Dunelm slides as brokers chop forecasts
Petro Matad up, company said yesterday nothing new to report
SIG rockets after trading update
Iofina rallies as production recovers
Not a good day for homewares retailer Dunelm PLC (LON:DNLM).
Its trading update yesterday went a little under the radar, but as analysts had a closer look out came the red pens.
Peel Hunt downgraded its stance to ‘hold’ from ‘buy’ and chopped its share price target to 800p from 1,000p.
“Q2 sales came in £13m or 5% below our forecasts, largely down to store sales, of which £4m relates to the timing of the post-Christmas sale (two days are pushed into Q3).”
Jefferies, meanwhile, downgraded to 'underperform' from 'hold' and cut its price target to 650p from 700p.
Christmas trading was actually a relief following a disappointing first quarter, said the US broker, but with rising UK inflation Dunelm faces a struggle as people’s real disposable income declines.
Shares fell 6.5% to 695p.
No such problems for building materials SIG PLC (LON:SHI), which has its best day in months after a trading update was deemed not as bad as feared.
Shore Capital’s Graeme Kyle suggested an element of relief at the absence of another profit warning might have been responsible, in part, for investors’ enthusiasm, but there was like-for-like improvement compared to November’s trading statement especially in the UK.
Profits in 2016 should also be within guidance of £75-80mln and the shares rose by 17.3% to 110.1p.
12.45pm... Oiler Petro Matad in demand again
Investors in Petro Matad (LON:MATD) seem convinced there is something going on at the Mongolia–focused oiler, even if the company says there isn’t.
Shares rose 24% today to 14.25p and have gained 70% this week despite the company stating again yesterday there was no news in the offing.
What we do know is that after a few delays it is shortly to receive the final US$5mln of US$15mln due from Shell after the Anglo-Dutch giant exited their joint venture in Mongolia.
The company is also involved in a farm-out process of its blocks IV and V and had previously reported a significant amount of interest, with several companies reviewing the information in the data room. The bid deadline is February.
Petro Matad intends to carry out a two well wildcat drilling programme starting in mid-2017.
Uranium Resources (LON:URA) ran into some profit taking following a surge earlier in the week on a refinancing update.
One of its main shareholders, Estes Limited, has extended its US$1.8mln loan facility until 15 March.
Uranium repeated it is reliant on Estes maintaining its financial support. The junior’s main project is Mtonya in Tanzania.
Shares dipped 22% to 0.799p.
Ariana Resources plc (LON:AAU) was another mining junior under pressure as it raised £900,000 through a share pricing.
The issue was oversubscribed but the shares were issued at 1.6p and the market price today dropped 8% to 1.75p to reflect that discount.
Ariana expects to start production soon from the Kiziltepe gold mine in Turkey but has been hampered by exceptionally bad weather in the region.
9.30am ... Countrywide ticks higher despite London housing struggles
Estate agent Countrywide PLC (LON:CWD) ticked higher as its indicated its lettings business had helped it offset the problems afflicting the London housing market.
Fourth quarter revenues slid by 9% though over the year Countrywide still managed to inch out a £3mln rise to £737mln. Volumes were 6% below last year.
Shares rose by 4% to 176.5p.
Iodine producer Iofina plc (LON:IOF) had one of its good days as it reported output had recovered in December after two difficult months previously.
As a consequence, it produced just short of 219 metric tonnes of iodine in the second half of 2016 and 474 tonnes for the year.
First half 2017 output will be between 235-255 tonnes and the shares rose 10% to 11p.