Broker Upgrades and Downgrades & Key UK Corporate Snapshots 07 March 2016

UK Broker Upgrades / Downgrades

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ABCAM Plc (ABC.L)  Announced, in its interim results for the six months ended 31 December 2015, that revenues rose to £78.8 million from £66.7 million recorded in the same period a year ago. However, profit after tax narrowed to £16.9 million from £17.7 million. The board increased the interim dividend by 2.8% to 2.354p (2015: 2.29p). Chief Executive Officer, Alan Hirzel said, “With this first half performance and our traditionally seasonally weighted second half, I am confident we will achieve our targets for the full year.” Separately, the company announced that Jim Warwick intends to step down from the board by the end of 2016. Jim remains committed to the company and would continue to work with the executive team to lead existing activities and plan the transition of his role. Also, Jim’s role as COO would not be replaced.

APC Technology Group Plc (APC.L)  Announced, in its business update, that its bookings for the period rose by 28% YoY to £7.2 million, achieving its best first half performance in terms of bookings since FY2011. The company posted its highest ever recorded single month bookings of £1.8 million in February. The company also announced that Art Russell has been appointed as the Chief Financial Officer (CFO) for the Group.

Ariana Resources Plc (AAU.L)  Announced an increase and upgrade of its JORC compliant Mineral Resource estimate for the Kizilcukur Project following its recent drilling programme in Turkey. Kizilcukur is located outside of the Red Rabbit joint venture with Proccea Construction Co. and is 100% owned by the company. There is 100% increase in the Mineral Resource to c.308,000 t @ 2.11g/t gold and 73.4g/t silver, for 33,000 oz gold equivalent. Potential for 18 months of add-on mine life for the Kiziltepe mining operation if the Kizilcukur area is developed as a satellite mining region. Mining permit is already in place for seven years, as announced on 18 November 2015.

Avacta Group Plc (AVCT.L)  Announced that it has appointed three leading immunologists, Professors Terence Rabbitts, Paul Moss and Adrian Hayday, to form its Scientific Advisory Board which is to be chaired by Non-Executive Director Dr Mike Owen.

Avingtrans Plc (AVG.L)  Announced that Sigma Components, which forms the company’s aerospace division, has signed a ten year contract with Rolls-Royce valued at more than £75 million to supply pipe assemblies for a range of engine programmes including the rapidly growing Trent XWB variants fitted to the Airbus A350.

Cable & Wireless Communications Plc (CWC.L)  As announced on 23 November 2015, CWC intends to provide CWC Shareholders with illustrative calculations of the Exchange Ratio and the Alternative Exchange Ratio on a weekly basis until the Scheme Document is posted to CWC Shareholders, and on a daily basis (on business days only) thereafter, in each case until the Exchange Ratio Calculation Time. Accordingly, CWC announces today details of the Exchange Ratio and the Alternative Exchange Ratio as if the Exchange Ratio Calculation Time were 7 March 2016. CWC Shareholders should note that this is for illustrative purposes only and that the Exchange Ratio Calculation Time is not, and will not be, 7 March 2016. The Exchange Ratio Calculation Time, and accordingly the Exchange Ratio and the Alternative Exchange Ratio, will be determined as described in the Offer Announcement and as will be set out in the Scheme Document. CWC Shareholders are advised to read the Scheme Document carefully once it has been despatched, which is currently expected to be within 4 months of the date of the Offer Announcement.

Cambria Automobiles Plc (CAMB.L)  Announced, in its following trading update for the period to 29 February 2016, that trading in the first five months of the financial year has been substantially ahead of the corresponding period in 2014-15 on both a total and like-for-like basis. Moreover, the gross profit per unit continued to increase and this performance further enhanced the profit derived from the used car segment of the business. Growth in the Group’s aftersales operations has also continued, with profitability up by 4.1% year-on-year. The Board expects the Group to deliver another strong trading performance in this crucial month and continues to look to the future with confidence. The company will announce its interim results for the six months ended 29 February 2016 on Tuesday 10 May 2016.

Clarkson Plc (CKN.L)  Announced, in its final results for the year ended 31 December 2015, that revenues rose to £301.8 million from £237.9 million recorded in the same period a year ago. However, profit after tax widened to £22.3 million from £17.2 million. The board increased the dividend by 3% to 62p.

Duke Royalty Limited (DUKE.L)  Announced that Mark Le Tissier has been appointed to the Board of the Company as a Non-Executive Director, and Robert King has resigned as Non-Executive Chairman from the board of directors with immediate effect, completing his interim period as described in the result of EGM announcement June 16, 2015. Further, the company also announced the appointment of Trident Trust Company (Guernsey) Limited (“Trident Trust”) as the Company’s Secretary and Administrator and will become effective as at 1 April 2016.

ECR Minerals Plc (ECR.L)  Announced, in its final results for the year ended 30 September 2015, that operating loss fell to £1.0 million from £1.4 million posted in the last year. The company’s loss before tax stood at £1.5 million, compared to a loss of £1.7 million reported in the previous year. The basic and diluted loss per share stood at 0.13p compared to loss of 0.05p reported in the previous year. The company’s cash and cash equivalents stood at £90,398 (2014: £642,056).

Escher Group Holdings Plc (ESCH.L)  Announced, in its final results for the year ended 31 December 2015, that its reported revenue stood at $22.0 million, compared to $21.1 million in the preceding year. Operating profit stood at $1.6 million, compared to $0.1 million. Profit after tax was $0.4 million compared to loss after tax of $0.9 million. The company’s diluted earnings per share was 2.2c, compared to loss per share of 5.3c.

Fastjet Plc (FJET.L)  Announced, in its update on current trading and its operations, that the challenging market conditions affecting much of the African aviation industry have been a lot more prolonged than management originally forecast. The company has already taken action to manage its operating costs and overheads and is implementing further measures including reducing capacity and rationalising the route network to align it with current demand. The Board expects results for 2016 to be materially below market expectations and the no longer expects to be cash flow positive for the year.

GlaxoSmithKline Plc (GSK.L)  Announced publication of results from the ‘LABA’ (long acting beta2-agonist) safety study, AUSTRI (SAS115359) in the New England Journal of Medicine. The study, which reported results in October, compared AdvairR DiskusR, a combination of the LABA, salmeterol, and inhaled corticosteroid (ICS), fluticasone propionate (FP), to FP monotherapy, to assess the safety profiles of each medicine when used to treat adolescent and adult patients with asthma. This was assessed by the composite endpoint of serious asthma-related events (deaths, intubations or hospitalisations) and showed that Advair had a safety profile comparable to FP, including no asthma-related deaths in either arm. These results are being simultaneously presented at the American Academy of Asthma, Allergy and Immunology (AAAAI) Congress in Los Angeles, California. AUSTRI was undertaken as a post-marketing requirement of GSK for the US Food and Drug Administration (FDA). AUSTRI is the first of the large-scale safety studies to report results and was conducted in over 11,000 patients. In addition to the AUSTRI study, GSK is also conducting a second LABA safety study, VESTRI, in children with asthma aged 4 – 11 years of age. This study is on track to report at the end of Q1 2016.

Inspiration Healthcare Group Plc (IHC.L)  Announced that that the company’s Inspire rPAP, a neonatal resuscitation device that it has developed in conjunction with doctors in Sweden has been granted a CE mark*. The device was invented by Anaesthetists Drs Kjell Nilsson and Thomas Drevhammar in Ostersund Sweden in collaboration with the Neonatal team at the Karolinska Hospital in Stockholm. The device utilises the proven technology reducing the work of breathing imposed on a baby from traditional methods of ventilation. The Inspire rPAP delivers variable flow and pressure to a baby during resuscitation and when this is not needed, delivers nasal continuous positive airway pressure. An initial usability trial in Sweden has given confidence in the product and the company now intends an initial launch in the UK and Europe and will file for US registration to be able to market the product globally.

Keras Resources Plc (KRS.L)  Announced, in its final results for the year ended 30 September 2015, an operating loss of £1.18 million, compared to £1.49 million. Loss after tax was £5.72 million, compared to £1.79 million. Basic and diluted loss per share stood at 0.528p, compared to 0.192p. The company changed its name to Keras Resources Plc to reflect re-focused strategy on Australian gold and cash flow opportunities. It Completed equity fund raising of £0.84 million in February 2015 and raised £0.56 million in February 2016 by way of the issue of an unsecured loan note to include the limited working capital required to commence gold production.

Metminco Limited (MNC.L)  Announced that the company has signed a Heads of Agreement (“HOA”) with RMB Australia Holdings Limited (“RMB”) to purchase Minera Seafield SAS (“Minera Seafield”) from RMB. Minera Seafield owns 100% of the Quinchia Gold Project (“Quinchia Portfolio”) in Colombia where a NI 43-101 mineral resource of 2.8 million ounces of gold has been estimated. The Quinchia Portfolio covers 6,043Ha of granted concessions and an additional 3,792Ha of pending applications, and contains a number of deposits and exploration targets including Miraflores, Dosquebradas and Tesorito. The transaction paves the way for Metminco to become a gold producer with strong cashflows to fund exploration and production growth plans. The acquisition includes a near term development opportunity at the Miraflores deposit which contains 1.88Moz gold and 3.8Moz silver, estimated in accordance with NI 43-101 (Measured, Indicated and Inferred Mineral Resource categories) and an opportunity for Metminco to improve the economics of the Miraflores project by substantially reducing the capital and operating costs by taking advantage of current market conditions.

MXC Capital Limited (MXCP.L)  Announced, in its trading update results for the six months ended 29 February 2016, that it expects the underlying EBITDA to be approximately £1.2 million, compared to a loss of £0.1 million in the same period last year, driven by profitability of capital markets and advisory businesses in which it advised on 6 transactions during the period. The company invested £22.6 million across 5 businesses during the period while its portfolio currently consists of 6 quoted investments and 5 private investments with a value of £76 million.

Old Mutual Plc (OML.L)  Announced in response to the press speculation on Saturday 5 March 2016, that when new Chief Executive Bruce Hemphill joined on 1 November 2015, the company announced that it would be conducting a strategic review. The company can confirm that all options for the strategic review are being considered but no decision has yet been made. The company is due to announce its preliminary results for 2015 on 11 March 2016 and will provide an update on the strategic review at that time.

Pennant International Group Plc (PEN.L)  Announced, in its preliminary year results for the year ended 31 December 2015, that revenue stood at £9.89 million, compared to £17.80 million in the same period last year. Operating loss stood at £2.36 million, compared to a profit of £2.17 million. Loss after tax was £2.31 million, compared to profit of £2.98 million. Basic loss per share stood at 8.71p, compared to an earnings per share of 11.32p. Diluted loss per share was 8.71p, compared to an earnings per share of 10.88p. The disappointing trading performance in 2015 combined with the delay in the confirmation of several major new contract awards, leads the Board to conclude that it would be prudent to suspend the payment of a final dividend in respect of the year ended 31 December 2015. A major new landmark contract worth in excess of £7 million was secured with General Dynamics UK, a new customer for the Group, with a potential value in excess of £9 million.

President Energy Plc (PPC.L)  Announced, in its Corporate and Operational Update on Paraguay and Argentina Assets, current trading in line with management expectations. The contract signed for new workovers in Argentina will commence by end of March. It is planning to commence new drilling programme in Argentina H2 2016. Emphasis remains on rationalising core central G&A costs and concentrating spending. Ben Wilkinson, the Company’s London-based full-time Group Finance Director has agreed to step down as Director with immediate effect and from the Company in due course.

Seeing Machines Limited (SEE.L)  Announced, in its unaudited financial results for the six months to 31 December 2015, that revenue stood at A$29.32 million, compared to A$42.22 million in the same period last year. Gross profit stood at A$25.08 million, compared to A$16.24 million. Profit after tax was A$11.17 million, compared to a loss of A$43.10 million. Diluted earnings per share stood at A$0.012, compared to a loss of A$0.005. Additionally, the company secured a major follow-on order for their 2nd- Generation automotive driver monitoring systems (DMS) from one of the world’s largest automotive manufacturers, in partnership with tier 1 automotive supplier Takata. This sourcing agreement closely follows the partnership’s successful development of their 1st-Generation system for the same manufacturer, as announced in September 2014 and expected to launch this year in 2017 models, and will see the companies’ DMS technologies integrated into more than ten, higher-volume, 2018 vehicle models. This second program expands the DMS offering across a number of the manufacturer’s international car brands as DMS become part of the brands’ Advanced Driver Assistance Systems (ADAS) offering.

Telit Communications Plc (TCM.L)  Announced, in its preliminary results for the year ended 31 December 2015, that revenue stood at $333.49 million, compared to $294.00 million in the same period last year. Operating profit stood at $18.79 million, compared to $15.22 million. Total comprehensive income for the year was $7.11 million, compared to $2.57 million. Basic profit per share stood at 12.3c, compared to 10.6c. Diluted profit per share was 11.8c, compared to 10.2c. The Group developed and launched its IoT Portal during the period.

Thor Mining Plc (THR.L)  Announced, in its half yearly report for the six months ended 31 December 2015, that operating loss widened to £1.0 million from £0.562 million posted in the same period preceding year. The basic loss per share stood at 0.03p compared to loss of 0.02p reported in the previous year. The company’s cash and cash equivalents stood at £2,000 (2014: £20,000).

Tower Resources Plc (TRP.L)  Announced, in its preliminary results for the 12 months ended 31 December 2015, that operating loss narrowed to $9.7 million from a loss of $56.6 million posted in the preceding year. Basic loss per share stood at 0.19c compared to loss of 1.64c reported in the previous year. The company’s cash and cash equivalents stood at $3.5 million (2014: $7.9 million).

Trading Emissions Plc (TRE.L)  Announced that the company has been informed of the termination of a further arbitration in respect of a claim of approximately €5.6 million lodged by a subsidiary of Yunnan Dianneng (Group) Holding Co. Ltd. The tribunal also awarded TEP a total amount of HK$289,105.37 in respect of TEP’s legal costs, the tribunal’s fees and the administrative fees of the Hong Kong International Arbitration Centre.

Xtract Resources Plc (XTR.L)  Announced that the company has completed an in-house update on the economic metrics of the Manica Project, as part of the Definitive Feasibility study (‘DFS’) that is currently being undertaken by independent consultants. The project’s Net Present Value (‘NPV’) (discounted at 10%) increased to US$70 million (PEA NPV: US$50 million) with an Internal Rate of Return (‘IRR’) of 50% (PEA IRR: 58%) assuming a gold price of US$1,250/oz. Life of Mine (‘LOM’) increased to 12 years (PEA LOM: 8 years) and production is expected to commence in Q4 2017. Annual LOM production of 6.3mt at a head grade of 2.93g/t recovering 477koz (PEA Annual LOM production: 3.4mt at a head grade of 3.49g/t recovering 316koz of gold). Further, it involves and EBITDA of US$245 million (assuming LOM of 12 years) compared to PEA EBITDA of US$130 million (assuming LOM of 8 years).