Proactiveinvestors United Kingdom News http://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom News RSS feed en Mon, 19 Feb 2018 17:48:17 +0000 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[FTSE 100 ends in red after lacklustre session]]> http://www.proactiveinvestors.co.uk/companies/market_reports/191817/ftse-100-ends-in-red-after-lacklustre-session-191817.html
  • FTSE 100 closes down 47 pts

  • Wall Street and Canada markets closed

    • 'Uninspired, lower volume trading in London

    • Bitcoin price rises 5%

     

    European indices started the week off in the red with FTSE 100 closing its account on Monday over 47 points down at 7,247 as traders struggled for direction as US and Canadian markets were closed.

    "Equity markets started off the week on a lacklustre note, and the absence of important news flows encouraged dealers to exit the equity markets," noted David Madden at CMC Markets.

    The more UK company focused FTSE 250 was also lower - shedding around 80 points at 19,653,

    "Whenever a major player like the US is on holidays, the thin volumes can lead to exacerbated moves, which are unlikely to be a true reflection of the market," added Madden.

    The pound was also hit, with sterling losing 0.14% against the Euro and down 0.18% against the US dollar.

    The big Footsie laggard was consumer goods titan Reckitt Benckiser Group PLC (LON:RB.), which fell 7.51% to 6.075p as it posted flat revenue for the year but expects a return to growth in 2018 after a pick-up in the final quarter. 

    Miner Evraz (LON:EVR) was top winner, up 4.41% to 412p, on Footsie.

    3:30pm - FTSE 100 set to end quiet Monday on the back foot

    It was, as expected, a very quiet afternoon. Nonetheless, the FTSE 100 extended the morning’s losses.

    The blue-chip benchmark was down 22 points or 0.3% to change hands at 7,270.

    At the same time, the FTSE 250 was basically flat trading at 19.731.

    Corporate news was relatively thin on the ground, though there were still a few notable results.

    Reckitt Benckiser Group PLC (LON:RB.), down 6.5% at 6,135p, reported flat revenue for the year as a cyber-attack in June disrupted operations but expects a return to growth in 2018 after a pick-up in the final quarter.  

    The consumer goods giant said net revenue for the year to the end of December 2017 was £11.5bn, unchanged from the previous year on a like-for-like basis.

    Supply challenges resulting from the cyber-attack, pricing pressures in developed markets and a weak performance in footcare brand Scholl, offset strong sales from new products and healthcare brands such as Mucinex and Durex.

    Fidessa Group PLC (LON:FDSA) was a top FTSE 250 gainer on Monday, rising 7%, after the trading and investment information solutions provider delivered solid 2017 results.

    For the year ended 31 December 2017, Fidessa said revenue grew by 6.6% to £353.9mln, up from £331.9mln in 2016, with the increase at constant currency 3%. The firm said its recurring revenue rose by 8% to £312.3mln, up from £287.8mln in 2016, representing 88% of total revenue, up from 87% the previous year.

    Fidessa’s full-year pre-tax profit increased by 2.3% to £50.0mln, up from £48.8mln in 2016, although it fell by 2.0% on a constant currency basis.

    Merlin Entertainments PLC (LON:MERL) shares received a boost on Monday, gaining 4%, after a US activist investor became the third largest shareholder in the themepark operator.

    ValueAct, which pushed for management changes at Rolls-Royce Holdings PLC (LON:RR.)  and Microsoft Corp (NASDAQ:MSFT), has revealed a 5.4% stake in the owner of Legoland and Alton Towers.

    Merlin downgraded its full year profit forecasts in October after terror attacks in the UK had an impact on the number of visitors to its attractions, which also include Madame Tussauds and the London Eye.

    However, ValueAct is understood to be supportive of Merlin’s strategy after the two companies met, a source told the Daily Telegraph.

    1:00pm - Bitcoin and cryptocurrency prices rise but Ethereum founder fires warning

    Vitalik Buterin, founder of the Ethereum digital currency, was hardly drumming up speculative interest with his latest comments.

    The fintech pioneer effectively warned off risk averse investors, as he said that traditional assets are still the safest bet.  Cryptocurrency prices “could drop to near-zero at any time”, Buterin said.

    His comments came as he sought to clarify his views, after his identity was ‘spoofed’ by fake twitter accounts which were promoting what are described as ‘questionable’ cryptocurrency investment opportunities.

    By Monday afternoon, meanwhile, the price of Bitcoin rose by US$548 or 5.28% to trade at US$10,945.

    Ethereum was up 2.79% at US$950, and the Ripple XRP price was up 1.88% to US$1.15. Litecoin, which soared on Friday, was comparatively flat changing hands at US$223.

    12:00 - FTSE 100 still on back foot at midday

    By midday, the FTSE 100 remained on the back foot. The blue-chip benchmark was down 8 points, or 0.12%, to trade at 7,285. Meanwhile, the FTSE 250 added 10 points or 0.05% trading at 19,744.

    As the market moves into the afternoon the expected quietness will become more apparent. Wall Street is closed, due to the President’s Day public holiday.

    Monday’s lacklustre trading also coincides with a phase of contemplation for investors, many of whom are looking for a discernible steer either higher or lower.

    David Cheetham, analyst at online trading firm Xtb, reckons the outlook appears weak, with several technical indicators giving negative signals.

    “There are two dual forces that stock traders in London will be keeping an eye on this week with any large moves in the Pound and any significant deterioration in global risk appetite keenly on the radar in what could be a pivotal week for equities,” Cheetham said in a note.

    “Friday’s close marked the biggest weekly gain for US stocks in five years but the frenzied selling seen earlier this month remains fresh in the memory and the recovery seen since remains fragile.”

    10:15am - Data shows UK housing market is slowing, dragging down builder stocks

    A slowdown in UK house price growth, as indicated by the ‘Rightmove Housing Index’ data, has evidently impacted London’s housebuilding sector - which are falling wholesale on Monday.

    Barratt Developments PLC (LON:BDEV), down 3.8p or 0.69% at 547.4p, Taylor Wimpey PLC (LON:TW), down 1.3p or 0.69% at 186.45p and Bellway PLC (LON:BWY), down 21p or 0.68% at 3,046p, had led the morning’s losses.

    Followed by Redrow PLC (LON:RDW), down 22.5p or 0.43% at 584.5p, Bovis Homes Group PLC (LON:BVS), down 4.54p or 0.42% at 1,066p, and Persimmon PLC (LON:PSN), down 7p or 0.29% at 2,416p.

    Data from Rightmove showed a 1.5% increase in UK house prices year-on-year for the month of February, but, on a month-to-month basis, the rate of price growth was just 0.8% which, as noted by analysts, is “well below” average for this time of the year.

    Shares in the report’s author Rightmove PLC (LON:RMV) also dropped, losing 32p or 0.73% to trade at 4,358p.

    Fiona Cincotta, analyst at City Index, in a note said: “We are seeing caution dominate the housing market in a big way - those sellers that can wait are doing just that, in the hope that as Brexit uncertainties clear the housing market will pick up.

    “Overall, these figures are painting a picture of a rather anaemic housing market, which is struggling in the face of Brexit uncertainties. Housebuilders are by far the biggest drag on the FTSE this morning.”

    9:45am - FTSE 100 lagging as traders remain “uninspired” in quiet session

    The FTSE 100 was still off the pace following the morning’s early deals, with the blue-chip benchmark off 9 points or 0.13% changing hands at 7,285.

    At the same time, the FTSE 250 was practically flat at 19,732p.

    With lighter trading volumes anticipated due to the public holiday in the United States, trading triggers are likely to be somewhat few and far between, indeed CMC Markets analyst David Madden described traders are “uninspired”.

    Some attentions this morning were on foreign exchange, with the British pound weaker in the initial transactions.

    “With no high impacting data due for release traders will look cautiously across to an appearance by Mark Carney this afternoon, especially given his hawkish tone at the BoE meeting last week,” said Fiona Cincotta, analyst at City Index.

    8:15am: FTSE 100 quickly sees red after very short-lived positivity

    After Monday’s opening trades marked into positive territory, London’s FTSE 100 pulled back slightly and the equity benchmark is down.

    Just after 8:10am, the blue chip index was down around 6 points changing hands at 7,287.

    The FTSE 250 index, meanwhile, started higher – rising 34 points or 0.17% to 19,767.

    In terms of corporate highlights, Reckitt Benckiser Group PLC (LON:RB). boasted of a “significant 2017” as it released financial results.

    Nonetheless, the consumer products share pulled back 3.6%, losing 241p to change hands at 6,327p.

    Elsewhere, oiler EnQuest PLC (LON:ENQ) gained 4.14% after raising sentiments with a strong new 2018 outlook focussing on production growth.

    Financial software specialist Fidessa Group PLC (LON:FDSA) shares rose 190p or 7.3% to trade at 2,786 after it released financial results for 2017 showing revenue and profit growth.

    Proactive news headlines:

    As a result of a strong second half performance, BATM Advanced Communications Limited (LON:BVC) expects full-year revenue to be significantly ahead of market expectations.

    Europa Oil & Gas PLC (LON:EOG) has told investors that the UK Environment Agency has indicated in a draft decision advertisement that it is inclined to award a bespoke environmental permit for drilling and testing the Holmwood exploration well. There will now be a four-week public consultation process, taking place between February 15 to March 15.

    Digital communications group Next Fifteen Communications Group PLC (LON:NFC) said it traded in line with expectations in 2017.

    Haydale Graphene Industries PLC’s (LON:HAYD) Taiwan-based inks arm has agreed a deal to supply Japanese firm Graphene Platform (GPC). GPC will brand the inks as "GP Graphene Ink” and initially target Japan’s electronic printed inks market before spreading further across Asia.

    Directa Plus PLC (LON:DCTA) has been awarded a patent in Italy for a graphene-based solution that enhances the performance of tyres. “Specifically, the patent covers Directa Plus' elastomeric composition comprising graphene and tyre components,” said the AIM-listed company.

    Frontier IP Group PLC (LON:FIPP), the intellectual property commercialisation specialist, said that its portfolio company Molendotech Limited has completed a first fundraising.The AIM-listed company said Molendotech had received a commitment totalling £0.5mln which will be invested in three tranches, with Frontier IP to hold approximately 14% of the issued share capital of Molendotech following the investment of the third tranche.

    A survey conducted by Macquarie University has indicated that exploration upside for Shefa Yamim (LON:SEFA) in Israel is significant. Shefa Yamim is exploring for precious stones at Mount Carmel and the Kishon River.

    Stem cell services provider WideCells Group PLC (LON:WDC) has launched the first stage of Wideacademy, the firm’s 100%-owned education and training division.

    Polar Acquisitions Limited, a company that accounted for just under 38% of the net asset value of Baker Steel Resources Trust (LON:BSRT) in January, has announced the sale of its interest in the Prognoz silver mine in Russia for US$72mln. The deal is expected to provide uplift of around 25% to the valuation of Polar Acquisitions on Baker Steel's balance sheet at the next NAV. The buyer is Russian major Polymetal (LON:POLY).

    Cash shell Kin Group PLC (LON:KIN) has advised trading in its shares will likely be suspended at the beginning of next month.

    Chaarat Gold Holdings Limited (LON:CGH) has announced the appointment of BMO Capital Markets Limited as joint corporate broker to the company with immediate effect, It said BMO will work together with the company's existing broker Numis Securities.

    OPG Power Ventures PLC (LON:OPG) advised that, effective immediately, Cenkos Securities is the nominated adviser and sole broker to the company.

    6:45am: FTSE 100 to start Monday higher after Asia benchmarks rally

    The FTSE 100 is expected to make a positive start to the new week thanks, in part, to upbeat equity trading sentiments from Asia, although with US markets closed today, for the President’s Day public holiday, overall activity is likely to be fairly thin.

    CFD and spreadbetting firm IG Markets foresees a positive open for the FTSE 100 with the index called up by about 9 points, at 7,302 to 7,306.

    "Nonetheless, investors aren’t expecting too many fireworks rather they’re taking the obvious buying opportunities presented in the wake of the recent blue-chip sell off,” said David Madden, analyst at CMC Markets.

    “Stock markets around the world rebounded last week as investors took advantage of the relatively low prices of equities. Whenever there is a severe sell-off in the stock markets, traders spend a lot of time wondering is there another leg lower coming, or is it safe to get back in the water. The move higher last week saw some indices reach their highest levels in over a week."

    He concluded: “Market confidence often attracts even more market confidence, and that is what we are seeing at the moment.”

    In Asia today, Japan’s Nikkei advanced more than 400 points, marking a near 2% rally to take the benchmark to 22,149.

    Hong Kong’s Hang Seng meanwhile rose by 600 points or 1.97% to trade at 31,115 and the Shanghai Composite added 0.45% to trade at 3,199.

    Monday’s agenda:

    Finals: Reckitt Benckiser PLC (LON:RB.), Spectris PLC (LON:SXS), McColl’s Retail Group PLC (LON:MCLS), Fidessa Group PLC (LON:FDSA)

    Interims: MJ Gleeson PLC (LON:GLE), Petra Diamonds Limited (LON:PDL)

    Economic data: Rightmove UK house prices

    Around the markets:

    • Sterling: US$1.4022, down 0.03%
    • Gold: US$1,347 per ounce, up 0.44%
    • Brent crude: US$65 a barrel, up 0.7%

    City headlines:

    • Theresa May is warned her revamp for tuition fees doesn't add up - The Times
    • Sir Philip Green faces more pension questions from Frank Field - BBC News
    • Carillion shareholders considered suing after profit warning - The Guardian
    • £2bn of old paper £10 notes still in circulation as deadline nears - Sky News
    • Pimlico Plumbers boss Charlie Mullins reveals plan to sell £20m stake to fuel expansion - City A.M.
    • Mike Ashley´s Sports Direct damned by Church of England over failings - Daily Mail
    • Global dividends hit record $1.3tn in 2017 - Financial Times
    ]]>
    Mon, 19 Feb 2018 17:36:00 +0000 http://www.proactiveinvestors.co.uk/companies/market_reports/191817/ftse-100-ends-in-red-after-lacklustre-session-191817.html
    <![CDATA[Proactive news snapshot: BATM Advanced Communications, Europa Oil & Gas, Next Fifteen Communications]]> http://www.proactiveinvestors.co.uk/companies/market_reports/191849/proactive-news-snapshot-batm-advanced-communications-europa-oil-gas-next-fifteen-communications--191849.html As a result of a strong second half performance BATM Advanced Communications Limited (LON:BVC) expects full-year revenue to be significantly ahead of market expectations.

    Europa Oil & Gas PLC (LON:EOG) has told investors that the UK Environment Agency has indicated in a draft decision advertisement that it is inclined to award a bespoke environmental permit for drilling and testing the Holmwood exploration well. There will now be a four-week public consultation process, taking place between February 15 to March 15.

    Digital communications group Next Fifteen Communications Group Plc (LON:NFC) said it traded in line with expectations in 2017.

    Haydale Graphene Industries PLC’s (LON:HAYD) Taiwan-based inks arm has agreed a deal to supply Japanese firm Graphene Platform (GPC). GPC will brand the inks as "GP Graphene Ink” and initially target Japan’s electronic printed inks market before spreading further across Asia.

    Directa Plus Plc (LON:DCTA) has been awarded a patent in Italy for a graphene-based solution that enhances the performance of tyres. “Specifically, the patent covers Directa Plus' elastomeric composition comprising graphene and tyre components,” said the AIM-listed company.

    Frontier IP Group Plc (LON:FIPP), the intellectual property commercialisation specialist, said that its portfolio company Molendotech Limited has completed a first fundraising. The AIM-listed company said Molendotech had received a commitment totalling £0.5mln which will be invested in three tranches, with Frontier IP to hold approximately 14% of the issued share capital of Molendotech following the investment of the third tranche.

    A survey conducted by Macquarie University has indicated that exploration upside for Shefa Yamim (LON:SEFA) in Israel is significant. Shefa Yamim is exploring for precious stones at Mount Carmel and the Kishon River.

    Stem cell services provider WideCells Group PLC (LON:WDC) has launched the first stage of Wideacademy, the firm’s 100%-owned education and training division.

    Polar Acquisitions Limited, a company that accounted for just under 38% of the net asset value of Baker Steel Resources Trust (LON:BSRT) in January, has announced the sale of its interest in the Prognoz silver mine in Russia for US$72mln. The deal is expected to provide uplift of around 25% to the valuation of Polar Acquisitions on Baker Steel's balance sheet at the next NAV. The buyer is Russian major Polymetal (LON:POLY).

    Blockchain technology backer Coinsilium Group Limited (NEX:COIN, OTCMKTS:CINGF) has appointed investment bank Richard Lloyd as mining sector adviser to its TerraStream subsidiary. Lloyd, who began his career as a mining geologist, has 17 years of investment banking experience with a specific focus on the mining and exploration sector.

    The resignation last week of Ethiopia’s prime minister, Hailemariam Desalegn, is not expected to have any impact on KEFI Minerals plc's (LON:KEFI) activities. The gold and copper exploration company, which has the Tulu Kapi project in Ethiopia, said its activities have been unaffected in terms of its daily interaction with the various government agencies and the community at Tulu Kapi.

    Xtract Resources PLC (LON:XTR) has agreed a new collaboration with Omnia Mining Ltd for the exploitation of hard rock gold deposits at the Manica mining concession in Mozambique. Omnia will use its processing plant to target all hard rock occurrences at Manica, apart from the Fair Bride project, which remains under the sole control and management of Xtract.

    European Wealth Group Limited (LON:EWG), the integrated wealth management group, announced that Darryl Kaplan, the CEO of Astoria Investments Ltd, has joined its board as a non-executive director. The group said the appointment satisfies the right of Astoria to appoint a nominee to EWG’s  board under the subscription and underwriting agreement entered into at the time of the fundraising announced on 23 June 2017.

    Cash shell Kin Group Plc (LON:KIN) has advised trading in its shares will likely be suspended at the beginning of next month.

    Chaarat Gold Holdings Limited (LON:CGH) has announced the appointment of BMO Capital Markets Limited as joint corporate broker to the company with immediate effect, It said BMO will work together with the company's existing broker Numis Securities.

    OPG Power Ventures PLC (LON:OPG) advised that, effective immediately, Cenkos Securities is the nominated adviser and sole broker to the company.

    ]]>
    Mon, 19 Feb 2018 15:45:00 +0000 http://www.proactiveinvestors.co.uk/companies/market_reports/191849/proactive-news-snapshot-batm-advanced-communications-europa-oil-gas-next-fifteen-communications--191849.html
    <![CDATA[Saga appoints Old Mutual’s O’Sullivan as new chairman]]> http://www.proactiveinvestors.co.uk/companies/news/191856/saga-appoints-old-mutuals-osullivan-as-new-chairman-191856.html Saga Group PLC (LSE:SAGA), the over 50’s travel and insurance specialist, has appointed Patrick O’Sullivan as its new chairman effect from 1 May.

    The FTSE-250 listed company noted that O’Sullivan has been chairman of Old Mutual PLC (LON:OML), the FTSE 100-listed financial services conglomerate since January 2010.

    READ: Saga restructures travel unit in wake of December warning over Monarch Airlines collapse

    Saga also pointed out that O’Sullivan has been chairman of ERS (syndicate 218), a Lloyd’s market specialist motor insurer, and is hugely experienced in growing businesses in the financial services and insurance industry.

    In his new role, O’Sullivan will succeed Andrew Goodsell, who will retire from the board on 30 April. 

    Orna NiChionna, Saga’s senior independent director, said: “We are delighted to welcome Patrick to the Board of Saga. He brings many years of highly relevant commercial and board experience, working with companies in the financial services and insurance sectors.”

    She added: “His wisdom and leadership will be invaluable as we invest in growing the customer base to deliver profit across the business.”

    In a separate statement, Old Mutual said that O’Sullivan will continue in his role as the group’s chairman until its management separation process has been concluded.

    In afternoon trading, Saga’s shares gained 0.3% at 116.4p, while Old Mutual’s shares were up 1% at 249p.

    ]]>
    Mon, 19 Feb 2018 14:59:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191856/saga-appoints-old-mutuals-osullivan-as-new-chairman-191856.html
    <![CDATA[StatPro benefiting from Delta belter]]> http://www.proactiveinvestors.co.uk/companies/news/191855/statpro-benefiting-from-delta-belter-191855.html StatPro Group PLC (LON:SOG) has long augmented organic growth with a series of bolt-on acquisitions, but the purchase of Delta could be the best yet.

    It's still early days for the acquisition in the spring of 2017 of Delta - the risk and performance analytics service it bought from UBS - but the signs are very good.

    READ: StatPro finished 2017 strongly and is confident of further progress in 2018

    "The acquisition and successful integration of Delta in May was the highlight of 2017. Delta has since increased sales and plans are in place to achieve functional parity for Delta within StatPro Revolution,” said Justin Wheatley, the group chief operating officer of StatPro.

    The acquisition gave StatPro “scale” and significantly enhanced its product capabilities, with the portfolio analytics platform operator working hard on migrating Delta's unique functionality onto StatPro Revolution's platform.

    With Delta joining the family, StatPro's analytics service will branch out from the middle office to the front office of asset managers.

    The acquisition followed the previous year's purchase of a 72.7% stake in South African software provider, Infovest Consulting Ltd.

    Infovest specialises in data warehousing and reporting software for the asset management industry, a sector in which StatPro also operates.

    2016, meanwhile, saw the company acquire Investor Analytics (now known as Alpha), which will also beef up the group's flagship cloud platform, StatPro Revolution.

    Reaping rewards of early investment in the cloud

    The group's early switch to the cloud, which started taking place in the latter half of the previous decade before most of us had even heard of the term, looks to have been a very shrewd one.

    The cloud-based StatPro Revolution platform saw organic revenue growth of 16% in the first half of 2017, as the group as a whole reported a 2% organic rise in revenue.

    The group announced in a trading update that full-year revenues for 2017 are expected to be around £49.0mln, up 30% from £37.6mln the year before.

    Annualised recurring revenue (ARR) for the group as a whole rose by 39% on a constant currency basis to £53.0mln from £38.1mln the year before. ARR for StatPro Revolution rose 13% organically.

    Adjusted underlying earnings are expected to be roughly £6.9mln, up 35% from £51mlm the year before, when the audited figures are published.

    Net debt at the end of the year had doubled to £20.2mln from a year earlier as the company ploughed money into its acquisitions.

    The legacy StatPro Seven platform is still soldiering on, but software-as-a-service is clearly where it’s at.

    “This success is undoubtedly due to our early investment in cloud technology, over eight years ago. The complexity and scale of the technology we have developed will be difficult to imitate,” said Wheatley.

    “We are now firmly established as a leading innovator in the rapidly digitising asset management industry.”

    Research house Edison continues to see strong upside potential

    The research house said the 2017 trading update was broadly in line with its forecasts.

    It is forecasting revenue of £48.9mln for the year just ended and sales of £57.3mln in the current year.

    It expects profit before tax to surge to £4.2mln this year from its forecast £2.7mln in 2017.

    With the company investing for growth, Edison is not expecting the 2.9p annual dividend to be changed.

    Edison said that bearing in mind a number of takeovers in StatPro’s sector in 2017, the stock looks cheap.

    Key competitor BISAM was acquired by Factset for 7.3 times annual sales. On the same multiple, StatPro – currently capitalised at £168mln – would sell for around £342mln.

    “Separately, [the] LSE acquired Yield Book (a key competitor of Delta) along with Citi Fixed Income Indices from Citi for 6.4x sales, although we understand that the US$685mln price largely related to the indices. Additionally, SS&C is acquiring DST Systems at c 2.4x 2018 sales,” Edison noted.

    The stock does trade on a high earnings multiple, as befits a growth company. Based on Edison’s forecast of earnings per share of 4.9p for 2017, the stock is valued at a poky 37 times earnings but this falls to 25 in 2018, based on Edison’s forecast.

    “Our DCF [discounted cash flow] model, when incorporating 10-year organic revenue growth of 4.4%, terminal growth of 2%, a long-term margin target of 24.5% and a WACC [weighted average cost of capital] of 9%, would value the shares at 224p,” Edison said.

    At the time of writing, the shares were trading at 180.5p.

    ]]>
    Mon, 19 Feb 2018 14:54:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191855/statpro-benefiting-from-delta-belter-191855.html
    <![CDATA[Merlin Entertainments shares rise after US activist investor takes stake ]]> http://www.proactiveinvestors.co.uk/companies/news/191854/merlin-entertainments-shares-rise-after-us-activist-investor-takes-stake-191854.html Merlin Entertainments PLC (LON:MERL) shares received a boost on Monday after a US activist investor became the third largest shareholder in the themepark operator.

    ValueAct, which pushed for management changes at Rolls-Royce Holdings PLC (LON:RR.)  and Microsoft Corp (NASDAQ:MSFT), has revealed a 5.4% stake in the owner of Legoland and Alton Towers.

    Merlin downgraded its full year profit forecasts in October after terror attacks in the UK had an impact on the number of visitors to its attractions, which also include Madame Tussauds and the London Eye.

    READ: Terror attacks deterring visitors to London warns Merlin Entertainments

    ValueAct thinks market concerns on Merlin overdone

    However, ValueAct is understood to be supportive of Merlin’s strategy after the two companies met, a source told the Daily Telegraph.

    The source said ValueAct thinks concerns about the company are overdone, adding that it was “quite a different situation” to Rolls-Royce.

    ValueAct secured a seat on the board of Rolls-Royce in 2016 in order to push through changes it thought were needed to be made at the engineer.

    It had also gained a seat on the board of Microsoft in 2013 and used its position to press for the ousting of the then-chief executive Steve Ballmer.

    Merlin not worried about ValueAct investment

    Merlin’s management is said to be “not alarmed” by ValueAct becoming one of its main shareholders, a person familiar with the situation told the Financial Times.

    In a statement, Merlin said: “We maintain strong relationships with all of our major shareholders. As a matter of course we do not comment on specific investor dialogue.”

    Merlin’s main shareholder is Kirkbi, the investment company of the family behind Lego, with a 29.8% holding.

    Merlin to report full year results next week

    Merlin is due to report its 2017 fiscal year results on March 1 and Deutsche Bank expects underlying earnings (EBITDA) of £475mln on revenue of £1.6bn.

    “After the 3Q17 update, we cut our EBITDA estimates by 4%, 8% and 8% for FY17E, FY18E and FY19E. Much of the 3Q17 negative commentary focused on one-off events (terror, weather),” the bank said.

    In the year to December 31, 2016, Merlin reported a 1.8% decline in EBITDA to £433mln and a 1.4% like-for-like increase in revenue to £1.4bn. 

    Shares in Merlin rose 3.5% to 354p in afternoon deals. 

    ]]>
    Mon, 19 Feb 2018 14:39:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191854/merlin-entertainments-shares-rise-after-us-activist-investor-takes-stake-191854.html
    <![CDATA[Kin slumps as share suspension looms, elsewhere another ‘shell’ soars after getting deals done ]]> http://www.proactiveinvestors.co.uk/companies/market_reports/191835/kin-slumps-as-share-suspension-looms-elsewhere-another-shell-soars-after-getting-deals-done-191835.html 2:30pm - Kin Group slumps as share suspension looms

    Kin Group Plc (LON:KIN) shares sunk as the cash-shell confirmed its shares are set to be suspended in March.

    The team running the cash-shell has been checking out an array of potential acquisitions including messaging apps, online property services, VR, eSports and blockchain technology - and it says talks are ongoing - but, it won’t have a deal in place before the regulatory deadline of February 28.

    “We will continue to pursue these opportunities during the suspension period and remain confident we will deliver a transformational reverse takeover option for shareholders before 30 August," said Donald Stewart, Kin chairman.

    Kin, the day’s biggest faller, is in stark contrast to the biggest riser, which was also a cash-shell.

    RockRose Energy PLC (LON:RRE) marked a 185% gain on Monday as its shares resumed trading, following a suspension, though the move essentially represents a reset for the former cash-shell which recently closed acquisitions, stock split and capital redistributions.

    Kefi Minerals Plc (LON:KEFI) shares were down 9% as the company updated on its assets in Ethiopia, where last week the Prime Minister resigned.

    The junior miner, meanwhile, said that its activities (such as its daily interface with the Ethiopian government) have been unaffected and it believes that its finance plans remain unaffected “because it has targeted certain regional financier, including some who already have a long-term presence in Ethiopia.”

    Elsewhere, Zenith Energy Ltd (LON:ZEN) was down 7.7% at 7.1p after updating investors on its oil and gas field rehabilitation operations in Azerbaijan.

    10:50am - Oil firms RockRose Energy and Baron Oil are in the small cap spotlight.

    RockRose Energy PLC (LON:RRE) marked a 185% gain on Monday as its shares resumed trading, following a suspension, though the move essentially represents a reset for the former cash-shell which recently closed acquisitions, stock split and capital redistributions.

    The London ‘standard listed’ stock was up 235.5p or 185% priced at 362.5p.

    Elsewhere, the price of Baron Oil PLC (LON:BOIL) jumped 40% as it entered into a North Sea-based exploration venture and also detailed its plans over in Peru, where it wants to drill a well but the project is in “force majeure” amid disagreement with local government.

    Baron said it believes the Peru well could be drilled in the next six months. The share price was up 0.11p or 40.3% changing hands at 0.36p.

    Reckitt Benckiser shares struggle, while Fidessa and EnQuest find favour

    Reckitt Benckiser Group PLC (LON:RB. shares struggled in Monday’s early deals, falling more than 5%, after it reported flat revenue for the year.

    A cyber-attack in June disrupted operations, but, the consumer products firm expects a return to growth in 2018 after a pick-up in the final quarter. It said net revenue for the year to the end of December 2017 was £11.5bn, unchanged from the previous year on a like-for-like basis.

    “The household goods giant is going through somewhat of a transition period after its blockbuster $16.6bn takeover of US baby milk producer Mead Johnson in June last year,” said Henry Croft, Accendo Markets analyst.

    “And while the acquisition helped to more than triple annual profits on a year earlier (£6.17bn) while maintaining revenue growth (at least in Q4), disappointing like-for-like sales figures, missing analysts’ expectations, are taking precedent this morning.”

    Reckitt Benckiser shares lost 346p changing hands at 6,220p, at 9:30am.

    AstraZeneca PLC (LON:AZN), which has had a cancer drug approved in the United States, saw its share move positively – up 25p or 0.5% trading at 4,764p.

    Fidessa Group PLC (LON:FDSA) shares were up 225p or 8.6% changing hands at 2,830p after it released financial results for 2017, showing revenue and profit growth.

    Oiler EnQuest PLC (LON:ENQ) gained 4.14% after raising sentiments with a strong new 2018 outlook focussing on production growth.

    Proactive news headlines:

    As a result of a strong second half performance BATM Advanced Communications Limited (LON:BVC) expects full-year revenue to be significantly ahead of market expectations.

    Europa Oil & Gas PLC (LON:EOG) has told investors that the UK Environment Agency has indicated in a draft decision advertisement that it is inclined to award a bespoke environmental permit for drilling and testing the Holmwood exploration well. There will now be a four-week public consultation process, taking place between February 15 to March 15.

    Digital communications group Next Fifteen Communications Group PLC (LON:NFC) said it traded in line with expectations in 2017.

    Haydale Graphene Industries PLC’s (LON:HAYD) Taiwan-based inks arm has agreed a deal to supply Japanese firm Graphene Platform (GPC). GPC will brand the inks as "GP Graphene Ink” and initially target Japan’s electronic printed inks market before spreading further across Asia.

    Directa Plus PLC (LON:DCTA) has been awarded a patent in Italy for a graphene-based solution that enhances the performance of tyres. “Specifically, the patent covers Directa Plus' elastomeric composition comprising graphene and tyre components,” said the AIM-listed company.

    Frontier IP Group PLC (LON:FIPP), the intellectual property commercialisation specialist, said that its portfolio company Molendotech Limited has completed a first fundraising. The AIM-listed company said Molendotech had received a commitment totalling £0.5mln which will be invested in three tranches, with Frontier IP to hold approximately 14% of the issued share capital of Molendotech following the investment of the third tranche.

    A survey conducted by Macquarie University has indicated that exploration upside for Shefa Yamim (LON:SEFA) in Israel is significant. Shefa Yamim is exploring for precious stones at Mount Carmel and the Kishon River.

    Stem cell services provider WideCells Group PLC (LON:WDC) has launched the first stage of Wideacademy, the firm’s 100%-owned education and training division.

    Polar Acquisitions Limited, a company that accounted for just under 38% of the net asset value of Baker Steel Resources Trust (LON:BSRT) in January, has announced the sale of its interest in the Prognoz silver mine in Russia for US$72mln. The deal is expected to provide uplift of around 25% to the valuation of Polar Acquisitions on Baker Steel's balance sheet at the next NAV. The buyer is Russian major Polymetal (LON:POLY).

    Blockchain technology backer Coinsilium Group Limited (NEX:COIN, OTCMKTS:CINGF) has appointed investment bank Richard Lloyd as mining sector adviser to its TerraStream subsidiary. Lloyd, who began his career as a mining geologist, has 17 years of investment banking experience with a specific focus on the mining and exploration sector.

    Cash shell Kin Group PLC (LON:KIN) has advised trading in its shares will likely be suspended at the beginning of next month.

    Chaarat Gold Holdings Limited (LON:CGH) has announced the appointment of BMO Capital Markets Limited as joint corporate broker to the company with immediate effect, It said BMO will work together with the company's existing broker Numis Securities.

    OPG Power Ventures PLC (LON:OPG) advised that, effective immediately, Cenkos Securities is the nominated adviser and sole broker to the company.

    ]]>
    Mon, 19 Feb 2018 14:30:00 +0000 http://www.proactiveinvestors.co.uk/companies/market_reports/191835/kin-slumps-as-share-suspension-looms-elsewhere-another-shell-soars-after-getting-deals-done-191835.html
    <![CDATA[Balfour Beatty sells further stake in motorway operator Connect Plus to private equity]]> http://www.proactiveinvestors.co.uk/companies/news/191850/balfour-beatty-sells-further-stake-in-motorway-operator-connect-plus-to-private-equity-191850.html Balfour Beatty PLC (LON:BBY) shares slipped back on Monday following news it has sold an additional stake in Connect Plus, the operator of the M25 orbital motorway in London.

    The FTSE 250-listed infrastructure group said that a 5% stake in Connect Plus had been sold to funds managed by Equitix Investment Management Ltd for £42mln.

    READ: Balfour Beatty joint venture secures US$1.95bln Los Angeles International Airport contract

    The news comes on the back of a similar sale in December 2017, when Balfour sold a 20% stake in Connect Plus to Dalmore Capital Ltd in two transactions for a total of £165mln.

    Following Monday's sale, Balfour now holds a 15% stake in Connect Plus.

    READ: Balfour Beatty sells additional stake in Connect Plus

    The expected profit for the latest transaction is £22mln, and will go towards paying down borrowings in 2018, the company said.

    In afternoon trading, Balfour Beatty shares were down 1.5% at 276.4p, albeit having found gains on Friday following news that a joint venture had won a US$1.95bln contract for the building, financing and managing of an airport transit system at Los Angeles International Airport (LAX).

    ]]>
    Mon, 19 Feb 2018 14:30:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191850/balfour-beatty-sells-further-stake-in-motorway-operator-connect-plus-to-private-equity-191850.html
    <![CDATA[Fidessa shares jump as trading and investment information solutions provider delivers solid 2017 res]]> http://www.proactiveinvestors.co.uk/companies/news/191852/fidessa-shares-jump-as-trading-and-investment-information-solutions-provider-delivers-solid-2017-results-191852.html Fidessa Group PLC (LON:FDSA) was a top FTSE 250 gainer on Monday, with its shares gaining nearly 6% after the trading and investment information solutions provider delivered solid 2017 results.

    For the year ended 31 December 2017, Fidessa said revenue grew by 6.6% to £353.9mln, up from £331.9mln in 2016, with the increase at constant currency 3%.

    READ: Fidessa hikes dividend as annual profit and revenue rise

    The firm said its recurring revenue rose by 8% to £312.3mln, up from £287.8mln in 2016, representing 88% of total revenue, up from 87% the previous year.

    Fidessa’s full-year pre-tax profit increased by 2.3% to £50.0mln, up from £48.8mln in 2016, although it fell by 2.0% on a constant currency basis.

    The group’s total operating expenses grew by 7.5% to £305.1mln which included one-off and duplicate costs from moving the company's Jersey City office in the US, as well as property lease provisions.

    Without those items, Fidessa said it expects a small increase in its pre-tax profit margin for 2018, with falling costs offset by currency headwinds.

    Boss expects similar levels of growth in 2018

    Fidessa’s chief executive, Chris Aspinwall commented: “Overall, we expect to see similar levels of constant currency growth in 2018 to those seen during 2017.

    “For 2019, the increased capacity is expected to result in a greater ability to invest in further opportunities as the markets develop, or if the right opportunities are not clear, deliver an increase in margin."

    The firm increased its final dividend by 5.3% to 29.7p, up from 28.2p in 2018, with its special dividend unchanged at 50.0p.

    Numis ups target price

    In afternoon trading, Fidessa shares were 5.9% higher at 2,760p.

    In a note to clients, analysts at Numis Securities raised their target price for Fidessa shares to 3.070p and reiterated an ‘add’ rating on the stock.

    They said: “Fidessa's prelims are 5-10% ahead of our expectations (with beats on all major lines) led by margin outperformance, but the bigger story to us is the indication that margins may improve further from FY19.

    “This arises from attenuation of the current high levels of MiFID II investment coupled with derivatives moving into profitability, with no equivalent new investment of similar scale.

    The analysts added: “We think this could release up to c.200bp of margin (we include c.100bp in our forecasts) although there may be some reinvestment.”

    ]]>
    Mon, 19 Feb 2018 14:18:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191852/fidessa-shares-jump-as-trading-and-investment-information-solutions-provider-delivers-solid-2017-results-191852.html
    <![CDATA[CentralNic Group's acquisition strategy augmenting its growth surge]]> http://www.proactiveinvestors.co.uk/companies/news/191851/centralnic-group-s-acquisition-strategy-augmenting-its-growth-surge-191851.html CentralNic Group PLC (LON:CNIC) is a fast-growing wholesale, retail and enterprise supplier of domain names and associated services, that has global ambitions.

    For the uninitiated, in the internet world, the top-level domain (TLD) is the label given to the very last section of a web address, located after the last dot – so suffixes such as .com, .org and .gov.

    READ: CentralNic secures US$3.4mln contract for sale of premium domain names

    Back in 2011, a body called the Internet Corporation for Assigned Names and Numbers (ICANN) ended the restrictions on naming TLDs, ushering a new era for many companies such as CentralNic that had prepared properly for this revolution.

    Domains using the new TLDs rose from 11mln at the beginning of 2016 to 27mln at the end with CentralNic riding this wave.

    Crucial to this has been its relationship with XYZ.COM, which owns the .xyz TLD, one of the most popular in the world.

    In September, the company renegotiated and renewed its exclusive wholesaler contract with XYZ.COM.

    CentralNic will receive a fixed fee based on the volume of .xyz registrations and subscriptions managed.

    The TLD has seen the most adoption from start-ups and entrepreneurs, as well as from business in emerging internet markets such as Indonesia and China.

    Ben Crawford, chief executive of CentralNic, said: "The long-standing excellent relationship between CentralNic and .xyz has been updated to normalise the company's revenues and profits going forward.”

    Acquisitions have also pulled their weight

    CentralNic’s longer-term vision is to “join the ranks of world leaders in its industry, which include a number of multi-billion-dollar companies”.

    Its growth strategy will focus on developing and scaling up its software platforms, while concentrating on growth areas, including China.

    It also sees consolidation opportunities and chances to broaden its service offering.

    Acquisitions must “meet clear strategic criteria including being earnings accretive in the short term with a strong recurring revenues base”.

    Insta Group, acquired at the beginning of 2016, has been something of a star and now makes up the bulk of the retail division, the internet domain company’s largest and most lucrative arm.

    During the first half of 2017, the retail business generated revenues of £7.97mln (H1 2016: £6.76mln), thanks to a full contribution from Insta this time around, which was responsible for around three-quarters of those sales.

    Total revenues across the business – which also includes the wholesale and enterprise divisions – jumped 19% to £10.6mln (H1 2016: £8.9mln).

    A slight improvement in margins saw gross profit surge by almost a third to £3mln (H1 2016: £2.3mln) while adjusted underlying earnings rose by 50% to 1.4mln (H1 2016: £0.9mln).

    It is worth noting that the group’s results are traditionally weighted to the second half of the year. In December, the group revealed it was trading in line with expectations for the full year.

    The acquisition of the Slovakian domain name manager SK-NIC for up to €26.1mln was another step forward in the group’s consolidation strategy.

    The AIM-quoted outfit paid an initial €20.27mln for SK-NIC – which manages the top-level domain for Slovakia, .sk – with up to a further €5.85mln possibly to come in future milestone payments.

    CentralNic said the SK-NIC purchase would be double-digit percentage earnings-enhancing in the first full year of ownership.

    Given that the majority of Slovakian companies and websites use the .sk domain and 77% of those renew their licences every year, SK-NIC will increase the visibility and predictability of group revenues.

    ‘Acquisition another step forward’

    “SK-NIC is a major, earnings enhancing acquisition for the group, which is wholly consistent with our growth strategy,” said chief executive Ben Crawford.

    “The .sk country code adds a substantial new product and SK-NIC's network of over 2,100 local retailers extends our geographic footprint into an important new market with considerable growth potential.

    “The acquisition of SK-NIC moves us another step forward in our strategy to increase substantially the proportion of group revenues generated from recurring revenue streams spread across diversified products, territories and customer types.”

    ]]>
    Mon, 19 Feb 2018 14:14:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191851/centralnic-group-s-acquisition-strategy-augmenting-its-growth-surge-191851.html
    <![CDATA[Bluebird Merchant super-confident about South Korea's mining potential]]> http://www.proactiveinvestors.co.uk/companies/news/191848/bluebird-merchant-super-confident-about-south-korea-s-mining-potential-191848.html “We are explorers not miners” is a phrase often used by juniors looking to prove up a project and sell it on.

    So it is unusual, rare even, to come across a team at the helm of an AIM-listed company who say the opposite.

    WATCH: Gubong shaping up to be a 'company maker' for Bluebird Merchant Ventures

    But Colin Patterson and Charles Barclay, respectively chief executive and chief operating officer of Bluebird Merchant Ventures Limited (LON:BMV), insist they are miners through and through and specialist ones at that.

    In short, their expertise is re-opening closed mines and at Gubong in South Korea and the nearby Taechang and Kochang, Patterson reckons he has hit the proverbial mother lode.

    Friendly address

    South Korea is simply the most supportive jurisdiction he has ever worked in, Patterson told Proactive.

    No royalties, partial state funding for environmental projects and enthusiastic local governments are worlds away from the backdrop to his previous undertakings, of which there are many, he adds.

    Most notably, Patterson points to the rejuvenation of Western Mining’s Emperor gold mine in Fiji.

    Having been handed the keys in expectation of an orderly wind-down, within two years production had risen 75% to 140,000oz per year.

    Western Mining even sent a team over to the mine to understand where it had gone wrong, he quips.

    That project made him (and his backers) a lot of money and it’s clear he sees similar potential in the clutch of projects Bluebird now has on its books in South Korea.

    Gubong closed in 1970, but Patterson points out that was at a time when the gold price was just US$40 per oz, whereas most of the mines he had worked struggled to make money at a price of US$1,000 per ounce.

    “In those days anything less that 6-7g/t would not have been bothered with.”

    But grades of that magnitude are rare now and with the gold price at US$1,350 per oz, what was uneconomic then is looking pretty attractive to Patterson now.

    Untouched ore bodies

    “At Gubong, we know there are nine stacked ore bodies, only half of which have been mined or partially mined.”

    High-grade remnants have already been unearthed in some of the old adits or access tunnels to the worked areas, while Patterson is confident it will find grades of up 3- 6g/t once it gets into the mine in earnest.

    “Once when we get into heart of mine, we expect to find virgin ore bodies that are untouched’

    “Even in the old high-grade zones, remnants of ore on the ground and grab samples of spillage are up to 20 g/t.”

    He adds the reason that no one has gone back to the mine since is that the original explorer made three discoveries straight off, worked those and left when the gold price collapsed.

    They were explorers who weren’t interested in complex mining, he adds.

    The mining sector, too, dropped off the radar in South Korea as the country went hell-for-leather for technology and IT.

    Things have changed now, though, and Bluebird sees the potential for a resource of greater than one million oz of gold at Gubong with a further 300,000 oz in satellite areas.

    Admittedly not huge, but the plan is to get into profitable mining at about 30,000oz per year initially and see what the full potential might be as operations go deeper.

    Even that might take some time, as the mine has over 120 kilometres of underground tunnels.

    Pilot mining will start at 100 tonnes of ore per day, rising to 200tpd at which point Gubong should be self-funding and making around US$10,000 per day.

    Partner an explorer not a miner

    Southern Gold is the partner in the Gubong venture and also at the two other mines, gold and silver mine Kochang and copper mine Taechang.

    Under the arrangement, Bluebird has to pay US$500,000 for a study into re-starting production at each mine along with a A$250,000 placing each time for Southern Gold.

    Up to now, Patterson, and his vehicle Management Resources, have been funding the work at Gubong, with the CEO giving a personal guarantee to pay for the re-opening study.

    The Gubong report is due in the second quarter and if it is favourable, will likely herald the start of a push across South Korea, once the joint venture is formally cemented.

    A fourth mine is reportedly close to being added to the portfolio, though Patterson notes there are over 1,400 abandoned gold mines in South Korea and "many more opportunities.”

    Bluebird does have a project elsewhere, at Batangas in the Philippines, though this is on a care and maintenance basis until changes to the country’s mining regime are clarified, which is another reason Patterson perhaps is so keen on the more benign South Korea.

    Very confident

    Patterson is confident about the future.

    “Narrow vein underground mining is a specialist skill not many people have," he says.

    “We go in and systematically mine properly, put in the right systems and mining methods and we have the utmost confidence in our ability to make money where no-one else can.”

    ]]>
    Mon, 19 Feb 2018 13:06:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191848/bluebird-merchant-super-confident-about-south-korea-s-mining-potential-191848.html
    <![CDATA[Ceres Power driving higher on the back of big name development collaborations]]> http://www.proactiveinvestors.co.uk/companies/news/191846/ceres-power-driving-higher-on-the-back-of-big-name-development-collaborations-191846.html Commercialisation milestones will provide the near-term catalyst for Ceres Power Holdings PLC (LON:CWR), the German broker Berenberg said back in July 2017.

    In a pre-close trading update covering the six months ended December 31, 2017, Ceres Power ticked off many of those key milestones, which have been delivered with all its current partners, including Honda, Nissan and engineer Cummins, and it is on track to begin field trials in 2018 with its first go-to-market product.

    WATCH: Fuel Cell specialist CeresPower fully charged for 2018/9

    The firm said the delivery of these key customer contract milestones is driving revenue growth and, as a result, the company is on track to deliver half-year income of £3mln, around an 80% increase year-on-year.

    In January 2018, the company unveiled another collaboration agreement, this time a development partnership with a European original equipment manufacturer.

    Share price has already moved close to Berenberg’s price target

    When it initiated coverage of Ceres in July 2018, the shares were trading at around 11p and Berenberg set a fairly punchy target price of 15p.

    Fast forward seven months or so, and the shares are nearly there, trading at 14.32p.

    So, what made Berenberg so keen on the company?

    Berenberg’s analysts said they believe the group’s core IP “is unique and scalable, using cheap, everyday materials, which could support mass adoption”.

    “In the long run, we estimate that there is a market opportunity for Ceres to generate more than £1bn in revenues.”

    READ: Ceres Power rises as it signs development agreement with European original equipment manufacturer

    The analysts pointed out that underlying trends support fuel cell adoption, with industry sources estimating that the market for fuel cells will grow at a compound average growth rate (CAGR) of circa 25% between 2016 and 2024.

    They said that aside from their core benefits, fuel cells are increasingly relevant as a solution to the intermittency and capacity issues that the electricity grid will face in the coming years.

    The Berenberg team believes the increased relevance is partly due to the growing proportion of renewables in the system as well as electrification driving vast energy requirements.

    They said they believe that adoption is being driven by five key factors: 1) a global focus around air quality driving demand for alternative power; 2) growing proportion of renewables (solar and wind) increasing seasonal intermittency of electricity grids; 3) electricity grids facing capacity issues in the coming years driven by electric vehicles; 4) the technology maturing after more than a decade of global investment; and 5) cost coming down to levels conducive to mass adoption.

    SteelCell technology is poised to benefit from the growth in fuel cell demand

    The analysts added that, in their view, Ceres’s intellectual property and existing commercial partnerships “leave it well positioned to benefit from this market growth.”

    The German broker believes Ceres’s core SteelCell technology overcomes two problems traditionally associated with other solid oxide fuel cells, namely cost, and lack of robustness.

    SteelCell can use a variety of fuels - natural gas, hydrogen, biofuel - that can be manufactured from widely available materials, and is inherently the most cost-effective solution on the market.

    “This scalability is Ceres’s key competitive advantage, in our view,” Berenberg said.

    Collaboration deals and commercial launch programmes provide share price catalysts

    "We set ourselves the target of securing five major development partners within two years and we've now achieved that by signing an agreement with another global player,” declared Phil Caldwell, the chief executive officer of Ceres, in a statement announcing the fifth collaboration agreement.

    Berenberg believes the development partnerships and the impending commercial launches go hand-in-hand in helping profitability in the short-term, while drastically increasing the probability that the SteelCell will be commercially viable in the long-term.

    The five development agreements are in the bag, so it is now on to the commercialisation part of the equation. Caldwell sounded confident in the company’s January statement.

    “We are continuing to attract some of the biggest names in the power systems and energy sectors, an endorsement not just of our technology and engineering expertise, but also of the significant potential of the SteelCell,” he said.

    “Awareness in the technology and Ceres's leading position is growing fast. This latest agreement sets us up for a strong 2018 as we continue to add new partners and progress existing relationships towards the commercialisation of our technology with the world's best companies," he added.

    The Berenberg analysts said they have arrived at their 15p price target for Ceres by calculating the risk-adjusted net present value (NPV) of its future income from three markets - Japanese residential micro combined heat and power, US commercial and US data centres.

    They noted that Ceres believes its strength lies in its core technology, as opposed to directly commercialising the end-product.

    “As such, the business aims to make money by licensing its technology to larger OEMs [original equipment manufacturers] and manufacturing partners who have the brand, development manpower, scale, balance sheets and distribution channels to successfully commercialise the product,” the analysts concluded.

     

    ]]>
    Mon, 19 Feb 2018 12:57:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191846/ceres-power-driving-higher-on-the-back-of-big-name-development-collaborations-191846.html
    <![CDATA[One-offs to muddy HSBC's full-year results as global lenders kicks off sector reporting season]]> http://www.proactiveinvestors.co.uk/companies/market_reports/191844/one-offs-to-muddy-hsbc-s-full-year-results-as-global-lenders-kicks-off-sector-reporting-season-191844.html The UK banking sector reporting season kicks off in earnest on Tuesday with full-year results due from global giant HSBC PLC (LON:HSBA), ahead of numbers from Barclays PLC (LON:BARC), Lloyds Banking Group PLC (LON:LLOY), and Royal Bank of Scotland PLC (LON:RBS) later this week.

    While it may be listed in the UK, HSBC is far from a UK operation, with 70% of its profits coming from Asia.

    HSBC’s reported 2017 profits are going to be very muddy because of one-off accounting factors like a write-down of its US deferred tax assets, while comparison with the prior year is also going be flattered by a write-down on the sale of HSBC’s Brazilian business in 2016.

    The dividend is looking safer than it did, though it’s not expected to rise significantly for the foreseeable future, however, HSBC is instead choosing to return cash to investors through share buybacks, to which end a fresh US$2bn scheme was announced last summer.

    Investors to check-out InterContinental Hotels

    Meanwhile, full-year results from InterContinental Hotels Group PLC (LON:IHG) are expected to show revenue rising by 5.6% to US$1,811mln, driven primarily by net system size expansion and growth in revenue per available room.

    A 7% increase in the FTSE 100 listed firm’s EBIT to US$757mln is also expected, in addition to an 18% increase in EPS to US$2.37 as a result of solid operating profit growth and lower shares outstanding following consolidation.

    The main point of interest for the update will be the performance of US operations, aside from the tax change impact, and whether there are signs of improvement, particularly following lower than expected performance in the Middle-East and US regions in interim results.

    Hope for recovery at Dunelm

    In mid-January, homewares retailer Dunelm PLC (LON:DNLM) reported a solid second -quarter trading update, with like-for-like sales growth of 3.4%, ahead of Numis Securities’ forecast for 2.5% growth.

    Although that was a marked slowdown from first-quarter growth of 9.3% it reflected much tougher comparatives after Dunelm had seen a bounce back from a poor weather-affected start to full-year 2017.

    Dunelm’s half-year results, due on Tuesday, will reflect the contribution from its acquisition of Worldstores, which annualised in late November, with the group’s new store contribution at the highest level for two years, being boosted by a further 5 openings in the second quarter.

    While top-line progress in the second-quarter was slightly ahead of Numis’s forecast, gross margin was a touch light, partly resulting from the drag of the lower margin Worldstores business, so investors will be eyeing any comments on margins with the interims.

    Significant events expected on Tuesday February 20:

    Finals: HSBC Holdings PLC (LON:HSBA), InterContinental Hotels Group PLC (LON:IHG), Lighthouse Group PLC (LON:LGT), Synectics PLC (LON:SNX)

    Interims: BHP Billiton plc (LON:BLT), Dunelm PLC (LON:DNLM); Green REIT PLC (LON:GRN), Springfield Properties PLC (LON:SPR), Tristel Plc (LON:TRTL)

    Economic data: CBI UK industrial trends survey

    ]]>
    Mon, 19 Feb 2018 12:25:00 +0000 http://www.proactiveinvestors.co.uk/companies/market_reports/191844/one-offs-to-muddy-hsbc-s-full-year-results-as-global-lenders-kicks-off-sector-reporting-season-191844.html
    <![CDATA[Reckitt Benckiser shares drop as it reports flat 2017 revenues and warns on margins]]> http://www.proactiveinvestors.co.uk/companies/news/191824/reckitt-benckiser-shares-drop-as-it-reports-flat-2017-revenues-and-warns-on-margins-191824.html Reckitt Benckiser Group PLC (LON:RB.) reported flat revenue for the year as a cyber-attack in June disrupted operations but expects a return to growth in 2018 after a pick-up in the final quarter. 

    The consumer goods giant said net revenue for the year to the end of December 2017 was £11.5bn, unchanged from the previous year on a like-for-like basis.

    Shares fell 5.6% to 6,202p around midday.

    READ: Reckitt Benckiser rallies on JP Morgan upgrade

    Supply challenges resulting from the cyber-attack, pricing pressures in developed markets and a weak performance in footcare brand Scholl, offset strong sales from new products and healthcare brands such as Mucinex and Durex.

    Adjusted net income, excluding discontinued operations, came to £2.3bn, up 4% at constant exchange rates or 10% at actual exchange rates.

    Including discontinued operations, adjusted net income rose 1% at constant currency or 7% on a reported basis to £2.4bn.

    Total group adjusted operating margin fell 70 basis points to 27.1%.

    Reckitt's restructuring efforts

    During the period, the company agreed to sell its food business to US-based McCormick & Company Inc. (NYSE:MKC) for US$4.2bn in an effort to streamline the business and cut debt.

    READ: Reckitt Benckiser shares rise as it sells its food business to McCormick & Company for US$4.2bn

    The group has also created two separate business units – health and hygiene – as part of its reorganisation and the new structure has been in place since January 2018.

    The company said the integration of Mead Johnson Nutrition is firmly on track since completing its US$16.6bn acquisition of the US baby formula maker in February of last year. Growth has returned after nine quarters and the takeover has delivered US$25mln of cost savings earlier than planned.

    Reckitt raised its cost synergy expectations for the takeover to around US$300mln from the US$250mln previously estimated.

    "However, the Mead Johnson acquisition means Reckitt’s balance sheet is looking more stretched, with net debt rising by over £9bn through the course of the year," said Laith Khalaf, senior analyst at Hargreaves Lansdown.

    "This raises the stakes and leaves less room for error. With margins heading in the wrong direction, shareholders will be looking for some reassurance from Reckitt’s performance as we head through 2018."

    Net debt stood at £10.7bn at the end of the year, up from £1.3bn in 2016.

    Reckitt returns to like-for-like growth 

    It returned to like-for-like revenue growth in the fourth quarter with a 5% increase, led by sales of Durex, Nurofen, Mucinex and Strepsils. 

    “For 2018 we are targeting +13-14% total revenue growth (implying +2-3% LFL revenue growth),” said chief executive Rakesh Kapoor.

    “Whilst 2018 will see some specific factors impacting margin, we reiterate our medium-term target of moderate operating margin expansion."

    The company recommended a final dividend of 97.7p, compared to 95p the previous year, bringing its total dividend for the year to 164.3p, up from 153.2p in 2016. 

    Analyst questions revenue guidance

     AJ Bell investment director, Russ Mould, said Reckitt promised the same revenue guidance for 2017 but only delivered flat sales, meaning it has "limited credibility with the market".

    Jefferies left its rating on the stock at 'hold', saying the guidance was in line with consensus forecast but pointed to the company's warning about margin pressures. 

    "In 2018, we expect puts and takes on margin will be i.) increased MJN synergies offset by ii.) incremental cost of the new organisation and iii.) underlying MJN margin dilution," the broker said.

    Market debates Reckitt's bid to buy Pfizer unit

    Meanwhile, analysts expect speculation around Reckitt's bid to buy Pfizer's consumer business to dominate the market debate today. 

    Earlier this month, it emerged that Reckitt and GlaxoSmithKline PLC (LON:GSK) submitted rival bids for the business, which owns pain reliever brand Advil.

    The unit is expected to fetch between US$15bn to US$20bn.

    ]]>
    Mon, 19 Feb 2018 12:00:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191824/reckitt-benckiser-shares-drop-as-it-reports-flat-2017-revenues-and-warns-on-margins-191824.html
    <![CDATA[Berenberg gives Softcat shares a boost, upgrading to 'buy' after raising its price target]]> http://www.proactiveinvestors.co.uk/companies/news/191841/berenberg-gives-softcat-shares-a-boost-upgrading-to-buy-after-raising-its-price-target-191841.html Berenberg gave a boost to Softcat PLC's (LON:SCT) shares on Monday, upgrading its rating for the FTSE 250-listed IT infrastructure provider to 'buy' from 'hold' after increasing its target price to 650p from 563p following a recent trading update.

    In late morning trading, Softcat’s share price was up by around 1% to 569p.

    READ: Softcat edges higher as it lifts full-year guidance after strong first half

    In a note to clients, the German broker's analysts cited Softcat’s benefits from higher inflation, its run-rate earnings being ahead of expectations, and the high likelihood of a special dividend as the three key reasons behind its decision to upgrade both the rating and target price.

    The analysts said that Softcat's valuation was “reflecting a modestly higher long-term margin and growth assumption alongside a roll-forward of our estimates.”

    They noted that: "As a reseller for technology vendors, Softcat applies a margin on top of its prices. An inflationary environment across the last year has been a significant benefit to the firm as it has been able to retain the margin that it applies, but on higher prices.

    "With no inventory risk and very little FX risk, we are confident that the current run-rate on gross profit growth could be a significant benefit in the short term.”

    The analysts said: “With little seasonal volatility in the business, we think there is a strong chance that the company will outperform these estimates if current run-rate growth continues”.

    They also concluded that: “Given Softcat’s track record of paying special dividends each year, we believe it is highly likely that they will announce another in the region of £40m within the next year.”

    ]]>
    Mon, 19 Feb 2018 11:40:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191841/berenberg-gives-softcat-shares-a-boost-upgrading-to-buy-after-raising-its-price-target-191841.html
    <![CDATA[Former Tesco UK boss Matt Davies to join N Brown as chairman ]]> http://www.proactiveinvestors.co.uk/companies/news/191843/former-tesco-uk-boss-matt-davies-to-join-n-brown-as-chairman-191843.html The former boss of Tesco PLC’s (LON:TSCO) UK division is to become chairman of fashion retailer N Brown Group PLC (LON:BWNG).

    Matt Davies will join N Brown on May 1 when Andrew Higginson retires from top job after five years at the company.

    READ: Tesco confirms final dividend and says Booker CEO will head retail arm after merger

    Shares in N Brown rose 2% to 192.8p in late morning trade.

    Davies was replaced at Tesco earlier this month by Booker Group chief executive Charles Wilson following the supermarket’s £3.7mln merger.

    He became head of Tesco UK in 2015 – in the wake of the company’s accounting scandal – after serving as chief executive of retailers Pets at Home Group PLC (LON:PAHL) and Halfords Group plc (LON:HFD).

    He joins N Brown during a difficult period for UK high street retailers, which are tackling the rise of online rivals and a slowdown in consumer spending.

    The company cut prices at the end of last year in an effort to lure in customers who have been squeezed by higher inflation.

    READ: N Brown's margins slide as promotional blitz bites

    The appointment of Davies follows the announcement of three new additions to the executive team earlier this month, including a chief people officer, a director of supply chain and a chief information officer.

    ]]>
    Mon, 19 Feb 2018 11:37:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191843/former-tesco-uk-boss-matt-davies-to-join-n-brown-as-chairman-191843.html
    <![CDATA[BATM Advanced Communications seeing the rewards from investment and new product launches]]> http://www.proactiveinvestors.co.uk/companies/news/183170/batm-advanced-communications-seeing-the-rewards-from-investment-and-new-product-launches-183170.html BATM Advanced Communications Limited (LON:BVC), a provider of real-time technology for networking and lab systems, is reaping the rewards of sustained investment and product launches.

    A strong second half performance in 2017 prompted the company in February 2018 to advise the market to raise its expectations in terms of revenue and underlying earnings (EBITDA).

    The group said it expects revenue for 2017 to be around US$106mln, which would represent year-on-year growth of 17%.

    The increase in revenue was driven by growth in both of the group's divisions, BATM said.

    EBITDA is expected to be around US$7.0mln, up from US$2.8mln in 2017, although the group pointed out that both the 2016 and 2017 EBITDA figures were inflated by profits from property disposals.

    In 2017, the EBITDA figure was boosted by roughly US$5.6mln of profits from a property disposal, compared to the preceding year when it pocketed a profit of around US$2.8mln from another property disposal.

    The business is divided into two parts, both of which are growing

    The group operates two divisions: bio-medical (which includes diagnostics and accounts for around 58% of total revenues) and the networking and cyber division, which accounts for 42%.

    The bio-medical arm is split into three further sub-units: distribution operation, eco-med (waste treatment) and sterilisation and diagnostics. The networking and cyber division is just that and does what it says on the tin.

    In 2017, the networking & cyber division generated significantly better-than-expected sales largely due to growth in the group's existing information and communications technology services and solutions business as well as its success in implementing its strategy to leverage the telecom industry transition from hardware to network function virtualisation (NFV) and software-defined networking (SDN).

    Revenue growth in the Bio-Medical division was driven by stronger sales in the distribution unit, mostly based on diagnostic and molecular biology products and services.

    Strong finish to 2017 bodes well for current trading

    “The importance of this update, in our view, is what it implies for the trading performance going into the current year, in particular higher revenues from recent published contract success across the group with positive operating leverage beginning to come through,” said Shore Capital, the company’s house broker.

    The broker has upgraded its expectations for 2018 accordingly, noting that “investors will welcome this significant trading improvement after the last few years of strategic development from BATM”.

    It has bumped up its revenue forecast by 9% to US$110mln while its underlying earnings (EBTIDA) estimate has been increased from US$2.8mln to US$3.9mln – an increase of 39%.

    Adjusted earnings per share are now forecast to be 0.25 cents versus 0.07 cents previously.

    “With BATM’s intellectual property set configured to tackle real world challenges in its specialist markets, we believe that the scope for further revenue and profit improvement is significant,” the broker said.

    ]]>
    Mon, 19 Feb 2018 11:26:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/183170/batm-advanced-communications-seeing-the-rewards-from-investment-and-new-product-launches-183170.html
    <![CDATA[KEFI says it's business as usual after last week's resignation of Ethiopian prime minister]]> http://www.proactiveinvestors.co.uk/companies/news/191842/kefi-says-it-s-business-as-usual-after-last-week-s-resignation-of-ethiopian-prime-minister-191842.html The resignation last week of Ethiopia’s prime minister, Hailemariam Desalegn, is not expected to have any impact on KEFI Minerals PLC's (LON:KEFI) activities.

    The gold and copper exploration company, which has the Tulu Kapi project in Ethiopia, said its activities have been unaffected in terms of its daily interaction with the various government agencies and the community at Tulu Kapi.

    WATCH: KEFI Minerals in a 'terrific position' and on track for Tulu Kapi financing

    The company believes its finance plans remain unaffected because it has targeted certain regional financiers, including some who already have a long-term presence in Ethiopia.

    “Everyone we deal with appears to regard the prime minister's resignation as a sincere step to the facilitation of broader democratic representation in Government. The concurrently announced State of Emergency appears generally regarded as a preventative measure to ensure peace and order during the leadership transition,” the company said.

    KEFI revealed that the Ethiopian Ministry of Mines, Petroleum and Natural Gas has signed off the transfer of the mining licence from KEFI Minerals (Ethiopia) Limited to Tulu Kapi Gold Mines Share Company Limited (TKGM), the jointly-owned project company now owned by the Government of Ethiopia (via the Ministry of Finance and Economic Cooperation) and KEFI.

    TKGM's joint KEFI-Government board of directors has approved the business plan for the mine development to commence as soon as the regulatory authorities allow TKGM's financing agreements to be finalised and implemented. 

    READ: KEFI Minerals scheduled to start work at Tulu Kapi this year

    Shares in KEFI were down 0.18p at 3.35p in late morning trading.

    ]]>
    Mon, 19 Feb 2018 11:25:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191842/kefi-says-it-s-business-as-usual-after-last-week-s-resignation-of-ethiopian-prime-minister-191842.html
    <![CDATA[Berenberg turns negative on the AA, downgrading to 'sell' from 'hold' on dividend concerns]]> http://www.proactiveinvestors.co.uk/companies/news/191840/berenberg-turns-negative-on-the-aa-downgrading-to-sell-from-hold-on-dividend-concerns-191840.html Berenberg turned negative on the AA plc (LON:AA.) on Monday, downgrading its rating to ‘sell’ from ‘hold’ because it believes short-term risks for the roadside services and insurance provider are greater than previously assumed, and thinks too that the company’s dividend will need to be cut.

    The German bank also reduced its target price for the FTSE 250-listed firm to 100p from 170p, with the shares changing hands currently at 114.35p, down 3.6% on last Friday’s close.

    READ: AA lifted by motor insurance as roadside struggles

    In a note to clients, Berenberg’s analysts pointed out that they downgraded their rating for the AA to ‘hold’ from ‘buy’ in October last year because they felt consensus expectations for the company were too high, and that additional investments announced by the new CEO were likely to increase costs and worsen the group’s cash generation.

    They added that, revisiting the investment case following the AA’s recent trading update, they have further downgraded their rating and target price highlighting the dividend worries.

    READ: AA downgraded by Berenberg as cost savings take their time feeding through

    The analysts said they also think that the group’s strategy update, planned for February 21, is likely to significantly increase investment into the business, further pushing the possible deleveraging story into the outer years.

    ]]>
    Mon, 19 Feb 2018 10:56:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191840/berenberg-turns-negative-on-the-aa-downgrading-to-sell-from-hold-on-dividend-concerns-191840.html
    <![CDATA[Xtract Resources extends partnership with Omnia Mining for Manica project]]> http://www.proactiveinvestors.co.uk/companies/news/191839/xtract-resources-extends-partnership-with-omnia-mining-for-manica-project-191839.html Xtract Resources PLC (LON:XTR) has agreed a new collaboration with Omnia Mining Ltd for the exploitation of hard rock gold deposits at the Manica mining concession in Mozambique.

    Omnia will use its processing plant to target all hard rock occurrences at Manica, apart from the Fair Bride project, which remains under the sole control and management of Xtract.

    READ: Xtract Resources says contracted gold operations are “progressing favourably”

    The plant is capable of processing 400,000 tonnes per year.

    Xtract will carry out the initial investigation on potential targets while costs of further exploration work will be shared equally between the two companies.

    Hard rock occurrences that meet the agreed target hurdle rate of return of 25% will be mined and the benefits shared on a 50:50 basis.

    “Within the partners concession areas, there exists numerous hard rock occurrences most of which have undergone limited, superficial or no exploration,” said Xtract executive chairman Colin Bird.

    “The agreement provides Omnia with the company's mining and processing expertise and gives the company the opportunity for a fast track hard rock operation.”

    The deal extends a collaboration agreed earlier this month between Xtract and Omnia to exploit alluvial gold deposits at Manica.

    READ: Xtract Resources hires new mining contractor for Manica alluvial project

    Xtract said the aim of the agreement is to convert hard rock exploration targets into a joint mining operation with Omnia.

    The Fair Bride project will be developed separately by Xtract. 

    ]]>
    Mon, 19 Feb 2018 10:52:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191839/xtract-resources-extends-partnership-with-omnia-mining-for-manica-project-191839.html
    <![CDATA[BATM raises guidance after strong second half in 2017]]> http://www.proactiveinvestors.co.uk/companies/news/191820/batm-raises-guidance-after-strong-second-half-in-2017-191820.html After a strong second-half performance, BATM Advanced Communications Limited (LON:BVC) expects full-year revenue to be significantly ahead of market expectations.

    The provider of real-time technologies for networking solutions and medical laboratory systems expects revenue for 2017 to be around US$106mln, which would represent year-on-year growth of 17%.

    READ: BATM establishes telecom partnerships for network virtualisation market estimated at US$200mln

    Underlying earnings, or EBITDA, are expected to be around US$7.0mln, up from US$2.8mln in 2017, although the group pointed out that the 2017 EBITDA figure was boosted by roughly US$5.6mln of profits from a property disposal, compared to the preceding year when it pocketed a profit of around US$2.8mln from another property disposal.

    The increase in revenue was driven by growth in both of the group's divisions, BATM said.

    The Networking & Cyber division generated significantly better-than-expected sales largely due to growth in the group's existing information and communications technology (ICT) services and solutions business as well as its success in implementing its strategy to leverage the telecom industry transition from hardware to network function virtualisation (NFV) and software-defined networking (SDN).

    READ: BATM bags fourth cyber-communication government contract

    Revenue growth in the Bio-Medical division was driven by stronger sales in the distribution unit, mostly based on diagnostic and molecular biology products and services.    

    “The importance of this update, in our view, is what it implies for the trading performance going into the current year, in particular higher revenues from recent published contract success across the group with positive operating leverage beginning to come through,” said Shore Capital, the company’s house broker.

    The broker has upgraded its expectations for 2018 accordingly, noting that “investors will welcome this significant trading improvement after the last few years of strategic development from BATM”.

    It has bumped up its revenue forecast by 9% to US$110mln while its underlying earnings (EBTIDA) estimate has been increased from US$2.8mln to US$3.9mln – an increase of 39%.

    Adjusted earnings per share are now forecast to be 0.25 cents versus 0.07 cents previously.

    “With BATM’s intellectual property set configured to tackle real world challenges in its specialist markets, we believe that the scope for further revenue and profit improvement is significant,” the broker said.

    Shares in BATM were up 8.2% at 26.5p on Monday morning.

    ]]>
    Mon, 19 Feb 2018 10:48:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191820/batm-raises-guidance-after-strong-second-half-in-2017-191820.html
    <![CDATA[McColl’s Retail shares fall as like-for-like sales disappoint after Palmer & Harvey collapse]]> http://www.proactiveinvestors.co.uk/companies/news/191827/mccolls-retail-shares-fall-as-like-for-like-sales-disappoint-after-palmer-harvey-collapse-191827.html McColl’s Retail Group PLC (LON:MCLS) saw its shares drop 8% on Monday after it revealed a fall in current year like-for-like (LFL) sales impacted by the collapse of wholesaler Palmer & Harvey (P&H) at the end of November.

    In an update on currency trading with its full-year results statement, the FTSE All-Share listed firm said total LFL sales for the 11 weeks to 11 February 2018 were down 2.2%, held back by a 3.6% fall in LFL sales in stores formerly supplied by P&H, although total sales continued to perform strongly, up 26.7%.

    READ: McColl's in talks with suppliers after Palmer & Harvey collapse, reports record annual revenue

    The company said: "We have put in place contingency arrangements, entering into a new short-term supply contract with Nisa on 4 December 2017 for the affected stores. We also began our new supply partnership with Morrisons (LON:MRW) (agreed in August 2017) earlier than previously scheduled to supply these same stores with tobacco.

    "Whilst these contingency agreements have largely ensured continuity of supply, we continue to closely manage distribution to these stores and the disruption has impacted our sales performance."

    For the full-year to 26 November 2017, McColl’s total LFL sales rose 0.1%, helped by significant mix improvements as a result of growth in key grocery categories alongside some declining traditional categories, with total revenue increase jumping by 19.1% to £1.13bln, boosted by the successful integration of 298 convenience stores, completed in mid-July 2017.

    The group saw its full-year pre-tax profit increase to £18.4mln, up from £17.7mln a year earlier, as gross margin rose by 60 basis points to 25.7%, up from 25.1% the previous year.

    READ: McColl's Retail rockets as it chooses Morrison's as key supplier

    In a note to clients, analysts at Liberum Capital noted that the fall in current LFL sales was well below their forecast for a 0.4% decline.

    They said: "We expect this to see consensus forecasts come down towards an EBITDA range of £50m-51m (vs. c.£54m currently)."

    But, the analysts added: "That said, we believe this short-term impact needs to considered in the light of overall strategic progress being made by the group, including the transition to Morrisons as its single supplier over 2018. Whilst there may be some disappointment today, it is not wholly unexpected and we maintain our buy on the long-term view.”

    In mid-morning trading, McColls shares were down 5.6% at 235p, off earlier lows of 221p.

    The group proposed a full-year dividend of 6.9p, up from the 6.8p paid a year earlier.

    ]]>
    Mon, 19 Feb 2018 10:30:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191827/mccolls-retail-shares-fall-as-like-for-like-sales-disappoint-after-palmer-harvey-collapse-191827.html
    <![CDATA[Coinsilium welcomes mining-focused investment banker to subsidiary TerraStream's team]]> http://www.proactiveinvestors.co.uk/companies/news/191837/coinsilium-welcomes-mining-focused-investment-banker-to-subsidiary-terrastream-s-team-191837.html Blockchain technology backer Coinsilium Group Limited (NEX:COIN, OTCMKTS:CINGF) has appointed investment bank Richard Lloyd as mining sector adviser to its TerraStream subsidiary.

    Lloyd, who began his career as a mining geologist, has 17 years of investment banking experience with a specific focus on the mining and exploration sector.

    READ: Coinsilium launches fund to hold cryptocurrency assets

    He will advise TerraStream, a company that was formed with the objective of creating a blockchain-powered platform to support the offering of token-based alternative funding solutions.

    Coinsilium believes that the mining and exploration sector offers a broad range of compelling commercial opportunities for TerraStream, particularly in relation to the provision of project-level finance solutions for precious metals resource developers.

    Market sector analysis and industry-specific modelling are in progress and discussions are now being advanced with potential industry partners.

    Terrastream is based in Gibraltar and plans to partly fund the development of its platform from a token generating event (TGE); it is currently waiting on the Gibraltar Financial Services Commission to publish a more detailed and specific set of regulations relating to TGEs.

    Coinsilium expects the new regulations to be published in the second quarter of the year. The company's priority is to ensure that the TerraStream TGE will be fully compliant with Gibraltar's forthcoming TGE regulations and aims to be in a position to commission the development and build of its minimum viable product once the TGE regulations are published.

    READ: Coinsilium appointed to advise Hyundai-backed Blockchain event

    "We are delighted to welcome Richard as an advisor to TerraStream and it is most pleasing that, as an industry sector veteran, he shares Coinsilium's vision and enthusiasm for the opportunities that blockchain technology has to offer within the mining and exploration sector,” said Malcolm Palle, Coinsilium’s chairman.

    "Richard is now working with us on developing the TerraStream model and we are confident that his industry knowledge and experience will be of great benefit as we progress discussions with potential industry partners and look to position TerraStream for its mining sector launch," Palle added.

    ]]>
    Mon, 19 Feb 2018 09:50:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191837/coinsilium-welcomes-mining-focused-investment-banker-to-subsidiary-terrastream-s-team-191837.html
    <![CDATA[MJ Gleeson sees strong home sales boost half-year profits]]> http://www.proactiveinvestors.co.uk/companies/news/191836/mj-gleeson-sees-strong-home-sales-boost-half-year-profits-191836.html MJ Gleeson PLC (LON:GLE) saw its shares jump 5% higher after the urban housing regeneration and strategic land trading firm reported another strong half-year performance, with pre-tax profit jumping by 19%.

    In results for the half-year to December 31, the FTSE All-Share listed company posted pre-tax profit of £13.7mln, up from £11.5mln a year earlier, as revenue increased by 34.7% to £73.7mln, up from £54.7mln.

    READ: Housebuyers queue to view Gleeson’s homes as demand booms in the North

    The company’s home sales went rose by 31.5% to 593 units in the last half year, compared to 451 homes at the same period the year ago, with the average selling price rising by 2.5% to £124,000, up from £121,400 in the previous year.

    MJ Gleeson opened its new pilot office in Ashington, Northumberland in the year, bringing the total to 7 area offices and 3 pilot offices.

    Dermot Gleeson, the firm’s chairman commented: “Land remains available to us at sensible prices and demand for our homes amongst our customer base remains strong.”

    He concluded: “Against this background, the board is confident that the group will deliver a result for the full year in line with expectations.”

    In early morning trading, MJ Gleeson’s shares were up 5% at 726p.

    The firm plans to pay an interim dividend of 9.0p per share, up 38.5% on last year’s 6.5p payout.

    ]]>
    Mon, 19 Feb 2018 09:42:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191836/mj-gleeson-sees-strong-home-sales-boost-half-year-profits-191836.html
    <![CDATA[ University study details exploration upside for Shefa Yamim in Israel]]> http://www.proactiveinvestors.co.uk/companies/news/191831/university-study-details-exploration-upside-for-shefa-yamim-in-israel-191831.html Studies recently conducted by Macquarie University for Shefa Yamim (LON:SEFA), the Israeli gemstone company have provided a clearer understanding of the geology of Mount Carmel, the area in which Shefa Yamim has been able to find a suite of gemstones, including natural moissanite and sapphire.

    "The existence of large quantities of moissanite, coupled with the titanium-rich corundum - Carmel Sapphire™, makes this one of the most scientifically exciting projects I have worked on,” said Professor William Griffin, Professor of Geochemistry at Macquarie University.

    WATCH: University study sheds light on exploration potential for Shefa Yamim in Israel

    “Shefa Yamim's exploration samples host some of the rarest and most unusual minerals on earth. Our recent findings add to the geological history of the region and provide incentives and directions for further exploration."

    Professor Griffin’s research implies that there are other primary sources of gemstones yet to be found in the area surrounding Mount Carmel and the Kishon River, and that further exploration is necessary to uncover the geological structure of the Israeli landscape and all the sources of the Kishon River gemstone placers.

     

     

     

     

     

    ]]>
    Mon, 19 Feb 2018 08:21:00 +0000 http://www.proactiveinvestors.co.uk/companies/news/191831/university-study-details-exploration-upside-for-shefa-yamim-in-israel-191831.html
    <![CDATA[Banks to feature strongly in deluge of blue chip earnings, including Lloyds, RBS, Barclays]]> http://www.proactiveinvestors.co.uk/companies/market_reports/191772/banks-to-feature-strongly-in-deluge-of-blue-chip-earnings-including-lloyds-rbs-barclays-191772.html It will be a bumper time for corporate earnings in the coming week, with over 15% of the FTSE 100 reporting results, though the main focus will be squarely on the banking sector.

    HSBC PLC (LON:HSBA), Barclays PLC (LON:BARC), Lloyds Banking Group PLC (LON:LLOY), and Royal Bank of Scotland PLC (LON:RBS) will all report numbers, with Laith Khalaf, senior analyst at Hargreaves Lansdown expecting a mixed bag.

    After a decade of making losses, RBS is teetering on the brink of being back in the black, having posted profits of £1.3bn for the first nine months of 2017.

    However, analysts full-year estimates are pencilling in £2.2bn of conduct charges in the fourth quarter, which is expected to push the state-owned lender into a loss of £592mln, its tenth consecutive year in the red.

    Across the whole year, conduct charges are expected to total £2.7bn, stemming mainly from an impending fine from the US Department of Justice, while an increase in PPI compensation costs has also tilted the scales.

    RBS has been guiding towards profitability in 2018, which suggests it is looking to book the lion’s share of the fine in 2017, however, with the timing and size of the US DoJ fine still to be announced, RBS could actually break its duck and return to profit in 2017, with that fine pushed into the current year.

    Fireworks unlikely from Lloyds

    Analysts are not expecting any fireworks from the full-year numbers from Lloyds Bank – which finally returned to full public ownership last year - with underlying income growth likely be steady rather than spectacular, and loans to customers broadly flat for the year.

    However, cost savings and an improved net interest margin should mean profit growth is a little more impressive, although further charges for payment protection insurance (PPI) mis-selling are also likely.

    But the real focus for investors is the strategy review accompanying results, with cost savings likely to remain a key focus, as will efforts to move more services online and increasingly offer a digital banking service.

    Big charges also to drag down Barclays profits

    Barclays is also facing some large exceptional items which are going to drag down its reported profits., one of which is a £1bn charge to profits thanks to President Trump’s US tax reforms.

    However, that charge does mean in the meantime Barclays will need to write down an estimated £1bn of its US deferred tax assets, a bit of accounting jiggery pokery which will reduce reported profits but doesn’t really tell us anything about Barclays in the real world.

    Like Lloyds, Barclays may also face further PPI charges, with PPI costs for 2017 to come to at least £700mln, taking Barclays’ total PPI bill to £9.1bn.

    The bank’s dealings with Qatar holdings in 2008 are being investigated by no less than the SFO (Serious Fraud Office), the FCA (Financial Conduct Authority), the DOJ (US Department of Justice) and the SEC (US Securities and Exchange Commission).

    Former CEO John Varley is also being prosecuted by the SFO and may ironically end up being the only UK banking boss brought to book for the financial crisis, despite avoiding a taxpayer bailout.

    Change of guard at HSBC

    Tuesday’s full-year results will be Stuart Gulliver’s last day in the office as CEO of HSBC, before John Flint takes over - since January 2011 when Gulliver took charge, HSBC’s share price has risen by 16% although it’s not all been plain sailing.

    While it may be listed in the UK, HSBC is far from a UK operation, with 70% of its profits coming from Asia.

    Like Barclays, HSBC’s reported 2017 profits are going to be very muddy because of one-off accounting factors like a write-down of its US deferred tax assets, while comparison with the prior year is also going be flattered by a write-down on the sale of HSBC’s Brazilian business in 2016.

    The dividend is looking safer than it did, though it’s not expected to rise significantly for the foreseeable future, however HSBC is instead choosing to return cash to investors through share buybacks, to which end a fresh US$2bn scheme was announced last summer.

    Strong fourth-quarter needed from Reckitt Beckiser

    Away from the bank’s, Monday sees Anglo-Dutch fast-moving consumer goods giant Reckitt Benckiser Group PLC (LON:RB.) try to emerge from the shadow of successive sales warnings.

    The group was hit hard by the impact of the so-called ‘Petya’ ransomware attack that blocked access to computers and demanded US$300 in bitcoin to release them; that prompted a warning on sales in July, which was followed by another warning in October after a rough third-quarter in which disruptions caused by the cyber-attack were still being felt.

    “Underlying sales and profit forecasts have tailed off to such an extent that Reckitt needs a strong fourth quarter to hit even its revised target of a flat like-for-likes,” suggested Nicholas Hyett, an equity analyst at Hargreaves Lansdown.

    “One division which will attract attention is infant nutrition brand Mead Johnson, which was acquired in a $17.9bn deal last summer. With little product or geographic cross-over, it’s perhaps not a natural fit,” Hyett added.

    US tax changes the focus for BAT after expansion

    British American Tobacco plc’s (LSE:BATS) quarterly results on Thursday should also reveal more details on how the recent tax changes in the US are likely to affect the company and comments on the steady increase in regulation of tobacco products will also be interesting.

    In December, the cigarette manufacturer said it was performing well with trading in line with the cigarette maker’s expectations and its markets in Canada, Germany, Romania, Bangladesh and Ukraine were performing well, but condition in Russia, the Gulf states, Brazil, South Africa and Malaysia remained challenging.

    In January the FTSE-100 listed firm said that the announced tax changes will have no impact on its underlying effective tax rate, saying it anticipates that the changes will result in a non-cash exceptional tax credit as a result of the revaluation of deferred tax balances arising from the acquisition of Reynolds American Inc.

    Investors to check-out InterContinental Hotels

    Full-year results from InterContinental Hotels Group (LON:IHG) on Tuesday, are expected to show revenue rising by 5.6% to US$1,811mln, driven primarily by net system size expansion and growth in revenue per available room.

    A 7% increase in the FTSE 100 listed firm’s EBIT to US$757mln is also expected, in addition to an 18% increase in EPS to US$2.37 as a result of solid operating profit growth and lower shares outstanding following consolidation.

    The main point of interest for the update will be the performance of US operations and whether there are signs of improvement, particularly following lower than expected performance in the Middle-East and US regions in interim results.

    The effects of US tax reforms will also be considered, as IHG has said it expects the latest tax bill to “result in a significant, exceptional tax credit in the financial year the bill is signed into law, which would be realised in cash terms over a long period from 2018,”

    No dire straits for Barratt Developments

    To misquote Dire Straits, it has been a case of “money for nothing, and your bricks for free” for house-builders since the government’s “Help to Buy” initiative was introduced.

    As such, half-year results from Barratt Developments PLC (LON:BDEV) should be an upbeat affair, though much of the good news was released in the trading update on January 11.

    The focus will, therefore, be on current trading.

    “Given good demand and our healthy forward order book we continue to expect to deliver modest growth in wholly owned completions in FY18,” the company said in January.

    Total forward sales, including joint ventures, as at the end of 2017 were up 2.0% year-on-year, equating to 10,921 plots (2016: 10,520 plots).

    “Barratt is our least preferred house-builder as its lower margins make it more exposed to downside risk, and we do not see much scope to improve margins,” said Liberum in a note released after the January trading statement.

    “Its relatively short land bank and high land creditors mean it has less potential to cut cash outflows in support of the dividend than the other returners. As we set out in a recent sector review, we expect continued resilience for the market for new houses, and we do not see clear or present dangers for the cycle; however, we believe that margin progress will become tougher in a slower market,” Liberum said.

    Investors betting on growth at William Hill

    William Hill plc (LON:WMH), the self-styled “home of betting”, has already tipped off the market that trading in 2017 was ahead of expectations.

    Full-year adjusted profit is expected to be around £290mln, up 11% or so on 2016.

    In common with other bookies, William Hill has now enjoyed four successive months in which sporting results favoured the bookmaker more than the punter.

    According to the Barclays’ Oddschecker study of gross win margins (GWMs), January GWMs were once again friendly to the bookie, at +8%, versus +4.8% in December.

    Oddly enough, this may not be what the bookmakers want, and might result in the odds for the upcoming Cheltenham festival in March being more generous than usual.

    In its January trading update, William Hill said it was conducting a strategic review of its business in Australia in view of the credit betting ban down under and the likely introduction of a point of consumption tax in a number of states.

    Analysts will be keen to hear of any progress on this, though they may have to wait for the analysts’ presentation for clues on which way management will jump.

    City has mixed expectations for BAE Systems

    ‘Headwinds’ for BAE Systems PLCs (LON:BA.) fighter jet related business is expected, by Morgan Stanley, to offset positive momentum seen in the defence and engineering group’s American operations.

    Morgan Stanley analyst Andrew Humphrey said he expects to see a “temporary pause” for BAE in 2018.

    Nonetheless, Humphrey highlighted that BAE’s valuation is “inexpensive” and that there are better US budget trends and cash flow will provide support to the share.

    Morgan Stanley rates BAE as ‘equal weight’ and it has a price target of 550p, compared to a market price of 588p.

    Elsewhere, online equity dealer The Share Centre sees BAE as a ‘buy’ and, in its own preview, highlighted the “very good” recent news flow from contract wins that are due to factor into 2018 results.

    “Indeed, there are positive expectations for the 2017 numbers where the market believes revenues grew to £19.6bn, up by roughly 10% while reported profits are expected to breach £1bn for the first time since 2012 after a difficult numbers of years following government budget deficits.

    “Trading from the US and Middle East are expected to have been good and management should reaffirm these views for 2018.”

    Centrica outlook crucial as investors already braced for 2017’s bad news

    Previewing Thursday’s 2017 results Deutsche Bank repeated a ‘sell’ recommendation for Centrica Plc (LON:CNA) with a 125p price target linked to the British Gas owner’s November profit warning.

    With the recent warning priming investors for bad news, analyst Martin Brough reckons the market will be looking closely at the future outlook – and his expectations are not positive.

    “A key focus may be the outlook for the DPS beyond 2017,” the analyst said in a note.

    Centrica has said the FY dividend is underpinned by cash flows and earnings and that it is willing to live with low dividend cover for a period.

    “The outlook for group earnings may be heavily dependent on the level chosen by regulator Ofgem for the full standard variable tariff cap, due to be implemented later this year once legislation is in place.”

    Standard Life Aberdeen fund performance seen as “challenging”

    UBS analyst Colm Kelly highlighted there was “limited signs of stabilisation” in the fund management business ahead of Standard Life Aberdeen Plc’s (LON:SLA) full year results on Friday.

    Kelly noted the “continued deterioration” of in flows in the fourth quarter coinciding with sustained outflows for emerging markets and Asia-Pacific equities.

    “Fund performance has picked up YTD but remains challenged across core funds (lower percentiles vs benchmarks), providing limited confidence this could trigger a turnaround,” the analyst said in a note.

    “We expect more detail on the merger integration progress and an update on the retention or withdrawal of Lloyds insurance assets, which could occur in February 2018. We see an acceleration of reinvestment to reposition SLA's fund offering for longer-term growth as a key risk to merger synergy benefits at this point.”

    FOMC minutes the main economic focus

    Amidst the corporate news deluge, some important economic news will also be released in the coming week, including the latest UK unemployment and average earnings numbers, plus minutes from the latest US Federal Reserve FOMC policy meeting, all due on Wednesday.

    Given the market’s current obsession with inflation and interest rates, in a preview economists at RBC Capital think the odds that the FOMC minutes are interpreted as reinforcing this narrative of a firming inflationary backdrop are high.

    They said the tweaks to the Fed’s press statement were significant enough that the minutes are likely to read hawkish overall, having finally acknowledged that inflation will “move up” this year.

    The economists said this admission by the Fed is yet another step away from what has been an underlying dovish thread within the committee.

    UK labour market data a focus for the BoE

    With a possible further Bank of England rate hike now seen as likely in May, December UK average earnings numbers are likely to be left somewhat in the shadow of confirmation from the BoE regional agents’ survey on pay, showing settlements averaging an increased 3.1% rate for 2018.

    Economists at RBC Capital expect the growth rate of UK average earnings, excluding bonuses, to hold at 2.4%.

    The next few months of actual outturns will be crucial therefore, to see if this survey evidence actually materialises, which could be enough to bring the more dovish members of the MPC into line to supporting further gradual increases in interest rates by the BoE.

    Another solid gain in the level of UK employment also looks likely after last month’s surprise 106,000 increase. Although the unemployment rate is expected to hold at 4.3%, according to the economists at RBC Capital.

    Meanwhile, ahead of next month’s UK Budget on March 13, the latest public finances data, also due on Wednesday, is forecast to show a surplus of around £7bn in January, according to RBC, with the fiscal year-to-date borrowing standing at £50bn, in line with the full year target.

    Significant events expected:

    Monday February 19:

    US markets closed for President’s Day holiday

    Finals: Reckitt Benckiser PLC (LON:RB.), Spectris plc (LON:SXS), McColl’s Retail Group PLC (LON:MCLS), Fidessa Group PLC (LON:FDSA)

    Interims: MJ Gleeson PLC (LON:GLE), Petra Diamonds Limited (LON:PDL)

    Economic data: Rightmove UK house prices

    Tuesday February 20:

    Finals: HSBC Holdings PLC (LON:HSBA), InterContinental Hotels Group PLC (LON:IHG), Lighthouse Group PLC (LON:LGT), Synectics PLC (LON:SNX)

    Interims: BHP Billiton plc (LON:BLT), Dunelm PLC (LON:DNLM); Green REIT PLC (LON:GRN), Springfield Properties PLC (LON:SPR), Tristel Plc (LON:TRTL)

    Economic data: CBI UK industrial trends survey

    Wednesday February 21:

    Finals: Lloyds Banking Group PLC (LON:LLOY), Glencore PLC (LON:GLEN), Capital & Counties PLC (LON:CAPCC)

    Interims: Barratt Developments PLC, Hotel Chocolat Group PLC (LON:HOTC), SkinBioTherapeutics PLC (LON:SBTX)

    Trading update: FirstGroup PLC (LON:FGP)

    Economic data: UK unemployment, average earnings; UK public sector finances; US existing home sales; US FOMC meeting minutes

    Thursday February 22:

    Finals: Anglo American PLC (LON:AAL), BAE Systems PLC (LON:BA.), Barclays PLC (LON:BARC), British American Tobacco plc (LON:BATS), Centrica PLC (LON:CAN), RSA Insurance PLC (LOON:RSA), Intu Properties PLC (LON:INTU), KAZ Minerals PLC (LON:KAZ), Macfarlane Group PLC (LON:MACF), Morgan Sindall Group PLC (LON:MGNS), Playtech PLC (LON:PTEC), Rathbone Brothers PLC (LON:RAT), Vitec Group PLC (LON:VTC)

    Interims: Go-Ahead Group PLC (LON:HOG), Hays plc (LON:HAS), Wilmington PLC (LON:WIL)

    Trading update: Hansard Global PLC (LON:HSD), Safestore Holdings PLC (Q1) (LON:SAFE)

    FTSE 100 ex-dividends: Carnival PLC (LON:CCL), Diageo plc (LON:DGE), GlaxoSmithKline plc (LON:GSK), Imperial Brands PLC (LON:IMB)

    Economic data: UK second reading Q4 GDP; US weekly jobless claims

    Friday February 23:

    Finals: Royal Bank of Scotland Group PLC (LON:RBS), International Consolidated Airlines Group PLC (LON:IAG), Standard Life Aberdeen PLC (LON:SLA), Pearson plc (LON:PSON), William Hill plc (LON:WMH), Rightmove PLC (LON:RMV), Afarak Group PLC (LON:AFRK)

    ]]>
    Mon, 19 Feb 2018 06:00:00 +0000 http://www.proactiveinvestors.co.uk/companies/market_reports/191772/banks-to-feature-strongly-in-deluge-of-blue-chip-earnings-including-lloyds-rbs-barclays-191772.html
    <![CDATA[Proactive Oil Highlights: 88 Energy, John Wood Group, Mosman Oil And Gas ...]]> http://www.proactiveinvestors.co.uk/companies/market_reports/191787/proactive-oil-highlights-88-energy-john-wood-group-mosman-oil-and-gas--191787.html 88 Energy Ltd (LON:88E) this week secured “a level of certainty” that it will receive A$6.75mln of additional capital funding in March, after entering into an underwriting agreement related to listed share options.

    There are around 340mln listed options which are exercisable at 2 Australian cents before a deadline of March 2 (current ASX price: 2.9 Australian cents).

    “The underwriting gives 88 Energy a level of certainty that the 88E options that haven't already been exercised will result in funding of A$6.75mln,” the exploration company said in a statement. This funding along with the existing strong cash position ensures the company is well funded for the next important programmes of work.”

    Mosman Oil And Gas Limited (LON:MSMN) announced that it had produced 3,558 barrels of oil in the four months to January from its Welch project in Texas.

    Cash flow from the project was also positive over the period. The first phase of workovers has established production of up to 40 barrels per day. An investment decision on a horizontal drilling programme will be taken later this year after a reserves report.

    In other news, Mosman revealed it has replaced all of the directors of GEM International Resources (CVE:GI) with its own nominees including John W Barr.

    Mosman owns 7.6mln shares in GEM, which is currently suspended on the Canadian Venture Exchange after failing to lodge its financial report.

    And on Thursday, the company announced that it has raised £500,000 in working capital through the issue of new shares in a placing.

    The firm issued a total of 45.45mln new shares at a price of 1.1p each. According to Mosman, the funds will be put towards its evaluation of new acquisition opportunities and general purposes.

    Looking to Africa, Tlou Energy (LON:TLOU) revealed that it has been asked by the Botswana government to re-tender for the 100Mw Lesedi coal bed methane-powered power station contract.

    The Ministry of Mineral Resources, Green Technology and Energy Security has requested that both short-listed bidding companies, Tlou and Sekaname, re-submit bids. The decision to cancel the original RFP and re-tender has been approved by the Public Procurement & Assets Disposal Board (PPADB) in Botswana.

    In a later statement, Tlou revealed that neither of the submitted bids met compliance requirements and it has been given details regarding the non-compliant issues.

    Tlou added that it believes the ministry is amenable to amending the tender document as required, and, it intends to write to the ministry to respond to all compliance matters raised.

    In Asia, Petro Matad Limited (LON:MATD) said it expects to kick off its new exploration drilling campaign in Mongolia during the second quarter following the receipt of drill permits.

    A recent US$16.8mln equity funding is to pay for four new wells. The first, the Wild Horse exploration well, located in Block IV, is going to be drilled by a contracted Sinopec rig.

    Wild Horse is targeting a 290mln barrel oil prospect. The well is expected to be drilled and log in 30-45 days, and it is expected to cost US$4mln.

    Meanwhile, in the UK, Union Jack Oil PLC (LON:UJO) highlighted “high impact” drilling planned for the Biscathorpe and Holmwood projects as the onshore British oiler updated investors on upcoming work programmes anticipated for 2018.

    It also expects a new planning application to be made for the stalled Wressle oil field development project. The new documents are due to be submitted to the authorities in April, UJO noted.

    The company also said it plans to advance discussions regarding potential development plans for the Dukes Wood, Kirklington and Keddington oil assets.

    Mayan Energy Ltd (LON:MYN) shares got a boost on Thursday after the company updated investors on the Gilbreath-15 well at the Forest Hill field in Texas.

    The well has yielded 51 barrels of oil in the first 24 hours of production, the company said. Additionally, it highlighted that the Gilbreath-19 well and the Morris-1 well continue to produce at rates consistent with their initial flow rates, meanwhile, the company is continuing to progress workover programmes.

    An overall production target of 300 to 500 barrels of oil per day is “in sight”.

    And Angus Energy Plc (LON:ANGS) told investors on Friday that it has now sealed its partnership with Cuadrilla for the Balcombe oil project in southern England.

    The AIM-quoted company has made a £1.85mln payment to Cuadrilla and Lucas Bolney, securing a 25% stake in the newly rearranged Balcombe joint venture,

    It will now seek consent for the operatorship to be transferred to Angus, from Cuadrilla, for the Balcombe field discovery.

    ]]>
    Sat, 17 Feb 2018 10:00:00 +0000 http://www.proactiveinvestors.co.uk/companies/market_reports/191787/proactive-oil-highlights-88-energy-john-wood-group-mosman-oil-and-gas--191787.html
    <![CDATA[Small-cap movers: Revived and packaged for sale, Plant Impact leads the week's risers]]> http://www.proactiveinvestors.co.uk/companies/market_reports/191783/small-cap-movers-revived-and-packaged-for-sale-plant-impact-leads-the-week-s-risers-191783.html When Plant Impact PLC (LON:PIM) put itself up for sale in December investors weren’t convinced a buyer would be found with the shares wilting from 21.5p to 5.88p by close of play Thursday.

    The market doesn’t usually get these things wrong, which is why the last rites were being administered to crop research group.

    Proving the miracles do occasionally happen, PI informed investors this morning it had found a buyer. Not just that, the acquirer was a top notch company willing to pay a significant premium to bag the business.

    Croda to the rescue

    Okay, chemicals giant Croda Group PLC (LON:CRDA) is still only handing over £10mln for PI, which is pocket change for a company valued at north of £6bn.

    But it will have come as a blessed relief for investors who faced the prospect of possibly receiving nowt.  PI was AIM’s biggest riser over the week as the stock shot up 71% to the 10p a share Croda is offering.

    The junior market clawed back some of the ground lost over recent weeks as the AIM All-Share advanced almost 3%, marginally outperforming the FTSE 100.

    It was a week of exits with Stadium Group plc (LON:SDM), the electronic components specialist, succumbing to a £45.8mln bid from TT Electronics.

    The shares rose 43% after TT pitched its bid at a significant premium to the prevailing share price.

    Tungsten joy 

    Sticking with the risers for a little longer, there was relief for the backers of W Resources after the mine developer secured the funding it needs to take its Spanish tungsten mine into production.

    Those savvy enough to have bought the shares at the start of the trading week are now sitting on a 30% profit.

    On the flipside, it was a tough week for investors in Tlou Energy PLC (LON:TLOU), whose shares retreated 38%.

    The fall coincided with news it has been asked to retender its blue-print for a 100-megawatt power plant fuelled by coal bed methane. This, of course, is a setback for the business, as the tumble on the price attests.

    That said, long-term investors are still very much in the money. And with small-caps such as Tlou, which could potentially be taking on a large capital project, some volatility should be expected.

    In the doghouse...again

    Perennially in the doghouse, Nighthawk Energy PLC (LON:HAWK) had another week to forget as it fell a further 24%. It is now worth just £3.5mln, or 0.36p a share.

    A year ago the beleaguered oiler was worth 1.33p and in June 2014 it hit the heady heights of 12.75p. The ticking time bomb that has scared off even the most hardy speculators is the £15mln it owes and which needs to be repaid by the middle of this year.

     Judging by the collapse in the value of Nighthawk over the past year (it has receded 73%), the market is ascribing long odds to a refinancing deal.  On Wednesday the company said that chief financial officer Kurtis Hooley was quitting the business.

    The life sciences sector can often be a graveyard for investors. That’s because the likelihood of success of drug candidate entering phase I clinical trials is 9.6%, according to the Bio Innovation Organisation, or just under 12% if the failure rates in the oncology sector are factored out of the equation.

    In short you’d be better off spending your money at the local casino. However, once in a while a company comes along that defies the odds and provides a decent return for investors along the way.

    MaxCyte...ing

    A case in point is MaxCyte (LON:MXCT), where £1,000 invested at float two years ago would now be worth just north of £3,500. Not a bad payback. This is a hybrid business. So it generated sales of around £10mln last year licensing its cell engineering technology to some of the world’s largest pharma groups.

    It is also using its platform, called CARMA, to develop treatments for cancer that incite the body’s own immune system to tackle the killer disease.

    This year news flow (and by extension the direction of the share price) will be dictated by the success, or otherwise of MCY-M11, a potential cancer drug that co-opts the body’s immune system into confronting and killing the disease.

    Having taken the opportunity to raise funds when the share price was buoyant it has the financial wherewithal to fund the first clinical trial of the treatment.

     

     

    ]]>
    Sat, 17 Feb 2018 09:00:00 +0000 http://www.proactiveinvestors.co.uk/companies/market_reports/191783/small-cap-movers-revived-and-packaged-for-sale-plant-impact-leads-the-week-s-risers-191783.html
    <![CDATA[Oil market experiences another volatile week ]]> http://www.proactiveinvestors.co.uk/companies/market_reports/191765/oil-market-experiences-another-volatile-week-191765.html Another volatile week on the global markets had analysts and investors questioning their next step.

    Leading oil producers held fast on their commitment to the OPEC, non-OPEC production cuts and in early trading on Friday, Brent crude was priced around US$65 with WTI holding above US$61 a barrel.

    The OPEC Secretary General, Mohammad Barkindo had another busy week, as he continues to deliver the message of sustained producer unity.

    Need for new investment in oil industry

    Speaking in Cairo at the Egypt Petroleum Show, EGYPS 2018, he emphasised the need for a focused return of investment to the oil and gas industry.

    He highlighted the market downturn that occurred in mid-2014 as the main reason we saw “a severe dent in industry budgets.”

    In his address to a small group of key energy players in Riyadh later in the week, he re-emphasised this point reminding those in attendance that “exploration and production spending fell by a massive 27 percent in both 2015 and 2016, with nearly one trillion dollars in investments frozen or discontinued.”

    Speaking at the annual gathering of OPEC, the International Energy Agency and the International Energy Forum, Barkindo said he was optimistic about the return of capital to the industry but added that levels are not back to what they used to be and he cautioned, “more short-cycle rather than long-cycle projects, which are vital to future industry growth.”

    Production cuts hold strong

    The Saudi Arabia oil minister, Khalid Al Falih was also in Riyadh and he said he was sure the OPEC, non-OPEC cuts would hold strong, even if it meant tightness in the market later in the year. 

    OPEC’s secretary general said he had commitment from Russia’s president Vladimir Putin not to abandon the deal with OPEC, even as crude prices rise.

    The oil price has increased by about 60 percent since last June.

    Speaking in Cairo, Barkindo said, “we are all in the same boat” and he said he had “received assurances both from Mr Alexander Novak and President Putin that they will remain committed to the OPEC, non-OPEC collaboration and the Declaration of Cooperation." Russia’s commitment to the greater OPEC, non-OPEC deal of 1.8 million barrels a day, is a reduction of 300,000 barrels a day.

    OPEC oil market report

    OPEC issued its monthly oil market report this week and while recognising a decrease in global stocks, the report said that inventory levels were still 109 million barrels above the five-year average.

    Looking at global oil demand growth for 2018, OPEC believes demand will continue to be stronger and the organisation raised its forecast, but acknowledged that production from non-OPEC players, especially the United States was growing faster than expected.

    US production is expected to top 11 million barrels a day later this year, putting it in lead producer position ahead of Saudi Arabia and Russia.

    The International Energy Agency said it was not surprised with the non-OPEC reaction, as higher oil prices brought back many American producers.

    US oil growth under scrutiny

    The pace of oil production growth in the US will be carefully watched by all players in the months to come.

    Rising oil demand growth is being welcomed by the industry, but many fear this demand will not be enough to absorb additional supply coming from the US market.

    While the fundamentals remain strong for the second month of the year, an aggressive increase in American production could tip the balance out of OPEC’s favour.

    ]]>
    Sat, 17 Feb 2018 09:00:00 +0000 http://www.proactiveinvestors.co.uk/companies/market_reports/191765/oil-market-experiences-another-volatile-week-191765.html
    <![CDATA[Proactive mining highlights: Sunrise Resources, Galantas Gold, Kibo Mining ...]]> http://www.proactiveinvestors.co.uk/companies/market_reports/191784/proactive-mining-highlights-sunrise-resources-galantas-gold-kibo-mining--191784.html Sunrise Resources Plc (LON:SRES) found some gains on Friday after it announced positive results from the phase 2 of drilling at the CS pozzolan-perlite project in Nevada. permitting.

    The company completed 25 reverse circulation percussion drill holes at 838m to better define the zones of commercial interest and assist in the preparation of mine plans for permitting.

    "The phase 2 drill programme has delivered everything that was hoped for and more,” said executive chairman Patrick Cheetham.

    “We are now very confident that the Main and Northeast Zones are part of one continuous zone with a very large open-pit tonnage potential," he added.

    Hummingbird Resources PLC (LON:HUM) also had news on Friday, saying its Yanfolila gold mine in Mali has been steadily ramping up towards full production since first gold was poured in December.

    The plant has achieved around 96% gold recoveries consistently since the start of operations, which is higher than the design specification. Total gold recovered to date is 10,737 ounces of which 5,483 ounces has been shipped to refiners.

    In the past 10 days the plant has been operating at an average of 90% design throughput capacity.

    Scotgold Resources Limited (LON:SGZ) received a boost to its plans to open an underground gold mine at Cononish this week.

    The Director of Rural Planning and Development at the Loch Lomond and the Trossachs National Park Authority has issued a report recommending approval of the company's application, subject to an S75 planning agreement.

    Meanwhile, Galantas Gold Corp (LON:GAL) announced that the Court of Appeal at the Royal Courts of Justice in Belfast, Northern Ireland has completed its hearing on an appeal by a third party regarding planning permission granted to the firm's gold mine in Omagh.

    In a statement, Galantas noted that the appeal is against a judicial review which upheld the Department for Environment, Northern Ireland's decision to grant planning consent for an underground mine on the former open-pit gold-mine site.

    Greatland Gold PLC (LON:GGP) was in focus as the company updated on plans to start a drill programme at the Havieron licence in April.

    The explorer expects to encounter a potentially large mineralised system, based on the results of detailed aeromagnetic and ground gravity data.

    Modelling of the data, also suggests that only two of six previously drilled holes at Havieron encountered what is deemed to be the primary target and that those two holes were “at the very top” of the mineralised system.

    A new programme of drilling will now include four holes, for a total of 2,400 metres, to test the mineralised system and to evaluate gold, copper and other elements.

    Kibo Mining PLC (LON:KIBO) signed a Memorandum of Understanding with the Tanzania Electric Supply Company, known as TANESCO, with regards to a Power Purchase Agreement for power that will be produced from Kibo’s 300MW Mbeya coal-to-power project.

    The MOU constitutes the precursor to the finalisation of the PPA with TANESCO.

    This could happen as early as the end of the current financial quarter, in accordance with the timeline previously agreed with TANESCO and the Ministry of Energy.

    NQ Minerals PLC (NEX:NQMI) told investors that it has raised £130,000 in new working capital through an issue of new shares.

    The company revealed that 1.35mln new shares had been issued – with 1mln shares priced at 10p and 352,941 shares priced at 8.5p. A further 4mln new shares are being issued at the equivalent of 7.875p as part of a deal to extend an existing lending facility.

    Chaarat Gold Holdings Ltd (LON:CGH), the gold exploration company operating in the Kyrgyz Republic, appointed Peter Carter as its new chief operating officer.

    Carter will lead the Bishkek team and his primary responsibilities will include preparing the company for operational readiness, building the local team, installing international safety standard and establishing suitable environmental management plans.

    Galileo Resources PLC (LON:GLR) updated investors on its ongoing drilling programme at the Star Zinc project in Zambia.

    Over 750 metres of diamond core drilling has been completed to date, with individual holes being drilled down as deep as 70 metres, and thirteen holes have intersected high grade mineralisation marking out 100 metres of strike length.

    And Amur Minerals Corporation (LON:AMC) secured a US$10mln convertible loan facility with a consortium of investors arranged by Riverfort Global Capital.

    The convertible loan consists of three advances with the initial advance of US$4mln to be drawn down by the company on February 14. Each advance is repayable by the company in 12 monthly instalments.

    It’s been a tough few months for Pan African Resources plc (LON:PAF) as time lost due to industrial action and processing problems at the Barberton tailings operation ate into production. Underground development issues were also a problem.

    During the six months to December 2017, Pan African said it delivered 85,282 ounces of gold produced from its South African projects, down nearly 7% on the comparable period in 2016.

    Wishbone Gold PLC (LON:WSBN) confirmed that a new Thai entity has now been set up, and highlighted that the first successful delivery of gold has now taken place.

    It currently owns 49% of the newly created Asian Commerce and Commodities Trading Co (ACCT), though arrangements are in place that could see Wishbone increase its stake up to 95%.

    Ongoing reverse circulation drilling at the Mina do Barroso lithium project in Portugal continues to return significant intersections of lithium mineralisation for Savannah Resources Plc (LON:SAV).

    The drilling is designed to build upon the existing JORC resource of 32,000t of Li2O already defined at the Reservatorio deposit, one of three targets currently being evaluated.

    Anglo Asian Mining Plc (LON:AAZ) announced it has refinanced the majority of its existing debts with a new US$15mln facility at 7% that will run over a two-year term.

    Anglo Asian’s debts are well supported by cash flow, although the loan itself is unsecured.

    Oracle Power PLC (LON:ORCP) ticked off another requirement for the Thar thermal power station in Pakistan.

    The Private Power and Infrastructure Board has approved the issue of a Notice to Proceed (NOP) and Letter of Intent (LOI) to the company's subsidiary Thar Electricity (Private) Limited (TEPL). 

    W Resources PLC (LON:WRES) told investors it has secured a US$35mln loan which ensures that the La Parrilla mine development is fully funded.

    BlackRock Financial Management is providing the loan, which will have a five-year schedule term (with the option for early repayment) and it has an average interest rate of 12.6%. The lender will also receive an upfront fee as well as share warrants.

    Sirius Minerals PLC (LON:SXX) saw its shares gain after the FTSE 250-listed firm said it has awarded the contract for drilling the shafts at its polyhalite project in Yorkshire to Polish firm DMC after ending discussions with AMC.

    AMC UK had received a ‘notice of award’ in July last year for the contract, with expectations for a finalised agreement to be signed soon after.

    Sirius Minerals PLC’s (LON:SXX) decision to switch drill contractor for its North Yorkshire polyhalite mine is a good move, according to City watchers of the FTSE250 company.

    Polish firm DMC Mining Services, part of giant contractor KGHM, is taking over from AMC after the Canadian firm failed to finalise commercial terms despite a ‘notice of award’ being signed last year. DMC is a world-leading shaft sinking company with experience in this sort of geology, said WH Ireland.

    Canada-based copper miner Rambler Metals & Mining PLC (LON:RMM CVE:RAB) achieved record throughput at its Ming mine in Newfoundland in the last three months of 2017.

    Production for the year overall was also a record with the level of ore processed rising by 27% to 339,631 tonnes, which generated 3,968 tonnes of saleable copper and 3,357 ounces of gold.

    ]]>
    Sat, 17 Feb 2018 08:00:00 +0000 http://www.proactiveinvestors.co.uk/companies/market_reports/191784/proactive-mining-highlights-sunrise-resources-galantas-gold-kibo-mining--191784.html
    <![CDATA[FTSE 100 caps comeback week with 60 point rise; FCA gives MPs full report into RBS GRG unit]]> http://www.proactiveinvestors.co.uk/companies/market_reports/191751/ftse-100-caps-comeback-week-with-60-point-rise-fca-gives-mps-full-report-into-rbs-grg-unit-191751.html
  • FTSE 100 rises 59 points

  • Retail sales rise less than expected 

  • Segro shares jump after well-received results 

  • Property company Segro PLC (LON:SGRO) led the Footsie higher on Friday after a strong set of results.

    The FTSE 100 closed at 7,295, up 60 points on the day and more than 200 points on the week.

    SEGRO topped the leader-board with a 6.5% rise to 591.2p after reporting a 25.7% increase in adjusted profit before tax for 2017.

    Net asset value per share rose 16.3% to 566p from 478p at the end of 2016.

    “A 6.1% increase to the final dividend will please income investors, but after a near doubling in share price from the Brexit lows (+84%) it is very much necessary to keep pace, with its circa 3% yield towards the lower end of a FTSE property sector paying anywhere from 1.8% for the more London-centric SHB, GPOR and DLN to a more competitive 4-7% at bigger retail-focused rivals INTU, HMSO, BLND, LAND,2 commented Mike van Dulken at Accendo Markets.

    3.50pm: RBS expected to dish out 10th consecutive loss

    The news about Royal Bank of Scotland’s GRG unit comes ahead of its full year results next Friday.

    RBS has guided towards a return to profitability for fiscal year 2018 and has posted £1.3bn of profits in the first nine months of 2017.  

    But analysts estimate £2.2bn of conduct charges in the fourth quarter, which is expected to push the state-owned lender into a full year loss of £592mln, its tenth consecutive year in the red.

    Lloyds Banking Group (LON:LLOY) reports its full year results on Wednesday but the focus will be on the new strategy it is also set to unveil to investors.

    The bank will book at least £1bn of charges related to its payment production insurance mis-selling scandal but cost savings and an improved net interest margin should mean profit growth is a little more impressive.

    Fellow UK lenders Barclays PLC (LON:BARC) and HSBC Holdings (LON:HSBA) post their earnings on Thursday and Tuesday respectively.

    For a full preview on what to expect in next week’s banks’ results READ: Banks to feature strongly in deluge of blue chip earnings, including Lloyds, RBS, Barclays

    3.30pm: FCA hands over report into RBS GRG to MPs

    The financial watchdog has provided MPs with its full report into the mistreatment of small businesses by Royal Bank of Scotland’s global restructuring group (GRG).

    The Financial Conduct Authority had until today to either publish the full report of hand it over to the Treasury Select Committee after chair Nicky Morgan warned the regulator would be held in contempt of parliament if it failed to do so.

    The FCA said it decided to give the report to MPs because it would be breaking the law by publishing it on its own.

    It had already published a summary of the report, which accuses GRG of profiting from the struggles of small businesses, following a leak. But it has faced calls from politicians and the affected businesses to publish the report in full.

    In handing over the report, FCA boss Andrew Bailey told Morgan in a letter that the leak was "regrettable".

    "I do want to make clear that it is not our intention to frustrate or impede the work of the committee, quite the reverse in fact," wrote Bailey. "With that in mind we are providing the report as required."

    3.00pm: US consumer confidence rises in February 

    US consumer confidence rose more than expected in February as Americans remained optimistic about jobs and economic growth.

    The preliminary reading for the University of Michigan’s consumer sentiment index increased to 99.9 from 95.7 the previous month, above expectations of 95.5.

    It marked the second-highest level in 14 years.

    The index measures consumers' attitudes on future economic prospects, in areas such as inflation, personal finances, unemployment, interest rates and government policies. 

    2.30pm: US stocks open little changed

    US stocks have opened little changed but remain on track for the best performing week in more than a year.

    The Dow Jones Industrial Average is flat at 25,194 while the S&P 500 and Nasdaq are also little changed at 2,733 and 7,623 respectively. 

    The US market has seen five consecutive sessions of gains and were expected to post a sixth rally. 

    1.40pm: US housing starts and import price index data beats forecasts

    The latest raft of US economic data has started to roll in.

    The Commerce Department’s report on housing starts showed construction on new homes jumped 9.7% to a seasonally adjusted rate of 1.33 million.

    Economists were expecting a 3.5% rise after a 6.9% fall in December.

    Building permits gained 7.4% to a rate of 1.39 million units in January, the highest level since June 2007.

    Separate government data showed the import price index rose 1% in January, adding to a picture of high inflation in the US. It compares to expectations for a 0.6% rise and follows a 0.1% gain in December.

    The increase was driven by oil but there were also price rises for German cars, French cheese and Italian wine.

    Excluding fuel, import prices rose 0.4%.

    Earlier this week, official data showed consumer price inflation held at 2.1% in January, above the Federal Reserve's 2% target. 

    1.00pm: Shares in Coca-Cola fizz up

    Coca-Cola Co (NYSE:KO) shares are higher in ahead of the opening bell in the US after reporting fourth quarter results that beat expectations.

    Net operating revenue dropped to US$7.51bn from US$9.41bn a year ago, mainly due to the refinancing of its bottling operations, but was ahead of analysts’ forecasts of US$7.36bn.

    The softdrinks company reported a net loss of US$2.75bn, or 65 cents per share, mainly due to a US$3.6bn charge related to the new US tax laws.

    Adjusted earnings came to 39 cents per share, topping estimates of 38 cents.

    Sports drinks and water were the company’s top performers as consumers become more health conscious. 

    The dividend has been lifted by 5.4% to US$1.56 a share.

    12.40pm: US stock futures hint at six straight session of gains

    US stock futures are pointing to another positive open with the Dow Jones Industrial Average expected to hold above the 25,000-mark.

    Equities have enjoyed five consecutive sessions for gains despite some volatility.

    Futures for the Dow on Friday were up 16 points to 25,249, while S&P 500 futures added 5.3 points to 2,740 and the Nasdaq rose 19 points to 6,835.

    Investors are looking ahead to economic data on import and export prices, housing starts and the University of Michigan’s sentiment index.

    Company-wise, Campbell Soup Company (NYSE:CPB) shares fell in pre-market trade as it reported a 2% drop in organic sales in the second quarter.

    Deere & Co. (NYSE:DE) shares jumped after the US tractor maker said net sales and revenues rose 23% to US$6.91bn in the quarter to January 28.

    12.00pm: London stocks gain in lunchtime trade

    The FTSE 100 increased 38 points to 7,272 at the midday mark as the pound fell against the dollar after disappointing UK retail sales data.

    Sterling is down 0.19% versus the dollar at US$1.4072, reversing gains in the previous session.

    Retail sales rose by just 0.1% in January from the previous month, below expectations for a 0.6% rise and following a 1.4% drop in December, as higher inflation put pressure on disposable incomes.

    On the company front, property developer Segro PLC (LON:SGRO) was the biggest riser on the  FTSE 100 after reporting a 25% increase in full year earnings on the back of a record level of development completions.

    FTSE 250-listed Balfour Beatty (LON:BBY) rallied after saying a joint venture has won a US$1.95bln contract for the building, financing and managing of an airport transit system at Los Angeles International Airport (LAX).

    Restaurant Group Plc (LON:RTN) received a boost after HSBC upgraded its rating to ‘hold’ from ‘reduce’.

    Shares in Old Mutual PLC (LON:OML) reversed the previous day’s gains when it rose to the top of the FTSE 100.

    Temporary power supplier Aggreko shares fell on a downgrade from Bank of America Merrill Lynch. 

    11.20am: Young adults shut out of property market, IFS reveals

    Consumers are being squeezed by high inflation in the retail sector but young adults trying to buy a home are even more so under pressure, according to figures released by the Institute for Fiscal Studies.

    The IFS has revealed the chances of a young adult on a middle income owning a home have more than halved in the past two decades.

    Home ownership for 25- to 34-year-olds earning between £22,200 and £30,600 per year has fallen from 65% two decades ago to 27%.

    Average house prices have grown approximately seven times faster than the average income for young adults, with the former growing 152% and the latter growing 22% since 1995 when accounting for inflation.

    11.00am: EY expects economy to slow in first quarter 

    EY Item Club expects UK economic growth to slow in the first quarter following disappointing retail sales and a weaker set of purchasing managers’ surveys for services, manufacturing and construction.

    It expects GDP to rise 0.4% quarter-on-quarter in the first quarter, down from 0.5% in the final three months of 2017.

    But EY thinks the squeeze on consumers should steadily ease as the year progresses due to inflation falling back and pay slowly trending up.

    “We believe inflation will fall back from 3.0% in January to close to 2% by the end of 2018 (largely due to the impact of sterling’s past sharp fall diminishing),” said Howard Archer, chief economic advisor to EY.

    “Meanwhile, we expect earnings growth to trend up gradually as a consequence of recruitment difficulties in some sectors and higher inflation fuelling some increased pay awards.”

    However, Archer reckons it is “highly likely” that real earnings growth remained negative in January with consumer price inflation of 3.0% “almost certainly” above annual earnings growth for the month.

    He expects the Bank of England to tighten monetary policy twice this year with 25 basis point increases in May and November.

    10.20am: Consumer confidence still down in the doldrums 

    The retail sales data suggests shoppers were reluctant to participate in January sales as consumer confidence remains depressed and disposable incomes look set to remain under pressure, according to ING Research.

    “True, wage growth has been performing better recently, giving the Bank of England increased confidence that the tight labour market is prompting firms to offer more generous pay packets,” said James Smith, developed markets economist at ING.

    “That said, it’s still early days, and we think there remains a risk that some firms take a more cautious stance, amidst slower economic momentum and elevated uncertainty.

    “At the same time, food and fuel costs are continuing to rise, even though in general consumer prices have largely adjusted to the post-Brexit weakening in the pound.”

    Ben Brettell, senior economist at Hargreaves Lansdown, said weak consumer spending remains a significant headwind for the UK economy.  

    “We’ve been waiting for the pay squeeze to filter through to the high street, but for much of last year retail sales held up better than many expected,” he said.

    “The big question now is whether this is the start of a worrying trend for the economy, or whether falling inflation and rising wages will come to the rescue.”

    He noted that monthly data is volatile and therefore harder to draw conclusions from two months of disappointing numbers but thinks it looks almost certain the longer-term trend is one of slowing growth in the retail sector.

    10.05am: Consumers won't drive the economy forward this year, says economist

    The failure of retail sales to recover meaningfully after December’s month-on-month decline highlights that consumers can’t be counted on to drive the economy forwards this year, said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

    “Volumes were 0.5% below their fourth quarter average in January, setting up overall consumption to provide little support to GDP growth in the first quarter,” he said.

    Tombs reckons food sales should recover soon now that supermarkets have largely finished pushing through price rises in response to sterling’s depreciation.

    “But consumers will come under more pressure to scrimp as the fiscal consolidation intensifies in April and mortgage rates continue to creep up,” he added.

    “Slower job creation, meanwhile, likely will be the flip-side of stronger growth in wages this year, implying that growth in overall nominal incomes won’t accelerate this year.”

    9.55am: Pound weakens after retail sales miss

    In reaction to the weaker-than-expected UK retail sales data, the pound is now down 0.01% versus the dollar at US$1.4098 after rising as high as US$1.4144 earlier.

    Against the euro, sterling is down 0.19% to €1.1253.

    “UK shoppers continued the theme of keeping their money in their pockets post-Christmas, and weaker than expected data could now have an adverse effect on the pound, which has been heading for its best weekly performance since September,” said Dennis de Jong, managing director at UFX.com

    9.45am: Falling food sales offsets growth in sports equipment, games and toys

    The ONS said the retail sales data showed a continued slowdown in the sector as higher inflation puts a squeeze on consumers.

    The main contribution to year-on-year growth came from non-food stores, with sports equipment, games and toys increasing sales in the quantity bought in this sector by 10.9%.

    “Growth in the quantity of sporting equipment, games and toys being bought was offset by falling food sales when compared with the same month a year earlier,” the ONS said.

    “Sporting equipment sales have grown more than usual in January 2018, following an increased uptake for gym wear.”

    9.30am: UK retail sales data misses expectations 

    UK retail sales rose less than expected in January, the Office for National Statistics has revealed.

    Sales, excluding auto fuel, rose 1.5% from a year ago, missing expectations for a 2.4% rise and following a 1.3% increase in December.

    On the month, retail sales, excluding fuel, climbed 0.1% against forecasts for a 0.6% gain and after a 1.5% dip in December.

    Including auto fuel, retail sales in January increased 0.1% on the month, after a 1.4% drop, and grew 1.6% on the year, after a 1.5% decline. Analysts were expecting a 06% monthly rise and a 2.5% yearly increase. 

    8.45am: FTSE 100 recovers ahead of retail sales data

    The FTSE 100 continued in recovery mode, taking its cue from Wall Street and Asian markets overnight to rise 39 points to 7,273.92.

    On the foreign exchange markets the pound nudged back over US$1.40 ahead of the retail sales data in less than an hour.

    Economists are looking for growth of 0.6% in January following December’s 1.5% slump.

    “The Bank of England will struggle to hike interest rates without an improvement in consumer spending, but that will come as an anticipated decline in the cost of living feeds through to more significant growth in real wages,” said Lee Wild, head of equity strategy at Interactive Investors.

    The Footsie’s top riser was Segro (LON:SGRO) after prelims from the property giant pleased investors and analysts, leading to a 2.3% rise in the share price.

    There was a dearth of fallers on the blue-chip index although the casualties were easier to spot a division down on the FTSE 250.

    Off 4% was Agrekko (LON:AGK), hit by the stronger pound/weaker dollar with the temporary generator specialist gleaning a large slug of its revenues Stateside.

    Among the tiddlers W Resources (LON:WRES) was an early riser (up 13%) after it concluded a financing deal with BlackRock that will fund its Spanish tungsten mine to production.

    Proactive news headlines:

    W Resources PLC (LON:WRES) told investors it has secured a US$35mln loan and in doing so it ensures that the La Parrilla mine development is fully funded. BlackRock Financial Management is providing the loan, which will have a five-year schedule term (with the option for early repayment) and it has an average interest rate of 12.6%.

    Sunrise Resources Plc (LON:SRES) has announced positive results from the phase 2 of drilling at the CS pozzolan-perlite project in Nevada. The company completed 25 reverse circulation percussion drill holes at 838m to better define the zones of commercial interest and assist in the preparation of mine plans for permitting.

    Learning Technologies Group PLC (LON:LTG), the leading integrated e-learning services and technologies provider, announced that it has appointed Goldman Sachs International as joint corporate broker alongside Numis Securities.

    Hummingbird Resources PLC (LON:HUM) said on Friday its Yanfolila gold mine in Mali has steadily been ramping up towards full production since first gold was poured in December. The plant has achieved around 96% gold recoveries consistently since the start of operations, which is higher than design specification.

    Victoria Oil & Gas plc (LON:VOG) told investors that fourth quarter gas sales were up 18.56% from the preceding three months. Gross sales amounted to 726mln cubic feet in the fourth quarter, which also represents an 11% increase in the year-on-year comparative. Daily gas production averaged 7.94mln cubic feet per day, up from 6.96mln cubic feet in the third quarter and 7.64mln in the fourth quarter of 2016.

    Galantas Gold Corp (LON:GAL) said the Court of Appeal at the Royal Courts of Justice in Belfast, Northern Ireland has completed its hearing on an appeal by a third party regarding the granting of planning permission to the firm's gold mine in Omagh.

    Scotgold Resources Limited (LON:SGZ) has received a boost to its plans to open an underground gold mine at Cononish. The Director of Rural Planning and Development at the Loch Lomond and the Trossachs National Park Authority has issued a report recommending approval of the company's application, subject to an S75 planning agreement.

    Accesso Technology Group PLC (LON:ACSO) has appointed Royce Paul Noland Jr. as the ticket and queue management company’s new chief executive officer and said he will join the board on 9 April 2018. The AIM-listed firm noted that Noland was president and CEO of the International Association of Amusement Parks and Attractions and has acted in a number of senior executive roles with Walt Disney Parks and Resorts and Marriot International.

    Faron Pharmaceuticals Oy (LON:FARN) has topped up its balance sheet with a £15mln funding to accelerate the development of its two lead products. A placing and subscription at 805p, the closing price yesterday, will bring in a net £14.1mln to add to an existing cash balance of €9.3mln.

    Advanced Oncotherapy PLC (LON:AVO), the developer of next-generation proton therapy systems for cancer treatment said it has been informed by Yantai Cipu that the Chinese authorities have authorised the transfer of the £13.5mln payable under the subscription for 45mln new ordinary shares to be issued by the company to Yantai Cipu at a price of 30p per share. The firm added that Yantai Cipu has also informed the company that they are in advanced negotiation with a major medical equipment and pharmaceutical distribution company in China for a collaboration to accelerate and strengthen their market access in the People's Republic of China, Hong Kong, Macau, Taiwan and South Korea.

    Concepta PLC (LON:CPT) the UK healthcare company and developer of a proprietary product targeted at the mobile health market with a primary focus on women's fertility, announced the appointment of David Darrock, its chief operating officer, as a director of Concepta Diagnostics Ltd. Alongside Darrock's appointment, and to strengthen the China team, the group added, Michelle Yao has been appointed as Concepta’s China General Manager, and will be reporting to Zhang Zi Gang, the UK-based Head of China.

    Goldplat plc (LON:GDP), the AIM listed gold producer with international recovery operations located in South Africa and Ghana and a mine in Kenya, announced the appointment of WH Ireland as it sole broker with immediate effect.

    6.45am: FTSE 100 set for strong start

    The FTSE 100 is expected to advance once more in early trading on Friday following further overnight gains by US and Asian markets, as investors await more UK data for direction, with retail sales due at 9.30am.

    Spread betting firm CMC Markets expects the UK blue chip index to open around 29 points higher at 7,263, having gained about 20 points on Thursday.

    Overnight on Wall Street, the Dow Jones jumped 306 points higher to close at 25,200, with both the other main US indexes also finding strong gains as recent worries over inflation and higher interest rates were pushed aside for now.

    Asian markets were slightly more subdued today given that many remained closed for the Chinese lunar new year celebrations, but Japan's Nikkei 225 still added 1.1%.

    On currency markets, the pound was fairly steady versus both the dollar and the euro, consolidating recent gains as traders awaited the latest UK retail sales data for clues to the health of the high street at the end of a week that saw UK inflation remain stubbornly higher.

    Michael Hewson, chief market analyst at CMC Markets UK commented that UK retail sales “had a pretty rotten month in December, with a slump of 1.5%, though that was largely as a result of bumper November number of 1.1% which had been boosted by Black Friday sales spending.”

    He added: “Recent retail sales numbers from the British Retail Consortium and KPMG earlier this month appeared to show that while some retailers were struggling we did see a pickup in January, as consumers started to re-open their wallets after a slow December.

    “The recent cold weather in January may well have also prompted an increase in demand for coats and gloves, with an expectation that we could see a rise of 0.6%.”

    Warehouse demand strong for Segro

    On the corporate front, Segro PLC (LON:SGRO), the FTSE 100-listed real estate developer focused on warehousing and light industrial property will report its full-year results on Friday.

    In a preview, Graham Spooner, investment research analyst at The Share Centre said: “In its third quarter update in October the company said demand for prime warehouse assets, especially related to ecommerce, remained strong.”

    He added: “Investors will be looking for information on how rents are performing as well as any change in the vacancy rate. Also, an update on how the APP cargo assets at Heathrow, acquired last year, are performing.”

    Significant events expected on Friday February 16:

    Finals: Segro PLC (LON:SGRO), BGRO Group PLC (LON:BGEO)

    Economic data: UK retail sales; US housing starts; University of Michigan consumer sentiment

    Around the markets:

    • Sterling: US$1.3852, up 0.1%
    • Gold: US$1,324.60 an ounce, up 0.1%
    • Brent crude: US$59.62 a barrel, up 0.6%

    City Headlines:

    • Burberry targets youth with Farfetch tie-up – The Times
    • Tesco faces shareholder revolt over planned £3.7 billion takeover of wholesale giant Booker – Daily Mail
    • GKN fights back in takeover battle: Melrose would destroy us, says engineer’s Boss – Daily Mail
    • Royal Mail Boss Moya Greene to join board of Rio Tinto – Daily Telegraph
    • Virgin Money hires Irene Dorner to form female top team – The Guardian
    • TalkTalk walk walk? Invesco filings baffle investors – City AM
    • South32 starts to feel “inflationary pressures” in South Africa, Australia - Financial Times
    • Neptune Energy sets aim on being the next BG Group – Financial Times
    • Lidl to create 700 new UK jobs as part of massive expansion drive – The Independent
    • Roche pays US$1.9bn for Alphabet-backed Flatiron Health – Financial Times
    • Amazon pledges to create 2,000 new permanent jobs in France this year – The Independent
    • Google bolsters cloud operations with Xively buy – Daily Telegraph
    • Elon Musk plans to beam broadband internet into homes from space – Daily Mail
    • Uber hails its own move from taxis to public transport – The Times
    • US Bancorp fined over US$600mln for transaction failings – Financial Times
    • AbbVie shares the wealth with dividend boost, $10 billion in buybacks – Financial Times
    • Airbus incurs €1.3 billion charge for delay in delivering military transport planes – The Guardian
    • Nestlé unwraps weaker growth after American dip – The Times
    • Steinhoff appoints ex-KPMG partner as restructuring chief – Financial Times
    • Petrol retailer MRH appoints Dennis Millard as chair ahead of £1 billion float – City AM
    •  Gaming pioneer Atari the latest company to join cryptocurrency craze – Daily Telegraph
    • China’s largest lithium producer Ganfeng files for US$1bn HK IPO – Financial Times
    ]]>
    Fri, 16 Feb 2018 16:50:00 +0000 http://www.proactiveinvestors.co.uk/companies/market_reports/191751/ftse-100-caps-comeback-week-with-60-point-rise-fca-gives-mps-full-report-into-rbs-grg-unit-191751.html
    <![CDATA[Will Dunlop be first of many brand sales at Sports Direct?]]> http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26801/will-dunlop-be-first-of-many-brand-sales-at-sports-direct-26801.html Sports Direct Plc’s (LON:SPD) £112mln disposal of Dunlop will be the first in a number of brand sales.

    This morning Mike Ashley’s retail group announced it had agreed to sell the Dunlop brand to Japan’s Sumitomo Rubber Industries for £112mln so it can concentrate on becoming the “Selfridges of sports retail”.

    The business, which turned over almost £43mln last year, was acquired 12 years ago for £40mln.

    Sumitomo, a conglomerate with interest spanning construction, media and food, already owns the rights to Dunlop in Japan, Korea and Taiwan and shares the US rights with Sports Direct.

    The sale is part of founder Mike Ashley’s back to basics strategy of focusing on core brands.

    Sports Direct cited a lack of management “bandwidth” to maintain and grow the label, although it will hold a royalty-free licence to continue to produce Dunlop workwear.

    “We would thus expect this to be the first of a number of brand disposals. The volte face is enormous here,” Peel Hunt analyst Jonathan Pritchard said in a note.

    “It will take time for sports direct to win over the third party brands but it seems that Mr Ashley's words are not just rhetoric. The shares are becoming very interesting if UK trading could be stabilised and a couple of solid names arrived on the board. Fascinating times.”

    ]]>
    Wed, 28 Dec 2016 09:15:00 +0000 http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26801/will-dunlop-be-first-of-many-brand-sales-at-sports-direct-26801.html
    <![CDATA[Ophir Energy to ‘outperform’ thanks to Schlumberger’s addition to Fortuna]]> http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26543/ophir-energy-to-outperform-thanks-to-schlumbergers-addition-to-fortuna-26543.html The credibility of Ophir Energy Plc’s (LON:OPHR) Fortuna project has been significantly boosted by Schlumberger’s addition to the venture, so says Credit Suisse.

    The Swiss bank today upgraded its view on the Africa focussed petroleum group to ‘outperform’ from ‘underperform’ and set a 100p target suggesting some 36% upside to the current share price.

    It comes after Schlumberger agreed a partnership between Ophir and OneLNG- a joint vehicle of Schlumberger and India’s Golar – which will oversee the development of Fortuna, a major floating LNG project offshore Equatorial Guinea.

    “The main barrier to Fortuna moving forward was Golar's lack of midstream financing, so the new ownership structure should allow Fortuna to move forward, as the new JOC should be more readily able to secure financing, given Schlumberger's bluechip balance sheet, and the fact that upstream resources can now be used as security,” Credit Suisse analyst Justin Teo said.

    Teo added: “Discussions with lenders are at an advanced stage, according to Ophir, and it is unlikely the company would have made an announcement if it wasn't confident on the financing.

    “Ophir has received interest from several potential off-takers, and two consortia have submitted bids for the upstream work, so the main uncertainty lies in approval from the government, in our view.”

    Elsewhere Jefferies International powered up its recommendation for portable generator firm Aggreko Plc (LON:AGK), moving to ‘hold’ from ‘underperform’, whereas Credit Suisse is still bearish with its ‘underperform’ rating intact and the target lowering to 690p from 740p.

    Peel Hunt lifts its target for Speedy Hire Plc (LON:SDY), to 50p from 36p, thanks to signs of revenue growth through the first half. Meanwhile, the broker also reduced its target for Majestic Wines Plc (LON:WINE) down to 300p from 440p. 

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    Thu, 17 Nov 2016 09:38:00 +0000 http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26543/ophir-energy-to-outperform-thanks-to-schlumbergers-addition-to-fortuna-26543.html
    <![CDATA[Brokers: 25% upside as well as big yield at Imperial Brands ]]> http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26534/brokers-25-upside-as-well-as-big-yield-at-imperial-brands-26534.html Imperial Brands (LON:IMB) has fared poorly in the anti-staple 'Trumpflation' rally but Deutsche Bank reckons this is about to change.

    Setting a bottom of 3,350p for the tobacco group, the broker believes  consolidation has returned to the tobacco sector.

    Dividends of 8% will be received within 16 months and the shares are worth 4,350p in Deutsche’s view.

    The current valuation of drug discovery firm ImmuPharma PLC (LON:IMM) is well below where it deserves to be, according to an analyst at Northland Capital.

    Vadim Alexandre has the stock as a ‘buy’ and has high expectations for the company, setting a price target of 137p – more than a quid higher than what the stock currently trades at.

    “You’ve got a potential blockbuster drug [in Lupuzor], this [current] valuation is way too low for that programme on its own, and that says nothing about the oncology programme [either],” Alexandre tells Proactive.

    Broker Numis has upgraded Mexico-based silver giant Fresnillo (LON:FRES) to 'hold' on valuation grounds.

    While the incoming Trump administration's actual policy stance towards Mexico remains unclear, 67% of its costs are Peso-based and so the group would be a clear beneficiary of a weaker currency, notes analyst Jonathan Guy.

    As the iron ore price posted its sharpest fall in five years, albeit after an almighty upward run, a heavyweight London broker has tipped the metaphorical bucket of cold water over the prospects for mining stocks.

    JP Morgan Cazenove believes investors are probably over-estimating the potential impact of a Trump presidency on the sector and not really assessing the risks.

    As a result, the rally in industrial metals values seen over the last week is probably out of touch with reality, it added.

    JPM’s picks are picks are Anglo American PLC (LON:AAL) and Rio Tinto PLC (LON:RIO), which are rated 'overweight'.

    BHP Billiton plc (LON:BLT) and Antofagasta PLC (LON:ANTO) are seen as vulnerable to a commodities market correction.

    Whether or not all of Next Plc’s (LON:NXT) problem come down to weather UBS analyst Andrew Hughes reckons it will be the biggest short-term influence on sales.

    Another risk is competition, particularly from Associated British Food Plc (LON:ABF) Primark.

    “The main risk is whether Primark destabilises the low end of the market to the degree that the mid market will be unable to make price increases stick,” the analyst said.

    Shell PLC (LON:RDSB) may be sitting on an undiscovered jewel with its onshore acreage in the US according to analysts at Deutsche Bank.

    The German broker notes that prospects in the US Permian Basin are now changing hands for up to US$45 per acre, which puts a value of US$10bn on its 2bn barrel Delaware position.

    Buy is Deutsche’s view with a 2,220p price target. Shares today were 2,068p.

    ]]>
    Wed, 16 Nov 2016 15:06:00 +0000 http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26534/brokers-25-upside-as-well-as-big-yield-at-imperial-brands-26534.html
    <![CDATA[Brokers: Hargreaves Lansdown's new cash platform prompts upgrade]]> http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26522/brokers-hargreaves-lansdown-s-new-cash-platform-prompts-upgrade-26522.html Hargreaves Lansdown’s (LON:HL.) new savings business offers a potentially substantial growth avenue, according to Numis.

    Cash savings are by far the largest pool of financial wealth in the UK and Hargreaves is looking to address this opportunity in a unique manner.

    For the first time, depositors will have access to an open architecture platform with the ability to instantly switch accounts to maximise returns.

    Investors will be able to have all of their wealth in one place and not have the inconvenience of switching accounts to follow the best rates.

    Hargreaves is likely to be able to offer depositors close to the top of the best buy table always.

    The scale of the opportunity is significant, adds Numis, with Hargreaves’ customers estimated to have over £60bn of cash.

    Surveys by the wealth manager suggest 45% of customers hold more than £75,000 in cash with 70% saying they may use Hargreaves for savings.

    “Furthermore we believe this savings offer will attract younger savers who have not ventured into other investments yet and older savers who only hold cash,” said the broker.

    Numis’ rating is upgraded to buy from add with a target price of 1,458p

    First electricity has been produced by Atlantis Resources (LON:ARL) at the tidal power project MeyGen, offshore Scotland.

    It is a big milestone says Peel Hunt, with the rest of the first phase to come on stream shortly and start to export power to the grid in the next few weeks.

    While future costs, finance availability and the subsidy regime are uncertainties, Atlantis can now demonstrate the potential of the technology and the project, and the ability of management to deliver it.

    The fun is over in the copper market according to HSBC, which has stuck reduce ratings on KAZ Minerals PLC (LON:KAZ) and Antofagasta PLC (LON:ANTO).

    After its 19% spike over the past month, HSBC expects the copper price to be range bound for next 2-3 years.

    Sell Lloyds Banking Group PLC (LON:LLOY), buy Royal Bank of Scotland PLC (LON:RBS) is Goldman Sach’s view today in its latest update on the UK banks.

    The theme is that competitors are encroaching on the four major’s traditional stamping ground, especially mortgages where ring-fencing and the newly introduced term funding scheme provide a strong incentive for some banks to substantially increase their exposure.

    Goldman Sachs has a target price of 50p on Lloyds and 225p on RBS against today’s market prices of 61.6p and 210.4p respectively.

    Having moved the giant polyhalite project in North Yorkshire. into development, Sirius Minerals’ (LON:SXX) net present value is now £7.4bn, according to Shore Capital.

    This equates to 129-166p a share fully diluted on the Shore analyst’s base case assumptions.

    The risked NPV, which factors in all the potential hurdles between now and 2018, comes in at a more modest 65-82.5p a share. That lower figure is still roughly three-times the current share price.

    “If all goes to plan hereafter, there would be no further need to raise equity,” said analyst Yuen Low.

    ]]>
    Tue, 15 Nov 2016 13:10:00 +0000 http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26522/brokers-hargreaves-lansdown-s-new-cash-platform-prompts-upgrade-26522.html
    <![CDATA[William Hill worth a punt after better start to the second half]]> http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26509/william-hill-worth-a-punt-after-better-start-to-the-second-half-26509.html Bookie William Hill PLC (LON:WMH) was a winner with retail-focused brokers this morning as it upgraded profits guidance.

    The bookmaker said full-year operating profits should come in at the top end of forecasts.

    Nicholas Hyett, an analyst at Hargreaves Lansdown, said William Hill looks as if it has gone back to concentrating on its knitting.

    “Having considered mergers with what feels like every other gaming company around, William Hill finally seem to be knuckling down to the job of turning the core business around. The online business is back in growth, efficiency savings have been identified and the self-service terminal roll-out is complete,” Hyett said.

    “The group has also announced a revamped board this morning. Former Coral and Betfair execs bring in industry knowhow, and Tesco’s Mark Brooker an increased focus on customers,” he added.

    In Hyett’s view, it is good to see William Hill betting on the core business again rather than “rolling the dice on big strategic moves that have so far failed to pay out”.

    Ian Forrest at The Share Centre said William Hill is “back in the game” after a poor first half.

    “Investors will be watching closely for potential merger and acquisition activity as the gambling sector consolidates. William Hill has abandoned recent merger talks with Canadian online gaming group Amaya and has also rejected a three-way merger proposal from 888 Holdings and Rank Group,” Forrest noted.

    The Share Centre rates the bookie as a higher-risk ‘buy’, due to the potential for further growth in mobile wagers, expansion into overseas markets and the prospect of further efficiencies within the business.

    House builder Taylor Wimpey PLC (LON:TW.) said trading continued to be strong in the second half of the year, although Liberum Capital Markets noticed the growth in the sales rate was down a little compared to the prior year.

    It thinks the shares are cheap, but it prefers Persimmon PLC (LON:PSN) in the sector. Hold ‘em if you’ve got ‘em, is Liberum’s view on Taylor Wimpey.

    SP Angel, the nominated advisor for mine developer Amur Minerals PLC (LON:AMC), has welcomed the news that the access road to the company’s Kun-Manie road will cost less than originally envisaged.

    Amur updated this morning on its plans for a 316km-long road from Kun-Manie to the rail depot.

    “Road access is one of the major project capex components along with processing plant infrastructure, mining equipment and power supply solution. A major cost saving on road construction budget in US$ terms is a welcome news with the company planning further works to finalise the route and narrow cost estimates range,” SP Angel noted.

    Ascent Resources PLC (LON:AST) caught a break last week when it was told it won’t have to carry out a full environmental impact assessment prior to installing a new processing facility at the Petišovci gas project in Slovenia.

    “With the Slovenian Environmental Agency deciding that Ascent Resources will not need to complete a full environmental impact assessment at the Petišovci Project, the company now expects the IPPC Permit to be awarded sometime in 2017. Had the Environmental Agency not taken such a commercial stance then it could have delayed the Project’s development by around a year,” noted house broker Northland Capital Partners.

    “Ascent is continuing to advanced towards commencing untreated gas production on a smaller scale using existing infrastructure in Q117, this is not reliant on the IPPC Permit - required for the larger operation that entails the construction of a new gas treatment plant,” Northland explained.

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    Mon, 14 Nov 2016 12:37:00 +0000 http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26509/william-hill-worth-a-punt-after-better-start-to-the-second-half-26509.html
    <![CDATA[Is Marks & Spencer as bad as its share price suggests?]]> http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26480/is-marks-spencer-as-bad-as-its-share-price-suggests-26480.html Is Marks & Spencer as bad as its share price fall suggests?
     
    No, say the analysts at Haitong Research though they admit that turning around a juggernaut like M&S (LON:MKS) will take time.
     
    The broker would have liked chief executive Steve Rowe to have wielded the axe even harder and closed more its of UK clothing space rather 
     
    “10% over five years is not that much in the context of UK Clothing and Home sales densities in-store (excluding online) down 20-25% over the last five years - but we can see that there are reasons for management taking a less aggressive stance. “
     
    We do think though that the company would have seen its plans better received if it had given a clearer analysis of its assumptions for market growth, online penetration etc.,  rather than relying on the “Trust Us, We Know What We Are Doing” approach evident.
     
    Haitong is a buyer even so with a 375p fair value estimate.
     
    Housebuilder Redrow (LON:RDW) has 40% upside  according to  Peel Hunt, which has upgraded it forecast after a strong selling season this autumn.
     
    The broker now expects profits this year of £280mln and  has upgraded its forecast by 3% for the following two years. 
     
    Shares are trading on 20% discount on a price to asset value basis, which is good value and the price target of price target of 555p implies over 40% upside. 
     
    Macquarie has turned more bullish on contactor Amec Foster Wheeler  (LON:AMFW) with an upgrade to 'Neutral'.
     
    The broker has been a seller ut said the the stock has now sufficiently de-rated following last month's disappointing trading update. 
     
    Cantor Fitzgerald notes that Following the successful completion of the Lancaster 7 wells, Hurricane Energy PLC (LON: HUR) has announced the spudding of its first Lincoln well. 
     
    This is a material prospect for the company with the last CPR estimating a prospective resource base of 150MMbbls, which could be as high as 250MMbbls assuming the Lincoln prospect is analogous to the Lancaster field. 
     
    The presence of oil at 2,135m TVDSS indicates a continuous oil column to this depth and therefore the company can take sufficient comfort in this higher estimate. 
     
    Buy with a 69p target.
     
    UBS is a buyer of Royal Dutch Shell PLC (LON:RDSB) with a 2,250p) following its New York Investor Day.
     
    Shell is still targeting US$20-25bn of organic free cash flow (US$20-30bn disposals) and 10% return on capital by the end of the decade in a $60/bbl oil price scenario, which would more than cover the $16bn all-cash dividend. 
     
    ]]>
    Wed, 09 Nov 2016 14:22:00 +0000 http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26480/is-marks-spencer-as-bad-as-its-share-price-suggests-26480.html
    <![CDATA[HSBC upgraded to 'buy' as capital position impresses]]> http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26468/hsbc-upgraded-to-buy-as-capital-position-impresses-26468.html Deutsche Bank has upgraded HSBC (LON:HSBA) to 'buy' from 'hold' following the well-received third quarter results.

    The standout feature for the German broker was the rise in the core tier one assets due to a change in regulatory capital treatment.

    Deutsche’s target price rises to 665p from 620p.

    Online bookie Paddy Power Betfair (LON:PPB) is trading so well currently, Investec expects it to surprise the market with better-than-expected underlying earnings figures this year.

    The bookie – which came about after the merger of Paddy Power and Betfair back in February – recently upped its guidance for full-year EBITDA (underlying earnings).

    It said it expects to report underlying earnings of between £390mln and £405mln for the 12 months to December, although Investec thinks it should beat this comfortably.

     “FY16 EBITDA guidance looks too low and we expect the company to derive a further £30m of synergies in FY17,” said analyst Alistair Ross.

    Ross expects underlying earnings for this current financial year to come in at £408.1mln, although he concedes that even this will likely be beaten.

    “We think our forecasts are still cautious given the possibility of faster synergy realisation than expected higher cost synergies expected overall as well as revenue synergies.”

    'Buy' with a target price of £100.

    Savannah Resources (LON:SAV) and partner Rio Tinto’s, Mutamba project is one of the largest ilmenite dominant minerals sands deposits in the east coast of Africa, says Northland.

    The initial indicated and inferred mineral resource estimate for the project totals 3.5bt at a grade of 3.8% total heavy minerals (THM), containing 81mt of ilmenite, 2.2mt of rutile and 3.8mt of zircon.

    This mineral resource estimate will form the foundation of the scoping study that will focus on the high-grade areas where there is little or no overburden

    This is part of Savannah’s low-cost mining strategy for the project targeting production of around 200mt.

    Lock specialist Tyman (LON:TYMN) has given a reassuring update, with 2016 results likely to hit expectations said Liberum.

    This is in spite of slower than expected growth in North America, with the shortfall offset by better volumes in the rest of the world and strong pricing in the UK.

    The shares have been abnormally weak for a US$ earner and trade at an attractive valuation, says the broker which has a target price of 305p.

    Societe Generale has suggested the oil sector as a good bet if Hillary Clinton wins the US presidential election.

    Her track record suggests she will be more interventionist than Obama, a stance that can support oil prices, defence and oil & gas stocks and oil-related currencies, says the French bank.

    A victory for Trump meanwhile should mean a  switch out of equities into bonds, hedge the dollar and buy the euro, Swiss franc, gold and Chinese onshore assets. Buy the pharma sector as well.

    ]]>
    Tue, 08 Nov 2016 13:34:00 +0000 http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26468/hsbc-upgraded-to-buy-as-capital-position-impresses-26468.html
    <![CDATA[Brokers: UK pharma giants in good shape if Clinton wins says Citigroup]]> http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26458/brokers-uk-pharma-giants-in-good-shape-if-clinton-wins-says-citigroup-26458.html Hillary Clinton’s proposals for US healthcare reform will, if she wins, create almost limitless outcomes, according to Citigroup with potential black swan outcomes in the event of a Democratic clean sweep.

    “From a legislative angle, we continue to prefer names with either limited part D exposure [US Medicare] or heavier contribution of non-pharma assets."

    Both UK flagwavers GlaxoSmithKline (LON:GSK)  and Astra Zeneca (LON:AZN) are buys on that basis for the broker.

    Gold miner Randgold Resources PLC (LON:RRS) is about 20% undervalued, a gap that should close as it releases more cash to pay out to shareholders according to JP Morgan.

    Berenberg is sticking with its buy case for gas utility Centrica (LON:CNA) even though the investment case has been a frustrating one.

    Centrica offers an attractive dividend yield underpinned by improving earnings and cash flow backed by cost-cutting, a recovery in commodity prices not yet reflected in the share price.

    " Politics continues to dog the investment case but we continue to believe that the market is overly bearish" ,says the broker.

    The target price is 240p.

    A rising coal price points to rising dividends from Anglo Pacific Group PLC (LON:APF), suggests broker Peel Hunt.

    Last week, the resource investor reported a 147% increase in royalty income in its third quarter.

    Spot prices of coking coal, used in making steel, are up 229% in the year so far and 110% for thermal coal (used, among other things, in generating  electricity). The target price goes from 128p from 108p

    Ergomed PLC's (LON:ERGO) co-development deal with Asarina Pharma AB for Sepranolone enhances its pipeline, says broker N+1 Singer, which repeats a 'buy' rating and lifts the target by 10p.

    ]]>
    Mon, 07 Nov 2016 14:22:00 +0000 http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26458/brokers-uk-pharma-giants-in-good-shape-if-clinton-wins-says-citigroup-26458.html
    <![CDATA[Broker spotlight: Rolls-Royce gets a lift from Citigroup ]]> http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26451/broker-spotlight-rolls-royce-gets-a-lift-from-citigroup-26451.html Yesterday's profits upgrade from pawnbroker H&T GROUP PLC (LON:HAT) was welcome, but not unexpected, according to finnCap.

    The broker, which rates the shares a 'buy', thinks the company's profits will get a £1.2mln boost from the resurgence in the price of the yellow stuff, but says the H&T story is not really about gold.

    “The real story is how the growth of the personal loans business will play out over the next few years.

    “Increasing the [personal loans] book by £2mln since the interim to £8mln is useful for 2016 but extrapolated beyond could prove transformational for the group in terms of lending growth.”

    Shell (LON:RDSB) edges it over BP (LON:BP.) for investors believes Goldman Sachs.

    Results from Anglo–Dutch Shell and BP this week both beat the US broker’s expectations.

    Shell’s performance though will reassure investors that the plan from the capital markets day in June remains on track, with cash flow picking up and further cost synergies and reductions to be realised.

    Rolls-Royce PLC (LON:RR.) investors have become used to profit warnings in recent months but that might be about change suggests Citigroup.

    On the back of a new cash-driven way of valuing the engineers, the US broker has upgraded the aeroengine maker to a ‘buy’.

    Prices comparison web site operator Gocompare.com demerged from esure Group PLC (LON:ESUR) and the shares are under-priced, according to Peel Hunt.

    The shares closed at 72p on their first day of listing, which is some way short of Peel Hunt's 85p target price, making the shares a 'buy'.

    One blue-chip City broker was singing Sainsbury PLC’s (LON:SBRY) praises ahead of its interim results next Wednesday (November 9).

    The investment arm of Deutsche Bank restated its ‘buy’ target and 280p a share price target.

    One of the major talking points next week will be the outlook for food prices, with imported inflation on the rise due to the post-Brexit tumble of the pound.

    ]]>
    Fri, 04 Nov 2016 16:02:00 +0000 http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26451/broker-spotlight-rolls-royce-gets-a-lift-from-citigroup-26451.html
    <![CDATA[Cineworld Group PLC shares are just the ticket for HSBC]]> http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26441/cineworld-group-plc-shares-are-just-the-ticket-for-hsbc-26441.html Cineworld Group PLC (LON:CINE) shares are just the ticket for HSBC, which has initiated coverage on the cinemas group.

    HSBC’s price target implies the price could advance around 30% from the current level of 543.5p.

    Analyst Ali Naqvi described the UK business as a ‘cash cow’ able to deliver £100mln of underlying earnings a year.

    He also lauded the business’s defensive qualities, given its ability to continue almost untroubled in times of economic uncertainty.

    Increasingly, long-term holders are looking for this type of investment as counter-weight to the more cyclicals stocks held in portfolios.

    Credit Suisse is becoming increasingly concerned about fashion firm Next Plc’s (LON:NXT) ability to maintain its margins.

    Operating expenditure is rising and, reflecting sterling’s post-Brexit vote plunge, input costs are on the rise, meaning Next will struggle to pass on higher costs.

    On top of that, Next Brand sales are “looking increasingly mature”, and Credit Suisse (CS) reckons Next’s underlying earnings (EBIT) margins will have peaked at an industry high of 20% in 2015/16.

    “Deteriorating sales growth for Directory (3Q 0%) implies that the only sources of sales growth for Directory are lower margin Label and International,” CS said, as it downgraded the stock to ‘under-perform’ from ‘neutral’.

    The target price has been cut to 4,600p from 4,950p.

    A bullish note from US heavyweight broker Citigroup sent Shire Plc (LON:SHP) to the top of the FTSE 100.

    Brushing aside a mixed reaction to its third quarter results earlier in the week, the broker says relative to others in its sector Shire is compelling value.

    The worries were sparked by a disappointing sales performance from new subsidiary Baxalta’s haematology drug portfolio, but any concerns here are now well in the price, said analyst Peter Verdult.

    Suggestions that haematology revenues may drop by 10% from 2018 are wide of the mark, he reckons, given the volume growth, pipeline and potential safety issues for Roche’s new haemophilia rival ACE910.

    Verdult says Shire offers potential earnings growth of 19% over the next five years on an earnings multiple of less than ten, while on a cash flow multiple basis the implied price is 7,000p, versus this morning’s price of 4,538p.

    Morgan Stanley has upgraded defence firm BAE Systems PLC (LON:BA.) to ‘overweight’. Partly this is a response to an expected boost from overseas earnings, now that sterling is in the doghouse, but it also sees “upside risk from tank opportunities”, while concerns about Saudi Arabia and regulatory risks are overdone, in the US bank’s view.

    ]]>
    Thu, 03 Nov 2016 11:41:00 +0000 http://www.proactiveinvestors.co.uk/columns/broker-spotlight/26441/cineworld-group-plc-shares-are-just-the-ticket-for-hsbc-26441.html