Diversified miner Rio Tinto (RIO) is to save $3 billion from its iron ore expansion plan by focusing on existing sites rather than new greenfield development. The FTSE 100 constituent rises 1.9% to £31.98 as the market likes the potential reduction in expenditure. We flag the company's potential in today's new issue of Shares where we look at the outlook for the iron ore price which is Rio's biggest contributor to group earnings.
Shares in the construction sector are in freefall as the Bank of England says the Funding for Lending (FLS) scheme will no longer be aimed at housebuilders. Governor Mark Carney says an overheated housing market would be a risk to the economy. Read our story here.
Retail derivatives giant IG (IGG) falls 3.4% to 588p after the prospect of a tax on spread betting was raised in the House of Lords and backed by the Archbishop of Canterbury. In tandem contracts for difference (CFD) specialist Plus500 (PLUS), which might gain were the UK’s favoured method of taking investment leverage stymied, rises 2.8% to 274p. Stockbroker Numis says the plans are unlikely to make it out of the higher house. ‘The Archbishop of Canterbury apparently does not like the tax position of the spread betting industry,’ comments James Hamilton. ‘We are not sure he has been divinely inspired on this one with most IG customers losing money, most gains that are made are below the CGT threshold and last year IG paid £5.2 million of betting duty to the Government. We understand that the Treasury has looked into this area before and concluded that they would not be wise to change the tax status of this industry.’
NewRiver Retail (NRR:AIM) rises 1.2% to 262.5p on solid half-year results and the purchase of 202 pubs for £90 million from Marston's (MARS) which it will convert into retail outlets as we discuss in more detail here.
As well as the large cash injection from selling these pubs, Marstons has reported full-year results with a 7% rise in underlying operating profit to £168.3 million and a 5% hike in the final dividend. The new financial year has started well with a 3.1% rise in like-for-like sales, although that's slightly less than many of its quoted peers. The shares rise 0.6% to 156p.
Home improvement giant Kingfisher (KGF) gives up the best part of 5% to 376.6p as a disappointing third quarter trading update triggers earnings downgrades. The B&Q, Screwfix and Castorama owner's operating profits are light of expectations in the UK. Kingfisher has yet to see a benefit from the UK housing market upturn and the French DIY market remains subdued.
Machine gun manufacturer Manroy (MAN:AIM) falls 12.1% to 73p after discussions over a potential takeover offer from Nevada-based rival US Ordnance are terminated. Earlier this week (26 Nov) Manroy announced it was in preliminary bid talks with three parties: US Ordnance; Italy's Beretta SpA with which it now says it is not in active discussions; and Belgium's Herstal SA. The remaining bidders have until the end of Christmas Eve to announce an intention to make a firm offer or walk away.
Mid cap oil play Premier Oil (PMO) ticks up 1.5% to 312.9p as it confirms production guidance for this year with gas exports resuming from the repaired Chim Sao gas pipeline in Vietnam and oil production up to 20,000 barrels of oil per day at the Huntington field in the UK.
New Britain Palm Oil (NBPO) falls 2.8% to 440p as the Papua New Guinea-based palm oil producer releases a downbeat third quarter update. Over the nine months to September, sales were down the best part of 20% to $431 million sending pre-tax profits sharply lower to $18.5 million (2012: $76.1 million).
Toy company Character's (CCT:AIM) recent share price rally continues with a 6.5p gain to 168.5p. Annual results to end-August from the £37.3 million cap reveal a return to profits to the tune of £720,000, a turnaround from £7.1 million losses driven by a much stronger second-half performance. Chairman Richard King also issues a positive outlook statement, saying some ranges are already sold out for the Christmas selling season.
Japanese-to-Cuban themed leisure operator Eclectic Bar (BAR:AIM) rises 6.9% to 171p on its first day of dealings on Aim. The premium market-focused business has raised £15 million to pay off an existing shareholder loan and to fund expansion across the UK. We commented earlier in Shares that the business model is easy to copy and there's absolutely no barriers to entry so we take a cautious stance towards the stock.
Software supplier to broadcasters Pilat Media (PGB:AIM) rallies close on 8% to 67p as third quarter figures and new contracts hint at possibly beating full-year forecasts. The market is anticipating £2.2 million pre-tax profit for the year to end December, but closer to £2.5 million looks more likely now.
Digital publishing platform business Publishing Technology (PTO:AIM) sees 35% of its value wiped out after a profit warning. The shares slump to 385p.