Car dealer Lookers (LOOK) – a recent Shares Play of the Week - issues record half-year figures, triggering earnings upgrades from the analyst community. Alas, the shares lose their gains from early trading to fall 1.8% at 126.25p. Pre-tax profits are up 19.5% to £28.8 million, there's strong cash flow and debt reduction and shareholders will enjoy a 10% dividend hike. New and used car sales growth outperforming the UK market and Lookers' parts division returning to growth. Chief executive officer (CEO) Peter Jones is retiring, to be replaced by chief operating officer Andy Bruce from 1 January. Numis Securities upgrades 2013 profit forecast by £2 million to £41.5 million. Peel raises its profit estimate by 8% to £42.6 million.
Marmite insurance claims outsourcer Quindell Portfolio (QPP:AIM) leaps over 7% on news of robust cash collection. Average debtor days have been slashed from 6.5 months to 4.8 months, a blow to sceptics that had used ballooning debts to beat the company with this year despite several large contract wins. Shares has been a fan of the growth potential of Quindell for over a year, first flagging the shares at 5.63p in June 2012 (see page 8 of PDF), and again just days after Christmas as one of our plays for 2013. We'll have more on today's news on the website later.
Better-than-expected half-year results from Interserve (IRV) help sustain momentum in the share price, up 2% to 546p and extending a decent run in the weeks preceding the numbers. Its UK support services arm and overseas equipment hire business enjoy rising profit margins, but the opposite applies to its construction activities. Read our recent 'griller' interview with Interserve to understand why there is merit in retaining the construction arm.
Rentokil Initial's (RTO) second-quarter results are ahead of consensus forecasts, triggering a 4.7% rise in the share price to 101.6p. Yet European trading is still tough, there's no organic revenue growth and cash generation is weak.
There's a big management change at iron ore producer African Minerals (AMI:AIM). Chief executive officer (CEO) Keith Calder is leaving after just a year in the hot seat. He's being replaced by Bernie Pryor, currently a director at the Sierra Leone-based miner. Former CEO Alan Watling is back in a special advisor role. Chief financial officer Miguel Perry is retiring and will be replaced by Matthew Hird, the ex-finance boss at copper producer Kazakhmys (KAZ). The market is perplexed at African Minerals' revolving doors, the shares falling 9.5% to 220.75p.
A slug of miners report production and financial results, led by Glencore Xstrata (GLEN) which achieved a 20% uplift in copper output. Its shares slip 0.4% to 306.2p, having run up in the days ahead of the results. Eurasian Natural Resources (ENRC) retreats 2.1% to 231.6p as its half-year numbers slightly miss expectations. Gold miner Centamin (CEY) falls 4.3% to 37.1p despite hitting quarterly forecasts. Ongoing troubles in Egypt are no doubt contributing to negative market sentiment. Griffin Mining's (GFM:AIM) numbers are way below expectations, hence its stock slumps 8.4% to 27.25p.
International Consolidated Airlines Group (IAG) slips 0.6% to 318.7p after the US Department of Justice filed an anti-trust case to block the merger of American Airlines and US Airways. IAG has an trans-atlantic joint with American Airlines which would have benefited significantly from any merger with US Airways.
Bank of Georgia (BGEO) jumps 4% to £18.62 after reporting record interim profits. The bank made a taxable income in the first half of the year of £37 million, a 10.5% annual improvement, driven by a 111% pre-tax profit rise in its healthcare and insurance operations. The bank also reports another record as its cost to income ratio falls to 41.7% from 45.6%. Analysts at Numis believe there is more to come. ‘With continued good cost control and non-interest income growth (particularly Insurance & Healthcare), the prospect of stronger volume growth, and an improved impairment outlook we expect an improved second half performance.’ More of our coverage on the bank can be found here.
Shopping centre and retail park investor Capital & Regional (CAL) rises 6.3% to 37.5p after announcing plans to resume dividend payments, as Shares predicted earlier this month (1 Aug). This was driven by the group reducing its loan to value to 57% following several asset disposals and making a £3.7 million pre-tax profit, compared to a £9.2 million loss in July of last year. One negative is that its 52p NAV per share is down on last year’s 53p.
Hellenic Carriers (HCL) rises 3.2% to 32.5p after the freight specialist announced the delivery of an 81,662 deadweight tonne Kamsarmax vessel which brings the group's aggregate carrying capacity to about 250,778 deadweight tonnes with an average age of 12.1 years.
Balfour Beatty (BBY) slides 3.7% to 240.9p after reporting a 70% drop in pre-tax profit to £45 million. This share price performance fits our negative stance on the stock, read our recent Play of the Week trading idea here.
Israeli messaging minnow Emblaze (BLZ) jumps 10% to 52.5p as takeover hopes get investors excited. Chairman Naftali Shani has confirmed advanced talks to sell his 14.1% stake in the business to private investment company BGI Investments. That added to separate negotiations to get a 17.1% stake owned by Fortissimo Capital would pitch BGI over the 30% tipping point at which it would have to launch a bid for the whole company.
Malaysia-based RapidCloud (RCI:AIM) is the latest south-east Asia firm to join Aim. The web hosting and customer relationship management specialist raised £1 million to fund product development and expansion into Indonesia. The shares have got off to a good start, rising 25% on its placing price to 67.5p.
Engineering and public sector workflow software supplier IDOX (IDOX:AIM) stumbles after losing its finance director. William Edmondson is respected by the City so the news comes as a blow, although today's 8% slump to 34p looks like an over-reaction. The shares have been in the doldrums since a profits warning in May, although as Shares spelled out then, IDOX looks stung but not paralysed.