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Today’s market overview
Equities are off colour in early trading but The Trader Dominic Picarda believes that QE in the US is here to stay until early 2014 at the earliest after the latest jobs data and that the reversal today will only be a dip which represents another buying opportunity.
IC TIP UPDATES:
Sell recommendation. De La Rue (DLAR) shares have slipped back today after the bank note printer said that revenues are tracking marginally lower due to tough conditions in its end markets with banknote print volumes down 10 per cent in the first half. Improving performance in other areas of the business mitigated this a little and the order book is up by £25m to £232m since the start of the year. Pricing pressure is expected to continue through the next financial year. Operating profit for the full year is forecast to come in around the £90m level, below the three year profit improvement plan target of £100m for 2013/14.
Premier Oil (PMO) says full year average production is likely to be in the 57,000-59,000 barrels of oil per day range, which is slightly light of expectations due to pipeline and gas export issues in both the UK and Vietnam. But by the end of the year production should be running at 65,000 barrels of oil per day. Buy.
Well head technology specialist Plexus Holdings (POS) has posted record results for the year to June with revenues up by 30 per cent and profits 38.3 per cent higher at £4.27m and strong recent order intake also bodes well for a continuation of this performance. Meanwhile the final dividend is increased by 10 per cent giving a 0.99p payout for the full year. We keep our buy rating.
The improving performance at both Argos and Homebase helped Home Retail (HOME) post 3 per cent sales growth in the first half to just shy of £2.6bn. Argos like for like sales rose by 2.3 per cent and Homebase improved like for like sales by 5.9 per cent, helped by the good summer weather.
Online clothing retailer Asos (ASC) has continued its strong progress with another set of stellar annual results showing a 39 per cent rise in group revenues to £769m and pre-tax profits of £54.7m, up 37 per cent. Margins edged up by 1 per cent with UK sales rising 34 per cent and international sales by 44 per cent. International now accounts for 63 per cent of the total sales.
British American Tobacco (BATS) has grown revenues by 3.5 per cent at constant exchange rates, or 0.9 per cent at actual exchange rates despite a 3.2 per cent fall in cigarette volumes and a 3 per cent decline in tobacco volumes. Its key ‘Global Drive’ brand cigarettes grew volumes by 1.9 per cent and gained market share in their key markets.
Sports Direct’s (SPD) domination of high street sports retail continues with group sales for the nine weeks to 29 September rising by 15.1 per cent to £463.7m and gross profits up by almost 20 per cent to £199.8m despite challenging comparatives from last year’s strong Olympics and Back to School period.
Temporary power specialist APR Energy (APR) accompanied a solid trading update, showing revenues of $84m in the third quarter, with news of the acquisition of GE’s Turbine Rental business for a cash and shares consideration of $314m. The deal also sees APR and GE form a strategic alliance with GE also becoming a key investor in APR.
Set top box technology specialist Pace (PIC) is to acquire Aurora Networks for $310m in cash. Aurora is a developer and manufacturer of network access products for broadband networks.
OTHER COMPANY NEWS:
Quindell Portfolio (QPP) has won a contract to provide telecoms services to Arqiva, which offers communications and media services to the media sector, including a deal with the BBC.
Sirius Minerals (SXX) says it is considering withdrawing its current planning application for the North York Potash project and submitting a new application under which it may extend the original project boundary which would mean submitting applications to both the National Park Authority and North Yorkshire County Council. Any change would not affect current predicted timelines.
- De La Rue expects to miss profit growth target (scotsman.com)
- Michigan contract for cigarette stamps questioned (kansascity.com)
- Kuwait contracts with De La Rue to produce polymer currency (thecurrencynewshound.com)
- CBSI Launches Upgraded Banknote (solomontimes.com)
- Beyond America’s New $100 Bill: The World’s Best Currency (fool.com)
- De La Rue (ritholtz.com)
- Questions on ‘new DOW penalty’, plastic money (arabtimesonline.com)
- Argos and Homebase in sales rise (bbc.co.uk)
- Argos and Homebase owner sees profits soar (metro.co.uk)
- Housebuilders benefit from Goldman push (telegraph.co.uk)