G4S higher as HSBC ups to ‘hold’ from ‘reduce’, with increased target price, citing valuation grounds

A look at some of the biggest risers and fallers in London on Wednesday

G4S lorry
Unilever was also higher as UBS upgraded to the stock to ‘buy’ from ‘neutral’

G4S PLC (LON:GFS) was a gainer in late afternoon trading, ahead 1.3% to 245.3p as HSBC Securities upped its stance on the support services firm to ‘hold’ from ‘reduce’, with an increased target price of 245p from 230p, citing valuation grounds.

In a European sector review entitled ‘Cash and Security’, the global bank’s analysts said: “With potential for delays in contract conversion, and wage inflation headwinds, we do not consider these positives ample enough to offset the risks completely. However, the multiple de-rating limits the downside potential.”

Another blue chip gainer was Unilever plc (LON:ULVR), which added 4.0% to 3,890p as UBS upgraded to the stock to ‘buy’ from ‘neutral’, saying its recent underperformance creates a “compelling entry point”.

The consumer goods company’s shares have pulled back about 18% since their peak in October but UBS sees upside from its restructuring.

Unilever spent most of last year reviewing its business after rebuffing a US$143bn takeover bid from Kraft Foods in February 2017.

1.30pm: Norish up as cold storage firm reports strong 2017 profit growth

Norish plc (LON:NSH) saw its shares jump 8.3% higher to 84p in mid-afternoon trading after the reported cold storage provider strong full-year growth in profit and revenue.

The AIM-listed group reported a pre-tax profit of £1.5mln, up from £633,000 in 2016, as revenues rose sharply, up 32% to £42.3mln driven by increase in blast freezing volumes.

Norish chairman Ted O’Neill said: "We anticipate another strong year of profit growth in 2018, underpinned by the initiation of a continuous improvement programme across the business."

Meanwhile, Shire Plc (LON:SHP) (NASDAQ:SHPG) shares shot up 16.6% to 3,580p after Japan’s Takeda Pharmaceutical Company Ltd confirmed it is considering a takeover approach for the UK company.

Takeda said its consideration of a possible offer for Shire is at “a preliminary and exploratory stage” and there can be “no certainty” that an approach will be made.

In other news, shares in DFS Furniture Plc (LON:DFS) jumped 7.6% to 183p as the group said it remained confident of delivering modest earnings growth this year despite a decline in first-half profits and sales.

The furniture retailer said revenues, excluding the acquisition of Sofology in November, dropped 3.5% to £366.6mln in the six months to January 27. Profit before tax plunged 58.1% to £40.4mln. However, revenues increased 4.3% to £396.1mln when including a £29.6mln contribution from Sofology.

The group also said recent trading had improved and expects the second half to deliver a “stronger year-on-year revenue trend than the first half”.

12:30pm: Totally shares weak as healthcare services firm sees full-year pre-tax loss widen

Totally Plc (LON:TLY) saw its shares shed 1.9% to 26p in lunchtime trading as the healthcare services provider reported a widened full-year pre-tax loss.

The AIM-listed company posted a pre-tax loss of £2.08mln for the 12 months ended 31 December 2017, an increase from a £1.49mln loss a year earlier, though gross profits rose to £5.62mln from £1.37mln.

The group saw its full-year revenues jump to £21.35mln, up from £3.977mln a year earlier reflecting its "transformational acquisition" of Volcare, but its cost of sales more than quadrupled to £15.7mln from £2.6mln the year before.

But Totally’s chairman Bob Holt, commented: “Our overall cash management has been excellent and we closed the year to 31 December 2017 with £11.3m cash in the bank.”

He added:  Our existing core business has performed well with encouraging new contract wins. We remain confident that the new platform for business that we have created will deliver significant opportunities to support the NHS in the provision of improved out of hospital care.”

Among the blue-chips, shares in broadcaster Sky PLC (LON:SKY) dipped 0.34% to 1,311p as its gambling arm, Sky Bet, was fined £1mln by the UK industry regulator.

The company said the Gambling Commission concluded Sky Bet was guilty of failings in its self-exclusion tools, which are meant to help people who fear they have a gambling problem lock themselves out of online casinos and sports betting.

11:30am: Associated British Foods shares buoyed by Morgan Stanley upgrade

Associated British Foods plc (LON:ABF) saw its shares rise 1.1% to 2,451p in late morning trading as Morgan Stanley upgraded the stock to ‘Overweight’ from ‘Equal-weight’.

In a note to clients, the investment bank said the food and retail group and owner of Primark, along with its Spanish rival Inditex, “stand out as high quality businesses that investors should generally want to own over the long term”.

They added: “We conclude that it is ABF that represents the better buying opportunity for those with a c12-month investment horizon. We think profits at Primark are likely to inflect positively in that time frame, whereas we see no sign of the FX headwinds that are hampering Inditex abating”.

Elsewhere, shares in Burberry Group PLC (LON:BRBY) were lifted 1% to 1,687p as Goldman Sachs upgraded the stock to ‘buy’ from ‘hold’.

The bank said earnings momentum was poised to re-accelerate after 3 years of disappointing sales.

Goldman added that the use of third-party platforms to expand its online distribution was key to Burberry’s success.

“We see agreements with multibrand platforms as being capable of accelerating retail revenues and increasing Burberry’s addressable market base with a younger consumer - a potential win win” the bank said.

Legendary Investments plc (LON:LEG) saw its shares jump 9.6% to 0.08p as its investee company Virtualstock Holdings Limited partnered with Previse Ltd.

The AIM-listed investment company said the partnership would deliver a fully integrated purchase to pay supply system with cash on delivery for suppliers in the UK.

“The two British supply chain technology companies will enable clients to merge their accounts payable and procurement functions seamlessly, enabling suppliers to get cash-on-delivery.

“Buyers will now be able to manage their catalogues, contract pricing, inventory and purchases as well as track deliveries through Virtualstock's The EdgeTM platform, while also ensuring their suppliers are paid instantly with Previse's advanced machine learning technology and network of readily available funding” the firm added.

10:30am: Saga shares slide as CFO poached by Paddy Power Betfair

Shares in Saga PLC (LON:SAGA) fell 1.9% to 111.3p in mid-morning trading as their chief financial officer (CFO), Jonathan Hill, was poached by Paddy Power Betfair (LON:PPB) to become their new CFO.

The FTSE 250-listed over-50s services provider said Hill would remain with the company until September 2018 and that it would update the market as soon as a successor was appointed.

Meanwhile, Gloo Networks PLC (LON:GLOO) shares crashed 62% to 36p as the tech company abandoned its plan for a reverse takeover.

The group added that it was continuing to review acquisition opportunities following recent discussions with a potential target.

Gloo added that its cash balance at 31 March 2018 is expected to be between £12mln-£14mln, down from £21.4mln at the end of September 2017.

In other news, shares in e-sports firm Gfinity Plc (LON:GFIN) dropped 5.1% to 11.5p as it confirmed that it is raising £6.7mln via a placing and subscription of 55.8mln new ordinary shares at a price of 12p each to expand its Gfinity Elite esports series as it also delivered first-half results showing a doubling in revenue.

The AIM-listed firm said the net proceeds of the placing - which has been subscribed for by institutional and other investors, including existing shareholders - will be used to deliver strategic growth to fund the net cost of delivering Seasons 3 and 4 of the Gfinity Elite Series in the UK.

9:30am: Lansdowne Oil & Gas shares leap on news of Barryroe deal

Lansdowne Oil & Gas PLC (LON:LOGP) saw its shares leap 45% higher to 1.9p in early morning trading as it signed a farm-out agreement with a Chinese consortium.

The consortium, led by Apec Energy, has agreed to take a 50% interest in the Barryroe project in return for the cost of three wells and associated side-tracks.

Apec will pay half of the well costs itself with the remaining 50% financed by a non-recourse loan set against future cashflow from the prospect.

Lansdowne owns 20% of Barryroe while project operator Providence Resources holds 80%.

In somewhat predictable fashion, Providence Resources PLC (LON:PVR) shares also jumped 21% to 11.3p on news of the farm-out agreement.

The Irish oil explorer has been looking for a partner at Barryroe for at least five years.

Tony O’Reilly, Providence's chief executive, said the deal was a significant transaction that would allow exploration of the different parts of the Barryroe field and give it the tools to bring the field into production.

Elsewhere, Microsaic Systems plc (LON:MSYS) shares gained 14.6% to 2.3p as the mass spectrometry provider signed an agreement with Unimicro Technologies Inc.

The group said the agreement with the medical supplier would cover the integration of its 4500 MiD mass spectrometry detector with Unimicro’s Capillary Electrophoresis Platform.

Once completed, the integrated product will be sold directly by Unimicro in China via its extensive distribution network, the company added.

The agreement follows a UK commercial contract signed by Microsaic last week to provide instruments to the Centre for Process Innovation.

Proactive news headlines:

LoopUp Group PLC (LON:LOOP) has commercially launched into the Australian market with the formal opening of an office in Sydney. The AIM-listed remote meeting solution provider said the US$275mln development would augment a datacentre already in the country, which it has operated since 2016 to serve its UK and US customers, with a target focus on Australian-based enterprises.

Gfinity Plc (LON:GFIN) confirmed on Wednesday that it is raising £6.7mln via a placing and subscription of 55.8mln new ordinary shares at a price of 12p each to expand its Gfinity Elite esports series as it also delivered first-half results showing a doubling in revenue.

Collagen Solutions PLC (AIM:COS) said it expects to reach “a profitable state more quickly than previously planned” following the restructure of its New Zealand operation. The proposal, which is subject to an employee consultation process, would see the division focus on tissue collection and processing, a segment estimated to be worth US$100mln.

WYG  PLC (LON:WYG) has said it expects its full-year revenue and operating profit to be in line with current market expectations of £155mln and £3.5mln respectively before separately disclosed items and share-based payments that are expected to be approximately £8.5mln.

Connemara Mining Company PLC (LON:CON) has re-commenced drilling at its 100%-owned Mine River Gold project at Wicklow/Wexford in Ireland, boring 10 drill holes totalling 1,000 metres.

Renewable energy specialist Aggregated Micro Power Holdings plc (AIM:AMPH) looks set book a significant uplift to the value of its investment in an exchange traded products business which is raising capital. AMP holds a 27.89% stake in IncubEx, which plans to offer up to US$5mln Class B-1 units, valuing the business at US$50mln pre-money.

Strategic Minerals Plc (LON:SML) plans to carry out an initial exploration drilling programme at the Mount Weld tenements in Western Australia. The company said a technical review of the tenements, which are held by its wholly-owned subsidiary Central Australian Rare Earths, have identified a number of early targets considered to have good potential for gold and rare earth element mineralisation.

South African gold miner Pan African Resources plc (LON:PAF) is to carry out a feasibility study at Royal Sheba at the Barberton complex to assess its viability. A new estimate suggests Royal Sheba contains a potential 720,000oz of gold or double the previous resource.

Harvest Minerals Limited (LON:HMI) has announced that the application to register its multi-nutrient natural fertiliser, KPfertil has been processed by the Ministry of Agriculture (MAPA) in Brazil.

W Resources PLC (LON:WRES) said its subsidiary, Iberian Resources Spain SL (IRS), has been awarded a €5.3mln grant by the government of the Extremadura region of Spain. The AIM-listed tungsten-focused miner said the grant was for IRS’s La Parrilla tungsten and tin project in the region and equated to 32% of the €16.6mln plant and facilities package that qualified for grant contribution.

Lab testing has indicated potentially higher recoveries of lithium than previously predicted at the Cinovec deposit in the Czech Republic, according to European Metals Holdings Limited (LON:EMH).

A huge increase in the contribution from its Kestrel coal royalty in Australia helped Anglo Pacific Holdings PLC (LON:APF) to record revenues. Total royalty income in 2017 rose by 90% £37.4m, but it was Kestrel, which is being mined by Rio Tinto, that stood out.

Irish oil explorer Providence Resources PLC (LON:PVR) has finally found a partner for its Barryroe project in the Celtic Sea. A Chinese consortium led by Apec Energy has agreed to take a 50% interest in the project in return for the cost of three wells and associated side-tracks.

ImmuPharma PLC (LON:IMM), the specialist drug discovery and development company, announced that it has with immediate effect appointed Bryan, Garnier & Co. Limited as its joint corporate broker to act alongside Northland Capital Partners who remain the company's nominated adviser and joint corporate broker.

Savannah Resources Plc (LON:SAV), the AIM-quoted resource development company, announced that it has approved the settlement of the first deferred consideration tranche in accordance with the terms of the acquisition of the company's portfolio of Portuguese lithium projects in May 2017.

Metminco Limited (LON:MNC) (ASX:MNC) said that, further to its announcement dated 23 March 2018, it has successfully raised a total of approximately A$152,640 (before costs) from sophisticated and professional investors through the issue of 19,080,045 new ordinary shares in a placing. The company said subscribers will also receive one option exercisable at $0.011 on or before 1 June 2020 for every three placement shares subscribed for, subject to shareholder approval at the upcoming Annual General Meeting.

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