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S & U shifts into reverse despite continued strong growth

The share price fall in S&U was a bit mystifying; perhaps it was a further slight deterioration in the impairment percentage
Car on the road
Chairman Anthony Coombs said he was glad to see the company's merits "becoming more widely recognised within the investing community"

Hire purchase motor finance firm S & U Plc (LON:SUS) found the market hard to please with its trading update.

The shares were off 6% at 2,274.5p, wiping out half of the year’s gains in a single day.

On the face of it, the second half of the company’s financial year – which runs to the end of January 2018 – has got off to a strong start.

Advantage Finance, S & U's specialist motor finance provider, has seen active customer numbers rise from 49,000 at the end of July to 53,000, while net customer receivables have risen above £240mln for the first time – up from nearly £227mln in July.

The relatively new bridging loan operation, Aspen Finance, is still in the pilot phase but has made significant progress.

The loan book has increased to £9mln from £2mln in July, while margins and loan-to-value ratios are within budget.

The only dark cloud seemed to be another increase in the rolling 12-month impairment value as a percentage of revenue, which had risen to 23.4% in early December, having increased from 20.1% at the end of January 2017 to 22.7% at the end of July.

S & U says the change is primarily due to the overall portfolio product mix, and that monthly collections and overall credit quality remain good.

Underwriting refinements have seen a slight reduction in loan approvals, but the company say this is “appropriate in a more uncertain economic climate”.

The introduction of Advantage's new e-signature Dealfo system has been well received by both customers and brokers and has led to an improvement in the approval-transaction rate, it added.

The People's Operator in need of a bit of charity itself

Mobile virtual network outfit The People’s Operator PLC (LON:TPOP) started with such noble aims, but now it is facing the harsh realities of capitalism.

The cause-based firm floated almost two years ago to the day. It is no longer floating; it is sinking.

The shares plunged almost 75% after the company unveiled plans to raise yet another load of cash in a bid to stave off insolvency.

The company has burnt through the best part of £24mln since it joined AIM back in 2014, and has asked investors for up to another £3.2mln.

It plans to raise the money through a heavily discounted placing of up to 3.2bn shares at 0.1p apiece, while it will also issue up to 1.39bn warrants, which come with an exercise price of 0.2p.

The proceeds will be used to settle outstanding liabilities which total around £0.5mln, while they will also be used to implement a new digital marketing strategy.

The shares floated at 130p a pop; they are now – quite literally – tuppenny-ha’penny shares.

HSS Hire knows the drill and swings the axe

If any company is going to swing an axe, then HSS Hire Group PLC (LON:HSS) is probably best placed to do so.

It’s only a metaphorical axe, of course, so HSS’s stock-in-trade of hiring out tools does not really apply, but either way investors reacted positively to news that the company has identified further cost savings to reduce gearing and lift profits.

The shares rose 10% to 32p on the trading update, which focused on the additional £10-14mln in savings the board had identified, on top of the £13mln of annualised savings announced in its previous trading update.

The third quarter trading update revealed the group had enjoyed its fifth successive month of positive EBITA while underlying rental revenue was flat.

Advanced Oncotherapy and Dillistone soar in the morning session

It took a little while but the market has definitely woken up to the significance of this morning’s announcement from Advanced Oncotherapy PLC (LON:AVO).

The developer of next-generation proton therapy systems for cancer treatment, has secured £37.4mln of financing with £30mln of this coming from a new Chinese investor.

The shares opened around 10% higher but since then have extended that gain to more than 50%, making them the best performers in London today.

READ Advanced Oncotherapy secures £37.4mln of new financing

Hot on Advanced Oncotherapy’s heels was Dillistone Group PLC ([email protected]), the software company focused on the recruitment industry.

Dillistone’s shares zoomed up 25p to 79p as the company revealed its new private network, GatedTalent, was proving very popular.

The platform enables executives to share information with recruiters in a private manner, while also assisting recruiters in their data protection compliance.

By the end of November, contracts had been received from firms in more than a dozen countries across the European continent.

“Pleasingly, a number of additional contracts have been won with businesses based outside of the EU who see the value in the new portal as a way of increasing engagement with candidates,” Dillistone’s announcement said.

9.00am: FTSE 250 stocks in the spotlight

The FTSE 250 was overshadowing the FTSE 100 this morning, with deal activity and broker commentary boosting a slew of mid-caps.

In what may be the proverbial win-win situation, sports betting company GVC Holdings PLC (LON:GVC) rose 4.6% after making a bid approach to sector peer Ladbrokes Coral Group Holdings (LON:LCL).

Shares in Ladbrokes rose 24% on the news.

READ Ladbrokes Coral and GVC Holdings in 'detailed' talks about £3.9bn merger

Ladbrokes’s perennial rival, William Hill plc (LON:WMH), meanwhile, rose 2.4% after it reached agreement with Scientific Games Corporation (NASDAQ:SGMS) to unconditionally support Scientific Games' proposed acquisition of NYX Gaming Group Ltd (CVE:NYX).

Following the agreement all the parties have withdrawn from all litigation in the US and UK.   

On the broker front, car insurance giant Esure Group PLC (LON:ESUR) advanced 3.6% to 265.1p after Peel Hunt moved from ‘hold’ to ‘add’ and nudged up its target price to 295p from 285p.

Bus and trains group Stagecoach Group PLC (LON:SGC) motored 3.1% higher to 183.4p, after JP Morgan Cazenove responded to yesterday’s results by upgrading the stock.

The new recommendation is ‘neutral’, up from ‘underweight’ and the target price moves to 174p from 131p.

Engineering software specialist AVEVA Group PLC (LON:AVV) was another mid-cap stock to get the upgrade treatment; BarCap moved from ‘equal weight’ to ‘overweight’ and whacked up the price target from 1,750p to 2,900p.

Proactive news headlines:

Advanced Oncotherapy PLC (LON:AVO), the developer of next-generation proton therapy systems for cancer treatment, has secured £37.4mln of financing with £30mln of this coming from a new Chinese investor. The injection will bankroll the continuing technical development of the firm’s first LIGHT system and its installation at the Harley Street Proton Therapy Centre.

Wishbone Gold PLC (LON:WSBN) said its operations in Honduras are getting back in the swing of things now the wet season is over. The weather has now improved and the buildings are expected to be completed in the next couple of weeks, wishbone said.

Investors in Brave Bison Group PLC (AIM: BBSN), the digital media and social video specialist, will be heartened by the news its net revenues for the year will come in ahead of forecast at around £9.1mln. “The group continues to move up the value chain, with an increased focus on production and branded content deals, resulting in higher-margin revenues,” it said in a trading update.

The number of active customers at S & U Plc’s (LON:SUS) motor finance arm continues to grow at a fair old lick. Advantage Finance, S & U's specialist motor finance provider, has seen active customer numbers rise from 49,000 at the end of July to 53,000, while net customer receivables have risen above £240mln for the first time – up from nearly £227mln in July.

Fox Marble PLC (LON:FOX) has taken out an unsecured £500,000 loan with non-executive director Roy Harrison so it can invest in expanding its production facilities.

HemoGenyx Pharmaceuticals PLC (LON:HEMO) is making good progress in the laboratory on its two pioneering new treatments for blood cancer sufferers, it told shareholders at its annual meeting. The biotech, which listed on AIM in October, is developing two therapies to improve the chances of survival of people requiring a bone marrow transplant.

Hurricane Energy PLC (LON:HUR) told investors it has now hired executive search recruiter Spencer Stuart to source the company’s new chairman. The UK offshore oil company said in a statement that once a new chairman is in place it will seek to appoint additional independent non-executive directors to the board in order to make it fully compliant with corporate governance guidelines.

88 Energy Ltd’s (LON:88E) well programme may be on winter layover, but, that doesn’t mean the group’s interest in its Alaskan shale project has cooled – today, the oil and gas junior confirmed it is expanding its footprint. Named as the high bidder for two parcels of land, spanning a combined 32,800 gross acres, the explorer’s base has increased in Alaska’s North Slope region.

Ariana Resources plc (LON:AAU) has announced its latest new gold discovery at the Salinbas project, in Turkey. The exploration company told investors it has unearthed a significant anomaly, a 500x150 metre zone of precious metal and base metal, in the Salinbas North area.

Metal Tiger PLC (LON:MTR) said initial results from a mining study of the T3 copper project in Botswana have been “encouraging”. The company said the study of the joint venture project with MOD Resources Limited supports the start of a 30-hole resource drilling programme targeting high-grade veins with underground mining potential.

Macarthur Minerals Limited (CVE:MMS) has signed a strategic alliance with 3PL Operating to explore its Reynolds Springs lithium brine prospect in Nevada’s Railroad Valley. Cadence Minerals Plc (LON:KNDC) owns a 15.2% stake in Macarthur.

Stratex International plc (LON:STI) has said its investee company, Thani Stratex Resources, might need to make a few tweaks to the maiden resource estimate it published on Wednesday for the Anbat gold project in Egypt.

Xtract Resources PLC’s (LON:XTR) Mozambican subsidiary Explorator Limitada has negotiated a “significantly enhanced” deal with the contract alluvial miners at the Manica gold project.

Stobart Group Limited (LON:STOB)  said dividends of 4.5p per share were paid on 6 October 2017 and the board has now declared a further interim dividend of 4.5p per share which will be paid on 19 January 2018 to shareholders on the register as at 22 December 2017. It added that, subject to board approval, further quarterly dividend payments of 4.5p per share will be made on 13 April 2018.

AVEVA shares trade at 2,689p, up 3.7% on the day.

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