Better sales, earnings and cash flow than expected have pleased investors in telecoms giant BT (BT.A) as the shares jumped 4.6% to 260.1p in reaction to its third quarter results. Although revenue fell by 6% to £4.5 billion, cost cutting has helped to grow profits by 7% to £675 million. Investment bank Espirito Santo notes that BY has started the next phase of its group-wide restructuring programme which could lead to one-off items troubling the accounts from the fourth quarter. It also warns of a 'worrying deterioration in the pension deficit'.
Following the analyst conference call with BT's management, Liberum says it is 'clear that the restructuring programme... is going to deliver incremental cost savings and that this will translate into upgrades on cash flow guidance in the medium term.'
A trading update from Electrocomponents (ECM) failed to excite the market with its shares only nudging up 2.5p to 249.7p. Stockbroker Panmure Gordon believes now is a good time to take profits after the recent rally and a 'full valuation'.
Bank note printer De La Rue (DLAR) advanced 6% to 958.5p after reassuring market concerns about its new business pipeline. A trading update reveals that some of the delayed orders noted in November have now been received. Investec switched from 'hold' to 'buy' after De Le Rue reiterated expectations for more than £100 million of operating profit in its financial year to March 2014.
A profit warning dragged small cap tech stock Intercede (IGP:AIM) down 17% to 62p, thereby removing all the share price gains it has enjoyed since October 2012. The security software provider has blamed uncertainties around the US government's financial position for dampening its US prospects.
South American gold producer Minera IRL (MIRL:AIM) dipped 0.25p to 49.25p after clawing back fund raising efforts, suggesting that capital markets remain problematic for small to mid-cap companies. It now intends to raise $15 million instead of a $32 million targeted last month.
Elektron Technology (EKT:AIM) fell 13% (to 15p), representing the amount by which its full-year revenue has declined to £55 million. The precision engineer has high levels of operational gearing so a drop in revenue will equate to an even greater drop in profit due to predominantly fixed costs.
The market gave a better reaction to £27 million cap pharmaceutical group Anpario (ANP:AIM), moving up 4.7% to 133.5p despite only issuing a brief trading update. Confirmation that trading would meet market expectations was enough to trigger a buying spree by investors.
The worst performer of the day is New World Oil & Gas (NEW:AIM), collapsing 45% to 4.38p after abandoning its Blue Creek #2A ST well in Belize. The share price reaction is understandable given that the company had been bullish on the well's prospects in previous announcements, as were analysts. The company still has another asset to investigate in Belize, yet failure would leave it with less-attractive prospects in Denmark.