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Science Group takes down the 'for sale' sign

A look at the day's major movers, including Photonstar, Capita, IHG, GVC, Reach and Balfour Beatty
Fivers
The £100,000 will strengthen Photonstar's balance sheet

Science Group PLC (LON:SAG) has taken down the ‘for sale’ sign, blaming Brexit uncertainty and volatile markets.

The shares sagged from 215p overnight to 199p, a fall of 7.4%.

The group had put itself up for sale in September as part of a review of its corporate strategy.

The strategic review is still taking place and is expected to be complete by the time of the publication of its preliminary results., which normally takes place in late February or early March.

In terms of trading, the group said trading was “in line” with its expectations with a cash balance of £19.3mln and net funds of £6.4mln at 30 November.

The firm added that as a result of the termination of the sales process, it would be lifting the suspension of its share buyback programme of around £1mln worth of shares per year.

12.15pm: Photonstar buys time as it looks for life at the end of the tunnel​

Anyone who has been following the tribulations of Photonstar LED Group PLC (LON:PSL) will not have been surprised by this morning's fund-raising news.

Last month, the group’s fixed LED lighting subsidiary, PhotonStar LED Limited, was placed into liquidation to prevent it dragging the whole group under.

The legacy business generated the majority of the group's revenues, accounting for £1.15mln of the group's revenues of £1.33mln in the first half of 2018 but it also incurred the majority of the group's trading losses.

The lighting group has been attempt to move away from fixed LED lighting into the Internet of Things (IoT) world of lighting and building management as a service.

Its flagship solution is named halcyon, a retrofit building control & cloud-based building management technology that uses the IoT to reduce operating costs for businesses.

The solution is being trialled by potential customers but it is fair to say that take-up has not been as swift as the company hoped, hence today’s heavily discounted share issue at 0.02p a pop, to raise £100,000.

The shares more than halved from last night’s closing price of 0.055p to 0.025p.

11.15am: Capita falls down on its Rs again

It is easy to see why some people routinely insert an R into the name of Capita PLC (LON:CPI), the outsourcing giant.

The stock was down 4.5% to 109.35p this morning after the National Audit published a report on Friday detailing how the FTSE 250 outsourcing firm has missed its annual targets for recruiting new soldiers and officers for the British Army for the sixth year in a row.

The government’s spending watchdog noted that under the 10 year British Army Recruiting Partnering Project contract, which started in 2012, Capita's total shortfall each year has ranged between 21% and 45% of the Army's requirement.

10.45am: LVMH bid for hotels owner Belmond sparks interest in IHG

Shares in InterContinental Hotels Group PLC (LON:IHG) edged 0.1% higher to 4,138p as investors considered the implications of French luxury group LVMH Moët Hennessy Louis Vuitton’s US$2.6bn deal to buy Belmond, the owner of the Hotel Cipriani in Venice.

LVMH is paying US$25.00 per share in cash for Belmond, which owns, part-owns and manages 46 luxury hotel, restaurant, train and river cruise properties which includes the Venice Simplon Orient-Express.

The acquisition will significantly increase LVMH’s presence in the ultimate luxury hotel world, an area IHG has also been targeting.

10.15am: GVC shareholders set for potential windfall 

GVC Holdings PLC (LON:GVC) leapt 8.5% higher to 717p, extending recent gains ahead of next week's parliamentary vote on legislation regarding fixed-odds betting terminals (FOBT).

Analysts at Citigroup reportedly think the vote will be a "significant positive catalyst" for the stock as it could eliminate the possibility the company would have to pay out around £676mln to shareholders.

GVC agreed to pay that amount as part of its acquisition of Ladbrokes Coral, which completed in March this year, as a contingent value right linked to the FOBT legislation, which is worth 35p per Ladbrokes Coral share if the legislation is not enacted by 28 March 2019. 

9.00am: Reach and Balfour Beatty both raise expectations

Shares in newspaper groups have been about as popular as yesterday’s chip-wrappers this year, which makes today’s update from Reach PLC (LON:RCH) all the more remarkable.

The publisher, formerly known as Trinity Mirror, expects its 2018 performance to be “marginally ahead of market expectations” as its revenues were boosted by its acquisition of the Express and Star papers over the summer.

Broker Peel Hunt commented that the group will generate underlying earnings (EBITDA) of £175mln in the full year, which is more than its market capitalisation.

“The company confirms full-year revenue in line with expectation, with a noteworthy improvement in Q4 print advertising performance (-15% from -20% in Q3). Better synergies from the Express & Star deal (£3m vs £2m) and good cost control see PBT [profit before tax] forecast rise from £133.0mln to £137.0mln (36.1p to 37.2p EPS),” the broker said.

Peel Hunt’s target price is 190p, which is not even in the same ballpark (whatever one of those is) as the current share price of 60.8p, up 6.7%.

Balfour Beatty PLC (LON:BBY) settled a few nerves as it raised its guidance for the year following the disposal of further assets from its infrastructure investments arm this month as part of a wider restructuring plan.

The infrastructure group said it estimates profit from disposals will amount to about £65mln so now expects its full year performance to be ahead of its previous forecast.

Following the disposal of its interest in Fife Hospital for £43mln in September, the group expects to sell an 80% stake in the Edinburgh University student accommodation project for £24mln.

Liberum reiterated its ‘buy’ recommendation and 350p target price as it increased its fiscal 2018 (FY18) fully-diluted earnings per share (EPS) forecast by 18% due to a £25mln profit on the Edinburgh disposal.

“We increase average net cash from £145mln to £185mln for the FY, due to better working capital. The gross debt has been partially paid down. Order book has remained stable at c. £12bn vs the H1 18 level of £12.6bn, and £11.4bn last year,” the broker said.

“We continue to expect industry margins in H2 2018 at Construction and Aberdeen will be complete by the year end. At Investments, we increase expected profit on disposals from £40mln to £65mln. 2018 cash flow will be messy but 2019 working capital should be neutral and profits should convert to cash,” the broker said.

Shares in Balfour Beatty were up 3.5% at 254.6p.

Proactive news headlines:

Block Energy PLC (LON:BLOE) has revealed that the West Rustavi 16a legacy well has flowed 200 barrels of oil over a ten hour test. The company added that a further 300 barrels of oil was recovered in further tests over subsequent days. Big Pic in July.

The cell therapy specialist ReNeuron Group PLC (LON:RENE) is gearing up for a busy 18 months with read-outs from two clinical trials expected in that time-frame. Patient screening and enrolment has commenced for its most advanced programme, a CTX therapy for stroke, which is entering phase IIb clinical trials, with top-line data from the US study expected in early 2020. Big Pic in July.

OptiBiotix Health PLC’s (LON:OPTI) subsidiary, ProBiotix Health Limited, has raised around £1mln to fund a potential initial public offering (IPO). Big Pic in September.

PhotonStar LED Group PLC (LON:PSL) has raised gross proceeds of £100,000 from a placing of 500,000,000 new ordinary shares with new and existing investors at a price of 0.02p each.  The group said the net proceeds will provide the company with additional working capital and will also enable its board to initiate a further cost reduction programme and to evaluate new business opportunities.  Big Pic in August.

Wheelsure Holdings PLC (LON:WHLP) is to work with Haydale Graphene Industries PLC (LON:HAYD) on a “smart” graphene pressure sensor for the fastener market. Big Pic in September.

Ormonde Mining PLC (LON:ORM) continues to look forward to a February start-up at its 30% owned Barruecopardo tungsten mine. The company, in a stock market statement, told investors that development schedule at the Spanish project has progressed in line with previous guidance. Big Pic in August.

Chaarat Gold Holdings Ltd (LON:CGH) is preparing to have its suspension on AIM lifted today after securing “further improved terms” for its acquisition of the Kapan Mining and Processing Company. Big Pic in November.

Lithium mine developer Kodal Minerals PLC (LON:KOD) said it had made “excellent progress” towards the delivery of its first mining operation at the Bougouni project. As a pre-revenue company, the emphasis in the company’s interim results for the six months to the end of September was naturally on the progress made operationally rather than on the numbers. Big Pic in September.

EQTEC PLC (LON:EQT) said it has drawn down a third tranche amounting to US$864,000 under the US$10mln financing facility provided by Cuart Investments Fund and associates further details of which were announced by the company on 27 September 2018 and 5 July 2018. It said the total amount drawdown to date under the financing facility amounts to US$3,328,000 (approximately £2.6mln). The proceeds of the drawdown will be used to further develop the company's existing project portfolio, to avail of possible investment opportunities and for general working capital.

Further to the announcement on 26 November 2018, Maistro PLC (LON:MAIS) announced that it has raised gross proceeds of £250,000 through the issue of 25,000,000 open offer shares, with applications for 46,928,175 open offer shares made under the excess application facility.

U.S. Oil & Gas PLC has placed 1,367,566 new ordinary shares with private investors at a  placing price of 30p per share to raise gross proceeds of circa US$527,539. The group said the proceeds will be used to provide US Oil with additional working capital, including the funding of drilling operations.


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