Broker Upgrades and Downgrades & Key UK Corporate Snapshots 04 November 2015

UK Broker Upgrades / Downgrades

US Broker Upgrades / Downgrades

Key UK Corporate Snapshots Today

Countrywide Plc (CWD.L) Announced, in its trading statement for the quarter ended 30 September 2015, that it continues to perform well across its diversified portfolio, notwithstanding the impact on our estate agency business of lower levels of housing transactions than in 2014. Despite generally encouraging economic conditions, the anticipated post-election recovery in residential transactions failed to materialise in any significant way. This is underlined by the latest market data which shows Land Registry volumes to the end of July running 8% below 2014. The slow pace of recovery in housing sales transactions will most likely result in volumes for the year being at least 5% below 2014 at circa 950,000 in total. The Group’s five year plan requires an increased level of investment to deliver significant EBITDA growth and enhance shareholder returns. The Group’s normal dividends will, however, remain unchanged at 35-45% of underlying profit after tax. For the financial year ending 31 December 2015, the Board intends to maintain the total ordinary dividend at the previous year’s level of 15.0p per share.

Fevertree Drinks Plc (FEVR.L) Announced, in its trading update ahead of the year ending 31 December 2015, that the company has continued to perform strongly in the second half. Both UK and international sales have been encouraging, driven by distribution gains which have come through earlier than anticipated in our existing markets. Given the strong sales in the period to date, the Board anticipates that the results for the full year will be materially ahead of Board expectations.

Gemfields Plc (GEM.L) Announced, in its operational update for the three month period ending 30 September 2015, the first quarter of the financial year 2016, about production of 7.5 million carats of emerald and beryl. Focus on delineating additional areas of higher quality alluvial resource resulted in the production of 0.5 million carats of ruby and corundum, with a 96.0% increase in the volume of higher quality rubies recovered. September 2015 auction of predominantly higher quality rough amethyst held in Singapore generated revenues of $ 0.44 million at an average realised price of 4.32c per carat, the highest ever achieved at any Gemfields’ amethyst auction. Gross profits from sales orders agreed during the quarter ending 30 September 2015 increased by 61.0% when compared to the quarter ending 30 September 2014. The gross profit margin on sales orders agreed increased from 30.0% to 51.0% over the same period

Glencore Plc (GLEN.L) Announced that a long-term streaming agreement has been entered into by Anani Investments Limited (a wholly-owned subsidiary of Glencore) with Silver Wheaton (Caymans) Ltd a wholly-owned subsidiary of Silver Wheaton Corp. (“Silver Wheaton”), for delivery of silver calculated by reference to silver produced at the Antamina mine, located in Peru. Silver Wheaton will make an advance payment of $900 million to Glencore five business days after the closing of the transaction (closing is subject to the completion of certain corporate matters and customary conditions and is expected to occur prior to the end of November 2015). Thereafter, Silver Wheaton would pay 20% of the spot price at the time of delivery for each ounce of silver delivered to Silver Wheaton under the streaming agreement. In return, Glencore will deliver silver to Silver Wheaton equivalent to 33.75% of silver produced by the Antamina mine at a 100% payable rate. Separately, the company announced that $2.5 billion has been raised from the equity placement on 16 September. Available committed liquidity at 30 September increased to $13.8 billion (from $10.5 billion at 30 June), reflecting $1.7 billion of net capital raised (equity placement less interim dividend), as well as continued cash generation from the underlying operations and further release of RMI over the quarter. The group reported targeting net funding and net debt of around $40 billion and $25 billion respectively by year end, down some 15-20% from their respective 30 June 2015 and 31 December 2014 amounts. Further, in its production report announced that the shutdown and restart plans for Katanga and Mopani have been completed. At Mopani, post completion of the optimisation study, the smelter will continue to operate either at reduced level or in campaigns to service ongoing long-term third party concentrate purchase contracts. Own sourced copper production was down 2% to 1,127,500 tonnes in the nine months to 30 September 2015, primarily due to the anticipated lower production from Alumbrera (nearing end of mine-life) and some Katanga suspension impact, partly offset by Antapaccay’s successful ramp-up. Own sourced coal production was down 8% to 102.7 million tonnes as we continue to limit production in the current weak market environment. The Pasar copper smelter is in the process of being ramped up with its newly installed equipment enabling expansion to some 330,000 tonnes.

Gresham House Plc (GHE.L) Announced that its wholly owned subsidiary, Gresham House Holdings Limited (“GHHL”), has agreed to acquire 100% of Aitchesse Limited (“Aitchesse”), one of the leading managers of UK commercial forestry, for a maximum consideration of £7.7 million. The acquisition is a significant milestone for Gresham House and marks the launch of the comopany’s Real Assets division. On completion, the company will pay approximately £4.0 million made up of £1.8 million of cash, £0.7 million of short term loan notes and £1.5 million in Gresham House shares at 298.5p, based on last reported NAV at 30 June 2015. The remaining £3.7 million, made up of up to £1.5 million of cash and £2.2 million of shares, will be paid based on Aitchesse successfully delivering against performance targets for the period 1 July 2015 to 28 February 2018. Also, it is seeking shareholder approval to implement a long term incentive plan to align the interests of Shareholders and management in the long-term success of the company.

Heath (Samuel) & Sons Plc (HSM.L) Announced, in its interim results for the six months ended 30 September 2015, that revenues rose to £6.1 million from £5.4 million recorded in the same period a year ago. Profit after tax widened to £0.4 million from £0.1 million.

Immupharma Plc (IMM.L) Announced an update on the progress of its Phase III clinical trial of LupuzorT, its lead programme for the potential breakthrough compound for Lupus, the life threatening auto immune disease. The pivotal Phase III trial is progressing in conjunction with Simbec-Orion, the company’s contract research organisation conducting the study.

Legal & General Group Plc (LGEN.L) Announced, in its third quarter 2015 IMS, that net cash generation was up by 14.0% to £943.0 million and operational cash generation was up by 11.0% to £936.0 million. Total annuity assets increased by 8.0% to £43.1 billion. Annuity sales were £1.5 billion, with 2014 benefitting from the £3.0 billion buy-in transaction with ICI pension fund. The company’s total assets under management increased 8.0% to £717.0 billion reflecting external net inflows of £21.7 billion. LGC increased direct investments as at Q3 to £0.8 billion, an increase of 88.0%. UK Protection premium increased 3.0% to £1,109.0 million. New business sales reduced marginally to £174 million. Cofunds generated further YTD net flows of £2.6 billion with total AUA up 6.0% at £73.1 billion. LGA delivered lower Q3 sales of $24 million following recently introduced price changes. This is in line with guidance provided at the time of our interim results.

Magnolia Petroleum Plc (MAGP.L) Announced that it has commenced the 10 well drilling programme that targets the proven Woodford formation in the prolific South-Central Oklahoma Oil Province play in Oklahoma. It is estimated that a total 3.2 billion barrels of conventional oil have been recovered from 60 reservoirs till now. It has a 0.525% working interest in each of the 10 new wells, which are operated by Continental Resources. Drilling has commenced on the Sympson 10-6H Well, the first of five wells which are to be drilled in November 2015. The remaining five wells of the programme will be drilled by March 2016, with one well in January 2016, a further three in February 2016 and the last in March 2016.

Marks & Spencer Group Plc (MKS.L) Announced, in its half year results for 26 weeks ended 26 September 2015, that revenues rose to £4951.3 million from £4904.1 million posted in the same period preceding year. The company’s profit before tax stood at £216.0 million, compared to a profit of £279.4 million reported in the previous year. The basic earnings per share stood at 10.5p compared to earnings of 14.0p reported in the previous year. The company further stated that the board has approved an interim dividend of 6.8p per share (H1 2014: 6.4p), amounting to £111.3 million (H1 2014: £104.5 million), will be paid on 8 January 2015 to shareholders whose names are on the Register of Members at the close of business on 13 November 2015.

Old Mutual Plc (OML.L) Announced, in its trading update for three months ended 30 September 2015, that gross sales climbed 31% to £8.1 billion compared to £6.3 billion in the same period last year. Pension sales jumped by 71% while the Intrinsic segment generated 24% of net flows into the UK Platform. Funds under management (FUM) remained flat at £319.4 billion. Nedbank Credit Loss Ratio stood at 0.76% YTD (Q3 2014: 0.77% YTD). Total Wealth too rose by 45% to £5.5 billion

OneSavings Bank Plc (OSB.L) Announced, in its trading update for the period from the 01 July 2015 to date, that the company continued showing strong financial and operational performance. Net loans & advances grew £986 million for the first 9 months to £4.9 billion, driven by further strong organic origination, leading to a continued expectation for full year growth to be a few percentage points ahead of the 29% delivered in 2014. Margins on £548 million of new organic origination in the third quarter remained strong and we continue to expect full year net interest margin to be slightly ahead of the 305bps delivered in the first half of 2015. Also, cost:income ratio remains very strong. As previously guided the full year ratio is expected to be very slightly higher than the 26% seen in the first half of 2015 due to the impact of planned infrastructure investment in the second half of the year while business growth continues to be supported by a robust capital position.

Persimmon Plc (PSN.L) Announced, in its third quarter trading statement covering the period from 1 July 2015 to 3 November 2015, that customer activity strengthened in line with the traditional seasonality of the market. Private sales rate in the period were 12% ahead of last year, building on the 5% stronger sales rate through the summer weeks. The mortgage approval volumes continued to witness the positive trend. The group anticipates opening approximately a further 20 new sites in the remaining weeks of this year. The Group is likely to hold increased cash balances at the yearend (31 December 2014: £378.4 million) subject to the timing of further land investment. The group believes that the structural improvements in the mortgage market would support a more stable and sustainable outlook for the housing market in the UK in the future.

PPHE Hotel Group Limited (PPH.L) Announced, its trading update for the three months and nine months ended 30 September 2015, that total revenue increased by 9.7% to €79.8 million. On a constant currency basis, revenue increased by 3.8%. RevPAR increased by 12.1% to €138.4. RevPAR growth was driven by a 13.1% increase in average room rate to €155.5. Occupancy decreased by 80 bps to 89.0%. Performance during the nine months ended 30 September 2015, total revenue increased by 11.4% to €220.8 million. On a constant currency basis, revenue increased by 3.8%. RevPAR increased by 12.4% to €126.1. RevPAR growth was driven by a 10.5% increase in average room rate to €148.4. Occupancy increased by 150 bps to 85.0%. The interim dividend of 10.0 pence per share was paid on 8 October 2015.

Restore Plc (RST.L) Announced that it has agreed to acquire the records management business of Wincanton Plc, Wincanton Records Management (“Wincanton Records Management” or “WRM”), for an enterprise value of £60 million, on a cash and debt free basis (the “Acquisition”). The consideration will be approximately £55.7 million, which is after deductions for retained working capital of £2.4 million and certain tax costs of £1.9 million incurred by Wincanton Plc. The Acquisition will be financed from funds raised by a placing with certain institutional investors and partly through new debt facilities of £80 million with Royal Bank of Scotland and Barclays. The company also announced a firm placing with institutional investors to raise approximately £34 million before expenses (the “Placing”) through the issue of 13,076,924 new ordinary shares of 5 pence each (“New Ordinary Shares”) at 260p per share. The Placing was significantly oversubscribed with demand from new and existing institutional shareholders.

SABMiller Plc (SAB.L) Announced, in its update regarding the possible offer by Anheuser-Busch InBev, that both the companies have made good progress in agreeing the terms of the possible offer. In order to allow the companies to finalise their discussions and satisfy the pre-conditions to the announcement of a formal transaction, the company’s board has requested the Panel on Takeovers and Mergers to further extend the relevant PUSU deadline until 11 November 2015.

Savannah Resources Plc (SAV.L) Announced that it has commenced the drilling of selected new VTEM targets while the historical copper results around the Aarja Prospect in the Block 4 permit area have been released. The company earns a 65% shareholding in the Omani company, Al Thuraya LLC, the owner of the Block 4 Project (‘the Project’) by undertaking exploration activities on behalf of Al Thuraya. Drill testing the depth extents of the gossan at the southern end of the Aarja pit returned a trenching result of 14.5 m at 8.03g/t gold and 0.9% copper (AJT001). Drill testing at the Gaddamah Gossan showed encouraging trenching results like 7.7 m at 11.35g/t gold, 1.45% zinc and 0.40% copper in GDT01.

SKIL Ports & Logistics (SPL.L) Announced that the independent Directors of the Company visited its major new green field port and logistics facility in Navi Mumbai, India, on 3 November 2015 to monitor progress of the development and meet local Authorities and the site management. Despite heavier than normal rain falls in early October, which caused some minor delays, activity on site is progressing well.

Stagecoach Group Plc (SGC.L) Announced, in its trading update, that recent trading has been consistent with our expectations and there is no change to the adjusted earnings per share that it is anticipating for the year ending 30 April 2016. The Group maintains a strong financial position with investment grade credit ratings and appropriate headroom under its debt facilities. Consolidated net debt has, as expected, increased from 30 April 2015, reflecting additional investment in its bus fleet, the acceleration of interest and premium payable associated with redeeming our 5.75% bonds and the reversal of some favourable UK Rail working capital timing differences in the previous financial year, partly offset by continued strong cash generation from operations. Overall current trading is satisfactory and remains on course to meet its expectations for the year. The Group plans to announce its interim results for the six months ended 31 October 2015 on 9 December 2015.

Tracsis Plc (TRCS.L) Announced, in its final results for the year ended 31 July 2015, that revenues rose to £25.4 million from £22.4 million recorded in the same period a year ago. Profit after tax widened to £3.7 million from £3.3 million.

Vedanta Resources Plc (VED.L) Announced, in its interim results for the six months ended 30 September 2015, that revenues fell to $5,699.3 million from $6,455.8 million recorded in the same period a year ago. Loss after tax stood at $153.6 million, compared to a profit of $494.2 million. No interim dividend was declared in light of the current market volatility.

Wetherspoon (JD) Plc (JDW.L) Announced, in its interim management statement for the 13-week period up to 25 October 2015, that like-for-like sales increased by 2.4% and total sales increased by 6.1%. Sales have been slightly higher in the last 6 weeks, which has coincided with the Rugby World Cup. The operating margin in the 13 weeks to 25 October 2015 was 6.2%, compared with 7.7% in the same 13 weeks last year. The lower margin was due to increases in the starting rates for hourly paid staff in October 2014 and August 2015, which totalled approximately 13%. Meanwhile, the company has opened 3 new pubs since the start of the financial year and has sold 1. We intend to open approximately 15 pubs in the current financial year and it offered 20 leasehold pubs for sale and is now considering a small number of freehold disposals in the course of the financial year. The company remains in a sound financial position. Net debt at the end of this financial year is currently expected to be slightly above the 26 July 2015 total of £601.1million.

Wizz Air Holdings Plc (WIZZ.L) Announced, in its unaudited interim results for the six months ended 30 September 2015, that its total revenue stood at €836.4 million, compared to €727.3 million in the preceding period. Profit after tax was €182.1 million compared to €158.1 million. The company’s diluted earnings per share was €1.45, compared to €9.31. The company also mentioned that terms have been agreed in principle with József Váradi, the Group’s Chief Executive Officer, in respect of a new service contract with the Group for a term of five years, subject to a six month notice period on either side. Subsequently, it announced passenger statistics for October 2015 surpassed the 100 million mark in total passengers carried since beginning operations only 11 years ago and continues to expand its customer offering and network with flights between Budapest (Hungary) and Baku resuming in March 2016. Azerbaijan is the 39th country on Wizz Air’s network and Base expansion in Cluj-Napoca (Romania) with a fifth aircraft from July 2016. Route expansion with six new routes announced in October; Romania (x4), Hungary (x1) and Serbia (x1).

Zambeef Products Plc (ZAM.L) Announced, in its trading update for year ended 30 September 2015, that the group’s dollar unaudited revenue was $39.7 million, approximately 15.5% of total group revenue. The company continued increasing the range of its export products into the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA) regions. Net debt reduced to $74.7 million from $118.0 million in the previous year. It expects that FY14/15 operating profits and cash generated from operations would be ahead of market expectations while adjusted profit before tax would be in line with market expectations.