LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices midday Thursday.
FTSE 100 - WINNERS
SABMiller, up 3.3%. The brewing giant reported a higher pretax profit for its last financial year, despite a dip in revenues, supported by volume increases and demand driven by its emerging markets businesses, which continue to offset weakness in North America and Europe. It reported pretax profit of USD4.82 billion for the year to end-March, up from the USD4.68 billion reported a year earlier, despite revenue falling to USD22.31 billion from USD23.31 billion the prior year. It said group net producer revenue in the year declined by 1%, whilst organic net producer revenue grew by 3% on a constant currency basis, led by its developing market businesses in Africa, Latin America and its associate in China, on the back of price increases and growth in its premium brand portfolios there.
British American Tobacco, up 2.3%, and Imperial Tobacco Group, up 1.6%. Reynolds American Inc is in active discussions to buy Lorillard Inc in a complicated, three-way transaction that could see British American Tobacco take a major role, Reuters News has reported. The two US names are the second- and third-largest tobacco producers in the country, and are said to be in advanced merger talks to create a company with a market value close to USD55 billion, according to Reuters. British American Tobacco has a 42% stake in Reynolds and would likely have a significant say in any deal. The other FTSE 100-listed tobacco company, Imperial Tobacco, is also up following the reports.
Glencore, up 1%. The mining company said it will close its Newlands underground coal mine in Australia in late 2015 as part of its ongoing strategy to combat a collapse in coal prices. It said it will not extend the life of the Newlands mine in Queensland'sBowen Basin, which will therefore reach the end of its life in the fourth quarter 2015 after extracting the final volumes of coal from the site. The company said the decision will result in the end of development activities on site at the end of June 2014, leading to the loss of 50 jobs, a quarter of the mine's workforce.
Royal Dutch Shell A Shares, up 1%. The oil and gas major said it will stop providing a scrip dividend from the point it gives out its second quarter 2014 interim dividend, meaning that the second quarter interim dividend and all other dividends from the company will now be provided in cash. It said the decision will allow for a more efficient share buy-back programme, and it expects that buy-backs will offset dilution created by scrip dividends by the end of 2015, with roughly 135 million shares currently outstanding. Shell said it has recently been less attractive for Shell to buy back its A shares rather than B shares due to Dutch dividend withholding taxes, but the cancellation of the programme is expected to remove this problem.
FTSE 100 - LOSERS
Royal Mail, down 7%. The company is the biggest faller in the blue-chip index despite delivering results broadly in line with consensus expectations. However, with Royal Mail having just this week announced the introduction of a Sunday parcel delivery service, Shore Capital notes that competition in the parcel business is becoming increasingly intense. Indeed Royal Mail's management delivered a word of caution in their own release Thursday, saying, "the competitive environment on the parcels side is more intense." There may also be an element of profit taking given that, ahead of Thursday's session, the group's shares had risen 18% since hitting a 2014 low of 488.181 pence in mid-April.
Royal Dutch Shell B Shares, down 2.8%. The group's 'B-Shares' are down after it cancelled its scrip dividend policy.
Unilever, down 0.7%. The Anglo-Dutch consumer goods giant said it is selling its North America pasta sauces business, including the Ragu and Bertolli brands, to Japanese condiments maker Mizkan Group, in a deal worth USD2.15 billion. It said the deal, which is subject to regulatory approval and customary closing conditions, is expected to close by the end of June, and includes two production facilities - a sauce processing and packaging facility in Owensboro in Kentucky, and a tomato processing facility in Stockton in California. Annual revenue for Ragu and Bertolli is more than USD600 million.
FTSE 250 - WINNERS
Halfords, up 9.7%. The cycle and car-maintenance product retailer said its profits and revenues rose in its last financial year, as the UK's growing passion for cycling - and for online shopping - plus a revamp of its products, drove strong growth across the business. For the year ended March 28, the retail chain recorded pretax profit of GBP72.6 million, up 2.3% from GBP71.0 million a year earlier, driven by a 7.9% increase in revenues to GBP939.7 million from GBP871.3 million last year.
Imagination Technologies Group, up 6.3%. The electronic chip maker has announced a new collaboration with Oracle Corp, designed to boost the development of its Java language code for the MIPS architecture. "This is a long range partnership, which we see as an acknowledgement of the MIPS architecture and a boon to the early stage ecosystem development as another tier1 partner is added," said Jefferies analyst Lee Simpson.
Go-Ahead Group, up 2.7%. Liberum Capital has upgraded Go-Ahead Group to Buy from Hold, saying that recent share price weakness has created a "buying opportunity" in the company. On Wednesday, the bus and rail operator's shares closed at 1,892.00 pence, which represents a 4.1% decline from the end of April, and a 14% decrease from its 2014 high of 2,199.00p.
Ferrexpo, up 2.2%. In a statement released ahead of its annual general meeting Thursday, the iron ore producer said its operations in Ukraine remain unaffected by the political instability in the country, and it expects to shortly receive bonds with a value of USD117 million in local currency from the Ukrainian government for an outstanding value-added tax refund. It also said both production and shipment of its iron ore pellets have been in line with expectations and costs have continued to fall due to improved efficiency and a decline in the local currency exchange rates.
Carillion, up 1.9%. The integrated support services company said the company and its joint venture business, Al Futtaim Carillion, have signed, or have been chosen as the preferred bidder for, contracts in the United Arab Emirates and the Kingdom of Saudi Arabia, worth over GBP400 million.
FTSE 250 - LOSERS
Dairy Crest Group, down 5.3%. The company's shares are down even though it said it swung to a pretax profit in its last financial year, boosted by property disposals and supported by further revenue growth and strong demand for products such as its Cathedral City cheese. However, the company's results were "light" says Alex Howson, an analyst at Jefferies. Adjusted earnings per share of 40.80 pence was around 1-2% ahead of expectations, but adjusted pretax profit of GBP65.3 million was approximately 1-2% behind consensus and segment earnings before interest and taxes of GBP75.2 million is 5% behind Jefferies' forecast of GBP79 million, the analyst says. "Given that tax benefits have helped EPS and will not be repeated, the Segment EBIT number provides the best read for the likely trajectory of consensus forecasts," says Howson.
Electrocomponents, down 3.7%. The electronics and maintenance products said its pretax profit increased in its full year as expected due to strong revenue figures in Europe and North America, though its UK sales figures were disappointing. It said its pretax profit increased 17% to GBP101.1 million for the twelve months to end-March from GBP86.7 million the previous year, as revenue increased 2.4% to GBP1.27 billion from GBP1.24 billion. However, some analysts were underwhelmed with the figures. Shore Capital said it now expects a downgrade for the company after its performance for the year was a little below its expectations, particularly in revenues, which were GBP15 million below its forecasts.
Mitchells & Butlers, down 2.9%. The pub chain said that total revenue rose 2.5% to GBP1.02 billion and pretax profit was flat at GBP68 million in the half-year, with management reporting a return to food volume growth as it continues to focus on its business transformation plan. However, "this outcome is still disappointing," said Numis Securities analyst Douglas Jack. Operational progress appears slow, and the company is underperforming its peers, the analyst says. Moreover, being heavily food-led, the chain is unlikely to see much benefit from the upcoming FIFA World Cup.
Booker Group, down 2.9%. The company's shares have fallen despite reporting a significant increase in its pretax profit for its last financial year, boosted by its acquisition of Makro last year, which drove a 17% increase in revenues. However, while the stock has attracted "tremendous and deserved" investor support for some time, "the shares have gone to levels that frankly we have struggled with," says Shore Capital analyst Clive Black. With a price to earnings ration in the 25 times bracket, Black believes that shareholders believe that structurally and sustainably higher than forecast rates of growth are around the corner. "We, however, do not see such an outcome," Black says.
IG Group Holdings, down 2.7%. The firm said that subdued trading since the middle of March means that it currently expects full-year revenue to be slightly below expectations, but said profit, earnings and cash generation remain on track as operating costs continue to run slightly below plan.
Bwin.party Digital Entertainment, down 1.6%. The online gaming company said it has now agreed to work together, rather than against, its active investor SpringOwl, in an effort to shape the company's new board of directors. Just last week, Bwin.party said it had commenced a search for three new independent directors for the board, and was still urging shareholders to vote against the nominations of Gibraltar-based SpringOwl Gibraltar Partners B Ltd.
Polymetal International, down 1.2%. The gold, silver and copper-mining company's shares are heavy fallers after it agreed to acquire the major Kyzyl gold project in Kazakhstan for up USD1.12 billion in cash and shares. The group said it has entered binding agreements with Sumeru Gold BV and Sumeru LLP for the acquisition of Altynalmas Gold Ltd, the holding company for the Kyzyl gold project. The Kyzyl gold project is a highly prospective mining area including the Bakyrchik and Bolshevik gold deposits, which Polymetal said would increase its gold equivalent reserves by roughly 50% including a single high grade region holding 6.7 million ounces of gold at 7.5 grams per tonne.
AIM ALL-SHARE - WINNERS
LightwaveRF, up 18%. The radio frequency technology company has reported a substantial reduction in its loss in the first half of its financial year as revenue more than tripled following a refocusing of the business on expanding its distribution outlets. It reported a pretax loss of GBP123,092 for the six months to the end of March, compared with a GBP408,938 loss a year earlier, as revenue jumped to GBP1.7 million, from GBP476,285. It also said it expects its full-year sales to be about GBP3.5 million, thanks to its GBP1.9 million order book scheduled for delivery in the second half. Its revenue in the whole of fiscal 2013 was GBP1.1 million.
Energy Technique, up 13%. The company, which produces air conditioning and heating services, said its pretax profit tripled in its full year as fan coil sales drove up overall revenues and improved operating profit at its trading subsidiary Diffusion. It said its pretax profit increased to GBP649,000 for the twelve months to end-March from GBP200,000 the previous year, as revenue increased 26% to GBP9.6 million from GBP7.6 million. The company said its fan coil sales were particularly strong during the period, increasing by 42% to GBP7.5 million due to a number of large commercial and high-end residential projects needing the equipment during the period. Energy Technique said that as a result, Diffusion more than doubled its operating profit to GBP906,000 from GBP406,000, representing an improved operating profit margin of 9.5% from 5.4% the previous year.
Tangiers Petroleum, up 7.4%. The exploration and development oil and gas company said that drilling of its TAO-1 exploration well off the Moroccan Atlantic coast is on track to start in mid to late June. It said its jack-up rig has now been mobilised to the site, which the company says has the potential of 190 million barrels of net unrisked prospective resources. The company said earlier in May that the Moroccan National Office of Hydrocarbons and Mines had given final approval relating to the farm-out agreement between Tangiers and Galp Energia, which gave the company a 25% interest at the site.
AIM ALL-SHARE - LOSERS
Deltex Medical Group, off 14%. The company said it proposes to raise up to GBP4 million before expenses by way of a placing of 36.4 million new shares at 11 pence per share with institutional and other shareholders. It also said up to a maximum of GBP1.0 million will also be raised by an open offer to qualifying shareholders of up to 9.5 million new shares. These will be purchased on the basis of one new ordinary share for every 18 existing shares at 11 pence per new share. Deltex shares are currently quoted at 12.00 pence.
Prophotonix, down 12%. The independent designer and manufacturer of diode-based laser modules and LED systems is down despite reaffirming its half-revenue expectations after it lowered its costs and secured a new contract. It said it has reaffirmed its current expectations for first-half revenue to come in between USD7.8 million to USD8.2 million after its trading performance since the beginning of the year has benefited from the LED and laser market sectors.