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Today’s market overview

Equities are still off colour and are likely to remain so until the US debt negotiations are resolved. But The Trader Dominic Picarda still expects a rally to follow.

IC TIP UPDATES:

Simon Thompson recommendation. Thorntons (THT) has enjoyed 11 per cent sales growth in its fast moving consumer goods division during the 14 weeks to 5 October, with sales of £23.8m now surpassing the retail division where sales dipped by 5.7 per cent to £23.2m. Eight retail stores were closed in the period taking the total to 288 as management continues to refocus the business.

Pubs and brewing group Marston’s (MARS) posted ‘encouraging’ growth in the second half of its financial year which meant its premium and destination pubs posted 2.2 per cent like for like growth and own-brewed ale volumes rose by 6 per cent against a falling market. The tenanted and leased pubs posted more subdued performance and the company is planning to ramp up its churn of the estate by selling off pubs and building more sites for its destination division. We keep ourbuy rating.

Iodine specialist Iofina (IOF) says that the construction of its IO#3 plant is almost complete and commissioning will commence next week with full scale production to follow shortly after. Buy.

Sell recommendation. Optos (OPTS) says its full year performance is likely to be in line with market expectations and that a strong period in terms of installations of its medical retinal imaging equipment should lead to future revenue growth.

NewRiver Retail (NRR) has increased the total occupancy of its retail portfolio to 95 per cent after increases its total number of leases from 947 to 955 during the past three months. Rent roll increased by 2.8 per cent to £42.4m. Buy.

Keller (KLR) has announced a deal to buy the geotechnical division of South African civil engineering company Esorfranki Geotechnical of South Africa for £31m. We keep our buy recommendation.

KEY STORIES:

Wood Group (WG.) has entered into a joint venture with global engineering giant Siemens which will amalgamate Wood’s Maintenance and Power Solutions business with Siemens’ Turbocare turbine aftercare business.

Greggs (GRG) posted total sales growth of 3.6 per cent in the 13 weeks to 28 September but this was driven by new openings as like for like sales dipped by 0.5 per cent. The company has refitted 141 shops so far this year with a full year target of 215 refits. The size of the estate is expected to remain broadly the same with new openings offsetting closures from now on.

Online and catalogue clothing retailer N Brown (BWNG) has recorded revenue growth of 8 per cent for the six months to August with profits up by 7.1 per cent. Like for like sales for the past five weeks grew by 8 per cent.

Quindell Portfolio (QPP) has announced a three year contract with Direct Line Insurance worth £150m under which it will use Quindell’s claims technology and outsourced services for motor liability claims. Quindell has also totted up its recent contract wins which it says should add £300m of turnover during the coming months.

OTHER COMPANY NEWS:

Hutchison China Meditech (HCM) has signed a licensing and co-development deal with Eli Lilly for its Fruquintinib oncology therapy which could be worth up to £86.5m in milestone payments before royalties kick in. The company also received a $6m milestone payment from Janssen Pharmaceuticals for progress in an immunology product.

Zytronic (ZYT) says that recent positive trading performance means that the company is likely to exceed market expectations with its full year figures.

Egyptian gold miner Centamin (CEY) produced 84,757 ounces of gold in the third quarter, up 39 per cent from the same period last year but down 9 per cent quarter on quarter. Total production year to date stands at 265,397 ounces.

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