the formal sale process, the Company received several indicative proposals and potential offerors were provided with access to management and detailed financial information. Following extensive discussions the Board does not believe the proposals received are at a level that would be acceptable to shareholders and are therefore not recommendable by the Board. The Board has therefore decided to terminate the formal sale process with immediate effect. The Company is no longer deemed to be in an "Offer Period" as defined in the City Code on Takeovers and Mergers ("the Code").

http://www.investegate.co.uk/Article.aspx?id=201209180700074740M

http://www.edisoninvestmentresearch.co.uk/researchreports/Sacoil180912update.pdf

Valuation: A play on globalising supply chains We continue to view Avingtrans as a long-term growth play allowing access to the globalisation of supply chains in structural growth markets. We believe the current rating of 10.7x CY12 EPS, falling to 9.0x CY13 EPS, does not yet fully recognise this potential, or the impact the strategy has had in securing long-term value creation. Our sum-of-the-parts valuation on to a CY13 basis yields a fair value of 146p per share

http://www.edisoninvestmentresearch.co.uk/researchreports/Avingtrans180912update.pdf

Full year results The information provided in this announcement is based on unaudited management information. The Company expects to announce its audited results for the year ended 31 August 2012 by 30 November 2012. As reported in the interim results, the new Board took a prudent view on the various assets on the Company's balance sheet incurring accelerated write-offs relating to intangible assets (US$ 10.8 million at 29 February 2012), mainly related to the Celsys Limited and FMNA investments. This had a negative impact on group wide operating results for the interim period and, as such, will impact results for FY2012. Further write-offs of US$ 3.3 million were incurred on 7 August 2012 related to the sale of the ATR and F27 aircraft (see RNS 5278J). As disclosed then, the total amount recognized by Cambria as being owed by its aircraft leasing customer is US$ 7.0 million, of which US$ 5.6 million are Contingent Assets. We understand the aircraft leasing customer claims it is owed US$ 1.4 million, which is a claim Cambria will vigorously defend. In addition, the changes made to the Board on 24 February 2012 came with significant one-off costs which included legal fees and various other charges associated with the transition away from Cambria's then largest shareholder (US$ 439 thousand as at February 2012). Again, this had a negative impact on group wide operating results for the interim period and, as such, will impact results for FY2012. The Board expects some of these costs to continue to be incurred by the Company in the forthcoming half of FY2013.

Given the growth rates of the Company's investments, and its increasingly attractive outlook towards group wide profitability, the Board continues to be cognisant of this discount. Were this position to continue the Board may review strategic alternatives for one or more of its investments to unlock (and/or make more apparent) some of the value built-up within its underlying investments. If this review were undertaken it may include, but would not be limited to, a potential sale of certain assets. In this context, the Company's Board may consider targeted buy-backs of its own shares were a realisation of any assets completed.