Today’s market overview
A summer lull has descended upon the markets with many investors either thinking of the beach or, like The Trader Dominic Picarda, staying out of the markets until we get more from the Federal Open Markets Committee in the US this evening on its intentions for QE tapering.
IC TIP UPDATES:
French engineering business Schneider Electric has announced recommended terms for its takeover of Invensys (ISYS). The mixed shares and cash deal will see Invensys shareholders receive 392p a share and 0.26 Schneider shares for each Invensys share they own, giving a total value of 502p a share which is a 14 per cent premium to the Invensys share price at the start of the offer period. It remains to be seen if a rival bid will emerge but we stick with our recommendation to sit tight.
Ithaca Energy (IAE) has completed the appraisal well test programme on its Norvarg discovery in the Barents sea which has confirmed that the discovery is ‘extensive’ but no final figure has yet been put on its size. We keep our buy rating.
Kurdistan’s largest oil producer Genel Energy (GENL) has reported a big uplift in profit in the opening six months of the year from $22.3m to $109.1m after net working interest production averaged 41,500 barrels of oil per day, up 7 per cent from the previous year. Buy.
Engineer and consultant WS Atkins (ATK) says trading is in line with expectations with the UK business maintaining the good form shown towards the end of last year into the opening quarter of this one. Buy.
Mwana Africa (MWA) has reported a 34 per cent rise in revenues to $109.2m after sales of gold from its Freda Rebecca mine in Zimbabwe rose by 37 per cent to 65,350 ounces in the year to March. We keep ourbuy rating.
Shares in Moneysupermarket (MONY) have shed 16 per cent despite the company reporting a strong first half performance in which revenues rose by 10 per cent and profits by 29 per cent. Investors appear to be concerned about current trading, which showed July to be flat against last year, and the departure of chief financial officer Paul Doughty – although he could be around until 1 June next year.
Housebuilder Taylor Wimpey (TW.) has announced strong results for the six months to 30 June, as expected. Across the board, all financial metrics are improving including margins and net debt reduction. Sales are running at record levels with a forward order book worth £1.3bn, up 35 per cent from last year.
Tullow Oil’s (TLW) half year results show a 15 per cent rise in sales revenues and a 13 per cent growth in gross profits to $764m. Production rose by 14 per cent to 88,600 barrels of oil per day.
British American Tobacco (BATS) posted a 2 per cent rise in group revenue in the six months to June, helping to produce a 3 per cent increase in profits from operations to £2.8bn. Group tobacco volumes fell by 3.2 per cent, which reflects the total decline across the wider industry. Meanwhile the company announces that John Daly will step down as chief operating officer at the end of this year.
Strong performance in the US and in emerging markets allowed drinks giant Diageo (DGE) to record 10 per cent growth in profits before exceptional items in the year to June.
OTHER COMPANY NEWS:
F&C Asset Management (FCAM) posted a 4.8 per cent improvement in net revenues in the opening half of the year as it benefited from the improvement in equity markets.
Sausage skin maker Devro (DVO) posted a 12.8 per cent decline in operating profits for the six months to June despite a 3.1 per cent uplift in revenues. But management has continued to invest in the business, with new capacity coming on stream in Czech Republic in August.
- Invensys agrees takeover by France’s Schneider (theguardian.com)
- Invensys on the bidding block (pacetoday.com.au)
- Schneider agrees $5.2 bln takeover of Invensys (worldbulletin.net)
- France’s Schneider Electric to acquire Invensys (gulfnews.com)
- Schneider to Buy Invensys for $5.2 Billion on Software (bloomberg.com)
- Schneider Electric To Acquire Invensys For $5.2 Billion (valuewalk.com)
- Schneider makes formal offer for Invensys (nickdenbow.wordpress.com)
- Schneider Electric agrees to buy UK industrial tech giant Invensys (information-age.com)
- France’s Schneider agrees £3.4 billion takeover of Invensys (standard.co.uk)
- Industrial software firm Invensys agrees £3.4bn takeover deal (independent.co.uk)