News Column

UK WINNERS & LOSERS: Wolseley Stands Out From Negative FTSE 100

June 3, 2014

James Kemp



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

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FTSE 100 - WINNERS

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Wolseley, up 2.7%. The plumbing and heating products distributor is one of just a few blue-chip risers after it reported higher trading profit for its fiscal third quarter, driven by strong growth in the US and Nordic countries, although adverse currency movements knocked GBP200 million off its revenue and GBP12 million off its profit. It posted trading profit of GBP153 million for the three months to end-April, up from GBP150 million a year earlier, as margin improvements offset a slight decrease in revenue to GBP3.12 billion, from GBP3.23 billion. However, profit from ongoing businesses would have been up 9.1% at constant currencies on a 6.0% rise in revenue.

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FTSE 100 - LOSERS

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William Hill, down 1.9%, and Melrose Industries, down 1.5%. Both stocks look set to be deleted from the leading index following the quarterly index review that takes place after the market close Tuesday and is announced after the market close on Wednesday. The stocks are likely to be replaced by current FTSE 250 listings 3i Group and Intu Properties.



WM Morrison Supermarkets, down 1.3%, Tesco, down 1.1%, andJ Sainsbury, down 1%. The food retailers are big losers after the latest figures from Kantar Worldpanel for the 12 weeks ending 25 May showed the slowest rate of growth in the UK grocery market for eleven years. "The Kantar data represents a continuum of recent trends with the limited assortment discounters gaining share at a rapid rate whilst Tesco in particular looks to be the big loser," said Shore Capital head of research Clive Black. "There is little going the way of the big supermarket groups at the moment with weak overall demand and rising competition, not just from discounters but also from more eating out of the home; tough times indeed," he added

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FTSE 250 - WINNERS

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Tullett Prebon, up 4.3%. The interdealer broker is in advanced talks to appoint a successor to Chief Executive Terry Smith, the Financial Times reported late on Monday, with former Nomura and Lehman Brothers executive John Phizackerley emerging as the leading contender to succeed him. Citing two people familiar with the situation, the FT said the nine month search is partially due to regulators requiring financial services companies to improve their succession plans. No formal agreement has been signed with Phizackerley, but Smith is expected to depart by the end of the year, the FT said.



Beazley, up 1.7%. Berenberg has upgraded the speciality insurer to Buy from Hold, increasing its price target to 278.00 pence from 271.00p. "Beazley shareholders have enjoyed a rewarding period since mid-2011 with a material re-rating of the share supplemented by attractive special dividend returns in both 2012 and 2013," says Tom Carstairs, an analyst at Berenberg. "Our analysis leads us to believe that strong underwriting results are set to continue despite the pricing competition being seen in certain parts of the market and that, assuming a "normal" year for catastrophe losses, 2014 will see the company return excess capital via another special dividend return," he adds.

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FTSE 250 - LOSERS

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Pennon Group, down 2.7%. The company is among the heaviest mid-cap fallers despite raising its dividend and reporting higher full-year profit, with profit growth at its South West Water unit more than offsetting a decline at its waste recycling and management business Viridor. It posted a pretax profit of GBP158.7 million in the year to end-March, up from just GBP13.6 million a year earlier, as revenue grew to GBP1.32 billion, from GBP1.20 billion, and exceptional items fell sharply. Excluding those items, pretax profit rose to GBP207.3 million, from GBP190.0 million. It said it will pay a final dividend for the year of 20.92 pence, up 6.2% on the previous year. That will bring the total dividend to 30.31 pence, a 6.5% increase.



Foxtons, down 2.7%. The estate agency's shares have fallen sharply after it said Chief Executive Michael Brown had decided to step down on July 1 after 7 years at the helm, for personal reasons. The company said Chief Operating Officer Nic Budden will take over as CEO, while Brown has agreed to stay on the company's board as a non-executive director. Stefano Curzio will step down as a non-executive director October 1.

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AIM ALL-SHARE - WINNERS

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Orogen Gold, up 42%. The exploration and development mining company said geophysical surveys carried out on its Mutsk gold project in Armenia have extended a target zone and show strongest anomalies in its undrilled northern sector on the site. It said a detailed geophysical testing programme at the site has extended its target zone to almost 2.5 kilometres in length, with the zone remaining open in the northern region. The company said the surveys have also shown a large area in the northern part of the survey grid which has low magnetism and could perhaps represent possible hydrothermal alteration, similar to that associated with strong gold mineralisation in the south of its Mutsk project.



Bowleven, up 12%. The oil and gas exploration company said a formal resolution confirming the Cameroon government's support for its Etinde Exploitation Authorisation application has been signed. It said that following the agreement, a formal decree is expected to be released before the company moves towards its full Exploitation Authorisation at the site, which will give development and exploitation rights over the block for an initial period of 20 years.



Xtract Resources, up 9.5%. The company said its pretax loss narrowed significantly in 2013 as it reduced expenses and achieved exceptional gains, including a payment from the disposal of an equity interest in Equus Mining Ltd. The group, which is yet to produce any revenues, said its pretax loss narrowed to GBP232,000 from GBP1.6 million the previous year. It said its operating loss fell to GBP1.2 million from GBP1.6 million due mainly to a reduction in its administrative and operating expenses to GBP803,000 from GBP1.6 million. Xtract also noted that it was paid out GBP840,000 in profits from its continuing operations, including a gain on its disposal of Equus Mining shares during the period. In addition, Xtract noted that its net loss narrowed to GBP128,000 from GBP7.6 million the previous year, a period when it was hit by a GBP6.0 million charge due to losses at the companies discontinued operations during 2012.



Amur Minerals Corp, up 7.5%. The nickel copper exploration company said the recent decision by the Russian Federation to remove export taxes on intermediate-product nickel and copper could net it as much as USD230 million over its current life-of-mine cycle. It said that this is the third financial inventive package implemented by the Russian government to reduce the cost of recovering nickel and copper. This follows the reduction of the profits tax and the mineral resources extraction tax.

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AIM ALL-SHARE - LOSERS

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Edenville Energy, off 9.1%. The coal exploration and development company said its pretax loss widened significantly in 2013 as the company was hit by a GBP1.7 million impairment charge on the write-off of exploration expenditure. The company, which is yet to produce any revenues said its pretax loss widened to GBP2.4 million from GBP643,842 the previous year. The company said its administrative expenses increased slightly to GBP638,868 from GBP598,415 but the majority of the company's losses came from an impairment charge of GBP1.7 million, as the company proposed to relinquish four licences which failed to show coal-bearing sediments, leading to the write-off of exploration expenditure at the sites.



London Mining, off 8.5%. The exploration and development mining company said late on Monday that it has evacuated "non-essential" staff from its operations in Sierra Leone in response to a deadly outbreak of the Ebola virus. It said production at its Marampa mine had not been affected and it is working with local and international agencies to monitor the dangerous situation in west Africa.

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Source: Alliance News