State-backed lender Royal Bank of Scotland (RBS) has taken advantage of the current bull market to offload more shares in Direct Line (DLG). The insurer fell 1.05% to 208p after the bank confirmed the sale of 15.3% of Direct Line, raising some £500 million in a deal that reduces the bank's stake in the business to below 50%. This sale marks the latest stage of RBS’ exit from the company under the terms of its £45 billion state-bailout. Back in October, RBS sold 30% of Direct Line for £787 million in an initial public offering (IPO) and must dispose of its remaining stake by the end of next year.
G4S (GFS) has produced a poor set of financial results, encompassing its Olympics losses and sending the shares down 3.2% to 297.7p. Yet is the company at a turning point? We discuss the matter in depth here.
Online betting provider 888 (888) dipped 4.7% to 153.5p despite reporting $40.8 million pre-tax profit for 2012, up from $5.8 million a year earlier. Stockbroker Daniel Stewart says the shares trade on a high rating compared to its peer group but says 888 has the 'right product to further expand into newly regulating markets', particularly the US.
Drug manufacturer Hikma Pharmaceuticals (HIK) surrendered a penny at 976p, despite announcing a 41% increase in taxable profits to $132 million for 2012 and raising the dividend 23% to 16 cents a share. Investors were unnerved by a warning that revenue growth would halve to some 10% this year.
PureCircle (PURE: AIM) sweetened up by 3p to 254p on better-than-expected interim results driven by growing use of its high purity stevia in carbonated soft drinks and other beverages. The £413 million cap's sales for the six months to December came in at $27.4 million, comfortably ahead of guidance of between $18 million and $22 million, while losses were virtually halved from $13.1 million to $6.9 million.
Unloved retailer French Connection (FCCN) fashioned a 6.12% gain at 26p, despite disappointing final results revealing an underlying loss of £7.2 million. Investors responded to the fact the Camden-headquartered fashion firm's numbers were in line with recently-downgraded forecasts following the profit warning accompanying the group's Christmas trading update (16 Jan).
French Connection has struggled in difficult consumer markets, suffering from weak sales in the UK and Europe, where like-for-like sales softened 7.4% last year, as well as in America, where like-for-likes fell 4.1%. The £23.5 million cap's gross margins were flat at 47.9%, boosted by a stronger retail versus wholesale revenue mix, yet any progress was pegged back by higher discounting in promotional markets.
Retail analyst Freddie George at Cantor Fitzgerald Europe is sticking with his January 2014 forecast of a £6 million loss and says 'we do not expect the company to break-even until FY15.' The broker is maintaining its 'hold' rating and 25p price target for French Connection, where a turnaround strategy is taking has had only a limited effect as yet. 'Though these results are disappointing, we believe the business does have value,' writes George. 'It has a number of valuable brands including Toast and Great Plains and has a relatively strong balance sheet with net cash encouragingly forecast to exceed £20m by end of January 2014.'
Veterinary practice operator CVS Group (CVSG: AIM) nurtured a 2p gain at 188p after announcing solid interim results which prompted forecast upgrades. Taxable profits perked up more than 10% to £3 million, on sales up 5.2% at £8.2 million, in the half to December, during which CVS generated positive like-for-like sales growth of 4%.
It's all go in the fuels cells space as both Ceramic Fuel Cells (CFU:AIM) and ITM Power (ITM:AIM) flag up major deals in Germany. ITM rose 9.7% to 41p after unveiling its first commercial sale into Europe's biggest economy, a 'significant milestone,' says N+1 Singer analyst Pia Tapley. But Ceramic tops that gain with a near 30% share price jump, to 5.6p. The Australian clean energy developer has struck an agreement with German power distributor Alliander to supply up to 600 of its BlueGEN generators to be installed by 2015. The beauty of Ceramic's BlueGEN power packs is that they provide consistent energy in all weathers, helping balance electricity grid volatility, something solar, wind and wave power struggles to match.
Marketing communications small cap Cello (CLL: AIM) was up 3.6% in early trade at 43.5p on reporting strong finals for the year to December. Gross profit was 5.3% ahead at £65.1 million and 7.2% up on a like-for-like basis and a strong cash-conversion rate of 88.5% meant net debt remained steady during the year, finishing the period at £8.7 million.
Elsewhere, Indian green energy play Mytrah Energy (MYT:AIM) gained 7.2% to 87.4p after the market gave the thumbs up to a deal to acquire 59.75 megawatts of operational wind power assets in the Indian States of Tamil Nadu and Maharashtra.