Today’s market overview
Equities have started the morning down a little more in London after a down day yesterday which caught The Trader Dominic Picarda out, but he’s staying bullish on equities for now.
IC TIP UPDATES:
New Britain Palm Oil’s (NBPO) results for the half year came in pretty much as expected with revenues and profits both slipping into reverse, profits fell from $63.6m to $14.1m, as production output was hit by severe weather and crude palm oil prices traded in a relatively narrow, and weak, band. The company expects a return to normalised extraction rates next year. The company made no further comment on the partial takeover offer received last month from Malaysian business Kulim. We keep our buy recommendation.
Sell recomendation Rotork (ROR)accompanied its interim results with news of two small manufacturing bolt-on acquisitions. Meanwhile it also reported record revenue and profit across each of its existing business divisions and an order book of £208m, up 15 per cent since December.
Credit specialist S&U (SUS)continues to trade well, particularly in motor finance where advances are up almost 50 per cent on last year. We keep our buy rating.
Safety barrier and infrastructure products specialist Hill & Smith (HILS) says momentum picked up in the second quarter of the year after a slow start with its roads business in particular benefiting – it doubled its profits in the first half – but a lack of large projects meant the utilities business traded below the levels of last year. Overall revenues dipped by 1 per cent and pre-tax profits by 17 per cent. Management warned that the full year performance may now come in a little shy of previous expectations. Our recommendation is under review.
Software Radio Technology (SRT) has announced a $670,000 order for its marine identifier products from the US. We keep our buy.
Legal & General (LGEN) enjoyed a strong performance in the first half of the year, growing pre-tax profits by 13 per cent to £592m. Assets under management in the LG Investment Management business grew from £406bn to £433bn and both bulk and individual annuity sales also grew strongly. The half year dividend is increased by 22 per cent.
Esure’s (ESUR) first results as a quoted company were impressive with post-tax profits rising by 16.9 per cent to £44.3m as the company’s combined ratio improved by almost 5 per cent to 89.6 per cent.
One of the biggest fallers in early trading is Greggs (GRG) after a lacklustre set of results sent its shares 7 per cent lower. Half year results showed total group sales up 3.4 per cent to £362m but like for like own shop sales fell by 2.9 per cent and pre-tax profits fell by £4.6m to £11.4m. The company is pushing on with its store refurbishment programme.
Capita Group (CPI) has signed another contract with Barnet Council to support a host of services including customer service, human resources and finance. The deal is worth £320m over 10 years.
Silver and gold miner Fresnillo (FRES) saw revenues dip by 14 per cent in the first half of the year as the average realised silver price fell by 20.3 per cent and the gold price by 10.6 per cent.
Intercontinental Hotels Group (IHG) enjoyed a strong half year with revenues growing by 7 per cent and profits up 20 per cent as a recovery in the Americas led the way.
Engineer and aerospace specialist Meggitt (MGGT) posted a solid first half performance with revenues growing by 4 per cent and underlying profits up by 7 per cent. The company also today announced contracts with Sikorsky for fuel systems and with Abris for fire protection equipment on the Irkut MC-21 aircraft programme.
OTHER COMPANY NEWS:
Feeds, fuels and logistics business NWF (NWF) enjoyed a bumper opening half to the year which helped it post record results. Revenues grew marginally to £545.8m and profits surged by almost 65 per cent to £8.7m.
Salamander Energy (SMDR) announces an oil discovery at the Surin exploration prospect offshore Thailand.
- Both parties peddle a fiscal fairytale (smh.com.au)
- Rockwood 2Q profit falls on charges, revenue up (miamiherald.com)
- Five questions answered on HSBC’s profit rise (newstatesman.com)
- Esure’s maiden results show 15% rise in profits (scotsman.com)
- HSBC Shares Fall Despite Profits (hispanicbusiness.com)
- L&G hikes dividend as first-half profits grow 13% (scotsman.com)
- British Gas urged to freeze price hikes as profits rise (metro.co.uk)
- HSBC says salaries may rise to beat bonus cap (scotsman.com)
- Australian unemployment on the rise – luck running out (oconnoroz.wordpress.com)
- Acquisitions boost Rotork first-half profit (uk.reuters.com)