Investment News: Costain, Merlin Entertainment, Infinis Energy, Quindell Portfolio & more

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Électricité de France, Balfour Beatty, Blackstone, Business, Costain, Costain Group, Crossrail, CVC, Great Western Main Line, Hinckley, Madame Tussauds, Malaysia, Merlin Entertainment, Merlin Entertainments, Royal Mail, Somerset, South Africa

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Today’s market overview

Equities are holding to their gains of last week and The Trader Dominic Picarda is ignoring any nay sayers and staying positive.

IC TIP UPDATES:

Costain (COST) is likely to be one of the main beneficiaries of today’s announcement that EDF is going ahead with the Hinckley C new nuclear power station in Somerset. Pending the final investment decision, Costain will provide the design and delivery of the water cooling systems. No value has been given for the contract. We keep our buy on Costain.

Rail scheduling and monitoring technology specialist Tracsis (TRCS) has won a ‘significant’ framework agreement for its rail condition monitoring equipment for an existing customer. This extends the relationship out over the next five years. Buy.

IC Top 100 Funds constituent HICL Infrastructure (HICL) has acquired a 50 per cent interest in the Brighton Children’s Hospital facilities management project and a 29 per cent stake in a Falkirk Schools project which runs four schools.

Japan Residential (JRIC) announces an uptick in the average occupancy of its residential portfolio in the country over the past 12 months, from 94.9 per cent to 95.7 per cent. Buy.

KEY STORIES:

Hot on the heels of the success of the Royal Mail flotation, Merlin Entertainment has announced its intention to float this morning. The amusement park giant, second only to Disney worldwide, generated revenues of more than £1bn from its 99 attractions in 2012, recording a cash profit of £346m. The float, which will have a retail element, will raise around £200m to pay down debt and allow the likes of Blackstone and CVC to cash in some of their holdings. The free float will be at least 20 per cent.

Also joining in the fun is Infinis, the renewable power company owned by private equity house Terra Firma, which has announced its intention to float. The business, which owns 147 power generating assets from landfill gas to windfarms with a capacity of 621MW, is looking for a free float of at least 30 per cent and will also include a retail element.

Co-op Bank says that a review of its financial situation suggests it is likely to need to put aside a further £100m-£105m to settle customer claims including PPI redress. It also reports that the terms of its recapitalisation plan, first announced in June, are now likely to be ‘materially different’ after discussions with disgruntled bond holders but no further details were disclosed.

Third quarter results from Quindell Portfolio (QPP) showed gross sales of £98.1m and adjusted cash earnings of £34.5m. Management says that the company is now delivering run-rate growth of around £300m a year and should hit the top end of expectations for the full year and exceed those expectations in the market for 2014.

Balfour Beatty (BBY) has won a £64m contract for electrification of a 12 mile stretch of the Great Western Line as part of the Crossrail project.

Engineer Senior (SNR) says that performance since 1 July has been in line with expectations and that strong cash generation has allowed it to reduce net debt by £10m to £61m.

OTHER COMPANY NEWS:

Anglo Pacific (APF) has announced a change of management with South African natural resources investment specialist Julian Treger taking over as chief executive and Mark Potter joining as chief investment officer, replacing John Theobald and Chris Orchard respectively.

Graphene Nanochem (GRPH) has announced the resumption of operations at its palm oil refinery in Malaysia. The plant has been shut down since 2012 due to the poor economics of the industry, but this has now changed.

Related articles

• Alton Towers owner Merlin Entertainments offers shares and theme park tickets (telegraph.co.uk)
• Merlin Entertainments to float on London Stock Exchange (theguardian.com)
• Legoland owner Merlin Entertainments to float in London (telegraph.co.uk)
• FTSE LIVE: London shares higher following gains on Asian markets (dailymail.co.uk)
• London Eye and Madame Tussauds owner Merlin set for £200m stock market float (standard.co.uk)
• London Eye and Madame Tussauds owner Merlin set to raise £200m with stock market float (standard.co.uk)
• Tourist Attraction Firm Merlin In Float Plan (news.sky.com)
• British entertainment group Merlin to float in London (scooprocket.com)
• Alton Towers’ owner plans flotation (belfasttelegraph.co.uk)
• Business news and markets: live – Monday October 21, 2013 (telegraph.co.uk)

Investment News: Rio Tinto, Telford Homes, Royal Mail, Burberry & more

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Angela Ahrendts, Bellway, Biffa, Burberry, Christopher Bailey, Hargreaves Lansdown, Ithaca Energy, Pilbara, Premier Oil, Rio Tinto, Rio Tinto Group, Royal Mail, Shanks Group, SKS, United States

This Blog is sponsored by http://www.reflexecogroup.com

Today’s market overview

Equities are on form again this morning as hopes crystalise that the US debt deal is going to be resolved, or at least kicked further down the road, before the nominal midnight Wednesday deadline. The Trader Dominic Picarda remains positive on the markets.

IC TIP UPDATES:

Rio Tinto (RIO) has turned in a strong operational performance in the third quarter of the year as its copper production was boosted by 23 per cent against the previous year due to volumes ramping up at Oyu Tolgoi in Mongolia and the Kennecot operations recovering strongly. New facilities in the Pilbara region of Western Australia also helped drive iron ore production to record levels. The company is also on track to reduce exploration and evaluation spending by $750m this year as it adjusts to a weaker pricing environment. We maintain our buy rating.

Telford Homes (TEF) continues to benefit from the booming conditions in London property, having sold 430 properties since 1 April. It has raised extra funds to expand its pipeline to capitalise on the exceptional conditions. The company has sold 100 per cent of its expected properties for the year to March 2014, pre-sold 70 per cent of the year to March 2015 and 55 per cent of the year to March 2016. Buy.

Ithaca Energy (IAE) reports production of 12,000 barrels of oil equivalent per day for the third quarter after being impacted by shutdowns during the quarter. The Cook field has recommenced production but the Causeway Area fields should come out of shutdown by mid-October, slightly later than expected. We keep our buy recommendation.

Asset tracking technology specialist Ubisense (UBI) has been appointed preferred supplier to a global original equipment manufacturer in the automotive space. Its systems will be installed at factories in the US to begin with as part of a ‘multi-million dollar’ deal spread over three years. Buy.

KEY STORIES:

Royal Mail (RMG) shares have risen yet further on the commencement of unconditional trading this morning, hitting 488p a share.

Burberry (BRBY) chief executive Angela Ahrendts has announced her intention to quit in the middle of next year, to be replaced by existing chief creative officer Christopher Bailey. Meanwhile, a first half trading update showed a 14 per cent increase in total revenues to £1.03bn, driven primarily by a strong showing from the retail business, which grew sales by 17 per cent.

Hargreaves Lansdown (HL.) enjoyed a strong trading performance during the past three months, traditionally its quietest period of the year. Assets under management rose by £2.9bn to a new record of £39.3bn as active client numbers rose by 20,000.

Housebuilder Bellway (BWY) has posted predictably strong results with revenues up by 10.6 per cent and profits 33.8 per cent higher at £140.9m for the year to 31 July. The full year dividend is increased by 50 per cent to 30p a share and the outlook is promising with a forward order book of £644m, up from £438m last year.

Premier Oil (PMO) has sealed a farm-in deal for 55 per cent of Taipan Resources’ Block 2B in Kenya which could end up costing up to $14.275m.

OTHER COMPANY NEWS:

Shanks Group (SKS) has sold the majority of its UK solid waste business to Biffa as it looks to complete its exit from this area of business.

Translation software and intelligence and analytics specialist SDL (SDL) says trading in its third quarter was below expectations and will result in full year profits coming in around £8m, against £35.5m last year.

Pawnbroker H&T (HAT) says trading remains in line with expectations after the company refocused on retail sales in the wake of the slump in the gold price and gold trading opportunities.

Related articles

• FTSE climbs on US debt hopes, Royal Mail soars, but Burberry and Severn Trent slide (theguardian.com)
• Goodbye humans, hello automation: Rio Tinto ditching $225k/year drivers in Pilbara (mining.com)
• VIDEO: Rio Tinto’s robot army (mining.com)
• Rio Tinto Third-Quarter Iron Ore Output Meets Analyst Estimates (bloomberg.com)
• 240k-a-year train drivers axed (smh.com.au)
• Rio Replacing Train Drivers Paid Like U.S. Surgeons (bloomberg.com)
• MP S.Ganbaatar requests investigation of Oyu Tolgoi project (ubpost.mongolnews.mn)
• European Stocks Climb Amid Optimism Over U.S. Debt Deal (bloomberg.com)
• Aust share market gains 1% on US hopes (skynews.com.au)
• Qld govt to hold on to coal royalties (skynews.com.au)

Investment News: Royal Mail, Chemring, Arrow Global, Transense Technologies & more

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Arbuthnot Banking Group, Business, Chairman, Chemring Group, Devon, Equities, London Stock Exchange, Middle East, Osaka, Percentage, Royal Mail, RWS Group, United States, United States public debt

This Blog is sponsored by http://www.reflexecogroup.com

Today’s market overview

Equities bounced back hard yesterday on the first hint of a resolution to the US debt impasse and have continued to rise this morning. The Trader Dominic Picarda reckons this could be the start of the upturn he has been waiting for.

IC TIP UPDATES:

Japan Residential Investment Company (JRIC) has sold a residential building in Osaka for £2m, 26 per cent ahead of its valuation in May. This takes total sales this year to £10.3 at a 24.5 per cent premium to book valuations. We keep our buy recommendation.

KEY STORIES:

The scale of the demand for Royal Mail (RMG) shares was reflected in the price action this morning after its shares started conditional trading, rising by 36 per cent to 450p almost instantly. Full unconditional trading begins on Tuesday.

Military countermeasures specialist Chemring Group (CHG) has issued both good news and bad in today’s trading update. Firstly it has won a contract in the Middle East, which will book profits in this financial year. But of more concern is the US federal government shut down which has impacted October order intake. Furthermore, problems with quality and production at its Kilgore production facility in the US has also hit revenues, as has the shift in the dollar/sterling exchange rate. All told, this will result in an £8m hit to operating profit this year.

Patent specialist RWS Group (RWS) says that strong recent trading means revenues for the year are likely to come in 10 per cent ahead of last year adjusted profit before tax should be in the region of £20.9m, well ahead of current market expectations.

Consumer debt acquisition specialist Arrow Global (ARW) began trading on the London Stock Exchange this morning after raising around £50m for the business.

Arbuthnot Banking Group (ARBB) reports that it has traded well in the third quarter and its offshoot, Secure Trust Bank (STB) also reports strong demand for both its deposit and lending arms. Secure Trust is building capacity to increase its lending to small and medium enterprises and also expects to launch an invoice financing business next year as it continues to take advantage of the state of flux among the mainstream banks.

OTHER COMPANY NEWS:

Bluefield Solar Income Fund (BSIF) has acquired an operational 6.9MW solar park in Devon for £9.35m.

XP Power (XPP) is benefiting from a pick up in demand for its power control equipment for the electronics industry and has seen revenues grow by 11 per cent in the three months to 30 September, which means over the opening nine months of the year revenues are up 7 per cent. Order intake over the third quarter exceeded revenues recorded during the period.

Transense Technologies (TRT) reports that it is seeing stronger business opportunities now than at any point previously with its tyre management systems business recording multiple orders in recent months and other areas of the business also performing well. This has prompted a boardoom change with chairman David Kleeman stepping down to a non-executive deputy chairman role and David Ford becoming executive chairman.

Related articles

• The cheque’s in the post: Thousands to profit as Royal Mail floats (metro.co.uk)
• FTSE LIVE: Royal Mail shares soar at debut (dailymail.co.uk)
• Post haste: Royal Mail shares surge on debut as thousands lose out (standard.co.uk)
• FTSE LIVE: Royal Mail shares soar at debut (thisismoney.co.uk)
• Royal Mail is undervalued by £600m, say City forecasters (independent.co.uk)
• Royal Mail shares: How the allocation will work (telegraph.co.uk)
• Royal Mail given £3.3bn valuation (standard.co.uk)
• Royal Mail Q&A: who will own the privatised mail service? (theweek.co.uk)
• Royal Mail share demand soars on hopes of quick profit (theweek.co.uk)
• Last minute rush to buy ‘undervalued’ Royal Mail shares as investors sense instant profit (independent.co.uk)

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)