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Halfords zips higher as heavyweight broker Deutsche Bank softens its bearish stance

Some of the main news-driven risers and fallers in London on Friday...
Halfords results yesterday were met with contempt from the markets, but they've more than recovered today

Bikes and car parts retailer Halfords Group plc (LON:HFD) surged on Friday after heavyweight German broker Deutsche Bank issued a more-bullish-than-usual note.

The bank upgraded the company from a ‘sell’ to ‘hold’, noting that foreign exchange headwinds – which put a £15mln dent in interim profits earlier this week – are starting to ease, while bosses are still confident of hitting full-year targets.

"With mitigation of sourcing cost headwinds progressing, and the headwinds themselves easing, we increase our earnings forecasts 1-6%," he said.

Muir-Sands says that with recent weakness in shares, and trading for calendar 2018 at just 11 times' price-earnings, and with a 5.8% dividend yield, the broker now sees more limited downside, hence the upgrade.

Halfords share were up 7.1% to 332.8p late on Friday.

Bunzl battered by Morgan Stanley downgrade

Distribution giant Bunzl PLC (LON:BNZL) was hammered by the markets today after it was downgraded by American banking heavyweight Morgan Stanley.

Analysts there – which lowered their rating to ‘underweight – reckon Amazon’s intention to target the business-to-business distribution sector could hit Bunzl’s earnings.

The note wiped 5.2% off the value of the company, leaving shares at £21.82.


12.30pm...Remaining investors desert Alpha Pyrenees as properties devalued again

Investors were running over the hills and far away from Alpha Pyrenees Trust Limited (LON:ALPH) after the troubled commercial real estate investor revealed its properties are likely to be worth less than previously thought.

The company is in the process of selling off its remaining three assets – two in Spain and one in France – and winding up the trust.

At the end of June the three properties were valued at £9.8mln but interest has been weak so far, and Alpha reckons if it can sell them the “prices achieved are most likely to be lower than the valuation”.

Given that the company has to repay just over £75mln in borrowings to its lender next October, Alpha reiterated that the sales process won’t result in any returns to shareholders. Shares slumped 23.8% to 0.08p.

Castings interim profits hit by production

Iron casting and machining group Castings PLC (LON:CGS) saw its first half profits dented by rising costs and production issues.

Customer demand remained steady with sales rising to £61.7mln (H1 16/17: £57.9mln), but a delay in passing on rising raw material prices to consumers and disruption in supply from the machining business saw profits slide to £5.9mln (H1 16/17: £7.1mln).

Castings doesn’t think the issues will have a “meaningful impact” on profitability for the rest of the year, adding that it was still on track to hit full-year expectations.

The markets weren’t completely reassured, with shares heading 5% lower at 437.3p.


9.30am...IQE in demand as it raises £95mln from institutions

It’s not very often that you see a company on the junior market raise a sizeable chunk of money by issuing shares at the going rate, but that’s exactly what IQE plc (LON:IQE) did on Friday.

The firm, which provides wafer products to the semiconductor industry, raised a whopping £95mln from investors to expand the business and develop its products and technologies.

More impressive was that the shares were issued at 140p – the same as Thursday’s closing price – and the fact the placing was completed in less than 24 hours, with IQE having only unveiled its plans on Thursday.

React Group results don't wash well with markets

Deep cleaning specialist React Group PLC (LON:REAT) was stuck in the mud early on Friday after it was forced to concede that last year’s results “were very disappointing”.

The board expects to report a pre-tax loss of £400,000 on revenues of £2.65mln for the 12 months through to 30 September.

React did say that the recent board restructuring and newly implemented financial controls had started to show signs of improvement in the second half of the year.

Investors weren’t so sure though, with shares shedding 12% immediately after the bell to 0.4p.

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