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The Most Followed report is a summary of the most interesting corporate stories of the day, including the most popular stock exchange statements, the hottest topics on message boards, the biggest movers of the day as well as rumours and speculation.
Thursday's most followed: Red Emperor Resources, RBS, JD Sports Fashion, Thorntons, Halfords Group, Mothercare, Booker Group, CapeJanuary 12 2012, 11:59am
Small cap oil and gas explorer Red Emperor Resources (LON:RMP) found itself at the centre of attention this morning, topping the list of the most searched for UK companies on Google Finance despite strong competition from several heavyweight retailers that released trading updates today.
The interest in Red Emperor was sparked by yesterday’s response to the recent surge in the share price. The company stated there was no information that had not been disclosed that could have been the reason behind the surge.
In the same statement, Red Emperor reminded investors that it has a 20 percent interest in two oil and gas blocks in Puntland with the first well of a two well drilling programme due to spud shortly.
On message boards, investors following Red Emperor discussed the share price movement with some arguing that gains in the stock was driven merely by expectations of the well spud. However, others suggested that most of the demand was from long term buyers, which are looking to capitalise on the potential of the group’s Puntland assets.
According to the company, the well is targeting an “enormous” potential oil in place of close to 1 billion barrels.
Part-nationalised bank Royal Bank of Scotland (LON:RBS) also ranked high among the most popular queries on Google as investors scrutinised the details of its plan to shrink its investment banking decision, which drove its shares up 8.5 percent to 23.7 pence.
The plan involves existing ash equities, corporate broking, equity capital markets and mergers and acquisition businesses to cut costs and funding requirements.
The bank will also cut a further 3,500 jobs over the next three years in addition to the 2,000 announced late last year.
Meanwhile, the response to today’s Christmas trading updates from retailers varied from a 14 percent drop in Tesco’s (LON:TSCO) share price after the UK’s biggest retailer released weaker than expected sales figures, to a 16 percent surge in online grocer Ocado (LON:OCDO).
In the seven days to Christmas, Ocado saw its gross sales increase 23.8 percent from the same period of 2010 to £18.7 million, taking the gain for the four weeks to Christmas to £59 million, up 16 percent compared to 2010.
Tesco was not the only company to experience a heavy decline after unveiling its Christmas figures. Chocolatier Thorntons (LON:THT) dipped 15 percent to 12 pence in morning trade as its sales also missed market forecasts.
Sales at Thornton’s own stores slipped 6.8 percent to £44.9 million in the 14 weeks to January 7, while franchise sales were down 17.5 percent at £4.1 million for the same period, prompting destocking activity in franchise stores.
However, total sales across the group rose 0.6 percent to £83.7 million largely due to a surge in online and direct sales.
The reaction to the highly anticipated update from JD Sports Fashion (LON:JD.), which showed up among the most popular searches on Google Finance yesterday with investors looking for market forecasts for its Christmas sales, was generally positive.
The sports fashion retailer reported a 1.6 percent increase in like for like sales in the core UK and Ireland shops for the five week period ending January 7.
JD said that while this week’s acquisition of Blacks Leisure Group for £20 million will result in lower earnings, its full year results will be in line with current expectations.
Shares in the firm were changing hands at 698 pence in early deals, up 1 percent from Wednesday’s close.
Other retailers that caught the eye of investors this morning included Halfords Group (LON:HFD) and Mothercare (LON:MTC), which both saw their shares climb as the markets welcomed their trading statements.
Halfords, which sells bicycles and car parts, said milder weather compared to the Christmas period of 2010 has negatively impacted its car maintenance revenues, leading to a decline of 2.1 percent in total group sales for the 13 weeks to December 30.
Nevertheless, shares in the group rose one percent as its bike sales impressed, showing a gain of 15.1 percent thanks to a strong performance in its Children's Bikes business.
“We are continuing to grow market share in the Cycles category through the launch of new ranges and the introduction of new products,” said chief executive of Halfords Group David Wild.
“The economic outlook remains uncertain, but we are confident that our focus areas create the right platform for future growth.”
Moving to Mothercare, the retailer of products for children and expectant mothers said its worldwide network sales improved 3 percent in the 13 weeks to January 7 as a result of “continuing strong growth in our profitable and cash-generative international business”.
International sales rallied 15 percent, which, however, was more than offset by a 6.9 percent drop in UK revenues due to planned store closures, resulting in a 1.2 percent drop in total sales across the group.
Investors shrugged off the drop in UK sales as shares in Mothercare rose 2.5 percent to 168.5 pence in early trade.
Today’s interim management statement from food wholesaler Booker Group (LON:BOK) also made the list of the most read stock exchange announcements.
In the 16 weeks to 30 December, total sales were up 7 percent with tobacco sales climbing 7.6 percent. Fresh departments performed well with fruit and vegetable sales up 17 percent, added Booker.
The group said its full year profits are expected to be in line with forecasts for the year.
Away from the retail sector, midcap energy services firm Cape (LON:CIU) said it has traded well since November 9 as the “strong” revenue growth experienced in the third quarter continued into the final three months of the year.
As a result, Cape said it expects significant growth in activity in the current year, which should help it hit its full year targets.
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