News & Tips: RSA, Kingfisher, Royal Mail, Centrica & more

March 25, 2014 by  
Filed under Wind Energy Tips

Equities have bounced out of the blocks in early trading this morning, adding to the growing sense of unease at the recent rather marked gyrations in the markets but The Trader Dominic Picarda is still confident that the next significant move will be upwards.

IC TIP UPDATES:

Retailer Kingfisher (KGF) posted a 5.2 per cent improvement in reported revenues in the year to 1 February, up 0.7 per cent on a like for like basis with adjusted pre-tax profits 4.1 per cent better at £744m. The company grew market share in the UK, France and Poland but the market in France remains very tough. We are reviewing our sell rating.

Simon Thompson recommendationWH Ireland (WHI) reports that since its last trading statement in late February, trading has continued to show encouraging signs.

Faroe Petroleum (FPM) grew its reserves by 27 per cent in 2013 due to various drilling successes although overall revenues fell over the year from £158.8m to £129.4m with a similar fall in cash earnings from £96.3m to £80.5m. Production guidance for 2013 is 4,000-6,000 barrels of oil per day with a significant number of exploration and appraisal wells also planned. We retain our buy rating.

Construction specialist Costain (COST) has been appointed to three frameworks with National Grid covering underground cabling, overhead lines and gas transmission. Buy.

Mobile payment specialist Monitise (MONI) has rapidly completed an oversubscribed placing to raise £109m gross at 68p a share, only a 1 per cent discount. We retain our buy recommendation.

Specialist credit provide SU (SUS) grew its profits by 31 per cent to a record £17.3m in the year to January, driven by a strong performance from its motor finance business which boosted profits by 42 per cent. The home credit business was more subdued although there are signs in recent trading that this is picking up. We keep our buy rating.

Asset monitoring technology specialist Ubisense (UBI) saw an 11 per cent increase in revenues in 2013, with recurring revenues accounting for more than a quarter of the total. Adjusted earnings were flat at £1.1m due to higher investment in the business. The order book was up by 75.5 per cent on the previous year at £17.9m at the end of December. Buy.

Simon Thompson recommendationKBC Advanced Technologies (KBC) has announced a 45 per cent surge in adjusted profits for 2013 after a turnaround in the volume of business and improved margins.

KEY STORIES:

Troubled insurer RSA (RSA) has announced a deeply discounted rights issue to raise up to £748m net at 56p a share, a 40 per cent discount to the current share price. The move is part of new chief executive Stephen Hester’s plan to bolster the capital position of the business.

Royal Mail Group (RMG) has announced plans to cut a net 1,300 jobs as part of its ongoing efficiency programme. The plans are for 1,600 jobs to go, mostly within managerial and head office ranks, with 300 jobs created. The plan is expected to cost around £100m but will save £50m a year. Consultations with unions will begin immediately.

Centrica (CNA) has announced the proposed acquisition of Irish integrated energy business Bord Gais Energy from the Irish government for €1.1bn in conjunction with partners Brookfield Renewable Energy and iCON Infrastructure Partners. Centrica will take the Irish gas and electricity supply business and the Whitegate gas power station, iCON will take on the Northern Irish distribution business and Brookfield the renewable power assets.

Builders merchant Wolseley (WOS) boosted revenues by 5.2 per cent overall in the six months to 31 January with like for like sales up 3.2 per cent. Profit before tax leapt from £193m to £316m.

EasyJet (EZJ) has narrowed its predicted losses for the six months to 31 March from £70m-£90m to £55m-£65m after better than expected trading and lower cost inflation over the quieter winter months.

Retailer Topps Tiles (TPT) is enjoying a revival in trading with total revenues for the 26 weeks to 29 March likely to be around £97.5m, an 11.6 per cent improvement on last year with like for like sales expected to be 10 per cent ahead.

Irn-Bru maker AG Barr (BAG) enjoyed a 9.6 per cent rise in pre-tax profits to £38.1m for the year to January after a 6.9 per cent rise in turnover.

OTHER COMPANY NEWS:

Logistics specialist Stobart (STOB) has announced a five year deal with airline FlyBe (FLYB) which will station two planes at Stobart’s Southend Airport which will serve six routes into Northern Europe and is aiming to carry 200,000 passengers in 2015 with the option to expand the franchise further in future.

Final results from broker Panmure Gordon (PMR) showed a virtual doubling of profits in 2013 to £1.17m after a 29 per cent increase in commissions and fee income.

Interim results from quantum dot technology developer Nanoco (NANO) were accompanied by news that it has signed a follow on development agreement for the display sector with a major South Korean electronics manufacturer, which should culminate in commercial product development.

Commercial washing machine maker Xeros (XSG) commenced trading on Aim this morning after raising £27.6m in a placing.

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