News Column

UK WINNERS & LOSERS: Retailers Dip As Barclays Warns On Sector Outlook

August 22, 2014

Jon Darby



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

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FTSE 100 WINNERS

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Ashtead Group, up 0.8%. The business services company had its price target upgraded by Berenberg to 1,145p from 1,110p, along with the reiteration of a Buy rating. Berneberg says the investment case for Ashtead is based on the expected recovery in US non-residential construction, and the market share gains forecast in the US through organic expansion and bolt-on merger and acquisition, as well as a positive outlook for margins.

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FTSE 100 LOSERS

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Petrofac, down 1.7%. The oil and gas services company leads the blue chip fallers after saying Chairman Norman Murray has resigned with immediate effect and will be replaced by Senior Independent Director Rijnhard van Tets. Murray had been chairman since May 2011, while Van Tets has been a director of Petrofac since May 2007. In a statement, Petrofac said Murray stepped down for "compassionate reasons".



Kingfisher, down 1.0%. The home improvement retailer has suffered a number of negative broker comments Friday. Nomura cut its price target to 320p from 420p, reiterating a Neutral rating, while Barclays cut its price target to 300p from 390p, reiterating an Equalweight rating. The cut from Barclays was part of a note that downgraded the outlook for the whole European General Retail sector to Negative from Neutral. Barclays said that "tightening monetary policy in the UK will likely pressure the finances of UK households, forcing a reconsideration of spending habits after five years of near-zero interest rates." Furthermore, the rise of the discounters is putting pressure on the traditional retailers, with B&M 11% cheaper across a basket of goods compared to Kingfisher-owned B&Q, according to a Barclays study.



London Stock Exchange Group, down 0.7%. The stock exchange priced a 3-for-11 rights issue at 1,295 pence per share Friday. The GBP938 million of net proceeds will be used to part fund its USD2.70 billion acquisition of the US's Russell Investments. The issue price is a 30% discount to the theoretical ex-rights price based on the closing middle-market price of 2,005.00p per share on Thursday. The rights issue will result in the issue of 74.3 million new shares, about 27% of the group's existing issued share capital and about 21% of the resulting shares in issue.

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FTSE 250 WINNERS

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Lonmin, up 2.9%. The platinum and precious metals miner leads the index gainers after being added to Goldman Sachs influential Conviction Buy list. Goldman upgraded the stock from Neutral on Friday, also increasing its price target to 280p from 270p.



HellermannTyton, up 1.5%. The manufacturing company, which was promoted to the FTSE 250 in March last year, posted pretax profit of EUR34.6 million for the six months ended June 30, up from EUR21.8 million a year earlier, as revenue rose to EUR292.4 million from EUR267.5 million. On the back of its performance the company increased its interim dividend to 2.82 cents from 1.32 cents. The company's three main divisions - electrical, automotive and data communications - all performed well, with the automotive businesses again leading the way with revenue rising 16% to EUR146.6 million from EUR126.5 million a year earlier.

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FTSE 250 LOSERS

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Halfords Group, down 2.7%. The retailer has its rating cut to Underweight from Equalweight by Barclays as part of the bank's downgrade to the whole European general retail sector.

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AIM ALL-SHARE WINNERS

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Magnolia Petroleum, up 40%. The US onshore-focused oil and gas exploration and production company said net production stood at 257 barrels of oil equivalent per day as at July 1, up from 150 barrels of oil equivalent per day on April 1, as wells in which it holds a larger-than-average interest have come into production. Magnolia said that thanks to the combination of growing revenues from production and its USD5 million credit facility, it is well placed to deliver on its objective to prove up the reserves on its leases.



Connemara Mining, up 23%. The zinc, lead and gold exploration company said it has been awarded a prospecting licence in County Kilkenny, Ireland, sending its shares higher in early trade. The group said it has been awarded Prospecting Licence 3313, located north east of the Vedanta, Lisheen, Lundin and Galmoy mines and to the south of the Ralpha mineralised zone. It said the licence covers nearly 50 square kilometres, with previous drilling in the area having been restricted to the north-west corner.

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AIM ALL-SHARE LOSERS

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Sefton Resources, down 21%. The oil and gas exploitation and production company, which has interests in California and Kansas, posted a net loss of USD959,000 for the six months to June 30, compared with a loss of USD253,000 last year. This was as revenue fell to USD1.4 million, from USD2.2 million in the first half of 2013, which it said was largely on the back of lower production and sales volumes. The company said oil production fell significantly in the first-half, down to 15,178 barrels, compared with 22,699 barrels a year earlier. It said it sold a total of 15,024 barrels in the first half. Oil prices also fell slightly in the period, with realised oil price per barrel at USD96, compared with USD97 a year earlier.



African Consolidated Resources, down 14%. The resources and development company said it had agreed to a further extension to the date on the payments due on the purchase of the Dalny Mine in Zimbabwe and said it is still seeking financing to continue as a going concern. African Consolidated said it has agreed with Falcon Gold Zimbabwe Ltd, the Dalny Mine's current owner, to extend the payment date for the outstanding USD7.5 million owed to October 31. Due to the extension, African Consolidated has agreed to make a contribution to care and maintenance costs at the Dalny Mine on a stepped basis. If the outstanding payment is made by October 3, it will make a USD250,000 contribution. If the payment is made by October 31, the contribution may rise to USD1 million.



Wildhorse Energy, down 11%. The alternative fuels company cancelled a rights issue Friday, saying that it plans to conduct a review and possible restructuring of its board, operations and strategy. All funds submitted to the company will be returned to subscribing shareholders.










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Source: Alliance News


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