News Column

UK WINNERS & LOSERS: Costly Single Withdrawal Hits Aberdeen

July 28, 2014

James Kemp



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

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FTSE 100 - WINNERS

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Reckitt Benckiser Group, up 2.7%. The consumer goods and healthcare company's shares have risen after reporting a first half profit of GBP1.04 billion, up from GBP898 million in the first half of last year. The results were driven by a better-than-expected performance from the group's pharmaceutical business, RBP, for which management has announced plans for a UK listing, expected over the coming year, as a conclusion to Reckitt's strategic review.



British Sky Broadcasting Group, up 2.6%. The broadcaster's shares are rebounding, having ended Friday as the blue-chip index's biggest loser, closing down 5.5% at 874.50 pence. The company's shares fell sharply on Friday after it said it will acquire 21st Century Fox Inc's holdings in Sky Italia and Sky Deutschland for a total of GBP4.9 billion in cash, plus BSkyB's 21% stake in the National Geographic Channel, and also reported a fall in pretax profit in the year to the end of June. To part-fund the acquisitions, BSkyB placed 156.1 million shares, representing around 9.99% of its existing share capital. The shares were placed at 870 pence each, BSkyB said, raising a total of GBP1.36 billion. On Monday, the company said it has made a USD400,000 investments in California-based early-stage technology company Jaunt Inc. The investment follows a USD350,000 equity investment that BSkyB previously made in the company during an earlier round of funding in December 2013. Also on Monday, Nomura raised BSkyB to Neutral from Reduce, according to traders.



EasyJet, up 1%. The low-cost airline has seen its share price rise after Irish rival Ryanair Holdings revealed that the timing of a very strong Easter boosted its first quarter results, as it reported higher revenue and pretax profit for the period, leading the company to raise its full-year profit after tax guidance. In a trading update for the first quarter to end-June, Ryanair said revenue rose 11% to EUR1.50 billion, up from the EUR1.34 billion posted in the comparable quarter last year. Pretax profit also jumped, coming in at EUR223.6million, compared to EUR88.5 million in 2013. Subsequently, the company has "cautiously" raised its full-year profit after tax guidance to a range of EUR620 million to EUR650 million from the previous range EUR580 million to EUR620 million. Ryanair shares are up 4.1%.

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FTSE 100 - LOSERS

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Aberdeen Asset Management, down 3.1%. The asset manager's shares have moved firmly lower after it said its assets under management fell by 0.6% in its third quarter, hit by a GBP4.0 billion withdrawal by a single client of low-margin assets under management from its Asia Pacific and global equities strategies. It did not name the client, but said assets under management fell to GBP322.5 billion at the end of June from GBP324.5 billion at the end of March. Net outflows from the main business, recently acquired Scottish Widows Investment Partnership, and negative foreign exchange movements were in the main compensated for by positive investment performance in the quarter.



Royal Bank of Scotland Group, down 2.6%. The bank's shares are firmly lower, following material increases posted on Friday. RBS ended Friday as the biggest gainer in the blue-chip index, closing up 11%, after it said it expects to report a near doubling in first-half pretax profit, driven by a turnaround in impairments due to improving credit conditions in the UK and Ireland, and the performance of the part of the bank tasked with running down assets that require especially high levels of capital. Monday's losses come despite a raft of positive broker recommendation and price target revisions. UBS has upgraded the company to Neutral from Sell, increasing its price target to 378 pence from 320p, while JP Morgan Cazenove has upgraded the company to Neutral from Underweight, Credit Suisse has increased its price target on the bank to 310 pence from 280p, Deutsche Bank has raised its target to 335 pence from 325p, and Citigroup has lifted its target to 330 pence from 300p.

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FTSE 250 - WINNERS

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Debenhams, up 4.2%. The high-street department store chain said it has appointed Mothercare's chief financial officer, Matt Smith, as its own CFO. Smith will also join the retailer's board upon his appointment. He had served as CFO at Mothercare only since 2013 and before this held a number of finance positions at Home Retail. Debenhams said Smith will join "upon the satisfaction of his existing contractual obligations."



Petra Diamonds, up 2.5%. The diamond miner reported a 17% increase in revenue in its last financial year, as production also rose 17% to 3.1 million carats from 2.7 million carats a year earlier, above market guidance of 3 million carats. The company said revenue rose to USD472.6 million in the year, from USD402.7 million a year earlier. It said it experienced a firmer diamond market in the second half, with rough diamond prices achieved by Petra either in line with or above full-year guidance. It said costs remained well controlled despite ongoing inflationary pressures experienced in the mining industry, specifically rising costs for labour and electricity. Capital expenditure rose to USD210.0 million, from USD191.2 million a year earlier. Financially, Petra said it had USD33.3 million in cash at the bank at the year-end, compared with USD26.2 million a year earlier.

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FTSE 250 - LOSERS

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Cranswick, down 1.8%. After jumping almost 3% at the UK equity market open to close to its 52-week high, the food producer's shares now trade firmly lower, even though it said it has seen a good start to the new financial year, with revenue growth in the first quarter, while overall trading has been in line with expectations. Revenue in the three months to end-June was 5% ahead of the same period last year, reflecting continued growth across most product categories, the pork products supplier said, and "trading so far in the current financial year has been in line with the board's expectations," it added.

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AIM ALL-SHARE - WINNERS

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Frontier Mining, up 15%. The company said that it has received approval from the Ministry of Industry and New Technology in Kazakhstan to proceed with the sale of its Naimanjal licence area to Union Transnationale Miniere SA. Regulatory approval comes after the copper production, exploration and development company in March unveiled an agreement to sell subsidiary FML Kazakhstan LLP, the owner of the Naimanjal licence area, to UTM for USD30 million in cash. Frontier Mining expects to use the proceeds to repay maturing debt and to finance capital expenditure for the ramp up of copper production at Benkala to maximum levels.



Stadium Group, up 13%. The company said it has acquired specialist electronics designer and manufacturer United Wireless for up to GBP8 million in cash and shares. It said the acquisition is expected to "significantly" add to earnings in its first full year of ownership and will compliment its existing technologies, presenting growth opportunities and synergies. It expects that in the current year the acquisition will make a small contribution to profits. It will pay an initial consideration of GBP6.0 million, of which GBP5.0 million will be in cash and GBP1.0 million from the issue of 1.5 million new shares. It will pay for the cash portion using a new five-year facility of up to GBP5 million provided by its existing banking partner HSBC Holdings. Stadium will make an additional earn-out payment of up to GBP1.3 million in shares and GBP660,000 in loan notes if United Wireless exceeds certain defined earn-out targets.



Legendary Investments, up 8.4%. The investment company said it swung to a full-year profit after reporting a significant increase in net gains on investments. It said that it made a GBP901,000 profit in the year to end-March, compared with a GBP158,000 loss a year earlier. Legendary's net gain on investments increased to GBP1.1 million from GBP38,000. Administrative costs increased to GBP214,000 from GBP196,000. Net assets increased to GBP1.5 million from GBP554,000. Chairman Zafar Karim said the investment company is pleased with its results, adding that they demonstrate Legendary's ability to source, invest in, and proactively add value to investments with potential for capital appreciation.



Snoozebox Holdings, up 7.5%. The portable hotel provider said it has significantly reduced its losses in the first half of the year, supported by a successful events programme, while saying it has a strong pipeline of opportunities. It said it expects to report an improvement in pre-exceptional earnings before interest, taxes, depreciation and amortisation for the six months to end-June, while it expects to reduce its losses to GBP1.6 million in the period, compared with GBP4.2 million the prior year, supported by a GBP1.7 million reduction in administrative expenses and central overhead costs. It said it is expecting revenue of GBP0.7 million for the first half. The company said it will release its interim results on September 30.

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AIM ALL-SHARE - LOSERS

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Broca, off 32%. After jumping at the UK equity market open, the company's shares have since fallen sharply and are now the biggest fallers in the AIM All-Share index. The drop comes after the company resumed trading on AIM and said it was convening an annual general meeting August 12 to approve the reverse takeover of MXC Capital Advisory LLP. Shareholders will be called on to approve the reverse takeover, the placing of 850.0 million shares at 1 pence per share, and the change in its name to MXC Capital PLC. Broca said that if the placing and acquisition complete, it will seek to generate shareholder returns by providing corporate finance advisory services to grow businesses in which it makes investments. Broca's shares are currently quoted at 1.60 pence.



Tangiers Petroleum, down 27%. The oil and gas explorer said it has failed to find hydrocarbons at the Tao-1 exploration well off the Moroccan Atlantic coast, at its secondary target. The company holds a participating interest in the Moroccan Tarfaya Offshore Block, which is operated by Galp Energia with a 50% interest. It said that, based on its current available information, it has failed to find hydrocarbons at the Assaka secondary target in the well but a full petrophysical evaluation of the Assaka objective is still to take place. Tangiers said that drilling operations continue at the Tao-1 exploration well towards its primary and largest objective, the Trident formation. It added that the possible success at Trident is not linked to the results from Assaka.



Forbidden Technologies, down 12%. The company, which develops and operates cloud video-editing platform ForScene, has posted a widened pretax loss of GBP1.2 million for the six months to end-June, widened from GBP189,618 in the previous year, as revenue declined to GBP348,077 from GBP401,278, but administrative expenses nearly tripled as it upped its headcount and set up its new US subsidiary. Some GBP184,000 was spent on setting up and staffing the US subsidiary.

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Source: Alliance News


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