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Today’s market overview

Equities remain stuck in a rut as the US budget situation continues to drag on with one renowned stock market watcher predicted a sell off stretching into November, but The Trader Dominic Picarda is not too concerned about that prospect.

IC TIP UPDATES:

Sell recommendation. Carpetright (CPR) has announced a boardroom shakeup today after issuing yet another profit warning. Chief executive Darren Shapland is stepping down with immediate effect and trading director Graham Harris, who has only been with the business for four months, steps up to chief operating officer with founder and chairman Lord Harris resuming some executive duties. UK like for like sales fell 2.5 per cent and European like for likes by 7.8 per cent during the 10 weeks to 29 September, which will cause profits to come in ‘significantly’ below expectations.

Polo Resources (POL) reports that Signet Petroleum, in which it holds a 47 per cent stake, continues to progress with a strategic review and discussions are ongoing with a number of potential bidders either for assets or the entire business but the process is taking longer than initially anticipated. Nonetheless we retain our buy recommendation.

KEY STORIES:

Tate & Lyle (TATE) has reiterated the expectation that it will deliver ‘another year of profitable growth’ but that adjusted operating profit for the first half will be lower than last year’s. This is mostly due to softer performance in the US where the beverage was softer, affecting sweetener sales. Lower volumes in the US also affected the ingredients and speciality food segments.

WS Atkins (ATK) has acquired Confluence Project Management of Singapore for £8.6m in cash.

Oil services specialist Wood Group (WG.) says it expects to report full year results in line with expectations with Wood Group Engineering expected to deliver earnings growth of 10-15 per cent.

Serco (SRP) has agreed to sell its UK occupational health business to its management for £3.5m. The business serves 450,000 people in the UK and made adjusted operating profits of £1m last year.

API Group (API) says recent guidance given remains unchanged and that it is likely to meet expectations for the full year despite a weaker first half showing. Its laminates and foils businesses are expected to perform well during the second half but the holographics business continues to show little improvement.

OTHER COMPANY NEWS:

Arbuthnot Banking Group (ARBB) has announced a sale and leaseback deal for its premises at Wilson Street in the City of London. The deal values the property at £26.215m compared with its book value of £16.5m. The buyer, GMS Bricks, is also providing £5.4m for a renovation and fit out programme. The net gain to Arbuthnot from the deal is £5.8m and this will help fund an 18p a share special dividend to be paid after completion.

Firestone Diamonds (FDI) posted a 52 per cent increase in revenues in the year to June, which resulted in a commensurate reduction in losses to £14.5m. Activities at the Liqhobong mine in Lesotho continue apace with diamond quality and grades produced in line with expectations and nine 100 carat-plus stones broken in the period. Financing discussions for the full mine development are continuing.

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