Aer Lingus, Aviva Investors, Cheltenham Festival, Competition Commission, Hansteen Holdings, HSTN, Johnston Press, Meggitt, Michael O'Leary, Ophir Energy, Paddy Power, Royal Yachting Association, Ryanair, Texas, UK Competition Commission
Today’s market overview
Equities are off again as geopolitical concerns and the fear of QE tapering in the US continue to spook investors. The Trader Dominic Picarda is respecting the short term down trend but thinks another good buying opportunity will present itself before too long.
IC TIP UPDATES:
Industrial property specialist Hansteen Holdings (HSTN) is planning to acquire a 26 per cent stake in the Ashtenne Industrial Fund and also become its asset manager. Owner Warner Estates (WNER) announced it was appointing administrators after Aviva Investors changed the terms of its payment of the asset management fee for the Ashtenne fund, putting Warner into serious financial difficulty. The move by Hansteen represents a full circle for its main directors who made their names running the Ashtenne Industrial fund before selling it. We keep our buy on Hansteen.
Sell recommendation Paddy Power (PAP) has reported revenue growth across all its divisions in the first half, with particular strength in online and mobile channels. Revenues rose by 22 per cent and profits by 12 per cent although Irish retail sales suffered from adverse results, particularly at the Cheltenham Festival.
Northcote Energy (NCT) is acquiring a 25 per cent working interest in producing leases in Texas from Aminex (AEX) for around $450,000 in cash and shares. Buy.
Insurance investment specialist Randall & Quilter (RQIH) has posted solid interim results showing a growth in revenues from £25.3m to £26.2m although profits dipped by a third due to prior year adjustments. During the first half the company completed an equity fundraising worth £24m to fund its participation in Lloyd’s Syndicate 1991. We keep our buy recommendation.
Airline Rynair (RYA) has been told by the UK Competition Commission to reduce its stake in Irish rival Aer Lingus (AERL) from 29.8 per cent to 5 per cent, a process that the Competition Commission is proposing is undertaken by an independent third party. Ryanair has vowed to appeal against the decision.
Recent trading at military countermeasures business Chemring (CHG) has been tough, as expected, with revenue down from £165.1m to £142.8m in the past three months. The order book has risen by 6.7 per cent since April but, at £747.8m, is well down on the £909.9m level of the previous year.
APR Energy (APR) has announced another 147MW of contract wins in Mozambique, Senegal and Indonesia alongside its interim results. Performance dipped in the first half as the company repositioned its assets in preparation for a ramp up in second half performance, which growing orders suggest is possible.
East African oil and gas play Ophir Energy (OPHR) has announced a further discovery of gas at Pweza-2 offshore Tanzania which confirms the extension of the field.
Half year results from 888 Holdings (888) showed a 7 per cent improvement in revenues and a similar rise in adjusted earnings to $38.6m. It is experiencing rapid growth in mobile, which now represents 17 per cent of total revenues.
OTHER COMPANY NEWS:
Meggitt (MGGT) is to acquire US focused sensor technology group Piezotech for $41.2m.
Chime Communications (CHW) reports that all five of its divisions gained market share in the first half of the year although operating income fell by 4 per cent on a like for like basis. Pre-tax profits rose by 3 per cent to £11.2m.
Like for like operating profits at publishing group Johnston Press (JPR) rose by 4.3 per cent despite a continued decline in revenues as management cut costs and reduced debts. Advertising remains weak but digital revenues grew by 13.3 per cent in the first half.
- Ryanair told to cut Aer Lingus stake (bbc.co.uk)
- Online sales help profits at Paddy Power soar (independent.ie)
- Ryanair told to cut Aer Lingus stake by Competition Commission (busiandtech.wordpress.com)
- Latest UK watchdog decision has ‘an element of Ryanair bashing’ (independent.ie)
- The Week Ahead: Regus set to meet first-half forecasts (independent.co.uk)
- News in brief: H&M disappoints with 1% sales drop, Ophir Energy trims its losses to $19m, Phones and tablets give Lenovo a lift (standard.co.uk)
- Ryanair forced to give up stake in Aer Lingus (metro.co.uk)
- Ryanair must cut Aer Lingus stake, says Competition Commission (theguardian.com)
- Questor share tip: Ophir Energy still a buy after falls (telegraph.co.uk)
- Week ahead in business and economics: August 27-30 (telegraph.co.uk)