Broker Upgrades and Downgrades & Key UK Corporate Snapshots 05 August 2015

UK Broker Upgrades / Downgrades

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Arcontech Group Plc (ARC.L) Announced, in its final results for the year ended 30 June 2015, that its reported revenue stood at £2.1 million, compared to £1.9 million in the preceding year. Profit after tax was £0.4 million compared to £0.06 million. The company’s diluted earnings per share was 0.023p, compared to 0.004p.

BBA Aviation Plc (BBA.L) Announced its interim financial report for period ended 30 June 2015. Group revenue decreased by 5% to $1,096.4 million (H1 2014: $1,148.1 million). Underlying profit before tax remained flat at $79.2 million (H1 2014: $79.2 million). The Board is declaring an increased interim dividend of 4.85¢ (H1 2014: 4.62¢) up 5% reflecting the Board’s progressive dividend policy and its continued confidence in Group’s future growth prospects. The company remains confident in the full year outlook.

CLS Holdings Plc (CLI.L) Announced that it has appointed Panmure Gordon (UK) Limited as its joint Broker alongside Liberum Capital Limited with immediate effect, following the completion of the acquisition of Charles Stanley Securities by Panmure Gordon & Co.

Coal of Africa Limited (CZA.L) Announced that it has entered into a Subscription Agreement and a Loan Agreement with Yishun Brightrise Investment PTE Limited (“Yishun”). Under the Subscription Agreement, Yishun has agreed to acquire upto 183,231,261 ordinary shares (approximately 9.5% of the issued share capital of the company) in the company at a price of 5.15p per share, making an aggregate subscription amount of £9.4 million (approximately $14.7 million) which is currently held in an escrow account. With respect to this agreement, both the companies have also entered into a Loan Agreement wherein Yishun has agreed to lend the company $10 million (approximately £6.4 million), conditional upon the company’s shareholders approving the issue of the Subscription Shares.

Cohort Plc (CHRT.L) Announced that it has agreed to acquire Empresa de Investigação e Desenvolvimento de Electrónica, S.A., (EID), a Portugal based supplier of advanced electronics, communications and command and control products and systems for the global defence market for a gross cash consideration of €19 million (£13.3 million).

Electra Private Equity Plc (ELTA.L) Announced that it has agreed to sell its interest in ventilation systems manufacturer Nuaire to Polypipe Group, a London Stock Exchange-listed manufacturer of plastic piping systems for a total value of £145.0 million. After the completion of the transaction, the company will receive proceeds of approximately £72.0 million which represents a rise of £24 million, or 50% on the valuation of Nuaire at 31 March 2015, suggesting an increase in diluted NAV per share of 49.0p. It is inclusive of income and proceeds from a refinancing, that will generate a return of 3.8 times on original cost.

Forte Energy NL (FTE.L) Announced update on its operations in the Slovak Republic. The Company advised on 14 June 2015 that lawyers acting on behalf of Ludovika Energy, the Slovak subsidiary that held the Kursiskova Uranium permit, had filed court proceedings against the Ministry of Environment (“Ministry”, in Slovakia in respect to its decision not to grant the extension of the Uranium Permits. The Company now advises that Ludovika Energy is in the final stages of negotiating an agreement with its lawyers that would see the deferment of any payment of fees or costs associated with the proceedings until the outcome of those proceedings is determined, with fees payable only if the outcome is favourable. The Company also advises that the applications Ludovika currently has before the Ministry for Rare Earth exploration licences over the area of the Kuriskova and Novoveska Huta uranium projects are still being processed by the Ministry. The Company will update shareholders as developments occur. Separately, the company announces the allotment of 290,107,340 fully paid ordinary shares (“Conversion Shares” in the Company to Darwin Capital Limited (“Darwin”. The Conversion Shares have been issued following the receipt of a conversion notice from Darwin in relation to the convertible loan notes announced on 26 March 2015. The Conversion Shares were issued at 0.03447 pence per share for the exercise of conversion rights in respect of £100,000 of Convertible Loan Notes. Following this share issue, Convertible Loan Notes issued in March 2015 for £900,000 remain outstanding.

Glencore Plc (GLEN.L) Announced that the company will release its 2015 half-year Production Report on Thursday, 13 August 2015 and its half-year results for the six months ended 30 June 2015 on Wednesday, 19 August 2015. The announcement will be screened by the Regulatory News Service of the London Stock Exchange and available on its website (www.glencore.com) at 07.00 UK time.

IP Group Plc (IPO.L) Announced, in its interim results for the six months ended 30 June 2015, that portfolio return and revenue rose to £78.9 million from £20.5 million. Profit after tax widened to £66.4 million from £12.6 million. Diluted earnings per share stood at 12.89p, up from 2.81p. As at 30 June 2015, net cash and deposits stood at £219.6 million (HY14: £122.6 million; FY14: £97.3 million). Chief Executive Officer, Alan Aubrey said, “Having strengthened the Group’s balance sheet with more than £200 million of available capital, IP Group is well placed to continue its strategy of supporting compelling opportunities both in the UK and the US. Our performance during the year so far, combined with the Group’s pipeline of exciting opportunities and strong cash and financial position, means we are able to look to the second half of the year with confidence.”

Legal & General Group Plc (LGEN.L) Announced, in its interim results for the six months ended 30 June 2015, that total revenues declined to £8,389 million from £19,184 million recorded in the same period a year ago. Profit after tax widened to £547 million from £507 million. The board increased the interim dividend by 19% to 3.45p (H1 2014: 2.90p) per share.

London Stock Exchange Group Plc (LSE.L) Announced, in its unaudited interim results for the 6 months ended 30 June 2015, that its reported total revenue stood at £705.9 million, compared to £638.3 million in the preceding period. Profit after tax was £130.8 million compared to £90.2 million. The company’s diluted earnings per share was 42.8p, compared to 26.2p.

LondonMetric Property Plc (LMP.L) Announced that it has exchanged on the sale of its 341,000 sq ft distribution facility in Wellingborough to an institutional investor for £29.2 million, reflecting a NIY of 5.8%. The property was acquired in June 2009 for £19.6 million and has delivered a 38% profit on cost. The unit is let for a further 12.3 years to Somerfield Stores Limited and sublet to Yusen Logistics on a short-term basis. The transaction will complete at the end of October. Following this disposal, LondonMetric’s distribution portfolio will comprise 22 distribution centres and total £633.4 million. The distribution portfolio has 100% occupancy, a WAULT of 12.9 years and now accounts for 46% of the total portfolio.

PHSC Plc (PHSC.L) Announced final results for the year ended 31 March 2015. Group revenues increased by 2% to £7.731 million compared with £7.594 million recorded in the previous year. Profit after tax and exceptional costs fell to £349k from £494k. The Board proposed a final dividend held at 1.5p per share. On the outlook front, the company commented that whilst it remain confident that core revenues from its regular and retained clients will underpin the coming year’s performance, it recognise that it is unlikely that it shall be able to replicate the exceptionally favourable circumstances that occurred last year. The company added that it will work hard to find similar opportunities to replace revenues that ended on completion of the large one-off additional assignment fulfilled by B to B. Another high-value contract that ends in 2015-16 relates to asbestos consultancy services provided by Adamson’s Laboratory Services Limited (ALS) and the company do not expect that this subsidiary will be able to win sufficient new work in the short term to fully compensate for this gap in the forward order book.

Principality Building Society (PBS.L) Announced, in its half yearly reports ended 30 June 2015, that net interest income grew marginally to £66.8 million from £66.3 million posted in the same period last year. The company’s profit before tax stood at £23.2 million, compared to a profit of £30.6 million reported in the previous year. The company’s liquid assets stood at £934.5 million (H12014: £1222.5 million).

Restore Plc (RST.L) Announced that it has signed contracts to acquire the business and assets of The Data Imaging and Archiving Company (“Imaging and Archiving”) for a cash consideration of £1.45 million on a cash-free and debt-free basis which is funded from its existing banking facilities. The acquisition is expected to be completed on 18 August 2015, after staff consultation.

Rosslyn Data Technologies Plc (RDT.L) Announced that it has recently won a milestone contract which, the Board believes, demonstrates the scalability and applicability of its platform. The contract is with a large global enterprise in the Fortune 500. This enterprise has chosen the RAPid Big Data cloud analytics platform to replace an incumbent analytics solution to support an increasing need to include analytics, as a value-add layer, to its existing services for the enterprise’s largest clients across several industry verticals. Upon completion of the first phase of the contract, it is anticipated that several further projects will be initiated and this will continue in line with the client’s expanding business needs.

Satellite Solutions Worldwide Group Plc (SAT.L) Announced a strategic sales and marketing agreement with Gigaclear plc. (“Gigaclear”), the institutional investor funded pure fibre-to-the-premises telecommunications operator. This agreement will see SSW and Gigaclear working together to identify and serve the large numbers of properties across the UK that cannot currently access fibre or fast broadband. SSW fully supports Gigaclear’s innovative plans to deliver pure Fibre To The Premises (“FTTP”) to communities that wouldn’t otherwise benefit from gigabit fibre technology. As part of the agreement, SSW will offer its super-fast satellite broadband solution to communities that have been identified by Gigaclear as suitable areas to build their FTTP network, whilst they wait for it to be installed. Additionally, Gigaclear will refer customers to SSW in those areas that have been identified as needing a faster broadband solution, but haven’t been confirmed to date as suitable location for Gigaclear to deploy their solution. SSW is the first satellite broadband ISP in Europe to offer a ‘fibre guarantee’, a facility whereby satellite broadband customers can easily cancel their contract when pure fibre broadband arrives at their premises.

Scotgold Resources Ltd (SGZ.L) Announced, in its Bankable Feasibility Study (‘BFS’) results for its wholly owned Cononish Gold and Silver Project, that the Project’s EBITDA stood at £67.4 million, pre-tax free cashflow was £43.4 million, pre-tax NPV(10%) stood at £22.5 million and a pre-tax IRR was 45%, using a base case gold price of $1,100/ounce (£688/ ounce). The operating costs were lower as Life of Mine (‘LoM’) average was seen at £327/ounce equivalent gold ($523/ ounce equivalent gold) (including Royalties) and the Project breakeven (0% IRR) was $689/ ounce equivalent gold. Its Peak Funding Requirement was seena t £18.5 million and LoM Capital including contingencies, replacements etc. was £24.0 million. Average annual gold production was 23,370 ounce equivalent gold with peak production in Year 2 was 28,540 ounce equivalent gold. Average LoM grade was 11.8 grams equivalent gold /tonne and peak grade stood at 15.4 grams equivalent gold / tonne in year 2. It rapidly implemented the schedule of 16 months post contract and completed the finance and short payback period of 19 months from full production. Based on the earlier PFS, the company was been offered indicative terms by leading banks to provide debt finance for the majority of the project’s funding requirement. Completion of the BFS will facilitate the selection of the preferred finance route and the signing of a mandate with the selected institutions in near future.

Spark Ventures Plc (SPK.L) Announced that under the open offer, valid applications have been received from Qualifying Shareholders in respect of 54,816 open offer shares, including applications under the Excess Application Facility, representing 15.7% of the open offer shares. It has raised approximately £0.5 million pursuant to the open offer, and total aggregate gross proceeds of £10.6 million pursuant to the Fundraising. The total funds raised, including £3.8 million raised via the asset swaps, was therefore £14.4 million.

Spirax-Sarco Engineering Plc (SPX.L) Announced interim results for the six months ended 30 June 2015. Organic sales growth was 3% in the first half, partially offset by unfavourable currency movements that reduced sales on translation by 2.6% when compared with first half 2014 average exchange rates. Sales of £320.0 million were therefore marginally ahead of the prior year (2014: £319.2 million) at reported exchange rates. Adjusted pre-tax profit increased by 1% at constant currency to £65.5 million but was reduced by 1% at reported exchange rates (2014: £66.3 million). The Board has declared an interim dividend of 20.8p (2014: 19.5p) per ordinary share, an increase of 7%. Chief Executive Nicholas Anderson said “We anticipate that our markets will remain challenging, especially in emerging economies, but continue to expect modest market improvements in Europe and North America during the second half of this year and remain focussed on our strategic priorities to generate our own growth. We have a robust and resilient business model and, assuming no unexpected deterioration in our markets, the Board remains confident that the Group will make progress in 2015.”

StatPro Group Plc (SOG.L) Announced, in its half year results for the six months ended 30 June 2015, that total revenues fell to £15.4 million from £15.7 million. Profit after tax narrowed to £0.6 million from £0.7 million. Diluted earnings per share stood at 0.8p, down from 1.0p.

Stratex International Plc (STI.L) Announced in its gold mine update that installation of low permeability soil liner fill and geomembrane 50% complete – installation of pipework and diversion channels progressing well, while Dry commissioning of ADR plant underway. Mechanical and electrical installations of crusher and screening sections complete – conveyor and punch list item works are underway and construction of gold room and installation of internal mechanical works completed – internal electrical works nearing completion. Meanwhile, mechanical installation of agglomerator complete – overland conveyors installation and electrical and automation works are in progress; and Cold commissioning of grasshopper system to commence mid-August, ahead of leach pad and crusher testing once construction is completed.

Tern Plc (TERN.L) Announced, in its half year results for the six months ended 30 June 2015, that total revenue rose to £60,000 from £10,000. Loss after tax narrowed to £87,534 from £93,079.

Unite Group Plc (UTG.L) Announced, in its half year results for the six months ended 30 June 2015, that total revenue rose to £141.8 million from £57.9 million. Profit after tax widened to £210.7 million from £44.6 million. The board increased the interim dividend by 150% to 5.5p per share (2014 interim: 2.2p).

Wizz Air Holdings Plc (WIZZ.L) Announced that in July 2015, the company took delivery of its 63rd brand new A320 from Airbus. The peak summer season also brought enhancements and changes by Wizz Air to its customer offering. The company upgraded its Priority Boarding service to include the option to bring a second personal item such as a handbag, camera bag, or briefcase on board in addition to the small or large cabin bag chosen during the booking process and simplified the change fee to only 50% of the original fare (no less than €10 and no more than €60) and any difference in price of the new fare.