News Column

UK MIDDAY BRIEFING: Mixed News For London's IPO Market

June 16, 2014

LONDON (Alliance News) - Low-cost airline Wizz Air Holdings Monday pulled its planned initial public offering in London, blaming the recent volatility in airline stocks, but three other companies added themselves to the London IPO pipeline.

Wizz Air is the fourth company to postpone or cancel a planned IPO in London in 2014. Last month, fashion retailer Fat Face Group Ltd pulled out of its UK stock market debut, citing weak conditions in the UK equity market as the main reason for backing out.

"Despite the positive response to our business story and the company's growth opportunities and prospects within the institutional investment community, Wizz Air today announces that the company has decided not to proceed with an IPO at this stage, due to the current market volatility in the airline sector," the company said in a statement.

Still, the London IPO pipeline was bolstered Monday by African construction services company Mota-Engil Africa, which will list on the main market, and satellite technology company Global Invacom Group and biopharmaceuticals technology company Abzena, a portfolio company of Imperial Innovations Group, which will both list on AIM.

Mysale Group, the online retailer part owned by the wife of UK retailer Philip Green, saw its shares slide below its IPO price as dealings got underway on AIM Monday. The company had prices its IPO at 226 pence, giving it an initial market capitalisation of about GBP340 million, but was trading at 178 pence Monday lunch time.

Meanwhile, fast-food chain group SPP, which owns the Upper Crust and Caffe Ritazza brands, is set to announce plans for a GBP2 billion stock-market flotation this week, according to the Sunday Telegraph, a deal which would make it one of the biggest new listings in London so far in 2014.


FTSE 100: down 0.3% at 6,756.80

FTSE 250: down 0.9% at 15,676.25

AIM ALL-SHARE: down 0.2% at 786.20

GBP-USD: up at 1.6968

EUR-USD: down at 1.3536

GOLD: up at USD1,282.35 an ounce

OIL (Brent): down at USD112.59 a barrel


Other Top UK Corporate News


Vodafone plans to acquire Italian security and telematics company Cobra Automotive Technologies SpA through a voluntary tender offer of EUR1.49 per share, valuing it at EUR145 million. Telematics is the combination of telecommunications and informatics, often used to create technology for navigation systems in vehicles. Vodafone said it has inked an agreement with Cobra's main shareholders, who have a total 73.96% interest in the company, to tender their shares in the offer. It has also agreed with some minority shareholders to acquire their 20% holding for EUR20 million.


Royal Bank of Scotland is in talks over a restructuring of its Ulster Bank unit that could overcome a hurdle to selling some of the government's majority stake, The Sunday Times reported, without saying where it got the information. The taxpayer-backed lender is working on a plan to attract private equity into Ulster to boost its capital position before the business is merged with another Irish bank. Permanent TSB, owned by the Irish government, is considered the most likely partner for the creation of an enlarged Irish bank, the newspaper said. Any such transaction would enable RBS to cut its holding in Ulster below 50%, where it would no longer have to consolidate the lender in its accounts, The Sunday Times added.


Mitchells & Butlers said it has acquired the majority of the activities of pub and restaurant operator Orchid Group for GBP266 million in cash. The UK pubs and restaurant operator had said last month it was in exclusive discussions to buy the majority of the assets of Orchid. On Monday, it confirmed it has acquired a total of 173 "well-located" pubs mainly in the South Eat and North West of England, of which 158 pubs are freehold or long leasehold. It said the purchase will be immediately earnings enhancing, with double-digit earnings enhancement following cost cuts and revenue synergies, with returns well ahead of the cost of working capital.


Ultra Electronics Holdings has acquired Dorset-based Lab Impex Systems Ltd for GBP3.2 million in cash, financed from existing facilities, from private investors, including Lab Impex's founder. Lab Impex produces radiation measuring products and services for the nuclear industry. Ultra Electronics will integrate the company into its Nuclear Control Systems business, also based in Dorset, and said it will help to expand its radiation monitoring offering, as well as strengthening its engineering expertise.


Ladbrokes has extended its existing bank facilities and completed an oversubscribed GBP100 million retail bond offer. The 5.125% retail bond has an 8.25 year maturity and closed early on strong demand, Labrokes said. The UK betting firm said that, having completed its balance sheet re-financing, it has successfully extended the maturity of GBP350 million of its previous GBP540 million bank facilities, due to expire in 2016, until June 2019. It has also cancelled a surplus GBP135 million of the previous facilities.




UK Oil & Gas, Solo Oil, and Stellar Resources are big gainers after the operator of the Horse Hill oil and gas project in the Weald Basin near Gatwick Airport said it had started building the site for the Horse Hill-1 well and expected to start the actual well in July. TXO jumped after it announced that its investee company, Athabasca Resources Ltd, has raised GBP305,000 and appointed advisers ahead of its proposed initial public offering on AIM in September. The company said that the GBP305,000 Athabasca had raised through a private placement was sufficient to cover the deposit for its farm-in agreement for 50% of four leases with Nordic Petroleum AS, as well as the initial costs of its AIM admission. Range Resources is doing well after it said that its average Trinidad production has increased by 18% to an average of 630 barrels of oil per day, from the 533 barrels of oil per day it reported back in April. The company said the production increase was primarily due to excellent results at its QU 452 well in the South Quarry field, which it said is producing at a stabilised rate of 70 barrels of oil per day of very light 470 API oil on a 5/32" choke.AorTech has lost a quarter of its value after it said it expects to post exceptional charges for the year to end-March as a result of launching litigation against its former chief executive, Frank Maguire. Artilium is down after it warned that earnings in the second half of the year will be lower than the first half due to challenging operating conditions. Its chairman and chief executive will resign on July 1.Gaming Realms is another faller after it reported strong revenue growth in the first half of the year from new players and paying users, but said its loss widened as it continued to invest heavily in marketing. Zambeef Products is down after it swung to a loss in the first half of its financial year, hit by increased competition and currency depreciation.


Top Economics And General


House prices in the UK remained almost unchanged in June, as demand matched supply, figures from Rightmove showed. On a month-over-month basis, prices rose 0.1% in June following the 3.6% hike in May. House prices rose 7.7% year-over-year in June, a slower rate of increase than the 8.9% rise in May. House prices in most of the regions declined compared to the previous month, with prices in London decreasing 0.5% due mainly to a combination of buyer reluctance and over 20% more sellers entering the market this month.


Low investment in both physical and intangible capital weighed on the UK productivity, the Bank of England said in its Quarterly Bulletin. Nonetheless, the research paper indicated that there remains a large degree of uncertainty around any interpretation of the weakness in productivity. "Factors related to the nature of the financial crisis are likely to be having a persistent impact on the level of productivity - but there remains considerable uncertainty around any interpretation of the puzzle," it said.


Eurozone inflation slowed as estimated in May, final data from Eurostat showed. Inflation eased to 0.5% in May from 0.7% in April. The rate came in line with the flash estimate published on June 3. Month-on-month, prices fell 0.1%. Inflation has been below the European Central Bank's target of 'below, but close to 2%' for the sixteenth consecutive month.


Jihadist militants fighting the Iraqi government claimed further advances in the north of the troubled country. The Islamic State in Iraq and the Levant said it had captured the northern town of Tel Afar "with the exception of a small heavily guarded area known as the Green Zone," freeing "hundreds of prisoners." The claim came on a Twitter account used by the al-Qaeda splinter group for updates on its operations in northern Nineveh province.


Russia said it will deliver gas to Ukraine only if it is paid in advance, accusing its western neighbour of "chronic non-payment." "Today at 10 amMoscow time (0600 GMT) Gazprom in full accordance with contractual obligations, switched to pre-payment gas deliveries for Naftogaz Ukraine," the company said in a statement. Russia had given cash-strapped Ukraine until 0600 GMT to settle about 2 billion dollars in gas arrears. The two countries held last-minute talks late Sunday in Kiev on their gas-pricing dispute, but the meeting ended after several hours with no apparent agreement.


Europe could face problems getting enough gas in the cold season if the gas dispute between Russia and Ukraine is not solved, EU Energy Commissioner Guenther Oettinger said. He said there are currently no supply problems. "But if stocks are not replenished now, we might all face a problem in winter," he said in Vienna. Although talks between Russia and Ukraine, which were mediated by Oettinger, ended without agreement Sunday, the commissioner said he plans to invite the two sides for further talks, following an exploratory phase.


The Philippines called for a moratorium on construction in the South China Sea in a bid to ease territorial tensions in the region. Countries with overlapping claims should hold a meeting to discuss such a freeze in contested areas, Foreign Secretary Albert del Rosario said. "Let's call for a moratorium in terms of activities that escalate tension while we work on an expeditious conclusion of the code of conduct and effective and full implementation," he said.


Israel continued large-scale arrests of Palestinians, including many Hamas members, as it searched for three Israelis suspected to have been kidnapped in the West Bank. A 20-year-old Palestinian was killed by Israeli soldiers in a refugee camp on the outskirts of the West Bank city of Ramallah during a confrontation with protesters, according to medics and witnesses. It is the first death in clashes since the Israeli youths went missing Thursday near a settlement bloc on the southern West Bank, north of Hebron, the largest Palestinian city in the territory. Israeli Prime Minister Benjamin Netanyahu has accused the militant Islamist Hamas movement of abducting the teenagers.


At least 48 people were killed in the Kenyan coastal settlement of Mpeketoni near the tourist resort Lamu in an attack by about 50 gunmen, a news report said. "The situation is not good for now. The toll could be more than the 47 bodies that we have collected," Police Inspector General David Kimaiyo was quoted by The Standard newspaper as saying. Kimaiyo said those confirmed dead in Sunday's attack included a police driver.


Afternoon Watchlist (all times British Summer Time)


13:30 US NY Empire State Manufacturing Index

14:15 US Industrial Production

15:00 US NAHB Housing Market Index


Tuesday's Key UK Corporate Events


Crest Nicholson Half Year Results

Record Full Year Results

Consort Medical Full Year Results

Daisy Group Full Year Results

Whitbread Trading Statement

Ashtead Group Full Year Results

JD Sports Fashion Interim Management Statement

Trifast Full Year Results


Tuesday's Key Economic Events (all times British Summer Time)


03:00 China FDI - Foreign Direct Investment

09:00 Italy Trade Balance EU

09:30 UK Consumer Price Index

09:30 UK DCLG House Price Index

09:30 UK Producer Price Index

09:30 UK Retail Price Index

10:00 Germany ZEW Survey

10:00 EU ZEW Survey - Economic Sentiment

13:30 US Consumer Price Index

13:30 US Housing Starts

13:55 US Redbook index


Contact: +44 203 668 7440;; @AllNewsTeam

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Source: Alliance News

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