News & Tips: Gulf Keystone, Faroe Petroleum, Ithaca Energy, RSA & more

November 11, 2013 by  
Filed under Wind Energy Tips

Equities in London have started the week flat despite good economic news from Asia overnight but The Trader Dominic Picarda is confident that we haven’t seen the end of the rally yet.

IC TIP UPDATES:

Gulf Keystone Petroleum (GKP) has confirmed that the full judgement with regard to the dismissed claims of Excalibur Ventures will be given on 13 December, at which point Excalibur can apply for permission to appeal although Gulf Keystone is confident that that clarity of the initial ruling is strong enough to make an appeal unlikely. As a result, Gulf Keystone is moving forward with plans to move to the main list early in 2014. We keep our buy rating.

Faroe Petroleum (FPM) announces that the Snilehorn well in the Norwegian Sea, in which it holds a 7.5 per cent interest, has made a successful oil discovery which gives the prospect an estimated 57-101 million barrels of oil. Elsewhere, the Faroe-operated Novus well in the Norwegian Sea has begun drilling. We maintain our buy recommendation.

Ithaca Energy (IAE) reported record quarterly cashflow in the third quarter at $77.8m, up from $30.1m last year. Average production was 11,942 barrels of oil per day, which was held back by a number of shutdowns during the period. Full year production is forecast to average 13,000 barrels per day. Buy.

Simon Thompson recommendationMacau Property Opportunities (MPO) increased its net asset value by 4.7 per cent to $4.13 a share in the three months to September. The company also recently agreed to sell its Zuhai properties for $64m with completion expected by March next year.

Fellow Simon Thompson recommendationGreenko (GKO) has completed the first phase of the commissioning of its Balavenkatpuram wind farm in Andra Pradesh, adding 51MW to its capacity, giving it a portfolio of 411MW of renewable power, up by 38 per cent since April. The second phase of the Balavenkatpuram wind farm is under construction and will add a further 50MW.

Land development and property specialist Henry Boot (BHY) says trading is in line with expectations with two disposals completed since July and a further seven deals moving towards completion. Buy.

Insurer Admiral (ADM) has posted third quarter results in line with expectations with market premiums falling in the UK car insurance market which has led to reduced UK turnover of £440m, down 12 per cent. But success in the international business, which has passed the 500,000 milestone of cars insured, meant the overall group turnover reduction fell 7 per cent to £528m. We keep our sell rating.

Catlin (CGL) reports an 8 per cent increase in gross written premiums in the nine months to September with the US and other international markets including Canada, Europe and Asia-Pacific outperforming a flat showing in London. Buy.

KEY STORIES:

Insurance company RSA (RSA) has confirmed that it is commencing a comprehensive review of its Irish business after the announcement late on Friday that it was suspending the chief executive, finance director and claims director of the business after issues were identified during an internal audit that are likely to cause a £70m hit to the overall group result.

Shire Pharmaceuticals (SHP) has announced the proposed acquisition of biopharmaceuticals business ViroPharma for $4.2bn which will add to Shire’s rare disease portfolio.

BT Group (BT.A) confirms that it has won the auction for exclusive live rights to 350 Uefa Champions League and Europa Cup football matches for three seasons from 2015, the first time a single UK broadcaster has won the rights. It is paying £299m a season for the deal.

Funerals business Dignity (DTY) grew turnover by 12.5 per cent in the three months to 27 September with underlying operating profits up by 12.7 per cent to £60.2m. Growth slowed slightly in the third quarter as the death rate reduced compared to the first half of the year. Since July the company has acquired a further four funeral businesses and opened up one new satellite business.

Cobham (COB) says trading is in line with expectations with the US defence business suffering short term weakness due to uncertainty in government spending but commercial markets performing better. The full year outlook remains subdued with a low-to-mid single digit declines in revenue and margins expected with the continued uncertainty now meaning 2014 performance is expected to see a similar decline.

OTHER COMPANY NEWS:

Housebuilder Redrow (RDW) is, along with its peers, enjoying the strong market conditions with private reservations up by 52 per cent in the first 19 weeks of its financial year, selling prices up by 11 per cent and cancellations down from 17 per cent to 12 per cent. The government’s Help to Buy initiative is having an effect, with 35 per cent of reservations during the period being supported by the scheme.

 

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