Broker Upgrades and Downgrades & Key UK Corporate Snapshots 28 October 2015

UK Broker Upgrades / Downgrades

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Aggreko Plc (AGK.L) Announced the appointment of Nicolas Fournier as Managing Director, Power Solutions, with effect from 2 November, 2015. This announcement follows the reorganisation, announced on 22 June, to move from a regional structure to two separate business units: Rental Solutions and Power Solutions.

Antofagasta Plc (ANTO.L) Announced, in its Q3 2015 production report, that copper production was 157,000 tonnes, in line with the previous quarter, despite lower grades and recoveries at Centinela Concentrates. Group copper production for the first nine months of the year was at 460,400 tonnes was 11.0% lower than in the same period last year. Gold production was 158,200 ounces in the first nine months of the year, a 16.1% decrease on 2014 due to lower grades at Centinela. Molybdenum production was unchanged in Q3 2015 compared with Q2 2015 and 32.7% higher in the first nine months of the year compared with the previous year, principally due to higher grades at Los Pelambres. Cash costs before by-product credits in Q3 2015 were $1.67/lb, 13.5% lower than in Q2 2015. Cash costs before by-product credits for the nine months of 2015 at $1.81/lb were 2.7% lower than the same period last year. First production was achieved at Antucoya in September, with 2,200 tonnes of copper cathode produced in Q3 2015. As announced, on 30 July 2015 the group entered into a definitive agreement to acquire 50% controlling interest in the Zaldívar copper mine in Chile. The transaction is expected to close in Q4 2015. Guidance for the year reduced to 635,000 tonnes of production, following delayed ramp-up at Centinela Concentrates and a minor pit wall slide at Centinela Cathodes. Net cash cost guidance unchanged at $1.47/lb.

Barclays Plc (BARC.L) Announced that Mr James E. Staley (Jes Staley) has been appointed as Group Chief Executive Officer of Barclays. Mr Staley will take up his role, and join the Barclays Boards as a Director, with effect from 1 December 2015.

British American Tobacco Plc (BATS.L) Announced, in its interim management statement for nine months ended 30 September 2015, that its revenue at constant rate of exchange rose 4.2% from the previous year. At current exchange rate, its revenue declined 6.5% from the previous year. It successfully submitted tender offer for Souza Cruz minorities and completed acquisition of TDR in Croatia.

bwin.party digital entertainment (BPTY.L) Announced, in its third quarter 2015 trading update, that clean EBITDA for the nine months ended 30 September 2015 up 5% to €79.8 million. Excluding EU VAT and UK point of consumption tax, Clean EBITDA would have increased by 26%. Moreover, total revenue in the nine months to 30 September 2015 down 8% to €429.9 million reflecting the absence of a major football tournament, the sale of non-core businesses and the impact of EU VAT. The sports betting turnover in the nine months to 30 September 2015 up on the same period last year, despite no World Cup. Sports margin has recovered from the first half, although still lower than last year. Original target of €15 million reduction in administration expenses for this year already met at end of third quarter. Current trading has been strong with average daily revenue of €1,484,300, up 9%; excluding EU VAT, total net revenue is up 12%.

C4X Discovery Holdings Plc (C4XD.L) Announced, in its preliminary results for the year ended 31 July 2015, that its reported revenue stood at £0.31 million, compared to £0.62 million in the preceding year. Loss net of tax was £3.06 million compared to £1.12 million. The company’s basic and diluted loss per share was 10.77p, compared to 5.60p. Moreover, the company announced that it has entered into a research collaboration with the University of Oxford’s Structural Genomics Consortium department.

Circle Oil Plc (COP.L) Announced, in its operational update, that it discovered gas at the Caid El Gaddari-13 (CGD-13) exploration well on the Sebou Permit, Morocco. The target consisted of gas-bearing Miocene sandstones in a structurally elevated position east of the CGD-1 well and west of the CGD-9 well. The well has encountered approximately 5.9m of net pay and an interval of 4.7m was perforated between 791m and 812m. The discovery concludes the 2014/15 drilling campaign for the company in Morocco. The successful campaign saw ten wells drilled in total, seven wells in Sebou and three in Lalla Mimouna.

Epistem Holdings Plc (EHP.L) Announced, in its preliminary results for the year ended 30 June 2015, that its reported revenue stood at £3.7 million, compared to £4.50 million in the preceding year. Loss net of tax was £3.03 million compared to £1.69 million. The company’s diluted loss per share was 30.2p, compared to 17.4p.

Gear4music (Holdings) Plc (G4M.L) Announced, in its half year results for six months ended 31 August 2015, that revenues rose to £12.5 million from £8.7 million posted in the same period preceding year. The company’s loss before tax stood at £1.1 million, compared to a loss of 0.914 million reported in the previous year. The basic and diluted loss per share stood at 10.1p compared to loss of 71.3p reported in the previous year. The company’s cash and cash equivalents stood at £1.5 million (2014: Nil).

Grainger Plc (GRI.L) Announced it has acquired a residential property portfolio of 112 private rented sector (PRS) units for c.£10.4 million. The portfolio comprises five sites located in Newcastle, Whitley Bay and Leeds, with an estimated rental value of c.£694k per annum. The company has also acquired over 1,000 PRS units with a market value of c.£94 million since 1 October 2014, bringing the value of the company’s total UK PRS portfolio to over £925 million of assets under management.

Kennedy Wilson Europe Real Estate (KWE.L) Announced that it has conditionally acquired a portfolio of nine offices in Italy fully let to the Italian government. The portfolio is being acquired from InvestiRE SGR, as the management company of the closed-end mutual property investment fund known as Fondo Immobili Pubblici (“FIP”). The portfolio net purchase price is €185.5 million, reflecting a yield on cost of 6.3%.

Lloyds Banking Group Plc (LLOY.L) Announced, in its Q3 2015 interim management statement, that total income stood at £4,237 million, compared to £4,419 million in the same period last year. Profit after tax was £690 million, compared to £693 million. Earnings per share stood at 0.8p, compared to 0.9p.

Meggitt Plc (MGGT.L) Announced, in its trading update, that trading during the third quarter was below expectations, due to a marked deterioration in September. Continued organic (excluding the effects of M&A and foreign exchange) growth in civil original equipment of +2% was more than offset by weaker than expected trading in civil aftermarket (0%), military (-2%) and energy (-16%) markets, resulting in an organic decline of 1% in the quarter. Profitability in the third quarter has been impacted by mix, both across end markets and within the aftermarket following lower than anticipated spares volumes for older civil and military aircraft. Additionally, lower volumes and a number of programme deferrals announced by customers have also impacted margins. Energy markets continued to weaken, with the further organic decline resulting in lower than expected overhead absorption. These factors are expected to persist through the fourth quarter, which will result in underlying operating profit for the year being meaningfully below the current company compiled consensus estimate of £369 million. Free cash flow for the group remains strong, although given the lower than expected profit outturn for 2015 this will result in financial gearing higher than the previously guided level of 2.1x net debt:EBITDA.

Next Plc (NXT.L) Announced that full price sales for the third quarter were up +6.0%, which is just above the mid-point of our second half guidance range of +3.5% to +7.5%. The company’s guidance for the full year remains broadly unchanged. Now expects group profit before tax to be in the range £810 million to £845 million (previously £805 million to £845 million). As announced in July Trading Statement, the company will pay a further special dividend of 60p per share on 2 November. The company intends to issue our usual sales update for the period to 24 December 2015 on Tuesday 5 January 2016.

Petra Diamonds Limited Plc (PDL.L) Announced, in its trading update for 1Q16, that 1Q production up 1% to 842,796 carats (1Q15: 833,744 carats), representing record quarterly production for the Group and a solid start to the year measured against the 1H16 production guidance of 1.5 Mcts. It remains on track for its full year production guidance of 3.3 – 3.4 Mcts for FY16 and ca. 5 Mcts for FY19. 1Q16 revenue: nil (1Q15: $100.8 million). Petra’s first tender of FY16 was held in October and yielded $68.9 million. Diamond prices on a like for like basis were down 8.8% vs 4Q15 in US Dollar terms. Cash at bank at Period end of $57.2 million (30 June 2015: $166.6 million) and diamond inventories of ca. $103.4 million (30 June 2015: ca. $33.5 million).

Plexus Holdings Plc (POS.L) Announced, in its full year results for year ended 30 June 2015, that revenues rose to £28.5 million from £27.0 million posted in the same period preceding year. The company’s profit before tax stood at £5.9 million, compared to a profit of £5.4 million reported in the previous year. The basic earnings per share stood at 6.4p compared to earnings of 5.44p reported in the previous year. The company’s board proposed a final dividend of 1.75p per share (2014: 0.62p) subject to shareholder’s approval.

Prime People Plc (PRP.L) Announced, in its half year results for six months ended 30 September 2015, that revenues rose to £10.2 million from £8.0 million posted in the same period preceding year. The company’s profit before tax stood at £1.1 million, compared to a profit of £0.640 million reported in the previous year. The basic earnings per share stood at 6.97p compared to earnings of 4.17p reported in the previous year. The company further stated that an interim dividend for 2016 of 1.75p (2015: 1.75p), and a special second interim dividend of 4.0p (2015: 4.0p) was approved by the board to those shareholders whose names are on the register on 20 November 2015. The company separately announced that Christopher Heayberd has resigned as a Finance Director with effect from 27th October 2015. Mr Heayberd will continue to serve the company as a Non-executive Director. Mrs Donka Zaneva-Todorinski has been appointed as Finance Director and member of the board.

Redefine International Plc (RDI.L) Announced, in its final results for the year ended 31 August 2015, that its total revenue stood at £79.7 million, compared to £77.3 million in the preceding year. Profit after tax was £77.9 million compared to £102.8 million. The company’s diluted earnings per share was 5.1p, compared to 8.0p.

Riverstone Energy Limited (RSE.L) Announced, in its interim management statement for third quarter, that it loss during the period stood at $4.9 million. Its basic loss per share during the period was 6.44c. It invested total capital amounting to $105.0 million. Its total committed capital on 30 September 2015 was $1,304 million or 107% of total capital raised and total invested capital on 30 September 2015 was $660 million or 54% of total capital raised.

SABMiller Plc (SAB.L) Announced, that they had reached agreement in principle on the key terms of a possible recommended offer to be made by AB InBev for the entire issued and to be issued share capital of the company. Under the terms of the Possible Offer, its shareholders would be entitled to receive GBP 44.00 per share in cash, with a partial share alternative available for approximately 41% of the its shares, comprising 0.483969 unlisted shares and GBP 3.7788 in cash for each its share.

SafeCharge International Group Limited (SCH.L) Announced the migration of the company’s domicile to Guernsey and resultant re-admission to the AIM Market of the London Stock Exchange. The Migration is expected to complete prior to market opening on 30 October 2015. As part of the Migration and resultant re-admission to AIM, Guernsey ordinary shares in the capital of the company will be issued to replace the existing issued BVI ordinary shares.

Standard Life Plc (SL..L) Announced, in its 2015 Q3 AUA and flows update, that assets under administration was up 2% to £301.9 billion (FY 2014: £296.6 billion; Q3 2014: £290.0 billion) in volatile markets, driven by strong net inflows of £5.8 billion, including net inflows of £2.4 billion in Q3 2015. Standard Life Investments meeting the investment needs of clients across the globe with 3rd party net inflows of £5.3 billion (2014: £3.9 billion). UK and Europe business continues to build momentum with net inflows of £1.9 billion (2014: £1.5 billion). The company agreed terms to increase stake in HDFC Life from 26% to 35% for c£170 million subject to regulatory approval.

Sylvania Platinum Limited (SLP.L) Announced, in its results for quarter ended 30 September 2015, that revenues fell to $8.8 million from $10.0 million in the previous quarter. Sylvania Dump Operations ounce production increased 2.0% to 13,729 ounces for the quarter (Q4 FY2015: 13,468 ounces). SDO cash cost fell by 17% to $532/oz from $638/oz. Gross basket price also dropped 15% to $879 from $1,032.

Telecity Group Plc (TCY.L) Announced, in its trading update for the third quarter of 2015, that Year to date organic currency neutral (‘OCN’) revenue growth of 7.2%, with underlying revenue growth of 9.7%, driven by an improvement in the UK’s revenue growth on both an OCN and underlying basis through 2015. A further improvement in the underlying revenue growth rate in Q4 is expected which, along with the significant reduction in prior year non-recurring items in that period, results in full year revenue growth guidance being reiterated. The company recorded stable adjusted EBITDA margin of 46.9% (Q3 2014: 46.9). Year to date churn down materially year-on-year, led by a significant improvement in the UK and at the lower end of the guidance range. Q3 2015 sold power percentage increased 420bps to 75.9% (Q3 2014: 71.7%), adjusting for new capacity delivered during the nine month period, the sold power percentage was 80.0%. At the end of Q3 2015 available customer power was 121.1MW, up 9.4MW from the start of the year versus 10.0MW net power sold in the same period. The Directors confirmed that the 2015 full year guidance remains valid on the basis of the profit forecast assumptions stated, with FY2015 revenue growth expected to be towards the lower end of the guided revenue growth range.

Victoria Oil & Gas Plc (VOG.L) Announced, in its final results for the year ended 31 May 2015, that its reported revenue stood at $27.93 million, compared to $14.73 million in the preceding year. Loss net of tax was $50.81 million compared to $1.67 million. The company’s diluted loss per share was 48.28c, compared to 1.58c. Moreover, the company announced the appointment of Ahmet Dik as a Director of the company, and Chief Executive Officer of Gaz du Cameroun S.A. with effect from 27 October 2015.

Wood Group (John) Plc (WG..L) Announced that Robbie Brown will step down as General Counsel and Company Secretary at the end of 2015. He will continue serving as the Chairman of trustees of the group’s Retirement Benefit Scheme.