News Column

UK WINNERS & LOSERS: Telecom Plus, Britvic, DCC Lead FTSE 350 Risers

May 21, 2014

James Kemp



LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices midday Wednesday.

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FTSE 100 - WINNERS

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Petrofac, up 1.8%, and AstraZeneca, up 1.6%. The companies are the two biggest risers in the blue-chip index following broker recommendation revisions. Barclays has upgraded Petrofac to Equal Weight, but on a reduced price target of 1,500.00 pence. Barclays has raised its price target on AstraZeneca to 4,000.00 pence from 3,800.00p, while UBS has increased its price target to 5,000.00p from 4,825.00p.



WPP, up 0.4%. The media buying giant said its subsidiary Millward Brown has acquired Romanian market research agency Daedalus for an undisclosed fee. It said the acquisition of Daedalus will provide Millward Brown with a presence in Central and Eastern Europe. Millward Brown is research agency specializing in advertising, marketing communications and media.

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FTSE 100 - LOSERS

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WM Morrison Supermarkets, down 2.5%. Deutsche Bank has downgraded the food retailer to Sell from Hold, and lowered its price target to 190.00 pence from 200.00p, saying that the group's recent share price performance is unjustified. Morrisons share price has rallied 10% in the past two weeks, outperforming the FTSE 100 by 10%, and rivals J Sainsbury and Tesco by 3% and 1%, respectively, says Niamh McSherry, an analyst at Deutsche Bank. "Neither incremental news flow nor fundamental valuation supports the recent share price move," McSherry says.



HSBC Holdings, down 1.5%, Intertek Group, down 1.4%, and Compass Group, down 0.7%. The companies are some the heaviest fallers in the blue-chip index after going ex-dividend, meaning new buyers no longer qualify for the latest dividend payout.



Antofagasta, down 1.2%. The copper miner has released a statement that indicated the company is on track to meet it's current production guidance. At the annual general meeting that followed, Chairman Jean-Paul Luksic commented on the potential negative impact to potential changes to tax rates in Chile that will come into effect if the re-elected president, Michelle Bachelet, is successful in pushing through her election pledges. However, these changes have previously been flagged as an upcoming issue for the miner, and Wednesday's small fall in the share price is more a consolidation on a day of thin volumes, as well as reaction to a small dip in the price of copper, down 0.6%, amid a mixed day for mining stocks in general, say analysts.



Vodafone Group, down 1.1%. The wireless company is a big loser again Wednesday, having dropped 5.5% on Tuesday, following a raft of negative price target revisions. Goldman Sachs has cut its price target on the company to 225.00 pence from 240.00p, JPMorgan has lowered its target to 260.00p from 270.00p, and Barclays has cut its target to 245.00p from 260.00p. The company fell sharply on Tuesday after it warned that its cash flow would be hit by its huge investment programme in the next few years, and it reported falling service revenue due to continued weakness in some of its European markets.



SSE, down 0.8%. The energy supplier is down despite reporting pretax profit of GBP575.3 million for the year to end-March, up from GBP571.3 million a year earlier, with revenue rising to GBP30.59 billion from GBP28.30 billion in the corresponding period. While the company has repeated that it expects earnings to in current full year to be similar or slightly higher than last year, it has again highlighted downside risks to earnings per share and dividend cover in future year, says Martin Brough, an analyst at Deutsche Bank. "With risks around the Scottish independence vote, the possibility of a retail price cut, and the electricity distribution price review the shares look unattractive to us," says Brough.

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FTSE 250 - WINNERS

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Telecom Plus, up 12%. The utility firm has reported a rise in revenue, higher pretax profit and a boosted full-year dividend, as the firm continues to grow its customer base. It said revenue rose 9.5% to GBP658.8 million from GBP601.5 million last year. Adjusted pretax profit jumped 25% to GBP44.6 million from GBP35.6 million the previous year. It also boosted its dividend for the full-year by 13% to 35 pence per share from the 31 pence per share paid in 2013.



Britvic, up 6.3%. The soft drinks maker has reported strong revenue, profit and margin growth in the first half of the year, supported by volume increases, higher prices and increased market share. It also raised its interim dividend by 13%, highlighting a confident outlook for the year ahead, the company said.



DCC, up 5.6%. The sales and support-services group has declared a 10% increase in its annual dividend, as it reported strong gains in both revenue and profit in its recent financial year, driven by acquisitions and by strong organic growth in its Technology and Healthcare divisions. Revenue for the year to end-March rose 6.2% to GBP11.23 billion from GBP10.57 billion the year before, boosting pretax profit by 16% to GBP123.9 million from 106.6 million.



FirstGroup, up 2.5%. The bus and rail company said that trading during its full-year was in line with expectations, as it recorded an improved statutory pretax profit despite poor weather conditions hitting profits in its First Student and Greyhound businesses in its final quarter. It said its statutory pretax profit for the year was GBP58.5 million, up from a GBP28.9 million loss the previous year. On an adjusted basis, before amortisation and exceptional charges, pretax profit rose 23% to GBP111.9 million from GBP90.9 million last year. Revenue came in at GBP6.7 billion, down 2.7% from the GBP6.9 billion recorded for 2013.

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FTSE 250 - LOSERS

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Michael Page International, down 1.5%, Home Retail Group, down 1.3%, Provident Financial, down 1%, Computacenter, down 1.1%, and Dignity, down 1%, are five more companies that have gone ex-dividend.



HICL Infrastructure Co, down 1.4%. The equity investment company reported a rise in pretax profit to GBP153.8 million in the year to end-March, compared with GBP93.1 million in the previous year. It also declared a second interim dividend of 3.60 pence per share. The group noted that demand for UK infrastructure investments currently outstripping supply. However, the firm also has gone ex-dividend Wednesday.

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AIM ALL-SHARE - WINNERS

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Tower Resources, up 12%. The oil and gas exploration company is a big riser despite saying that there has been a delay in its drilling schedule in Namibia, and that it doesn't expect drilling operations to recommence until the end of May. The firm said that the delay will not have a material financial consequence on the company.



Belvoir Lettings, up 7.1%. The lettings specialists said trading in the current year to date has been positive, while its acquisition programme remains promising. It also announced that its newly-appointed chief executive, Carl Chadwick, has stepped down from the role and has left the firm to focus on other business interests, including his role as chief executive of Sun Axis Corporate Finance. In March, Chadwick, who was previously finance director, took over from Dorian Gonsalves. Gonsalves, who had overseen the company's shift towards providing an estate agency service, became the company's director of commercial and franchising. Belvoir said Executive Chairman Mike Goddard will resume the role of chief executive, supported by Gonsalves, who will continue his full-time operational responsibilities, overseeing the day-to-day running of the business.



Optimal Payments, up 6.8%. The company said that both revenue and earnings before interest, taxes, depreciation, and amortisation are now forecast to be "materially ahead of market expectations" in its full-year on the back of strong trading in the year to date. The company said its strong performance in 2013 has continued into the current trading year, with its NETELLER and NETBANX businesses performing well; revenues are ahead of the same period last year, said Optimal Payments, as the firm looks to the World Cup in Rio to provide a further boost.

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AIM ALL-SHARE - LOSERS

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DekelOil, off 9.7%. The crude palm oil extractor's shares have slumped, even though it said it had secured a second contract to supply crude palm oil from its extraction mill in the Ivory Coast and had already started supplying oil to its new customer, meaning it has now secured buyers for its entire 2014 production. Under the terms of the new deal, which will initially run to the end of 2016, DekelOil will supply Adam-Afrique with a minimum of 5,000 metric tonnes of crude palm oil a year, up to a maximum of 10,000 tonnes. It will be paid the official AIPH price, which is similar to the CIF Rotterdam benchmark price. The AIPH is the Inter-professional Association of Oil-Palm Industry, an Ivory Coast palm oil industry representative body that sets selling prices for palm fruit clusters and raw palm oil "according to markets".

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Source: Alliance News


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