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Today’s market overview

Equities in London have followed the positive lead set by New York and Asia overnight with a strong start this morning and The Trader Dominic Picarda sees this as confirmation that the bulls are back in town.

IC TIP UPDATES:

Shares in Gulf Keystone Petroleum (GKP) have been suspended this morning at the request of the company as it prepares for the result of the legal action taken against the company by Excalibur Ventures to be announced later this morning. The shares should be relisted later today. We maintain our buy recommendation for now.

Rolls Royce (RR.) has won a $175m contract to supply equipment to the Kazakhstan section of the Central Asia – China gas pipeline. Buy.

Sell recommendation. Whitbread (WTB) has continued to deliver solid sales growth. In the 24 weeks to 15 August like for like sales rose by 2.6 per cent and total sales by 12.4 per cent. The performance is primarily powered by continued strong growth from the Costa Coffee brand but there are signs of growth slowing a little.

Simon Thompson recommendation. Netplay TV (NPT) has issued strong interim results showing turnover rising 36 per cent and profits up by 47 per cent. The third quarter has also seen a 17 per cent increase in average daily net revenues. Netplay is benefiting from more penetration into the tablet and mobile markets which now account for 28 per cent of net revenue, against 10 per cent last year, and one third of new depositing players.

Interior Services Group (ISG) managed to grow profits and margins in the year to June despite continued difficult end market conditions. Revenues were flat at £1.28bn but underlying profits rose by 14 per cent to £8.5m. The order book ended the year 12 per cent ahead of the previous year at £854m. Buy.

Protein research tools supplier Abcam (ABC) posted a 25 per cent rise in revenues for the year to June which prompted a 20.6 per cent increase in adjusted operating profits to £46.5m and a 17 per cent increase in the full year dividend. Our recommendation is under review.

Meat packer Hilton Food Group (HFG) grew revenues by 9.4 per cent in the first half of the year but post tax profits rose by just 4 per cent, held back by higher input prices and the costs of setting up a joint venture in Australia. We keep our buy rating.

KEY STORIES:

Consumer debt specialist Arrow Global has announced its intention to float on the main list of the London Stock Exchange. The company, which buys up distressed consumer debt from banks and sets about improving collection rates, is expected to be valued around the £400m mark when it floats.

Fenner (FENR) says results for the year to end August are likely to be in line with expectations and that management expects a return to growth next year.

Satellite business Avanti Communications (AVN) grew its revenues by 65 per cent to £20.6m in the year to June and with the Hylas 2 satellite now launched and coverage expanded to 50 countries management expects a similar growth trajectory this year. It has a backlog of £290m, of which £42m is expected to convert to revenues this year.

Healthcare revenues systems specialist Craneware (CRW) survived a tough year in its core US market with revenues coming in flat and profits edging ahead by 4 per cent to $11.2m. The company also reported ending the year with a stronger sales run rate that it began with.

OTHER COMPANY NEWS:

Circle Oil (COP) reports that its latest well, AASE-18, in Egypt has proved successful and is now producing oil. Current gross daily production is running at 11,234 barrels of oil per day with gas production equivalent to 2,282 barrels as well.

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