Broker Upgrades and Downgrades & Key UK Corporate Snapshots 16 February 2016

UK Broker Upgrades / Downgrades



Code Company Broker Recomm. From Recomm. To Price From Price To
ACA Acacia Mining Plc Deutsche Bank Buy Buy 280 290
HSTG Hastings Group Holdings Ltd Credit Suisse Outperform Outperform 200 210
IAP ICAP Plc Liberum Capital Hold Buy
IPF International Personal Finance Plc Liberum Capital Sell Buy
PHNX Phoenix Group Holdings Berenberg Hold Hold 888 892
RB. Reckitt Benckiser Group Plc Deutsche Bank Buy Buy 6500 7000
RB. Reckitt Benckiser Group Plc Barclays Capital Underweight Underweight 5700 5900
SBRY J Sainsbury Plc Nomura Neutral Neutral 250 280
STJ St James’s Place Plc Berenberg Buy Buy 950 1010
TLPR Tullett Prebon Plc Liberum Capital Hold Buy
TSCO Tesco Plc Nomura Neutral Neutral 190 200
ASHM Ashmore Group Plc Jefferies International Buy Buy 331 261
ASHM Ashmore Group Plc JP Morgan Cazenove Underweight Underweight 205 185
AV. Aviva Plc Berenberg Sell Sell 475 417
BARC Barclays Plc Investec Buy Buy 260 245
BARC Barclays Plc Deutsche Bank Buy Buy 303 255
BARC Barclays Plc JP Morgan Cazenove Overweight Overweight 260 250
CBG Close Brothers Group Plc Liberum Capital Buy Hold
ESUR Esure Group Plc JP Morgan Cazenove Overweight Overweight 295 286
HGG Henderson Group Plc Jefferies International Hold Hold 284 240
LGEN Legal & General Group Plc Berenberg Under Review Under Review 310 276
PNN Pennon Group Plc Credit Suisse Neutral Underperform 770 730
PRU Prudential Plc Berenberg Buy Buy 1930 1783
SHP Shire Plc JP Morgan Cazenove Overweight Overweight 6100 5300
SL. Standard Life Plc Berenberg Buy Buy 400 377
STAN Standard Chartered Plc Investec Securities Buy Hold
ACA Acacia Mining Plc Jefferies International Buy Buy 280 280
ACA Acacia Mining Plc JP Morgan Cazenove Overweight Overweight 300 300
AV. Aviva Plc JP Morgan Cazenove Overweight Overweight
BDEV Barratt Developments Plc Deutsche Bank Buy Buy 667 667
BVS Bovis Homes Group Plc Deutsche Bank Buy Buy 1318 1318
FDSA Fidessa Group Plc Barclays Capital Underweight Underweight 1860 1860
HMSO Hammerson Plc Deutsche Bank Buy Buy 775 775
HMSO Hammerson Plc JP Morgan Cazenove Overweight Overweight 730 730
IHG InterContinental Hotels Group Plc JP Morgan Cazenove Neutral Neutral 2750 2750
IMB Imperial Brands Plc Credit Suisse Outperform Outperform 3900 3900
LGEN Legal & General Group Plc JP Morgan Cazenove Underweight Underweight
LSE London Stock Exchange Group Plc Barclays Capital Overweight Overweight 2840 2840
MGAM Morgan Advanced Materials Plc JP Morgan Cazenove Neutral Neutral 245 245
MRW WM Morrison Supermarkets Plc Nomura Buy Buy 260 260
OPHR Ophir Energy Plc Barclays Capital Overweight Overweight 130 130
PRU Prudential Plc JP Morgan Cazenove Neutral Neutral
PSN Persimmon Plc Deutsche Bank Hold Hold 2225 2225
RB. Reckitt Benckiser Group Plc JP Morgan Cazenove Overweight Overweight 6700 6700
SL. Standard Life Plc JP Morgan Cazenove Overweight Overweight
STJ St James’s Place Plc JP Morgan Cazenove Overweight Overweight
TTG TT electronics Plc Jefferies International Buy 170
TW. Taylor Wimpey Plc Deutsche Bank Buy Buy 233 233


US Broker Upgrades / Downgrades



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Key UK Corporate Snapshots Today

Berkeley Energia Limited (BKY.L)  Announced that the first phase of a major exploration programme targeting further Zona 7 style deposits has commenced at the company’s 100% owned Salamanca project. The Zona 7 deposit has transformed the economics of the project and has moved the company closer to its aim of becoming one of the world’s lowest cost producers of uranium with an operating cost of $15.60 per pound which is less than half the current spot price. These eleven near surface targets lie within ten kilometres of the approved location of the proposed process plant and are being followed up with a two phase reverse circulation drill programme. Two rigs have commenced the 10,000 metre programme by drill testing the Luis target located five kilometres northwest of the process plant and will then follow up the broad, high grade intersections reported from immediately below the shallow Zona 7 deposit itself. The remaining ten targets will be tested over the next few months and the company will update the market with significant results as they come to hand.

Bgeo Group Plc (BGEO.L)  Announced, in its full year results for the year ended 2015, that profit for the year was GEL 310.9 million ($129.8 million/£87.6 million) and earnings per share stood at GEL 7.93 ($3.31 per share), up 18.0% y-o-y. Total assets increased to GEL 10,130.1 million. During the fourth quarter, profit was GEL 95.7 million ($ 39.9 million/£27.0 million), up 43.9% y-o-y and up 18.3% q-o-q. 4Q15 earnings per share were GEL 2.42 ($1.01 per share). The Board intends to recommend an annual dividend of GEL 2.4 per share payable in British Pound Sterling at the prevailing rate.

Castle Street Investments Plc (CSI.L)  Announced that it has acquired C4L Group Holdings Limited (C4L) for a total consideration of £20.2 million in cash and shares. The company’s Board will be joined by Mathew Hawkins, Chairman and Founder of C4L, as Chief Technology Officer (CTO). Meanwhile, Simon Mewett, CEO of C4L, will join as the Chief Operating Officer (COO).

Dechra Pharmaceuticals Plc (DPH.L)  Announced that Chief Financial Officer, Anne-Francoise Nesmes, would be stepping down from the Board of Dechra and leaving the business on 31 July 2016 in order to take up the role of Chief Financial Officer at Merlin Entertainments plc.

Digital Globe Services Limited (DGS.L)  Announced, in its trading update or the six months to 31 December 2015, that it posted the strongest first half revenues and EBITDA performance till date. It expects revenue to grow by at least 13% to $22.0 million-$24.0 million range, compared to $19.5 million in the same period last year. Meanwhile, it expects EBITDA to be between $2.2 million to $2.4 million (H1 2015: $0.5 million). The Board expects to achieve full year market expectations. The company separately announced that it has appointed Panmure Gordon (UK) Limited as its Nominated Adviser and Broker with immediate effect.

Eland Oil & Gas Plc (ELA.L)  Announced, in its operational update, that the company embarked upon a cost reduction programme in response to the falling oil prices and anticipates hitting its targeted reduction of 30.0% in operating costs by the end of first quarter 2016. Further, the cash and cash equivalents held as at 31 December 2015 was $8.40 million. A Reserve Based Lending facility of up to $75.00 million was signed with Standard Chartered Bank to fund development of OML 40 out of which $35.00 million has been committed. As at 31 December 2015, $15 million had been drawn from the RBL. Moreover, the Opuama-3 workover is funded and scheduled for Q1-2016 and is expected to lead to a material increase in production from the Opuama field.

FinnAust Mining Plc (FAM.L)  Announced that, in line with its strategy to rapidly assess the near term production potential of the Pituffik Titanium Project in Greenland (‘Pituffik’ or ‘the Project’), it has appointed independent experts Mr. Peter Waugh and TZ Minerals International Pty Ltd (“TZMI”) to assist in this process.

Gemfields Plc (GEM.L)  Announced, in its market update for the three month period ending 31 December 2015, that the company produced 8.2 million carats of emerald and beryl from its 75%-owned Kagem Mining Limited (“Kagem”) in Zambia, compared to 5.8 million carats in the quarter ending 31 December 2014. It involved a total operating costs of USD11.3 million, compared to USD11.6 million in the quarter ending 31 December 2014. Further, Gemfields’ next auction of predominantly higher quality rough emerald extracted from Kagem is scheduled to take place in March 2016.

Hargreaves Services Plc (HSP.L)  Announced, in its unaudited interim results for the six months ended 30 November 2015, that its reported revenue stood at £174.85 million, compared to £351.24 million in the preceding period. Profit after tax was £0.38 million compared to £13.94 million. The company’s diluted earnings per share was 7.04p, compared to 46.93p.

Merlin Entertainments Plc (MERL.L)  Announced that it has agreed the appointment of Anne-Françoise Nesmes to the Board as Chief Financial Officer, with effect from 1 August 2016. Ms. Nesmes will succeed Andrew Carr, whose intention to retire was announced in January. Mr. Carr will remain in post until her arrival and continue to be employed for a period after Ms Nesmes’ appointment as part of a handover process.

Metal Tiger Plc (MTR.L)  Announced that it has exercised its option to acquire the remaining South East Asia Mining’s (SEAM) Thailand interests, with an initial consideration of $500,000. It will pay $200,000 in cash which will be funded from its existing cash resources and $300,000 through the issue of 23.8 million new ordinary shares of the company at a price of 0.87p, calculated per new ordinary share being the volume weighted average price (VWAP) for the 14-day calendar period immediately prior to SEA shareholder approval of the SEA Option which occurred at a General Meeting of the SEAM shareholders on 12 January 2016.

Mondi Plc (MNDI.L)  Announced, in its trading statement, that in the prior year, the Group recognised a net special item charge after tax of EUR 48 million. The equivalent special item charge for the year ended 31 December 2015 is expected to be around EUR 47 million, of which EUR 36 million was recognised in the first half. In the second half of the year, additional restructuring and closure costs and related impairments as well as provision for settlement of a legal case relating to the 2012 acquisition of Nordenia were recognised. Accordingly, Mondi advises that it expects basic earnings per share (EPS) (euro cents) for the year ended 31 December 2015 to be within the ranges 121-126 (2014 97.4), increasing between 24% and 29%. Special items are those items of financial performance that the Group believes should be separately disclosed to assist in the understanding of the underlying financial performance achieved by the Group. Mondi has disclosed basic EPS which includes the effect of special items.

MXC Capital Limited (MXCP.L)  Announced that it advised Castle Street Investments plc on its acquisition of C4L Group Holdings Limited, a successful and growing network services and data centre hosting business, for a total consideration of £20.20 million in cash and shares. The acquisition of C4L is a key component in building out Castle Street’s platform and the company has helped in its originating and executing. Moreover, the acquisition will be immediately earnings enhancing and, in line with the company’s strategy, will facilitate a broader integrated service offering to a larger client base while focusing on delivering higher margin services.

Pendragon Plc (PDG.L)  Announced, in its full year results for the year ended 31 December 2015, that revenues rose to £4,453.9 million from £4,000.4 million recorded in the previous year. Net profit widened to £72.9 million from £49.8 million. The group proposed a final dividend of 0.7p per share in respect of 2015, bringing the full year dividend to 1.3p per share.

Redefine International Plc (RDI.L)  Announced that following the Extraordinary General Meeting held on 15 February 2016, at which all Resolutions were passed, today announced a placing of up to 375,000,000 new ordinary shares. The Company is seeking to raise a minimum additional aggregate £30.0 million from other Placees in order to raise an aggregate minimum amount of £100.0 million (gross) through the Placing. If there is sufficient demand from Placees, the Board may then decide to increase the size of the Placing up to a maximum amount of £150.0 million and the scale back Redefine Properties’ subscription, subject to Redefine Properties maintaining its pro-rata shareholding of 30.07%. Any excess proceeds up to £50.0 million raised above the £100.0 million minimum would be used, inter alia, to provide capital for further disciplined asset management opportunities within the Group’s existing portfolio, as well as potential new investment opportunities. Additionally, any excess equity raised would support the refinancing and restructuring of the Group’s existing facilities at lower leverage levels.

Rio Tinto Plc (RIO.L)  Announced that Megan Clark, Non-executive Director of Rio Tinto plc and Rio Tinto Limited, was appointed as a director of CSL Limited with effect from today.

Spectris Plc (SXS.L)  Announced, in its full year results for the twelve months ended 31 December 2015, that revenue stood at £1190.0 million, compared to £1173.7 million in the same period last year. Operating profit stood at £143.6 million, compared to £168.3 million. Profit after tax was £113.8 million, compared to £135.1 million. Basic earnings per share stood at 95.6p, compared to 113.7p. Diluted earnings per share was £95.4 million, compared to £113.4 million. The Board is proposing to pay a final dividend of 32.2p per share which, combined with the interim dividend of 17.3p per share, gives a total of 49.5p per share for the year, an increase of 6%. Lisa Davis will retire as a Non-executive Director of Spectris plc immediately following the Annual General Meeting on 20 May 2016.

Stellar Diamonds Plc (STEL.L)  Announced that it has exported a diamond parcel of 3,341 carats from trial mining of its Baoulé kimberlite project in the Aredor area of Guinea to Antwerp. These goods will be cleaned and assorted prior to a planned auction which is expected to take place in March. Till date some 8,830 carats have been recovered from the trial mining. Further information on the planned diamond auction will be given once the final schedule has been confirmed.

Tertiary Minerals Plc (TYM.L)  Announced the completion and receipt of analytical results from the Phase 4 drilling programme at its MB fluorspar project in Nevada, USA.

Tower Resources Plc (TRP.L)  Announced, in its update with regards to its interests in the SW Orange Basin Technical Co-operation Permit (“TCP”) and the Algoa-Gamtoos Exploration Right (“Algoa-Gamtoos ER”) in South Africa, that Tower’s wholly-owned subsidiary, Rift Petroleum Limited and its partner, New African Global Energy SA (Pty) Ltd, have agreed not to proceed with an application to convert the TCP for this ultra deep-water frontier area into an exploration right. Accordingly, New Age will reimburse Rift the sum of US$500,000, which was paid by Rift as part of its original farm-in agreement in 2013, and which has now been terminated. Tower’s exit from this high cost ultra deep-water frontier basin is consistent with its move towards a more balanced portfolio of proven and emerging basins. This decision will therefore enable the company to focus its efforts in South Africa on the Algoa-Gamtoos ER, which offers greater near-term potential.

Tracsis Plc (TRCS.L)  Announced, in its trading update for the six months ended 31 January 2016, that the Group had a busy first half on numerous fronts, with positive trading across all parts of the Group, and also completed the acquisitions of Ontrac Limited (‘Ontrac’), SEP Limited (‘SEP’), and made a strategic investment into Citi Logic Limited (‘Citi Logic’). During the period the Group also disposed of Tracsis Traffic Data Pty Limited, a non-core data capture operation in Australia. Revenues for the six month period were over £14 million (H1 2015: £12.0 million) with the increase due to a combination of organic growth and the contribution made by SEP and Ontrac. Adjusted EBITDA from continuing operations is expected to be slightly ahead of the previous period (H1 2015: £3.3 million). As anticipated, Statutory Profit before Tax will be lower than the previous year due to the exceptional costs incurred in relation to the acquisitions made, the disposal of the Australian operations, and the seasonality of the acquired businesses (which in the case of SEP is heavily weighted to the summer months). At 31 January 2016, Group cash balances were c. £8.0 million (July 2015: £13.3 million, Jan 2015: £10.0 million), which reflects the cash utilised on acquisitions and investments during the period. The business remains debt free and highly cash generative. Meanwhile, the Group’s Interim results will be released to the market on or around Wednesday 23rd March.

ValiRx Plc (VAL.L)  Announced that a further cohort of subjects have successfully completed the core part of their clinical trial dosing sequence with no significant adverse events being reported among the participants. In light of this, the trial’s Cohort Review Committee has recommended that the final dose escalation be approved.

Vodafone Group Plc (VOD.L)  Announced that Liberty Global Europe Holding B.V. and Vodafone International Holdings B.V. have reached an agreement to merge their operating businesses in the Netherlands to form a 50:50 joint venture (the “JV”). The JV will operate under both the Vodafone and Ziggo brands and will create a nationwide integrated communications provider with over 15 million revenue generating units, of which 4.2 million are video, 3.2 million are high-speed broadband, 2.6 million are fixed-line telephony and 5.3 million are mobile. In addition, the JV will become a leading national enterprise business through the combination of Vodafone’s B2B expertise, product portfolio and strong distribution footprint together with Ziggo’s B2B operations and its high-capacity nationwide cable network. Based upon the enterprise value of each business, and after deducting Ziggo’s €7.3 billion of net debt2, Vodafone will make a cash payment to Liberty Global of €1 billion to equalize ownership in the JV, reflecting the €2 billion difference in the two companies’ equity value. Vodafone Netherlands will be contributed to the JV on a debt and cash free basis.

Zoopla Property Group Plc (ZPLA.L)  Announced that it has invested in and agreed long term strategic partnerships with four of the UK’s most-promising and innovative property technology start-up companies. The partnerships/investments include PropertyDetective, the UK’s leading provider of property and neighbourhood research reports, which will provide more in depth property data to ZPG users and agents; FixFlo, the UK’s leading online repair reporting platform, which will give ZPG agent members tools to help them manage tenant maintenance issues more effectively; Landbay, a leading peer-to-peer lender for property, which will allow ZPG users to invest in the UK residential property market from as little as £100; and Trussle, the UK’s first and only online mortgage adviser, which will help ZPG users find the best value mortgages for their needs.

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