Investment News: JD Wetherspoon, Tethys Petroleum, Vodafone & more

Tags

28 July, Amec, Asia Pacific, Business, Egton Medical Information Systems, J D Wetherspoon, Kabel Deutschland, Kazakhstan, Kentz, Lamprell, Oil and Gas, Tethys Petroleum, Vodafone

Today’s market overview

Equities are marginally down as some risk is taken off the table ahead of next week’s Fed meeting.

IC TIP UPDATES:

Sell recommendation JD Wetherspoon (JDW) has posted 7 per cent growth for the year to 28 July with profit before tax up by 6.3 per cent to £76.9m, record levels for the business. Like for like sales over the year rose by 5.8 per cent but have been tracking at 3.6 per cent in the most recent six weeks. Our recommendation is under review.

Tethys Petroleum (TPL) has begun drilling on the Doto exploration well in Kazakhstan, which is targeting 22m barrels of oil. Buy.

KEY STORIES:

Vodafone (VOD) has won more than 75 per cent acceptances for its offer for Kabel Deutschland, which means it can now proceed with the deal and buy up the rest of the stock.

The board of motor retailer HR Owen (HRO) has indicated its willingness to recommend an improved offer of 170p a share from Berjaya Philippine, increased from its previous offer of 130p a share. The bidder has been buying up shares in the market and its concert party already owns 41.5 per cent of the company.

The bid interest in oil services and engineering specialist Kentz (KENZ) has well and truly faded away with M&W Group today confirming it has no intention of bidding at this point, following the lead of Amec (AMEC), who withdrew earlier this week.

Northbridge Industrial Services (NBI) has announced the acquisition of electrical equipment specialist Crestchic (Asia-Pacific) for a maximum of £6.6m alongside its half year results. These showed revenues rising by 31 per cent to £18.6m and profits up from £1.4m to £2.6m.

OTHER COMPANY NEWS:

Lamprell (LAM) has won a rig refurbishment contract worth $64m.

Engineering group Redhall (RHL) has issued a profit warning due to slower than anticipated order intake in its nuclear business.

GP surgery technology specialist Emis (EMIS) is to acquire software business Ascribe, which supplies primarily to the NHS through hospital pharmacies and A&E departments, for a mixture of shares and cash. A placing will raise £26.3m after expenses and shares and debt will take the enterprise value of the deal up to £57.5m.

Related articles

• JD Wetherspoon boss labels pub tax levels ‘unsustainable’ (telegraph.co.uk)
• Tethys Petroleum Limited: Organisational Changes (sys-con.com)
• Tethys Petroleum Limited: Chegara Presidential Decree Issued (sys-con.com)
• JD Wetherspoon makes record profits and plans to open another 30 pubs (theguardian.com)
• JD Wetherspoon’s good news (thejournal.co.uk)
• Record profits for Wetherspoons but boss cautious (standard.co.uk)
• Tethys Petroleum Limited Appoints Clive Oliver – Vice President Finance (sys-con.com)
• Hacker cracks Vodafone Germany servers and steals data of 2 million users (securityorb.com)
• Vodafone poised to grab German cable company (metronews.ca)
• Market round-up: Kentz backers’ gloom as Amec drops £700m takeover move (standard.co.uk)

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Investment News: Gulf Keystone, Morrison, Thalassa Holding, Noble Investments Next, Ocado & more

Tags

Amec, Dalton Philips, Deutsche Bank, Gulf Keystone Petroleum, June, KENZ, Kier Group, Morrison, Ocado, Royal Mail, Sales, Simon Thompson, Stanley Gibbons, Trinity Mirror, Ultra Electronics

Today’s market overview

Equities are marginally ahead in early trading and The Trader Dominic Picarda is happy with his assertion that we are in the early stages of another rally.

IC TIP UPDATES:

Gulf Keystone Petroleum (GKP) has appointed Deutsche Bank to help push through its planned move to the main list by the end of this year.Buy.

Sell recommendation. Morrison (MRW) has issued flat figures for the first half with revenues flat at £8.9bn and like for like store sales down by 1.6 per cent. Underlying profits are down by 10 per cent.

Oil services company Amec (AMEC) has confirmed that it has no plans to bid for Kentz Corporaton (KENZ). We keep our buy on Amec.

The board of Simon Thompson recommendation. Noble Investments(NBL) has indicated its willingness to accept an indicative offer of 255p a share in cash and paper from Stanley Gibbons (SGI) should the approach be firmed up. Stanley Gibbons will have to raise £37m from shareholders towards the deal.

Another Simon Thompson recommendation, Thalassa Holdings (THAL), has said that strong trading means full year results will ‘significantly exceed’ expectations.

A third Simon Thompson recommendation, 32Red (TTR), has issued strong result for the six months to June showing a 15 per cent rise in revenues and 12 per cent improvement in profits.

Full year results from Kier Group (KIE) reflect tough end markets with underlying pre-tax profits slipping from £70m to £63.4m. Looking ahead all of the construction division and 95 per cent of the services division order books are already secured for 2014. Buy.

Document storage specialist Restore (RST) has benefited from acquisitions with half year results showing a 35 per cent surge in revenues and a near doubling of adjusted pre-tax profits to £4.1m. We maintain our buy recommendation.

KEY STORIES:

The government has confirmed its plans to seek an initial public offering for the Royal Mail. The exact details are not yet known but employees will receive 10 per cent of the company and priority in the public element of the float. Investors will be able to buy shares through intermediaries or direct through a postal system.

Online grocer Ocado (OCDO) has posted a 16.4 per cent rise in gross sales and a 15.3 per cent increase in orders per week but the size of the average order has remained static at £113.54, up just 1 per cent. The company has completed the sale and leaseback of its second fulfilment warehouse to Morrison (MRW) which has helped to tidy up its balance sheet.

Retailer Next (NXT) has issued a strong set of results for the six months to July with operating profits coming in towards the top end of expectations, up by 7.2 per cent, as the company managed to sell more product at full price than the previous year. Overall sales rose by 2.2 per cent, primarily down to new store space, it added 145,000 square foot in the period, and continued strength in performance at the Directory business. The high street retail business actually posted a marginal reduction in sales, down 0.9 per cent to £1bn.

Continuing the retail theme, Home Retail (HOME) enjoyed a stronger performance in the second quarter of its financial year as its self help initiative at Argos kicked in and the improved weather gave Homebase a significant boost. At the half year stage, Argos like for like sales were up 2.3 per cent and Homebase sales up 5.9 per cent, boosted by a standout 11 per cent improvement in like for like sales at the DIY chain in the second quarter. Both chains actually reduced their sales space marginally during the year as management rationalise their store base.

Finally on the retail front, homewares specialist Dunelm (DNLM) continues to grow strongly having added another 14 stores in the year to June, increasing its portfolio to 126 with another 10 openings contracted for this year. Overall annual sales rose by 12 per cent to £677.2m and pre-tax profits rose by the same margin to £108.1m.

OTHER COMPANY NEWS:

Trinity Mirror (TNI) has confirmed that police are at an early stage in establishing whether Mirror Group Newspapers should face criminal charges in relation to phone hacking at the Sunday Mirror.

Ultra Electronics (ULE) has won a £6.3m contract for power distribution systems on the UK’s Warrior armoured vehicles.

Related articles

• UPDATE 2-Gulf Keystone wins Kurdistan oilfield ownership court case (uk.reuters.com)
• GKP to Suspend Shares Pending Verdict (iraq-businessnews.com)
• Morrisons pledges to fightback despite fall in sales (telegraph.co.uk)
• GKP Surges on Court Ruling (iraq-businessnews.com)
• Morrisons half year profits fall (metro.co.uk)
• Oil Pipeline From Kurdistan Makes Gulf Keystone Target: Energy – Bloomberg (bloomberg.com)
• Morrisons half-year profits fall (bbc.co.uk)
• Online food shopping to increase as families get fed up trudging the aisles at the supermarket (dailymail.co.uk)
• Ocado and Morrisons clash over online sales tax proposals (dailymail.co.uk)
• Morrisons struggles as profits and sales slide (standard.co.uk)

Investment News: Low & Bonar, Amec, Tullow Oil, EMIS & more

Tags

Amec, Avon Rubber, Barents Sea, Hoop-Maud Basin, North Sea, Norway, South Australia, TLW, Tullow, Tullow Oil, Wisting Central

Today’s market overview

Equities are flat in early trading. The Trader has detected a buy signal in the US markets but remains wary of the effect of announcements such as today’s non-farm payroll figures.

IC TIP UPDATES:

Specialist materials manufacturer Low & Bonar (LWB) has announced a placing to raise £20.4m which will fund the acquisition of Texiplast, a Slovakian geosynthetic products maker, for €18.9m (£16m). We keep ourbuy rating.

Altona Energy (ANR) reports that CNOOC, its Chinese partner on the Ackaringa coal to liquids project in South Australia is in the process of choosing a drilling services partner. Our recommendation on Altona is under review.

AMEC (AMEC) has been appointed to carry out the engineering work for the Cladhan oil field in the North Sea. The company did not reveal the value of the contract. We keep our buy rating.

KEY STORIES:

Tullow Oil (TLW) has made a first oil discovery in the Hoop-Maud Basin of the Barents Sea, offshore Norway. The Wisting Central discovery is described as a ‘major frontier light oil discovery for Norway’.

Clinical software specialist EMIS (EMIS) has posted an 11 per cent increase in revenues for the first half, with recurring revenues rising by 5 per cent. Operating profits were flat at £12.1m.

Recruitment specialist Matchtech (MTEC) has acquired niche technology recruitment business Provanis for £4m.

Avon Rubber (AVON) has announced an order from a Middle Eastern customer for 52,000 respirators and associated filters. The order should be fulfilled in the current financial year.

OTHER COMPANY NEWS:

John Laing Infrastructure Fund (JLIF) has announced a proposed fundraising to raise between £100m and £240m which will be used to refinance an existing banking facility and acquire a portfolio of three public private partnership projects for £103m.

Related articles

• Tullow strikes oil off Norway (telegraph.co.uk)
• Tullow shares rise on Norway discovery (thetimes.co.uk)
• Tullow Oil’s bad luck continues as oil firm drills dry hole off Mozambique (theoilandgasworld.wordpress.com)
• Kenyan locals say no to Tullow Oil (theoilandgasworld.wordpress.com)
• PSC Tema Shipyard won’t be transferred toTullow (modernghana.com)
• Tullow Oil accused of dumping human waste in Ugandan homesteads (theoilandgasworld.wordpress.com)
• PSC Tema Shipyard And Tullow Agitations-The way forward. (spyghana.com)
• U.K. Stocks Little Changed Before U.S. Employment Report (bloomberg.com)
• Investment News: Vodafone, Berkeley Group, Rolls Royce, Tullow Oil & more (theinvesmentman.wordpress.com)
• Tullow Oil Sees Increase in Revenue (theinvesmentman.wordpress.com)

News & Tips

Tags

Amec, Kentz, KENZ, Lloyds Banking Group, London, London Stock Exchange, New York Times, Royal Bank of Scotland

Gold futures headed up on early trading on Monday, extending gains from last week. Gold for December delivery improved by $9.30, or 0.7 per cent, to $1,380.30 an ounce.

IC TIP UPDATES:

UK engineering group Kentz (KENZ) has rejected separate takeover approaches from London-listed peer Amec (AMEC) and the German group M+W Group GmbH (part of the Austrian conglomerate Stumpf), as both offers undervalued the company. AMEC had offered 565p to 580p a share – giving a value of around £675n. The M+W offer was lower than the one from AMEC, and both had been unanimously rejected by the Kentz board.

Within its interim statement, Fastnet Oil & Gas (FAST) said it is in advanced discussions with “several targeted international oil and gas companies” aimed at bringing in a partner to help develop its assets in Ireland’s Celtic Sea. The farm-out talks, which are likely to conclude in the fourth quarter of the year, would likely involve a “significant” contribution to past costs, including 3D seismic and a contribution to a drilling programme anticipated in 2015.

KEY STORIES:

As part of its bid to shore up capital and refocus on UK retail banking,Lloyds Banking Group (LLOY) is considering selling its German insurance business Heidelberger Leben to Frankfurt-listed insurer Hannover Re, in a transaction valued at approximately €400m ($533m).

A sell-off of 315 branches by the taxpayer-owned Royal Bank of Scotland (RBS) could be delayed beyond the two-year schedule, according to W&G Investments, one of the three bidders vying for the branches. RBS has been ordered to sell the branches in return for receiving a £45.5bn bailout during the 2008 financial crisis.

Aminex (AEX) and Solo Oil (SOLO) confirmed that negotiations are ongoing with the Tanzanian authorities for gas produced from the Ntorya-1 well in the Ruvuma Basin, and the sale of gas into the 36 inch pipeline being constructed between Mtwara to Dar es Salaam and a point that passes approximately 12 kilometres to the east of Ntorya-1. Though the process towards commercialisation is rather tortuous, Solo said that initial indications of gas prices and a development scenario prepared internally, indicate favourable development economics.

OTHER COMPANY NEWS:

Magnolia Petroleum (MAGP) has raised its stakes in three wells in Oklahoma as part of its plan to rapidly increase production. It has increased its working interest in the JoLynn 18-1WH to 3.96 per cent from 0.453 per cent, the Voise 1-10H to 2.083 per cent from 1.667 per cent and the Sympson 1-6H to 1.15 per cent from 0.948 per cent.

Department store chain House of Fraser is considering a possible return to the London Stock Exchange after an absence of seven years. The 161-year-old business, which has been the subject of takeover interest in the past year, could be valued at between £200m-£300m if a flotation goes ahead.

The New York Times reports that authorities in the US have opened an investigation into whether JPMorgan Chase & Co hired the children of high-ranking Chinese officials to help it win business in the People’s Republic.

Related articles

• Kentz Said to Weigh Sale as Buyers Eye Irish Engineering Firm – Bloomberg (bloomberg.com)
• Kentz rejects AMEC offer (thejournal.co.uk)
• Amec Makes Approach for Kentz to Expand in Oilfield Services (bloomberg.com)
• Kentz rejects approaches from Amec and M+W (telegraph.co.uk)
• Kentz rejects €800 million bid for company (irishtimes.com)
• Engineering giant Kentz considers sale (irishtimes.com)
• Kentz stands firm against Amec bid offer (thetimes.co.uk)
• Business news and markets: live (telegraph.co.uk)
• Engineering giant Amec eyes £800m takeover swoop for big rival Kentz (dailymail.co.uk)
• Engineering giant Amec eyes £800m takeover swoop for big rival Kentz (thisismoney.co.uk)

News & Tips

Tags

Amec, Cairn Energy, June, mongolia, Oyu Tolgoi mine, Rio Tinto Group, Standard Life, Turquoise Hill Resources

Today’s market overview

Equities are holding steady this morning after a four consecutive sessions of reversals culminated in a healthy sell off yesterday. The Trader Dominic Picarda is happy to concede that the downtrend is set in, and is acting accordingly.

IC TIP UPDATES:

Alongside its interim results, Rio Tinto (RIO) has announced it has agreed to finance the continuing development of the Oyu Tolgoi mine in Mongolia by Turquoise Hill Resources and will also consider refinancing the existing debts Turquoise owes it. Half year results suffered from weaker commodity prices despite impressive production performance with underlying earnings dipping by 18 per cent to $4.2bn. We maintain our buy recommendation.

Simon Thompson recommendation IQE (IQE) reports that its concentrated photo voltaic solar wafer technology is ready for high volume manufacturing.

Bookmaker Ladbrokes (LAD) reports that good operational progress, especially in the development of its online venture with Playtech, has not yet been reflected in its financial performance. Group operating profit in the first half of the year fell by 19.8 per cent to £85.7m with gaming machines in shops proving to be a weaker performer, although this was expected. Nonetheless we retain our buy rating.

Cairn Energy (CNE) has agreed to farm in to exploration licences offshore Mauritania held by Chariot Oil & Gas. Cairn is paying $26m for a 39 per cent stake. Buy.

Packaging specialist Mondi (MNDI) is benefiting from recent acquisitions and better operational performance, it posted a 35 per cent increase in half year profits to €366m. Buy.

Oil services specialist Amec (AMEC) has announced a 250MW solar power installation contract in Nevada alongside half year results which showed flat revenues at a shade under £2bn and a 4 per cent rise in underlying earnings to £158m. We keep our buy recommendation.

Enterprise Inns (ETI) says that trading has improved markedly in recent months after the prolonged winter hurt the business. After a 4.2 per cent decline in like for like bet income in the six months to March, the period since has seen this improve to a 2.7 per cent reversal and the sunny weather in July helped produce a positive figure for the five weeks to 3 August. Buy.

KEY STORIES:

Aviva (AV.) produced a much improved first half performance, posting a post-tax profit of £766m compared with a loss of £624m last year. New business increased by 17 per cent and the company also managed to shave 9 per cent off its operating costs as part of its long term turnaround plan.

Fellow financial services giant Standard Life (SL.) also posted glowing results which boasted record flows into the business. It ended the period with group assets under management of £232.8bn, up from £218.1bn at the end of 2012. This helped produce a 6 per cent uplift in operating profit at £304m.

Schroders (SDR) has also benefited from improved trading conditions for financials. Its half year results showed a 25 per cent uplift in pre-tax profits to £221.7m after a 21 per cent rise in assets under management.

Housebuilder Bellway (BWY) is benefiting from the improving conditions in the housing market, which have been supported by government initiatives. A trading update for the year to July reported an 8.2 per cent rise in legal completions with a 3 per cent rise in the average selling price. The order book at the end of the year was £679.5m, compared with £441.2m at the same point of the previous year.

Stamps and collectibles continue to be popular according to Stanley Gibbons (SGI), it posted a 17 per cent rise in revenues and 9 per cent improvement in trading profits for the six months to June, although investment in its online business hit reported profits.

Posh car dealer HR Owen (HRO) has confirmed the board’s rejection of the recent a 130p a share offer from Berjaya Philippines. It also reported a 23.2 per cent improvement in pre-tax profits for the six months to June.

OTHER COMPANY NEWS:

Circle Oil (COP) reports another oil discovery in Egypt which should help to push its daily production up from 11,227 barrels of oil per day to more than 13,000.

Kazakh oil explorer Max Petroleum (MXP) says that its latest well on the Zhana Makat field has discovered oil and will be placed on production as soon as practicable.

Related articles

• Rio Tinto posts record iron production (bigpondnews.com)
• Rio Tinto half-year profit plunges by 71 per cent (abc.net.au)
• Aust shares close higher (news.theage.com.au)
• Emerging Markets Chief Quits In Blow To Amec (news.sky.com)
• Market follows Wall Street, opens lower (bigpondnews.com)
• FTSE LIVE: Markets cheered by surprise China trade data (dailymail.co.uk)
• In the markets… (theoilandgasworld.wordpress.com)
• Rio Tinto First-Half Profit Falls 18% as Metal Prices Slide – Bloomberg (bloomberg.com)
• Stocks to watch at close on Thursday (news.theage.com.au)
• Aust shares recover some of Wed losses (bigpondnews.com)