Product Promotion Network

WINNERS & LOSERS SUMMARY: Pets At Home Purrs After Strong Quarter

LONDON (Alliance News) – The following stocks are the leading risers and fallers within the main London indices on Tuesday.
Royal Dutch Shell ‘A’, up 0.6%, Shell ‘B’, up 0.4%, BP, up 0.4%. The oil majors were tracking spot oil prices higher, with Brent quoted at USD52.55 a barrel compared to USD51.59 at the London equities close Monday.
Paddy Power Betfair, down 5.3%. The bookmaker reported a pretax profit of GBP102.3 million for the six months to June 30, swinging from a GBP45.9 million loss the prior year, as revenue rose 9% to GBP827.0 million from GBP708.8 million.

However the growth was held back somewhat by increased investment in completing the group’s technology platform and its digital marketing campaign. Paddy Power Betfair raised its interim dividend per share to 65.0 pence from 40.0p the prior year. The company said its full-year underlying earnings before interest, tax, depreciation and amortisation are expected to be between GBP445.0 million and GBP465.0 million.

The results follow on from Monday’s news that Chief Executive Breon Corcoran will step down in the near future and be replaced by Worldpay Group’s Peter Jackson. Corcoran was a driving force behind the merger between Paddy Power and Betfair in 2015. The stock closed down 4.7% on Monday.

InterContinental Hotels Group, down 4.8%. The hotel operator, which owns the Holiday Inn, Crowne Plaza and Staybridge Suites chains, reported growth in profit in the first half of 2017, as revenue grew across the business and it said it is confident about the full year after passing its landmark of over 1.0 million rooms. IHG said pretax profit in the six months to June 30 rose to USD326.0 million from USD298.0 million in the first half of 2016, as revenue grew to USD857.0 million from USD838.0 million.

Growth was driven by a 2.1% increase in revenue per available room and 3.7% increase in net system size, as the company passed its landmark of over 1.0 million open or pipeline rooms. Occupancy grew by 0.9 percentage points. Numis and Liberum kept Hold recommendations on IHG noting a slowdown seen in revenue per available room growth.

Standard Life, down 1.8%. The life insurer and investment manager said reported its first-half profit attributable to equity holders rose 29% to GBP292 million from GBP226 million a year earlier. Total revenue for the first half declined to GBP7.40 billion from last year’s GBP7.70 billion.

The group raised its dividend by 8.2% to 7.0 pence. Standard Life noted that its proposed merger with Aberdeen Asset Management is expected to be effective from next Monday. Looking ahead, Standard Life noted that the slowdown in gross inflows it saw in the first half of the year is expected to ease as the company progresses with the merger integration.

The company also expects to benefit from strong demand for its retail platforms and improving investment performance.
Pets at Home, up 7.8%. The pet products retailer reported growth in revenue in the first quarter of its financial year and said it is on track to meet expectations for the full year. The group said revenue in the 16 weeks ended July 20 rose by 5% year-on-year to GBP256.5 million, as Merchandise revenue grew by 2.8% to GBP216.4 million and revenue in the smaller Services business increased by 19% to GBP40.1 million.

Like-for-like revenue was up 2.7%, reflecting strong growth in first opinion and specialist referral vet services, as well as continued positive momentum in Merchandise trading. On a like-for-like basis, Merchandise revenue grew by 1.5% and Services revenue rose by 11%.
IWG, down 9.3%. The office space provider, formerly known as Regus, said its revenue momentum improved in the first half of 2017, with a return to growth in the second quarter of the year, but said profit continued to fall.

IWG reported pretax profit for the six months ended June 30 of GBP80.8 million, down by 4.0% from GBP84.3 million for the same period the year before, despite revenue increasing by 8.5% to GBP1.17 billion from GBP1.10 billion due to stronger performances in the Americas and Asia Pacific regions. The UK saw revenue decrease by 7.5% to GBP209.0 million from GBP213.2 million due to closures and lower levels of occupancy. The drop in profit reflects a reduction in the group’s gross margin to 18.1% from 20.9% the prior year, partly offset by the reduction in overheads to GBP124.3 million from GBP136.5 million.

AA, down 6.5%. Credit Suisse downgraded the roadside assistance provider to Underperform from Neutral. SIG, down 4.5%.

The building products supplier cut its interim dividend after swinging to a loss in the first half of 2017, as it continues its strategic review of the business, although revenue rose thanks to sales growth in Europe and the UK. SIG cut its interim dividend to 1.25 pence from 1.83p the year before, which it said is in line with its rebased cover ratio. SIG said it made a pretax loss of GBP10.7 million in the six months ended June 30, having made a GBP38.4 million pretax profit in the first half of 2016, as it booked GBP49.0 million in non-underlying items mostly relating to losses on sale, closure or review of businesses.

SIG is currently conducting a comprehensive review of its strategy, use of capital and cost base. The aim of the review is to assess the potential profits and returns achievable by the group over the medium term and to identify the “key strategic levers that will drive a step change in performance”. Polypipe, down 2.5%.

The plastic piping systems manufacturer said it has continued to perform in line with management expectations in the first half of 2017, but remains cautious over political and economic uncertainties in the UK. Polypipe reported pretax profit for the six months ended June 30 at GBP31.5 million, up from GBP29.9 million for the same period the year before, on revenue that rose 8.4% to GBP242.0 million from GBP223.3 million. Polypipe said the improvement in revenue was due to purely organic growth, with focus largely on strategic growth initiatives, such as legacy material substitution, the development of selected export markets and legislative progress in water management and carbon efficiency.
Andalas Energy & Power, up 61%.

The upstream oil and gas and power company said it has signed a consortium agreement with a subsidiary of Indonesia’s state-owned firm PTT (Persero) Tbk to develop an independent gas-fired wellhead power facility. Andalas will have a 49% stake in the project, and Persero will have a 51% stake, with first power targeted for the end of 2019. The proposed facility in the Jambi province will have a minimum 30 megawatt capacity and is expected to generate gross revenue in excess of USD10.0 million per annum for 20 years.

Andalas noted this is a binding agreement to develop the first of three planned projects in its framework agreement with Persero, which it signed in July. Andalas and Persero will now review project financing options. GetBusy, up 8.6%.

The software developer said it turned to profit as it released its maiden interim results as a London-listed company, having been admitted to trading on AIM only on Friday. The company said revenue for the six months to June 30 was GBP4.6 million, up 24% from GBP3.7 million the year before. GetBusy turned to a pretax profit of GBP71,000 from a GBP15,000 loss.

The company said it saw good growth across all international revenue streams, with UK revenue up 9% to GBP2.6 million from GBP2.3 million, while US revenue was up up 37% to GBP1.4 million from GBP1.0 million. GetBusy said it was “extremely pleased” with its results, and remains focused on streamlining its operations, meeting customer product demand, and identifying new growth opportunities in the second half of the year. Seeing Machines, up 8.3%.

The computer vision technology provider said it expects full year results ahead of market expectations, with total sales in excess of AUD13 million, after it saw revenue momentum “accelerate” in the second half. The group said total revenue achieved in the year ended June 30 was “more than double” that of the year before on a like-for-like basis. Seeing Machines saw revenue momentum “accelerate” throughout the year, with second half sales more than tripling sales made in the first half.

In the year to the end of June 2016, revenue amounted to AUD33.6 million, having jumped to a new record from only AUD12.8 million in the 2015 financial year.
Firestone Diamonds, down 19%. The miner lowered its production guidance for the financial 2018 year, after commencing a review of its current life mine plan, which it said will hit revenue for the year. Firestone said it has commenced the review in order to optimise mining operations at its 75%-owned Liqhobong diamond mine in Lesotho.

As part of the review, Firestone will extend the mining of the weathered kimberlite over the coming months, in order to access the lower areas of the pit that have historically yielded higher grade and higher value diamonds. The company also plans to mine additional waste rock in the coming year, in order to improve the long-term mining operations. As a result, although the overall life of mine volume of carats is not anticipated to change, Firestone now expects to produce between 800,000 and 850,000 carats in the year ending June 30, 2018, down from its previous guidance of 1.0 million carats.

TClarke, down 11%. The building services firm reported an increase in interim profit but account issues in one of its regional areas dragged down its operating margin. TClarke reported a pretax profit from continuing operations of GBP2.0 million for the six months to June 30, up 17% from GBP1.7 million in the same period in 2016.

Revenue rose 17%, to GBP142.8 million from GBP121.6 million. However, the company’s operating margin dipped to 2.0% from 2.2%, due to “workload and protracted final account settlement issues” in its Central and South West region. Those issues saw the region fall to an underlying operating loss margin of 9.3% from a 1.3% profit margin year-on-year, and regional revenue fall to GBP23.7 million from GBP30.1 million.
By Arvind Bhunjun;; @ArvindBhunjun

Copyright 2017 Alliance News Limited.

All Rights Reserved.

Leave a Reply

Your email address will not be published. Required fields are marked *