Thursday’s Stock Market Report featuring Morrisons, ITV, Cineworld and Asos

The Markets

Iconic British department store BHS has been sold by owner and retail magnet Sir Philip Green’s Arcadia Group for a reported £1. Investment vehicle Retail Acquisitions Limited is the buyer. BHS had been struggling in recent years, making a loss of £69.6 million in 2013 on £675.7 million of revenues, with Arcadia having loked at offloading the business for some time. Joshua Raymond, chief market strategist at City Index commented, “BHS has struggled to adapt to the digital age and increasing competition on the high street. The challenge Retail Acquisitions now faces is monumental.”

Elsewhere, the UK trade deficit fell to £616 million in January, down from a five year high of £2.1 billion in December. Figures from the Office for National Statistics showed that the narrowing of the deficit was caused by a £2.5 billion fall in imports, with almost half of this attributed to oil imports, The figures reflected a deficit of £8.4 billion on goods, offset by an estimated surplus of £7.8 billion on services.

At the London close the Dow Jones was up by 171.01 points at 17,806.40 and the Nasdaq 100 was up by 17.40 points at 4,322.78.

In London the FTSE 100 rose by 39.56 points to 6,761.07 and the FTSE 250 gained 112.28 points to 17,061.13. The FTSE All-Share was up by 21.38 points at 3,655.28 and the FTSE AIM Index rose by 4.50 points to 716.09.

Blue Chips

There has been good news this year for Bradford based football teams. However, the city’s supermarkets are doing less well. Morrisons (MRW) posted a statutory loss before tax of £792 million for the year to 1st February as it took a £1.27 billion property impairment hit. Underlying results were also dire, with profits more than halving on a pre-tax basis to £345 million, the firm’s worst result in eight years. The Northern grocer saw revenues fall by 4.9% in the period as it struggled with competition from lower cost rivals. The firm also dissapointed by revealing that the roll out of it’s “M local” convenience stores would be slowed significantly, with 23 to be shut this year. While a total dividend for the year of 13.65p per share will be paid, in line with gudance and up by 5%, as expected the payment will be slashed in the current financial year, to a minimum of 5p per share. A big challenge awiats new CEO David Potts, who start in the position on Monday. Morrisons shares xxx

Broadcaster ITV (ITV) has agreed to acquire Talpa Media, the entertainment show producer which makes programmes including including The Voice, I Love My Country and Dating In The Dark. ITV will buy the business for an initial €500 millionin cash, with maximum consieration of up to €1.1 billion based on future performace. The deal is in line with the firm’s strategy to build an international content business that creates and owns entertainment formats and dramas that sell internationally. Over the last six years, Talpa has created 75 shows airing in more than 180 countries, with 16 new formats broadcast last year and in 2014 posted EBITA of €61 million. The deal is expected to be earnings accretive from day one. ITV shares xxx

Antofagasta (ANTO) appears to have solved its protest problems at the flagship Los Pelambres copper mine in Chile. After talks with relevant parties the firm has agreed to contribute funding for the study of a desalination plant project and to complete studies for the construction of a water dam for local use. Los Pelambres has also agreed that it will use sea water for any further expansions of its mining operations. Earier in the week Antofagasta revelaed that protestors had been blocking the access road to Los Pelambres over drought conditions. Full access to the mine is now is being restored by the authorities, with the company estimating the protesters’ action will reduce production by approximately 8,000 tonnes of copper for 2015. Antofagasta shares xxx

Mid Caps

Argos owner Home Retail Group (HOME) expects benchmark pre-tax profits for the year to February to be towards the top end of the current range of market expectations of £120-£132 million. Despite weak trading in the final 8 weeks of the year, with like-for-ike sales down by 5%, Argos posted sales up by 1.1% at £4.1 billion for the 2015 financial year, with gross margins up by 25 basis points. At Homebase total sakes slipped by 0.7% to £1.48 billion in the year, with gross margins down by 1 percentage point, driven by an increased level of stock clearance. Investors xxx

Full year results from film shower and popcorn seller Cineworld (CINE) reported adjusted pre-tax profits up by 73% at £75 million in the 53 weeks to 1st January. Benefitting from the firm’s merger with Polish peer Cinema City in February last year, the business grew pro-forma revenues by 1.7%. The firm is now the second largest cinema chain in Europe, having 203 sites and 1,875 screens at the end of 2014. The dividend was hiked by 34% to 13.5p per share. Cineworld commented that 2015 has the makings of a good year given a strong line up of films, including new Bond film “Spectre” and “Star Wars: Episode VII”. Cineworld shares xxx

TSB Banking (TSB) has received a preliminary proposal from Spanish bank Sabadell. The preliminary proposal has been set at 340p per share, up from the June 2014 IPO price of 260p and valuing the business at £1.7 billion. The TSB board has indicated it would be willing to recommend an offer at the proposed price, subject terms and also assuming that Lloyds Banking Group, from which TSB spun off last year, agrees to sell its 50.001% stake. Lloyds indicated that it would also be willing to accept the terms. Shares in TSB xxx

Small Caps

Shares in Enables IT (EIT) xxx after the cloud computing business announced a dire set of numbers for the year to September. While revenues were up by 5.9% at £7.04 millino in the year a statutory pre-tax loss of £2.18 million was booked in due to £0.6 million of operating losses and £1.57 million of exceptional items. Enables added that investments made, including the appointment of a sales director, will be reflected in a first half loss for the current year but the firm is “confident” these will give a platform from which to drive growth. Investors in the company haven’t had much luck over the years. The business originally listed on AIM in May 2001 as PC Medics Group, before becoming the stock market dog which was Nexus Management in June 2005. Shares worth £1,000 on closing after the first day of dealings in 2001 are now worth just over a tenner. The annual report is not yet available on the company’s website but when it is investors will surely be looking to see if total director remuneration of £546,549 in 2013 has been cut.

Doing better were shares in online retailer ASOS (ASC), which surged by xxx after the firm announced a positive trading statement. Total group sales rose by a better than expected 14% to £536.4 million in the six months to February after a strong second quarter which saw sales ris eby a more pronounced 19%. Driving growth in the first half was a 27% rise in UK sales and a 17% rise in US sales, which offset a 1% fall in the Rest of the World segment. ASOS added that investments in warehouse and IT platforms are on track and that pre-tax profits for the full year are expected to be in line with market expectations. This comes as a relief to investors who have seen a string of recent profits warnings from the stock market darling.

Transense Technologies (TRT), the provider of sensor systems for the transportation and industrial markets, has signed an exclusive agreement to supply its tyre inspection probe to Rema Tip Top Holdings. Under the deal tyre management subsidiary Translogik will supply the probe for use in Rema’s new passenger car tyre inspection system, “Tip Top Tread”. Rema’s exclusivity is contingent upon achieving agreed, rising quarterly minimum levels of UK sales totalling at least £1.1 million in aggregate over the next three years. Shares in Transense xxx

In a brief statement the global music and audio products company Focusrite (TUNE) said it expects to report revenues for the half year to February of over £23 million. The firm which supplyies hardware and software products to musicians listed on AIM in December and will release interim results in earyl May. The shares xxx

Essenden (ESS) the bowling and entertainment centre operator, increased adjusted pre-tax profits by 59% to £3.2 million in the 2014 financial year, on the back of like-for-like sales growth of 6.6%. The “Tenpin” brand owner saw growth spread across the year, driven by a 4.8% rise in footfall and a 1.8% increase in spend per head. Essenden added that 2015 has started well, with like-for-like sales growth of 4.2% seen in the 10 weeks to 8th March. The shares xxx

Thierry Andretta has been appointed as CEO of fruit monikered luxury brand Mulberry (MUL). Andretta, previously a non-exec at the company, has held a number of senior roles at brands including Lanvin, Moschino, the Gucci Group, LVMH Fashion Group and Céline. Until recently he was chief executive of Buccellati, the Italian high luxury jewellery brand. Invetsors reacted by