Monday’s Stock Market report featuring GlaxoSmithKline, GAME, WH Ireland and Coms

7 mins. to read

The Markets

At the London close the Dow Jones had risen by 95.17 points to 18,227.87 and the Nasdaq was up by 27.09 points at 4,467.76.

In London the FTSE 100 closed down by 6.02 points at 6,940.64 and the FTSE 250 fell by 23.90 to 17,249.92. The FTSE All-Share slipped by 3.94 points to 3,740.32 and the FTSE AIM Index fell by 1.40 points to 712.40.

Broker Notes

Credit Suisse increased its target price for International Consolidated Airlines (IAG) from 678p to 750p after the British Airways and Iberia owner’s results beat estimates last week. The investment bank reiterated its “outperform” rating, and said that the firm’s 2015 prospects emphasise pricing power, while peers suffer pricing weakness as fuel price tailwinds are competed away. It also praised the firm’s self-help momentum from a commercial as well as an efficiency perspective, and its returns focused capacity deployment from a full London Heathrow in particular. Shares in IAG closed down by 6p at 574p.

Meanwhile, fellow Swiss bank UBS upgraded its rating on RSA Insurance (RSA) from “sell” to “neutral”, as it argued that the market’s expectations have been reset following last week’s annual results. The bank said the insurer faces headwinds from lower bond yields and increased competition, which has undermined announced efficiency gains. Although it remains relatively cautious given these headwinds, it reckons the valuation is now more realistic. The bank left its 431p target price unchanged for the shares, which finished up by 5.4p at 434.3p.

Blue Chips

GlaxoSmithKline (GSK) completed a series of asset swaps worth more than 20 billion dollars with fellow pharmaceuticals major Novartis. The deal is essentially a rationalisation that sees GSK form a consumer health joint-venture with Novartis, while at the same time buying the Swiss company’s vaccines business and divesting its cancer drugs portfolio to Novartis. GSK is to receive net after tax proceeds from the Novartis transactions of 7.8 billion dollars, the majority of which will be distributed to shareholders through a so-called B share scheme. Shares in the UK’s largest drugmaker finished up by 12.5p at 1,554p.

Chemicals group Johnson Matthey (JMAT) has acquired battery materials business Clarinet for a total of 75 million dollars. Chief Executive Robert MacLeod said the deal further strengthens the firm’s battery technologies capability and is a key milestone in the development of the company’s New Businesses Division. “It marks an important step in Johnson Matthey’s long-term strategy to establish new businesses in adjacent markets with strong growth potential that align with our technology competences,” commented MacLeod. Johnson Matthey shares moved down by 5p to 3,404p.

British Land (BLND) has snapped up Surrey Quays Leisure Park in Canada Water for 135 million pounds, in a deal which the firm said completes its assembly of a significant 2 billion pound world-class development opportunity in the heart of one of London’s major regeneration zones. The Canada Water investment covers nearly 50 acres and is one of the largest mixed-use regeneration projects in London, according to the REIT. British Land finished up by 16.5p at 844p.

Shares in product testing company Intertek (ITRK) rallied by 32p to 2,562p as it said it expects its organic revenue growth rate to improve gradually during the year compared to 2014. This was despite news of a fall in full year net income to 190.4 million pounds, from 217 million pounds in 2013, as the sharp fall in oil prices since last summer impacted its customers in the oil and gas and mining sectors. Revenue fell 4.2% to 2 billion pounds, and the firm booked restructuring costs of 23.5 million pounds for the year. Intertek recommended a full year dividend of 49.1p per share, an increase of 6.7%.

The Evil Diaries are now free and EXCLUSIVE to Spreadbet Magazine. Cheers!


Mid Caps

Video games retailer GAME Digital (GMD) has bought Multiplay, a community-based games company focused on live events, online gaming services and eSports. GAME will pay a total of 20 million pounds for the business, in a mix of cash on completion and 7.4 million of deferred payments. Multiplay was founded in 1997 and has organised over 150 gaming events in the UK and internationally, including its flagship “Insomnia” festival, along with online multiplayer gaming services. GAME said that the deal will create a unique platform to expand its community events and eSports programme and drive deeper interaction with gamers. The shares edged down by 2.1p to 262.3p.

Balfour Beatty (BBY), the infrastructure giant, has signed a development agreement with the London Legacy Development Corporation to invest and construct the new East Wick and Sweetwater housing development project at the Queen Elizabeth Olympic Park in East London. Under the deal subsidiary Balfour Beatty Investments will provide up to 35 million pounds, or 50% of the equity required, over eight years. Balfour’s construction arm will deliver all construction on the project, which is expected to generate approximately 400 million pounds worth of revenue. Balfour Beatty shares fell by 1.1p to 249.7p.

Final results from Senior (SNR) reported adjusted pre-tax profits up by 5% at 102.6 million pounds for 2014. The international manufacturing group enjoyed strong organic growth in its large commercial aerospace and North American heavy trucks businesses during the year and spoke of a healthy outlook for its core large commercial aircraft business for 2015. Senior upped the full year dividend by 10% to 5.63p per share and will see new CEO, David Squires, join the firm on 1st May. Senior shares slipped by 2.9p to 336.7p.

Small Caps

Stockbroker and wealth management firm WH Ireland (WHI) saw its shares rise by 1.5p to 95p after announcing a 61% increase in adjusted operating profits for the year to November, to 1.45 million pounds. Highlights of the period included assets under management rising by 8.4% to 2.7 billion pounds, discretionary assets under management up by 42.7% to 0.7 billion pounds and management fee income rising by 25.6% to 4.9 million pounds. WH Ireland ended the period with cash of 7.5 million pounds and increased its final dividend by 33% to 2p per share. CEO Richard Killingbeck commented, “We are well placed to continue to build upon the positive momentum achieved during the past year.”

Manx Financial (MFX), the Isle of Man based financial services group, had a good 2014, reporting a record pre-tax profit of 1.73 million pounds for the year. Total assets smashed through the 100 million pound mark for the first time, ending the period at almost 120 million pounds. Other highlights of the period included net interest income rising by 31% to 10.8 million pounds and loans up by 18% at 89.3 million pounds. The firm said that the outlook for 2015 remains “very promising” and expects the trend of increasing profits to continue. Manx Financial shares surged by 0.625p to 12.5p.

Shares in communications specialist Coms (COMS) recovered by 0.2p to 1.35p after revealing that CEO David Breith has resigned his position with immediate effect. Last week it was announced that Breith had requested a general meeting to remove directors Frank Beechinor and Diana Dyer Bartlett and replace them with his own preferred management team. However, this request has now been withdrawn and Coms will take on Breith as a consultant. Discussions with candidates for the CEO position have begun.

MXC Capital (MXC), the specialist technology investor, announced that investee company 365 Agile has completed its first acquisition. The firm has bought South Views Solutions, a provider of mobile working and systems integration services, for 1 million pounds. MXC said that the deal opens up cross selling opportunities and is complementary to the existing operations of 365 Agile, in which it has a 25% stake. The combined businesses are expected to have annualised run rate revenues of over 2 million pounds. Shares in MXC, which last week bought IT services business Calyx Managed Services, rose by 0.08p to 3.02p.

Another of MXC’s investee businesses also announced corporate activity, with Castleton Technology (CTP), making two acquisitions and one disposal. The firm has spent 3.8 million pounds acquiring social housing managed services provider Keylogic and an initial 0.5 million pounds on Opus Information Technology, a software provider to the social housing market, while selling its Montal consultancy business to management for 0.6 million pounds. The firm said that the deals are complementary to its existing business, providing new customers and services, and are expected to accelerate the pace of growth at Castleton. Castleton shares surged by 0.23p to 2.5p.

Ceramic Fuel Cells (CFU) is no more, having appointed voluntary administrators yesterday evening. The fuel-cell-based, micro power plants developer said that it has been unsuccessful in securing further funding to explore a corporate transaction to maintain the future operations of the company and as such was left with no option but to place the company under external administration. The news comes just a few months after the firm raised 1 million pounds in a rights issue and received a 2.2 million pound tax rebate from the Australian tax office. The shares were suspended at 0.25p having traded at 53.25p back in 2007.

Comments (0)

Comments are closed.