Bradford-based supermarket group WM Morrison (MRW) nudged ahead 0.5% to 262.4p as investors responded to strategic developments. The fruit and veg seller is expected to unveil an online delivery service at full-year results (14 Mar), according to media reports. It has also bought 49 stores from defunct DVD retailer Blockbuster which will become 'Morrison M Local' convenience stores.
Announcing its online delivery proposition next month would suggest that Morrisons has opted for the organic route, rather buy a ready-made service – namely online grocer Ocado (OCDO). If this proves correct then Marks & Spencer (MKS) remains the only obvious buyer for Ocado.
Morrisons has been late to the party with online retailing, although it does have experience with web-based retailing through wine proposition Morrisons Cellar and baby goods retailer Kiddicare which it bought in 2011.
Analysts welcomes the purchase of stores from Blockbuster, whose UK arm went into administration last month, but they say Morrisosn is still playing catch-up compared to other large food retailers.
Shares in convenience food producer Greencore (GNC) sparked up 7.3% to 99.25p, regaining some lost ground following Friday's (15 Feb) horse meat scandal-related share price decline. Over the weekend, Dublin-headquartered Greencore confirmed that its recalled Chosen by You Beef Bolognese sauce produced for Asda at its Bristol factory contained 4.8% equine DNA. In a soothing statement, the £386 million cap says all other test results for Greencore products have been negative, while none of its remaining 21 convenience foods sites have been affected. As a precautionary measure, Greencore completed a 'deep clean' of its Bristol factory over the weekend ahead of resumption of production this morning.
Most reassuring was the news that Asda remains 'supportive', allaying concerns that the grocer could switch to another manufacturer. While products containing beef related ingredients account for less than 10% of Greencore's sales, consumer confidence has been dented by the horse meat scandal and analysts have prudently downgraded estimates. Panmure Gordon lowered its September 2013 pre-tax profit forecast by £2 million to £58.3 million. Yet the broker believes the shares are now attractively valued and has upgraded its recommendation from 'Hold' to 'Buy' with a price target of 110p.
Shares in Oxo-to-Hovis owner Premier Foods (PFD) dropped 3.6% to 80p ahead of Thursday's (21 Feb) annual results amid wider investor skittishness towards food producers given the fall out from the horse meat scandal. Sentiment towards the heavily-indebted £192 million cap had already turned negative following the surprise departure of chief executive officer (CEO) Michael Clarke (28 Jan) after less than 18 months in the hot seat. The appointment of Gavin Darby as his replacement was followed by the quick departure of chief operating officer (COO) Geoff Eaton (4 Feb) in a development creating yet more uncertainty.
Nickel producer Toledo Mining (TMC:AIM) jumped 57.4% to 48p as the market had the first opportunity to price in a 50p takeover offer made after Friday's (15 Feb) market close. The approach has been made by 37.7% shareholder DMCI, a $3.4 billion conglomerate with interests in mining, power and construction services.
Shares in Gulf Keystone Petroleum (GKP:AIM) advanced 3.75% to 207.5p as investors react positively to an update on its legal dispute with Excalibur Ventures, which is claiming that an agreement dating back to 2006 entitles it to a 30% share of the oil explorer's subsequent discoveries.
On Friday (15 Feb), the English Commercial Court in London ordered Excalibur to make a payment of £8 million within 21 days as additional security for the costs of Gulf Keystone, two of its subsidiaries, and Texas Keystone. In addition, Excalibur was ordered to make interim payments of £90,000 within 14 days in relation to the costs incurred in the 15 February 2013 hearing. Analyst Sam Wahab at Cantor Fitzgerald says: 'While shareholders are still some time away from an official judgement in favour of Gulf Keystone, the request for payments as additional security from Excalibur should be seen as a positive in our view.'
Hydrogen fuel for cars and trucks specialist ITM Power (ITM:AIM) is moving further along its path from research and development to commercial enterprise, sealing its first HPac electrolyser storage unit sale in Japan. The shares responded by jumping 8.1% to 40p. The deal, with an unnamed customer, is too small to be of financial significance but it is potentially more vital from a strategic standpoint. Japan may well be a substantial hydrogen fuel consumer in the future. House broker N+1 Singer expects sales efforts in Japan to 'intensify' over the coming year, adding to the more established sales forces in Germany, US/Canada and France. The broker forecasts £500,000 revenue in the financial year to April 2013, rising to £6.7 million in 2014 and £11.7 million in 2015, the year in which ITM is expected to turn profitable.
Disappointing exploration results dragged Sunrise Resources (SRES:AIM) down 24.1% to 0.55p. A review of diamond sampling from its Cue project in Western Australia shows that its Cue 1 kimberlite prospect doesn't contain enough macro diamonds to make the asset economic. The small cap will continue to explore other kimberlite targets in the licence area.
Construction group Costain (COST) has enjoyed a vibrant start to the week, adding £110 million of work to its order book. It will help Skanska to build the main station works at London's Bond Street Station, as part of the Capital's Crossrail project. Its shares junped 5.2% to 276.75p.
Media group Informa (INF) added a further 3.7p to 496.4p ahead of full-year results on Thursday (21 Feb). The stock has rallied by 30% since November 2012 but analysts are becoming more cautious towards the FTSE 250 constituent. Click here for Shares' take on the full story.
Interesting drill results pushed up Turkey-based junior Ariana Resources (AAU:AIM) 5.6% to 1.42p. The exploration data is focused on its Salinbas and Ardala prospects which are part of a joint venture with $7.2 billion cap Eldorado Gold (EGO:NYSE). The latter inherited the joint venture through its $2.5 billion acquisition of European Goldfields a year ago.
Fiji-based metals producer Vatukoula Gold Mines (VGM:AIM) jumped 11.7% to 26.25p after reporting high-grade drilling results. Broker Fox Davies dampened the parade by noting that the intersections of high-grade gold are narrow. It reckons there is a risk of dilution (through not being able to exclude unwanted 'waste' ore), therefore gold grades fed to the mill for processing could be 'significantly lower than the reported grades'.
Kryso Resources (KYS:AIM) retreated 11.3% to 30.5p after revealing delays to building its Pakrut gold mine in Tajikistan. The project was meant to be ready by March 2014. A new target will be published 'in due course', says the small cap miner.
It's long since fallen off the radar of most investors but HiWave Technologies (HIW:AIM) looks virtually worthless. Shares in the old NXT audio technology business crashed 75% this morning to 0.19p (valuing the company at just £780,000) after reporting lower-than-expected quarterly revenue and scaring the market over its planned sale. Management admits that even a successful business sale won't guarantee a penny of shareholder value.