Investors in Dignity PLC (LON:DTY) were saying their goodbyes to the FTSE 250-listed funeral services provider on Thursday after Berenberg removed its ‘buy’ recommendation from the stock.
Analysts at the German bank said that although Dignity’s delivery since its IPO in 2015 has been “exceptional” and current trading is “solid”, rising competition is starting to affect its pricing power.
“Given that our investment case is predicated on Dignity’s ability to deliver long-term growth in part thanks to strong pricing power, until its competitive response to these challenges is clarified, we are more cautious on it,” said analyst Sam England.
“As a result, we downgrade to ‘hold’ and reduce our price target to 2,350p to reflect the likely impact of lower pricing power and subsequently lower growth in the mature business.”
England adds that Dignity’s management have become more bearish on the threat from competitors in recent years and thinks the company could start going after lower-margin business to keep the top line looking healthy.
Dignity shares are down 8.5% so far on Thursday.
1pm...Regal Petroleum plunges as Ukrainian tax authorities raid its offices
Shares in Regal Petroleum PLC (LON:RPT) plunged on Thursday after the junior oiler confirmed local press reports that its offices in Ukraine were raided by Ukrainian tax authorities.
The AIM-quoted outfit said its offices and warehouses in Kiev and Yakhnyky – where its MEX-GOL and SV fields are located – were searched by officials on 10 November.
During the search, certain documents were inspected and removed, while officials also impounded some of the equipment at the Yakhnyky warehouse.
On top of that, the authorities have suspended the VAT registration of one of Regal’s subsidiaries.
Regal said its business activities continue as normal, adding that it believed the searches were “entirely unjustified” and “in contravention of Ukrainian law in a significant number of areas”.
“Regal has instructed its Ukrainian legal counsel to take all appropriate action to protect its rights and to challenge the actions of the Tax Authorities through the Ukrainian Courts.”
Shares dived 24.8% to 5.45p.
9.35am...Mkango shares double as it signs “transformational” earn-in agreement at Songwe
Mkango Resources Ltd (LON:MKA) shares doubled on Thursday morning after the junior explorer signed a “transformational” deal which will fund the development of its Songwe Hill rare earths project in Malawi.
Talaxis – a subsidiary of Noble Group – has agreed to plough in £12mln to fund a bankable feasibility study at Songwe in return for a 49% stake in the project.
It has the option to acquire a further 26% interest, if it arranges funding for the project’s development.
The deal means Mkango will retain a 25% stake in Songwe and is free-carried to production.
Mkango is in the process of setting up a new venture with Metalysis focused on alloy powders and magnet technologies, which Talaxis can take a 49% stake in by investing £2mln in two tranches.
“This transaction is transformational for Mkango and for Malawi, and is a further endorsement of the Company's strategy and potential,” said chief executive William Dawes.
“This agreement significantly strengthens our balance sheet whilst ensuring that the Company is fully funded to progress Songwe and our collaboration with Metalysis.”
Shares gained 99% to 7.99p
GKN hit by departure of CEO-designate and another writedown
Among the blue chips, GKN PLC (LON:GKN) was a big faller after it gave investors a double whammy they’d rather not have received.
The automotive and aerospace engineer revealed its chief executive-in-waiting Kevin Cummings is to step down and also announced a further write-off of its US aerospace business in the wake of a recent profit warning.
Non-executive director Anne Stevens will take up the role of interim CEO when current boss Nigel Stein retires in December.
In October, GKN warned that full-year profits will be just “slightly” higher than in the previous year after “disappointing” trading at its US aerospace arm and costs resulting from two legal claims.
A £15mln writedown was announced at its facility in Alabama and it now expects to take another hit of between £80mln and £130mln from its North America business. Shares are down 7.9% to 286.3p.
Proactive news headlines
Iofina plc (LON:IOF) said production from its iodine recovery facilities could exceed expectations after bumper third quarter as it gave an update on progress building its latest plant. IO#7 is on time and within budget, the company said.
IXICO Plc (LON:IXI) has landed another contract to support wrist-worn activity monitors being used by psychiatric patients taking part in a late-stage clinical trial. The deal, the second of its kind, is with an unnamed leading biopharmaceutical and is worth £750,000 over two years.
Oil and gas drilling services provider ADES International Holding Ltd (LON:ADES) has been awarded a new contract for its ADMARINE III offshore jack-up rig from one of its original customers.
The deal with General Petroleum Company is for an initial two-year period, although there is an option to extend that for another two years.
Myanmar-language social media, entertainment and payments platform MySQUAR Limited (LON:MYSQ) has appointed Stephen Chong as chief operating officer with immediate effect.
Aircraft lessor Avation PLC (LON:AVAP) has expanded its aircraft options pipeline to 30 new ATR72-600 aircraft over the next five years. Previously it had 27 options over new ATR72-600 turboprop planes.
Plexus Holdings Plc (LON:POS) chief executive Ben van Bilderbeek has described the drop in the group’s financial results as inevitable. In Thursday’s release, which comes after the announcement that Plexus is selling its jack-up exploration services business, the company reported annual revenue of £4.75mln for the twelve months ended June 30, down from £11.2mln.
Kibo Mining PLC (LON:KIBO) has persuaded Tanzania’s state power company Tanesco to speed up the finalisation of a power purchase agreement for the Mbeya (MCPP) project. An updated memorandum of understanding for the thermal power station has been submitted to Tanzania’s energy ministry and Attorney General for final sign off.
OPG Power Ventures (LON:OPG) said the scrip dividend reference price for the ordinary shares to be issued to shareholders will be 26.023p per share. The shareholders elected to receive the scrip dividend alternative for the company's final dividend of 0.72p per share.
Green Dragon Gas Ltd. (LON:GDG) said it continues to progress negotiations of the inter-creditor terms with its bond holders, as noted in its debt maturity extensions update on 30t October 2017.
Medical device company Belluscura Limited, part-owned by Tekcapital PLC (LON:TEK), has announced its intention to float on the London Stock Exchange’s junior market AIM. Belluscura is seeking to raise £7.5mln to £10mln in the placing and expects to begin trading in December.
Greka Drilling Ltd (LON:GDL) has confirmed it has now entered into a three-year drilling contract in India. The Oil and Natural Gas Corporation (ONGC) has contracted Greka to the Bokaro CBM asset, where it will provide drilling and mud services.
Highlands Natural Resources Plc (LON:HNR) has told investors of a significant step-up in flow back from the two new wells at the East Denver project. The operations at the Wildhorse and Powell wells yielded a combined flow rate of 1,022 barrels oil equivalent per day, in the 24-hour period ending 10pm November 15. It marks a 60% increase in production rates since November 10.
Belvoir Lettings PLC (LON:BLV) said it will not proceed with a merger offer for The Property Franchise Group PLC (LON:TPFG). The company had announced a possible bid on Tuesday and a number of common institutional shareholders had publicly stated their support for talks.
Brady Plc (LON:BRY) said Kestrel Partners LLP has raised its stake in the company to 27.02% from 26.04%.
Metal Tiger PLC (LON:MTR) had advised the issue of a further 256,735 new shares in respect of 5,000 of warrants. The warrants have been converted at an issue price of 1.95p. It added that the number of warrants extended by an agreement to 28 February 2018 is 199,500 and not 204,500 as originally stated on 6 November.
Eco (Atlantic) Oil & Gas Ltd (LON:ECO) said the subscription of shares by Africa Oil Corp (AOC) has been completed. AOC has received 29,200,000 new common shares in Eco and now holds an interest of about 19.77% in the company.