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Tuesday's most followed: Borders & Southern, Burberry, SDL, Dairy Crest, Renold, Walker Greenbank

Published: 12:58 17 Apr 2012 BST

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The closely followed exploration campaign in the Falklands again was at the centre of attention today with Borders & Southern (LON:BOR), which is currently drilling the 61/17-1 well targeting the Darwin prospect, emerging among the most searched for UK stocks on Google Finance.

Investors were looking for an explanation for today’s 3.5 percent rise in the company’s share price.

The Darwin prospect, which is located some 140 kilometres off the coast of the Falkland Islands, is believed to hold around 760 million barrels of oil.

After Darwin the Stebbing exploration well will follow to test a larger part, which has been estimated at 1.3 billion barrels of oil.

In mid-March, the company revealed that drilling had hit a delay due to "technical issues" with the equipment on the Leiv Eiriksson rig and the well was expected to take between four and five weeks.

On message boards, some investors linked the increase in the share price to speculation that the company is due to release an update, possibly reporting oil or gas shows or drilling a sidetrack.

It was also noted that the increase in the share price came on relatively small trading volumes, making some traders skeptical that any news has been leaked.

In the meantime, investors in London had a raft of trading updates to digest this morning, some of which made the list of the most read RNS statements.

Among them were reports from Burberry (LON:BRBY) and Daily Mail & General Trust (LON:DMGT), which were disappointing, pushing shares in both companies down around five percent in morning trade.

Burberry reported sales growth, which, however, missed expectations, while the Daily Mail publisher said ad revenue at both its businesses fell in the first half of the year.

In the six month period ending March 31, Burberry achieved an 18 percent jump in revenues thanks to the strong performance of its flagship markets, the UK, France and Greater China.

Underlying group revenues reached £1.03 billion as retail revenues surged 23 percent to £743 million.

Wholesale and licensing revenues reached £230 million and £54 million respectively, up 23 percent and seven percent compared with the 2010/11 financial year.

During the year, the group increased its exposure to some of its core markets by opening eleven stores including its first flagships in Paris and Taipei and gained momentum in social media with the number of its Facebook fans doubling to 12 million in the year.

 “Looking ahead, while we remain vigilant about the external environment, our global teams continue to focus on optimising our core brand, digital and cultural initiatives, while investing to drive sustainable, profitable growth,” said chief executive of Burberry Angela Ahrendts.

Shares in Burberry, which is a constituent of the FTSE 100 index, dropped 4.7 percent to 1,511 pence in early deals, while Daily Mail & General declined 5.7 percent to 419.2 pence.

At the group’s Associated Newspapers business, ad revenues dropped five percent in the first half of the year, while the Northcliffe Media regional newspaper division saw its ad revenues drop 11 percent.

As a result, both operating profits and profit before tax for the first half are expected to be lower than in 2011. However, the group said its full year outlook remains unchanged.

On a positive side, digital ad revenues soared 58 percent, including a 69 percent jump at Mail Online.

Circulation revenues at Associated Newspapers and Northcliffe Media were up five percent and one percent respectively compared with the first half of the previous year. According to the group, the Associated Newspapers revenues benefitted from cover price increased at the Daily Mail.

Daily Mail & General’s fellow FTSE 250 constituents SDL (LON:SDL) and Dairy Crest Group (LON:DCG) also emerged among the most followed stocks today.

Software group SDL reported that its operating profits and revenues were in line with expectations in the first quarter of the year amid stable demand, while Dairy Crest revealed that it is considering shutting down its Aintree and Fenstanton facilities.

This, said Dairy Crest, is part of its long term plan to reduce costs and sustain profitability in an “extremely challenging” market environment for its liquid milk business.

The group simultaneously announced that the liquid milk division has lost part of its business as its supply deal with retail major Tesco (LON:TSCO), which accounted for three percent of its total sales in the previous financial year, will not be renewed.

On a positive side, Dairy Crest said it expects its debt at March 31 to be five percent below market expectations, while again pointing out that the weak performance of its dairies division has been offset by strong trading at its food businesses.

“Our foods business has performed strongly and sales of our five key brands continue to grow,” said chief executive of Dairy Crest Mark Allen.

Other popular statements included an update from Renold (LON:RNO) and full year results from luxury interior furnishings group Walker Greenbank (LON:WGB). Both companies reported strong performance at its international businesses.

Renold, which makes industrial chains and gears, said the “encouraging” progress made in the first six months of the year continued into the second half, which ended on March 31, with full year earnings doubling on the previous year, which was in line with expectations.

Meanwhile, profits at the Torque Transmission and Chain divisions showed further improvement in the second half as underlying sales growth reached nine percent ahead of the previous year. 

However, growth in Europe moderated in the second half due to ongoing economic uncertainty. Renold said this slowdown was offset by the group’s sales outside of Europe, which were above double digit levels in the Americas, India and South East Asia.

Renold told the markets that it continues to expect good sales growth in both divisions and the rest of the world, while trading conditions in Europe will likely remain challenging.

The update disappointed investors as shares in Renold dropped 10 percent to 34.25 pence this morning.

Meanwhile, luxury interior furnishings group Walker Greenback reported sales growth of 7.6 percent for the year to January 31.

Brand sales were up 7.3 percent at £57.4 million, boosted by an 11 percent jump in international sales to £22 million with the group saying that the results demonstrated “further progress towards our vision of creating a highly profitable international luxury brands group”.

In the UK, which is Walker’s largest market, sales were up 4.6 percent at £33.8 million.

Operating profits across the group climbed 24 percent to £5.56 million and earnings per share improved 26 percent to 6.76 pence.

The outlook offered in the report was positive with Walker reporting a seven percent increase in brand sales in the first 11 weeks of the current year. The group added it was confident of delivering a positive outcome for 2012.

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