Broker Upgrades and Downgrades & Key UK Corporate Snapshots 12 November 2015

UK Broker Upgrades / Downgrades

US Broker Upgrades / Downgrades

Key UK Corporate Snapshots Today

3i Group Plc (III.L) Announced, in its interim results for the six months ended 30 September 2015, announced that gross investment return fell to £272 million from £297 million recorded in the same period a year ago. Profit after tax narrowed to £169 million from £241 million. The board declared an interim dividend of 6.0p per share.

AB Dynamics Plc (ABDP.L) Announced, in its final results for year ended 31 August 2015, that revenues rose to £16.5 million from £13.8 million posted in the same period preceding year. The company’s profit before tax stood at £3.8 million, compared to a profit of £2.7 million reported in the previous year. The basic earnings per share stood at 19.16p compared to earnings of 13.08p reported in the previous year. The company further stated that the board has proposed a final dividend of 1.65p per share, amounting to £0.286 million.

Aldermore Group Plc (ALD.L) Announced, in its third quarter results that net loans to customers rose by 20% to £5.8 billion (31 December 2014: £4.8 billion). Growth across the board was strong, with loans to SMEs up by 19% to £2.7 billion and lending to homeowners up by 22% to £3.1 billion. It remains excited about the opportunity it faces and is confident of its ability to build on their proven track record of delivery for both customers and shareholders during the rest of this year and beyond.

Armour Group Plc (AMR.L) Announced, in its final results for year ended 31 August 2015, that operating loss narrowed to £0.378 million from £0.939 million posted in the same period preceding year. The company’s loss before tax stood at £1.10 million, compared to a loss of £1.13 million reported in the previous year. The basic loss per share stood at 1.14p compared to loss of 11.96p reported in the previous year. The company further stated that the board has not recommended any dividend for the period.

Atkins (WS) (ATK.L) Announced, in its half year financial report for the six months ended 30 September 2015, that revenue stood at £904.6 million, compared to £831.4 million in the same period last year. Operating profit stood at £60.0 million, compared to £44.6 million. Profit after tax was £43.1 million, compared to £31.2 million. Diluted earnings per share stood at 42.9p, compared to 30.9p.

Avanti Communications Group Plc (AVN.L) Announced, in its trading update for the period ended 30 September 2015, that revenue was $13.7 million, representing 23.4% sequential growth over the previous quarter on a constant currency continuing business basis. Top-20 customer bandwidth revenue growth increased 57.5% a constant currency basis. Average Fleet Utilisation was at the upper end of the 20% to 25% range during the period. Strong growth is expected to continue throughout the remainder of 2016. Contracted backlog was $379.7 million. Period end cash was $219.3 million.

Beazley Plc (BEZ.L) Announced, in its trading statement for the nine months ended 30 September 2015, that premiums grew by 6% to $1,638 million (2014: $1,546 million). Premium rates on renewal business decreased by 2%. During 2015, prior year claims have developed favourably and catastrophe claims have continued below normalised levels. Provided that this experience continues until the end of the year, expects to achieve a combined ratio better than long term average. Investment income for the nine months to 30 Sept 2015 was $50.3 million, representing a year to date investment return of 1.1% (2014 full year investment return: 1.9%).

BHP Billiton Plc (BLT.L) BHP Billiton CEO, Andrew Mackenzie, and Vale CEO, Murilo Ferreira, gave a joint statement regarding the incident at the Samarco joint venture iron ore operation in Minas Gerais, Brazil. They said “As an immediate step, Vale and BHP Billiton pledge to support Samarco in creating an Emergency Fund for rebuilding works and to help the affected families and communities. It is our intention to work with the authorities to get this fund functioning as soon as practicable. Vale and BHP Billiton also have health, safety, environment and geotechnical experts onsite supporting Samarco’s response. We have also had discussions with Samarco and authorities about the additional support we can provide. Investigations are continuing and Samarco will provide further updates relating to the response and operations. Again, as joint shareholders in Samarco, we would like to offer our sympathies and prayers to the people of Minas Gerais, Espírito Santo and the people of Brazil.”

BTG Plc (BTG.L) Announced that the following amendment has been made to the half yearly report announcement released on 10 November 2015 at 7am GMT under RNS No 1126F, basic and diluted adjusted earnings per share (excluding acquisition adjustments and reorganisation costs) was previously stated as 18.7p and 18.4p respectively on an underlying earnings of £71.4 million. A mathematical error in calculating underlying earnings added back instead of eliminating from the calculation the £7.5 million post-tax impact of the fair value changes on contingent consideration, described in Note 6 of the interim financial statements. As a consequence, underlying earnings has now been amended to £56.4 million, giving a basic adjusted earnings per share of 14.7p and a fully diluted adjusted earnings per share of 14.5p. All other details remain unchanged.

Burberry Group Plc (BRBY.L) Announced, in its unaudited interim results for the six months ended 30 September 2015, that its reported revenue stood at £1,104.5 million, compared to £1,100.0 million in the preceding period. Profit after tax was £121.0 million compared to £108.4 million. The company’s diluted earnings per share was 26.7p, compared to 23.p.

Caledonia Mining Corporation (CMCL.L) Announced, in its third quarter results for nine months ended 30 September 2015, that revenues rose to C$46.8 million from C$46.1 million posted in the same period preceding year. The company’s profit before tax stood at C$7.9 million, compared to a profit of C$11.2 million reported in the previous year. The basic earnings per share stood at 6.7c compared to earnings of 10.5c reported in the previous year. The company’s cash and cash equivalents stood at C$22.4 million (31 December 2014: C$26.8 million).

Card Factory Plc (CARD.L) Announced, in its trading update for the nine months ended 31 October 2015, that revenue increased by +7.9%, driven by a combination of like-for-like sales growth, new store roll out and further growth in its complementary online activities. The company’s like-for-like sales growth continues to benefit from the innovation of our Design Studio with ongoing improvements in the quality and breadth of both card and non-card ranges. Nine net new stores were opened in the third quarter, bringing a total of 45 net new store openings in the year to date. This brings the total estate to 809 stores as at 31 October 2015. It remains on track to deliver approximately 50 net new stores in the current financial year and have started to build a strong pipeline of additional new opportunities for the next financial year and remains confident of continuing our historic opening rate of approximately 50 net new stores per annum. Also, the Group remains highly cash generative. As at 31 October 2015, net debt was marginally higher than that reported in the interim results reflecting the build-up of stock for the forthcoming Christmas trading period. The 2.5p interim dividend and 15p special dividend announced on 22 September will be paid to shareholders on 27 November.

Carillion Plc (CLLN.L) Announced that its subsidiary business, the Bouchier Group, have won support services contracts for a number of oil sector customers, including Shell and Canadian Natural Resources Limited (CNRL), together with a maintenance and hard facilities management contract for the Department of National Defence Canada. Together these contracts are expected to be worth over £100 million over a period of up to five years. The three-year contract for Shell (extendable to five years), which involves the provision of hard facilities management services to Shell’s estate across the Province of Alberta, will start in November 2015.

Conviviality Plc (CVR.L) Announced, in its trading update for 27 weeks to 1 November 2015, that group unaudited revenues grew 38% to £252 million (FY2015 H1: £183 million). Its Retail segment generated revenues of £191 million compared to £183 million in H1 2015. Like for like store revenue improved slightly to -1.3% (FY2015 H1 and FY2015: -1.7%) while the Wine Rack perform well as its like for like sales grew by 5.3%. Matthew Clark, which supplies 17,000 hotels, bars, restaurants and venues, generated revenues of £61 million compared to £59 million in the same period last year.

Derwent London Plc (DLN.L) Announced, in its third quarter business update, that in the year to date the company has let 501,500 sq ft securing £26.2 million pa of rental income. On average overall lettings have been 10.8% ahead of December 2014 ERV. Q3 lettings total 171,900 sq ft securing £9.5 million pa, 12.5% ahead of June 2015 ERV. 398,000 sq ft under construction, and a further 620,000 sq ft due to start by June 2016. The company has Contracted to purchase Aldgate Union E1 in Q4 taking current year acquisitions to c.£250 million. At 30 September, the LTV ratio was 19.6% with cash and undrawn facilities of £254 million.

FirstGroup Plc (FGP.L) Announced, in its half-yearly results for six months to 30 September 2015, that its revenue stood at £2,440.9 million, compared to £2,941.1 million in the same period last year. Operating profit stood at £58.5 million, compared to £80.2 million. Loss after tax was £3.1 million, compared to £7.5 million. Diluted loss per share stood at 0.4p, compared to 0.3p.

Grafton Group Plc (GFTU.L) Announced, in its interim management statement for the period from 1 July 2015 to 31 October 2015, that overall group trading was positive against a competitive backdrop in the four months to the end of October driven by broadly favourable economic and market conditions in the UK and Ireland which supported increasing spending in the residential repair, maintenance and improvement (RMI) market. The rate of growth in Group average daily like-for-like revenue eased as anticipated to 4.8% in the four months to the end of October from 5.3% in the first half. Revenue for the ten months to 31 October 2015 was £1.87 billion, an increase of 6.0% and 8.7% in constant currency.

Halfords Group Plc (HFD.L) Announced, in its unaudited interim results for the 26 weeks ended 02 October 2015, that its reported revenue stood at £533.5 million, compared to £524.1 million in the preceding period. Profit after tax was £37.4 million compared to £39.2 million. The company’s diluted earnings per share was 19.1p, compared to 19.7p. The company also mentioned that it will continue to invest to modernise the business to sustain long-term growth and Profit in FY17 expected to be broadly unchanged on FY16, with growth thereafter and the target to grow the dividend every year, with coverage of around 2 times earnings over time.

IMI Plc (OEX.L) Announced, in its interim management statement, that the economic and market conditions were challenging during the third quarter. Revenues for the three months ending September fell by 5% on an organic basis compared to the same period last year. On a reported basis, revenues declined by 7% showing the effects of adverse foreign exchange movements, partially offset by acquisitions. Despite such market conditions, its various initiatives harnessing the group’s potential continues to be fully supported which is progressing well. Critical Engineering organic revenues fell by 8% compared to last year while it fell by 6% on a reported basis. Precision Engineering organic revenues also fell by 5% compared with last year.

Independent Oil & Gas Plc (IOG.L) Announced, in its operational and funding update for the upcoming well on Skipper, that the company is at the advanced stages of planning the Skipper well. This will be a vertical well drilled to 5600ft with the primary objective of retrieving good quality reservoir condition oil samples in order to optimise the Skipper field development. The Directors believe an approved field development plan on Skipper would convert the board’s estimated 34.1 MMBbls of contingent resources into 2P reserves. The AGR Tracs’ historical CPR estimate for Skipper is 26.2 MMBbls 2C resources, using a 19% recovery factor. The secondary well objective is to drill two mapped reservoir structures beneath the Skipper oil field in the Lower Dornoch and Maureen formations, in which the CPR authors have mapped structures which could contain an additional 46 MMBbls of oil in place. If oil is present in these structures these accumulations would be co-developed with Skipper in line with the company’s hub strategy. The company is progressing discussions and documentation with a major North Sea rig provider to use a semi-submersible drilling rig to drill the Skipper appraisal well, with costs to be met on a mostly deferred basis. The base case is a 25 day contract. Terms have been agreed with GE Oil and Gas to provide wellheads and related equipment for this well and additional subsea equipment for the subsequent Skipper development. GE has approval to provide a £2 million loan to part fund the Skipper appraisal well. The formal documentation is now close to completion. Weatherford Technical Services Limited has agreed to extend the repayment date of its existing $2 million loan from September 2016 to December 2016.

International Consolidated Airlines Group (IAG.L) Announced that it is launching an offer of two tranches of senior unsecured bonds convertible into ordinary shares of IAG (the “Shares”) (the “Offering”). The first tranche has a proposed initial principal amount of approximately EUR 500 million due 2020 (the “2020 Bonds”). The second tranche has a proposed initial principal amount of approximately EUR 500 million due 2022 (the “2022 Bonds” and, together with the 2020 Bonds, the “Bonds”).In any event, the aggregate principal amount of the Bonds shall not exceed EUR 1 billion. The final terms of the Bonds are expected to be determined and announced later today and settlement is expected to take place on or about November 17, 2015. The Offering does not require approval by IAG shareholders and is being issued by IAG under the powers delegated to its board at its Annual General Meeting held on 18 June 2015.

Kier Group Plc (KIE.L) Announced, in its trading update, that it is on course to meet the board’s expectations for the current financial year. The business’ performance will be weighted towards the second-half, which is in line with its expectations. It has made a good progress on the integration of the Mouchel acquisition, which was completed in June 2015, while it remains on course to deliver £4 million of synergies in the second half of the 2016 financial year, as previously forecasted. The Property division performed well, with a pipeline of more than £1 billion. The Residential division was benefited from the demand in the UK for all forms of housing and currently is performing strongly, with approximately 2,350 completions expected this year, approximately 10% ahead of last year.

Morgan Advanced Materials Plc (MGAM.L) Announced, in its trading update covering the period from 1st July 2015 to 11th November 2015, that trading conditions in the period since the half year have weakened across the group with North America and China particularly affected by deteriorating demand. Overall order book has mirrored this weakness, but with a mixed profile across the geographies, businesses and end markets in which it operates. At the end of October the YTD book to bill ratio was 1.00 (June 2015 -1.03). The outstanding order book at the end of October was 5.3% below last year (June 2015 – 5.7% higher than the June 2014). Given this order profile, the group expects that reported revenue in the second half of the year will be c7% below the first half of 2015 and that EBITA before restructuring and one-offs will be around the lower end of the range of analyst expectations. The group is cautious about the trading and macro-economic environment for the rest of this year, and into 2016, and the group has undertaken a range of cost reduction measures in line with this weakening economic environment and will continue to take further action as necessary. The cash cost for these restructuring and one-off items is estimated to be low, in the region of £3 million. The company’s preliminary results for the year ended 31st December 2015 will be announced on 23rd February 2016.

Morrison (Wm.) Supermarkets Plc (MRW.L) Announced the appointment of Paula Vennells as Non-Executive Director, with effect from 1 January 2016. Also, Johanna Waterous, a Non-Executive Director, has announced her intention to step down from the Board at the end of the financial year, January 2016. As a result, Irwin Lee would succeed Johanna as Chair of the Remuneration Committee.

Oilex Ltd (OEX.L) Announced that it has requested an immediate halt in trading of its ordinary shares. The trading halt has been requested for pending release of an announcement concerning proceedings which it thinks it might have commenced against it by Zeta Resources Limited in the Federal Court of Australia.

Premier Oil Plc (PMO.L) Announced, in its trading update, that production averaged to 57.5 kboepd year to date which was ahead of full year guidance of 55 kboepd. It continues to anticipate first oil from Solan before the end of the year, as previously stated. Good offshore productivity and high uptime was achieved with the Regalia flotel during September and October. The Catcher project remained on schedule and on budget. It successfully completed 2015 subsea programme while the initial development drilling results were encouraging. It has significant liquidity as the cash and undrawn bank facilities stood at $1.2 billion and the year-end covenant headroom forecast is expected to be in excess of $700 million.

Restaurant Group Plc (RTN.L) Announced, in its trading update, that since its half-year results announcement at the end of August, the Group has continued to make progress. After 45 weeks trade in 2015, total sales are 8% ahead of the comparable period in 2014 and like-for-like sales are 2% ahead. It expects to open a total of 43 to 45 new sites in 2015 (2014: 40). The Group’s balance sheet position remains strong. It is confident that the business would continue to make good progress during the remainder of the year and expects to report full year results in line with market expectations.

Rexam Plc (REX.L) Announced, in its trading update for the period from 1 July 2015, that results for the group are in line with its plans. Overall global beverage can volumes were up 3% (1% excluding the acquisition of UAC) in the third quarter. Looking into 2016, the environment remains challenging but it continues to expect growth in global can volumes, despite the tough trading environment.

Rolls-Royce Holdings Plc (RR..L) Announced, in its interim management statement that, while 2015 remains broadly as expected, the outlook for 2016 is very challenging. It expects profits to be at lower end of range. Profit headwinds may be around £650 million compared to 2015. There have been no material changes to the balance sheet position of the company since the last update. As a result, Rolls-Royce’s balance sheet remains strong.

SABMiller Plc (SAB.L) Announced, in its unaudited interim results for the six months ended 30 September 2015, that its reported revenue stood at $9,990 million, compared to $11,366 million in the preceding period. Profit after tax was $1,757 million compared to $2,097 million. The company’s diluted earnings per share was 101.0c, compared to 121.6c.

Safestore Holdings Plc (SAFE.L) Announced, in its fourth quarter trading update for the period 1 August 2015 to 31 October 2015, that, its UK business enjoyed a strong final quarter growing like-for-like revenue by 11.6%. For the full year, 13.2% like-for-like revenue growth was achieved despite having annualised a number of the operational and pricing initiatives taken in the first half of the previous year. Its new lets increased by 7.9% in the quarter, offset by the usual seasonal increase in vacates, and 18.6% for the full year reflecting good customer enquiry growth and continued improving conversion performance in its stores. The company’s Paris business had another strong quarter growing like-for-like revenue by 8.5% in CER. The impact of the significant weakening of the Euro in the period resulted in the Sterling equivalent like-for-like revenue being in line with Q4 2014. Improving enquiries and a consistent conversion performance resulted in 10.1% year-on-year growth in new lets in the quarter driving a good occupancy performance in Paris. The business grew occupancy by 10,000 sq ft since the end of Q3 resulting in closing occupancy of 81.8%, up 4.6 percentage points compared to the prior year. The company has strong market positions in both the UK and Paris and, with 1.4m square feet of unlet space available, there remains significant operational upside in the existing portfolio. In addition, our planned new freehold stores at Chiswick, Wandsworth and Birmingham will further strengthen its London and regional UK market positions over the next year.

Spire Healthcare Group Plc (SPI.L) Announced, in its operational and trading update that, the total Group revenues have grown 4.1%. Inpatient and day case admissions rose 4.0% over the equivalent period in 2014. Underlying Group revenues grew by 2.8%. Also, Adjusted Group EBITDA (after PLC costs and rent adjustments) has grown 4.0%, at an EBITDA margin of 18.4% (2014 – adjusted margin of 18.4%). Net debt at 31 October 2015 was £410 million, better than expectations, after capital expenditure in the period of £81 million. The company’s PMI business experienced a slight reduction in revenue as an increasing share of the corporate PMI market was gained by the larger insurers, who tend to adopt a more rigorous approach to claims management. The underlying Self-pay business has continued to grow strongly in both volume and revenue. Reported Self-pay comparatives for the Group as a whole for the last four months are significantly impacted by acquisitions and disposals in the current and comparator periods. Within the NHS business: Choose & Book revenues have continued to grow strongly. For October 2015, referrals into Spire under Choose & Book were the highest ever monthly total, with Orthopaedics making up 45%. However, the impact of the Monitor letter of 3 August has continued to impact adversely our Local Contract NHS work, where it has seen a 39% decline in its revenues over the last four months.

Ubisense Group Plc (UBI.L) Announced, in its trading update, that the Geospatial division continued to trade satisfactorily. There was some significant deal concentration which was weighted towards the final weeks of FY15. The RTLS division was substantially impacted by the recent well-publicised challenges facing the company’s large automotive customers, especially in Germany. This resulted in the downscaling, delay or cancellation of certain major deployment contracts and a likely lengthening of customer decision cycles in the wider industry. Hence, the board’s estimates that second half revenues will be in the range of £12.6-14.6 million (as against first half revenues of £10.4 million) and the full year FY15 revenues will be in the range of £23-25 million.

Xeros Technology Group Plc (XSG.L) Announced in its final results for the year ended 31 July 2015, revenues rose to £0.5 million from £0.3 million recorded in the previous year. Loss after tax widened to £10.2 million from £6.4 million. Separately, the company announced that it intends to raise gross proceeds of approximately £40 million, pursuant to a placing of new Ordinary Shares in the Company at a price of 225p per Placing Share with both new and existing institutional investors.

XLMedia Plc (XLM.L) Announced, in its trading update for the financial year ending 31 December 2015, that he Group has continued to deliver strong growth in the second half of 2015, building on an excellent performance in the first half. As a result, it expects to exceed current market expectations delivering annual revenues of at least $88.0 million and adjusted EBITDA of at least $27.5 million. This strong performance represents growth of approximately 73% and 62% respectively compared to FY 2014. During 2015, the Group has made continued progress on the execution of its strategic plan, as demonstrated through the acquisitions of performance marketing company, Marmar Media and the acquisition of bolt on publishing assets. Furthermore, EDM, the social and mobile gaming marketing company which the Group acquired in September 2014, is also performing strongly. XLMedia has benefitted from its increased scale and the addition of further clients increasing the Group’s client base and its marketing channels. The Group has seen further benefits through the increase in its geographic presence mainly in North America, UK and Europe. The Group’s strong organic growth combined with the successful integration of the recent acquisitions positions the company well to further develop the business. Accordingly the Board remains confident of the company’s future prospects.

Young & Co’s Brewery Plc (YNGA.L) Announced, in its interim results for the six months ended 28 September 2015, that revenues rose to £126.3 million from £116.6 million recorded in the same period a year ago. Profit after tax widened to £15.9 million from £14.7 million. The board increased the interim dividend to 8.38p.