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Ocado heads higher on reports of new contract win and renewed takeover speculation

Some of the main news-driven risers and fallers in London on Thursday...

ocado worker
Could US retail giant Wal-Mart take out Ocado to help it fight back against Amazon?

Online supermarket Ocado Group PLC (LON:OCDO) was helping the FTSE 250 to reach new highs on Thursday afternoon.

The £2.8bn company was the subject of a double whammy of City chatter about a potential new European contract as well as renewed takeover speculation.

On the back of Ocado’s tie-up with French grocer Casino back in November, reports in Sweden have suggested a deal with Swedish retailer ICA Gruppen could be penned in the coming days

Shares in Ocado, the online grocery specialist, helped keep the FTSE 250 in positive territory on Thursday as City chatter grew louder about a potential new overseas contract and renewed talk of a possible takeover bid.

Reports in Sweden suggested that, following Ocado's first major deal with French grocer Casino in November, another deal could be imminent with Swedish retailer ICA Gruppen in coming days.

At the time of the Casino agreement, analysts commented that it was welcome proof of concept but more partners needed to be brought on board for Ocado to justify its lofty valuation.

But short sellers – those looking to profit from a fall in the share price – have continued to increase their positions, with at least 14.3% of the stock on loan according to the FCA.

Yet more talk of a takeover bid might pour cold water over the bears’ hopes though. The Daily Mail has reported that Asda owner and retail giant Wal-Mart Stores Inc (NYSW:WMT) is weighing up an offer for Ocado as it looks to fight back against the rise of online competitors, predominiantly Amazon.com Inc (NASDAQ:AMZN).

Ocado shares 4.7% to 442.8p.

 

1.15pm: Smashing update puts crockery firm Churchill China back on investors’ table

Another full-year update that gave investors some New Year cheer came from ceramic plates and cups maker Churchill China PLC (LON:CHH).

In a brief statement for the year to 31 December 2017, the AIM-listed firm said its revenue growth has again been good in export markets and, as a result, it now expects that its operating performance will be slightly ahead of current market estimates.

Churchill added that its cash and deposit balances are also expected to exceed current market expectations.

The group concluded: “We have continued to make solid progress against our long term objectives throughout 2017.”

In early afternoon trading, shares were up 9.5% to £12.65.

 

9.30am: Sopheon tops AIM risers after telling investors it is set to beat full-year forecasts

Sopheon PLC (LON:SPE) topped the small caps leaderboard on Thursday morning following a bullish year-end trading update from the software developer.

Back in its interim report in August, US-based Sopheon said momentum had been building on the back of “enhanced market recognition” of its enterprise innovation software.

The company said that momentum had translated into “solid growth”, with a particularly strong finish to 2017.

“As a consequence, early indications are that revenues, EBITDA and pre-tax profits for the year ended 31 December 2017 will all exceed market expectations,” read this morning’s statement.

On top of that, Sopheon’s board expects improved recurring revenue and visibility for 2018 as well.

Shares jumped 20.7% to 437p early on Thursday.

 

Proactive news headlines:

Symphony Environmental Technologies plc (LON:SYM) said profits in the year just finished will be significantly higher than current market expectations.

The positive data from the phase II trial of Futura Medical PLC’s (LON:FUM) MED2002 erectile dysfunction gel has been published in the well-respected and peer-reviewed Journal of Sexual Medicine.

LEKOIL Ltd (LON:LEK) told investors it has signed up a contractor for a new seismic programme at the Otakikpo field in Nigeria. The company’s joint venture vehicle Green Energy International has hired a Sinopec unit for the programme, which will capture just under 200 square kilometres of 3D data, spanning both the onshore and offshore areas.

Digital marketing services group Be Heard Group PLC (LON:BHRD) had mixed news on Wednesday, reporting strong revenue growth but lowering profits guidance.

SDX Energy Inc (LON:SDX, CVE:SDX) has confirmed that the recently drilled KSR-16 well, onshore Morocco, has now been connected to the sales line and flow testing will start early next week. The company also said it has decided to end operations on the ELQ-1 well, on the Gharb Centre permit, after encountered intervals were deemed not to be sufficiently commercial to complete the well.

Glycotest, the majority-owned portfolio company of Netscientific PLC (LON:NSCI), has reported positive results from a clinical evaluation of its HCC Panel liver cancer test.

It has taken a while, but the board of BOS GLOBAL Holdings Ltd (LON:BOS) once again has the minimum number of directors required by its constitution following the appointment of Michael Wilczynski to the board as a non-executive.

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