UK Market Wrap
Monday UK Market Round Up
Jessops (LSE: JSP), the struggling camera retailer, leapt today after agreeing to extend its bank loan facilities until the end of 2011, and reaffirmed its earnings before interest, tax, depreciation and amortisation (‘EBITDA’)would be at least £4.4 million in the year to 30 September, 2008.
Kalimantan Gold (AIM & TSX: KLG), the junior mining company, also rallied higher today after announcing further encouraging drill intercepts from the Jelai Gold Project in Indonesia. Drilling continues, and a maiden resource estimate for the project is expected before year end.
Positive drill results also lifted Kalahari Minerals (AIM: KAH), after it announced more excellent results from drilling at the Rossing South Uranium Prospect in Namibia. The Rossing project is controlled by Extract Resources (TSX & ASX: EXT), in which Kalahari holds a 39% interest.
Also higher today was DHX Media (AIM & TSX: DHX) which announced that it was recommending a proposed reverse takeover of Entertainment One (AIM: ETO). The combined group would boast revenues of approximately £350 million and EBITDA of £29 million.
Salamander Energy put the cat amongst the pigeons at Serica Energy (AIM: SQZ), after announcing an all share offer for its smaller rival. The deal values Serica at approximately £124 million based on the share price of the two companies last Friday. Serica was quick to rebuff the advance as “opportunistic”.
Also on the oil and gas front, Pantheon Resources (AIM: PANR) reported positive results from Jumonville 1 well. The well flowed 520 barrels of oil per day at 40.8 API with no water and 293,000 cubic feet of gas per day from upper portion of the reservoir.
Aurelian Resources (AIM: AUL) also climbed higher, after it was announced that a block of stock in the company changed hands at 40 pence per share, a substantial premium to the current market price.
Full year results from Netcall (AIM: NET) did enough to move the company’s share price higher. The call-back, auto-messaging and contact solutions company announced that its cash position increased to £2.92 million and that revenue in the first quarter of the new financial year was ahead of last.
Thomas Cook (LSE: TGC) was one of the few FTSE 100 constituents to be in the blue this morning, after announcing that it had pulled out of talks to merge its charter airline business with TUI Travel’s TUIfly and Lufthansa’s German Wings. Thomas Cook’s largest shareholder, Arcandor, also announced that it did not need to sell any of its equity in the group, further alleviating any concerns about a potential stock overhang.
There was no shortage of bad news out today unfortunately, with market sentiment still firmly in the negative territory.
I-Mate (AIM: IMTE) lead the loser board, not an unfamiliar place for the company recently, as it reported a much wider than anticipated loss for the year ended 31 March 2008. The company also said it was “considering the merits” of maintaining its listing on AIM – ouch.
Profit warnings are a bit commonplace at the moment, and today Innovation Group (LSE: TIG), added itself to the long list of companies revising their outlook to the downside. Zirax (AIM: ZRX), the specialty chemical company, also fell on disappointing interim results and guidance. For Dawnay DayTreveria (AIM: DTR) the plunge today was due to a 6% drop in the value of its property assets and confirmation of a strategic review.
ICAP (LSE: IAP) didn’t issue a profit warning today, but may as well, after the FTSE 100 interdealer broker reported in-line profits, but still fell 16%. As usual, it was the outlook that really caught investor’s attention, and here ICAP appeared to be too cautious, sending investors for the exit.
Not far behind ICAP on the large cap loser board was hedge fund manager Man Group (LSE: EMG) which announced that funds under management had shrunk by $5 billion to around $70.3 billion in the first half of 2008.
Usually the announcement of a potential takeover is seen as a positive, but for Arthro Kinetics (AIM: AKI) it had the opposite effect. Anthro warned that its bank balance of US$5 million was not enough to fund its requirements, and it was in discussions that ‘may lead to a takeover bid’. Clearly investor’s were not optimistic of the price.
Funding worries also undermined Roxi Petroleum (AIM: ROXI) today. The Kazakhstan focused oil and gas play said it had ‘not yet’ secured medium term financing for its assets.
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