News Column

UK WINNERS & LOSERS: Burberry Struts To Top Of FTSE 100 Winners

July 10, 2014

James Kemp



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

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FTSE 100 - WINNERS

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Burberry Group, up 2.3%. The luxury fashion retailer's shares have jumped after it posted a good increase in retail revenue in the first quarter of its financial year. Retail sales increased to GBP370 million in the three months to end-June, up from GBP339 million in the same period the prior year. On an underlying basis, sales grew 17%, but on a reported basis only 9%, hit by the strength of the sterling. Comparable sales growth in the period was 12%.



Randgold Resources, up 1.7%, and Fresnillo, up 1.1%. The precious metal miners have jumped on the back of a sharp rise in the price of gold and silver. Following a number of days of increased demand, analysts say that gold has broken out above a technical level Thursday. The yellow metal has risen to a near four-month high of USD1,342.35. Silver is also at a multi-month high, having risen more than 1.5% Thursday, currently trading at USD21.446 per ounce.

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FTSE 100 - LOSERS

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London Stock Exchange Group, down 3.2%. The Qatar Investment Authority, the Qatari sovereign wealth fund, has confirmed that it has sold about a third of its stake in the LSE, leaving it with a stake of about 10.3% in the exchange operator and index provider. The Qatari fund said the deal was part of its "routine" portfolio management, and it doesn't expect to sell any more LSE shares in the immediate future. The share sale was done through a block sale. It didn't identify the banks conducting the sale or say exactly how many shares were sold, but the fund held a 15.08% stake before the block sale. The sale by Qatar Investment Authority comes ahead of the LSE's planned USD1.60 billion rights issue in September, money it will use to help fund its USD2.70 billion acquisition of Russell Investments, the operator of benchmark equity indices widely used by US fund managers.



Associated British Foods, down 2.7%. After rising sharply at the UK equity market open, the food, ingredients and retail group is among the heaviest fallers in the blue-chip index, after it said the persistent strength of sterling continued to hit sales in the third quarter. It posted a 3% decline in total sales at actual currency exchange rates in the third quarter, hit by the strength of the sterling, but rose 3% on a constant exchange rate basis. In the year to date, AB Foods said sales were down 2% at actual rates, and were up 2% at constant rates. "The likely negative impact arising from currency translation, if current exchange rates prevail, will be some GBP50 million compared with last year's result," the company said in a statement Thursday. The group's low-cost fashion chain Primark is by far its biggest profit driver. Primark sales in the third quarter were up 19% at actual exchange rates, and are up 16% in the year to date, boosted by new store openings. However the company's sugar business saw sales decline 26% at actual rates in the quarter, and have fallen 23% in the year to date, hit by lower sugar prices.

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FTSE 250 - WINNERS

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Premier Oil, up 2.3%. The oil and gas company said its revenue in the first half of the year was about USD880 million, up from USD758 million in the first half of 2013, as production rose, although it will also book an after-tax charge of about USD30 million in its first-half accounts to cover future costs of abandoning the Balmoral area. Premier said its production averaged 64,700 barrels of oil equivalent a day in the first six months of 2014, up 10% on the year earlier and above the company's own target. It said it is keeping its full-year production target of between 58,000 and 63,000 barrels a day, which reflects the planned summer maintenance period and the impact of the sale of its assets in the Scott area of the UK North Sea.



AshmoreGroup, up 1.5%. The specialist emerging markets asset manager reported 7% growth in assets under management during its fiscal fourth quarter, the first growth since its fiscal first quarter, driven by USD1.6 billion of net inflows and a positive investment performance of USD3.3 billion. It said assets under management are estimated to have risen to USD75.0 billion in the three months to end-June, from USD70.1 billion at the end of March. It had reported 1.4% quarterly growth in assets under management in its fiscal first quarter, but then assets under management declined 4.1% in the second quarter and 6.9% in the third quarter.



Grafton Group, up 1.4%. The building merchants said group revenue for the six months to end-June increased 11% to GBP1.02 billion from GBP912 million a year earlier, reflecting improved demand in the group's markets and better weather conditions. The DIY group said overall trading conditions were favourable in the first half as the recovery in the UK and Irish economies became more firmly established and gradually gained momentum. Trading in the UK merchanting business, which accounts for three-quarters of group revenues, was influenced by better weather conditions with "solid" volume growth in the residential repair, maintenance and improvement market, the company said.



Galliford Try, up 1.2%. The housebuilding and construction company said it has acquired Miller Construction from Miller Group Holdings Ltd for GBP16.6 million, which it said it expects to be earnings enhancing in the year ending June 30, 2015. Galliford said the deal will accelerate growth in group construction revenue towards GBP1.25 billion and increases the 2018 target to around GBP1.5 billion. The acquired order book of GBP1.4 billion doubles the group's order book to GBP2.8 billion. Galliford Try said it expects to incur GBP4 million in on-off restructuring costs, mainly during the year ending June 2015 as a result of the deal.



African Barrick Gold, up 1.1%. The gold mining company is up following a sharp rise in the price of gold.

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FTSE 250 - LOSERS

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Hays, down 5.7%. The recruiter said net fee income was flat in its fiscal fourth quarter, as the strength of sterling against the euro and Australian dollar wiped out strong growth in the UK during the period, although it still expects to report strong operating profit growth for the year as a whole. In the three months to end-June, the company said net fee income was up 11% in the UK, where operations contribute about 35% of its total net income, driven by 17% growth in fees from permanent placements. This was slower than the 14% growth Hays had reported in the UK in its fiscal third quarter, but stronger than the 9% growth posted in the first half of the financial year. Hays also said net fees grew 7% in continental Europe in the quarter at constant exchange rates and excluding acquisitions, but the strength of sterling against the euro meant that organic growth was just 1% at actual rates. The big drag continued to be Asia Pacific, where there was no growth at constant currency rates, and a 13% decline in net fee income taking into account sterling's rise against the Australian dollar.

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AIM ALL-SHARE - WINNERS

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Empyrean Energy, up 9.9%. The onshore oil and gas development and production company has put itself up for sale as part of a review of its strategic options in order to maximise value for its shareholders, following a number of recent corporate acquisitions for companies close to its operations. It said it has decided to consider its strategic options to capitalise on the recent acquisition activity, and has put itself up for a 'formal sale process' and is now awaiting offers.



Minco, up 7.2%. The company said it saw positive results from a preliminary economic assessment for its Woodstock manganese project in New Brunswick, Canada. The assessment indicated a pretax net present value of CAD846 million at 8% discount rate, and a pretax internal rate of return of 17.97% based on a 3,000 tonne per day operation. It showed a pre-production capital expenditure of CAD864 million, and an average annual payable production of approximately 80,000 tonnes of electrolytic manganese metal. This indicated a project life of 40 years, with operating costs that are expected to "be the lowest in the world", Minco said, at an average USD0.64 per pound of electrolytic manganese metal produced over the first 20 years, and USD0.68 per pound over the life of the project.



W Resources, up 6.4%. The company said the ramp-up of production at its La Parrilla tungsten production facility in Spain has progressed well, delivering production rates ahead of its initial targets. It said that by the end of June, it had produced 10 tonnes of concentrate with production rates of an average 59% tungsten trioxide, above its initial target of 50%. Impurities are also lower than its expectations. It said it is on schedule to ramp-up production to 25 tonnes per month, and expects this to be completed by October. As a result, it expects the facility to move to complete operation by the end of July. The first shipment of tungsten is scheduled for later this month, which will deliver the first cash from the project.

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AIM ALL-SHARE - LOSERS

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Bglobal, off 8.7%. The energy metering company, which has sold its trading subsidiaries and is in the process of de-listing from the AIM market and winding up, said it is proposing to return 11 pence a share, or about GBP11.7 million, to its shareholders as part of the process. It had agreed last month to sell its Utiligroup Ltd subsidiary for GBP16.1 million in cash to private equity company NorthEdge Capital LLP, having sold its BGlobal Metering Ltd subsidiary for GBP2.3 million in cash in April to Energy Assets Group PLC. After paying off loans and closing down two other smaller units, Bglobal said it was left with cash balances of GBP16.4 million. However, it has decided to retain GBP4.7 million to cover contingent liabilities and wind-up costs. Shareholders will have the chance to vote on its proposals on July 30 at a general meeting. It expects to de-list on September 2. Bglobal also put out its results for the year to end-March Thursday, though they are meaningless given the situation.

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Source: Alliance News


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