News Column

UK WINNERS & LOSERS: Carillion Jumps Back In The M&A Spotlight

August 14, 2014

Jon Darby



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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SSE, up 1.0%. The UK power generator received a price target upgrade from Goldman Sachs to 1,472p from 1,415p, although analysts at Goldman kept a Sell rating on the stock. SSE has also said that it has an appetite for reform of the UK energy market, and suggested that government policy is paid for by taxation rather than through customer bills as one potential reform. In a response to a recent statement by Competition and Markets Authority, which is investigating the UK energy market amid complaints that customers pay too much for energy, SSE also called for a review of regulations that it says complicate bills and tariffs, and a look at whether the different regional costs of transporting electricity could be passed on to suppliers as one national charge to make price comparisons easier.

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FTSE 100 LOSERS

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Rio Tinto, down 1.7%. BHP Billiton, down 0.5%. The iron ore producers are underperforming. Iron ore futures in China Thursday reportedly fell to their lowest level in more than two weeks amid sustained pressure from a well supplied market.



Admiral Group, down 1.2%. The motor insurer is amongst the worst performers for the second consecutive day after reporting its interim results on Wednesday. Deutsche Bank has cut its price target on the stock to 1,260p from 1,330p, saying that "near term uncertainty and a premium rating are uneasy partners". The insurer reported first half numbers that were overall a little batter than expected Wednesday, but at the same time noted pressure on various income streams going into the second half.



Intertek Group, down 0.9%. The product testing company suffered a ratings downgrade to Neutral from Buy from Goldman Sachs.



Friends Life, down 0.7%. Another name to fall foul of Goldman Sachs, the life insurance group has had its rating cut to Neutral from Buy.

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FTSE 250 WINNERS

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Carillion, up 6.9%, Balfour Beatty, up 1.2%. The construction groups are back in the merger and acquisition spotlight after Carillion said it has held meetings with a number of major Balfour Beatty shareholders since Monday. Balfour Beatty has turned down two takeover approaches from Carillion over the last few weeks due to disagreements over the treatment of Balfour's Parsons Brinckerhoff business, which is in the process of being sold separately. Carillion said it has proposed that Balfour Beatty's shareholders receive an additional cash dividend, or equivalent, of 8.5 pence per Balfour Beatty share at the time that Balfour Beatty's final 2014 dividend would otherwise have been paid in 2015. The company said it will make a further announcement in due course, although there can be no certainty that it makes another offer.



Ophir Energy, up 5.6%. The oil and gas exploration company said it swung into profit in the first half, boosted by the sale of its stake in three blocks in Tanzania to Pavilion Energy PLC, which will leave the company well financed into 2015. It also announced a share buyback of up to USD100 million.



Derwent London, up 3.2%. The London-focused real estate investment trust said it made a pretax profit of GBP371.4 million for the six months to June 30, up from GBP219.8 million in the previous year. The impressive results were driven by stronger-than-anticipated property price rises, as well as growth in rental values. The investment portfolio saw a 10% increase in value over the first half as property value in London boomed.

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AIM ALL-SHARE WINNERS

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Graphene Nanochem, up 8.5%. The performance nanochemicals and advanced materials company said it has filed a patent application in Malaysia related to a method for making graphene nanocomposites by multiphase fluid dynamic dispersion. PlatSperse, the firm's multiphase fluid dispersion device, will enable the firm to explore more applications with a view to commercialising graphene-enhanced products.



Cyan Holdings, up 5.2%. The technology company's shares were given a boost after the company said it signed a partnership agreement with Dinsmore & Associates, which will distribute its smart metering, smart lighting and machine-to-machine solutions in sub-Saharan Africa. Cyan said the deal has the potential to create a big market opportunity, citing estimates that grid modernisation spend will reach USD11 billion over the coming decade.



Caza Oil & Gas, up 5.1%. The exploration company said it swung to profit in the second quarter on the back of a big rise in revenue from oil and natural gas sales and higher production volumes. The company said adjusted earnings before interest, taxation, depreciation and amortisation were up to USD3.3 million in the three months to June 30, against a USD824,891 loss in the same period last year. That was driven by a near-sixfold rise in revenue from oil and natural gas sales in the second quarter to USD6.3 million from USD1.1 million last year. That was also a 65% rise on the USD2.1 million in revenue generated in the first quarter of 2014.

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AIM ALL-SHARE LOSERS

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Mariana Resources, down 16%. The exploration and development company said it had failed so far to find any economically viable mineralisation at its copper, gold and molybendum exploration project in Peru, although it remains confident that there is still scope for an economic discovery in the large complex. The company has finished drilling a sixth hole at the Condor De Oro site, drilling down 300 metres, and again intersected low-grade copper-gold-molybendum mineralisation.

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Source: Alliance News


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