Gambling stocks enjoy a robust start to the week after a plethora of UK-quoted operators get approval to start online gaming services in New Jersey. The biggest cheers are seen with Bwin.Party (BPTY) which rises 5.4% to 128.1p; and 888 (888), up 2.1% to 157p. Betfair (BET) also gains approval but its shares remain flat at 981p; the same also applying to Paddy Power (PAP) which is unmoved at €61.85. The Irish bookmaker's green light is conditional on forming a partnership with one of New Jersey's land-based casinos. All four companies have got preliminary licences to one of the biggest potential markets in the reopening of the US online gambling scene. They've been granted waivers which allow then to start operating, potentially at this month's market launch. Read our gambling sector report from September to understand the US market opportunity.
There's perhaps a little irony in the fact that on Armistice Day the subscriber war between British Sky Broadcasting (BSY) and BT (BT.A) is cranked up a notch. The latter's £897 million exclusive TV rights deal to broadcast UEFA Champions League and Europa cup football from 2015 blasts a 10% hole in Sky's shares, down to 838.5p on the implied long-term implications, while BT's stock recovers early losses to edge fractionally higher to 372.9p. Read our opinion article here.
The UK’s third-largest pharmaceutical Shire (SHP) rises 3.9% to £29.06 as it buys US rare disease specialist ViroPharma (VPHM: NASDAQ). The $4.2 billion price tag will be paid in cash and at $50 a share it represents a 27% premium to ViroPharma’s closing price on Friday.
The UK’s largest biotech BTG (BTG) slips 0.7% to 425.3p on fears that its multiple sclerosis treatment Lemtrada will not be approved by the US regulator on Wednesday (13 Nov). In a review published by the Food & Drug Administration (FDA) it questioned the treatment’s safety and adequacy of the efficacy data. The advisory committee does not have to follow the recommendations outlined in the FDA’s review, but it usually does. Peak sales are estimated at $360 million to $1.2 billion, of which BTG receives royalties of 3%. FinnCap described the news as ‘not a game changer, but the FDA review will weigh on sentiment’.
Aerospace and defence firm Cobham (COB) falls 6.2% to 266.9p as it warns 2014 revenue will be lower than expected and down year-on-year due to US defence cuts. Although the group is cutting costs and diversifying away from its US defence exposure, this still represents around a third of its business. On a brighter note dividend growth guidance of 10% a year is reiterated.
After falling more than 2% at the market open, funeral services provider Dignity (DTY) now rises 1.7% to £14.33 as investors digest its warning about a slowdown in the death rate. The news coincides with a decent third quarter that has beaten analyst forecasts, although expectations were quite low after management flagged its belief that the high death rate in the first half of the year would ease in the second-half period. Dignity faces tough fourth quarter comparative figures to beat which adds to investors' worries. Yet there's no denying that the fundamental attraction behind the stock hasn't changed. It remains a highly dependable defensive business. Although the death rate is slowing, the population is growing so there's still a growth driver for Dignity in the long-term.
Platinum producer Lonmin (LMI) rises 5.4% to 345.7p after publishing full-year results. Production beat expectations but the company remains vulnerable to further strike action that previously caused significant disruption to operations.
Serco (SRP) falls 2.9% to 522.5p after The Sunday Times claimed the service giant would issue a profit warning later this week.
Oil explorer Faroe Petroleum (FPM:AIM) gets its drilling campaign in Norwegian waters off to a flier as it makes a discovery with its Snilehorn well. The shares rise 5.3% to 138.4p, helped by the group also announcing it the start of operations on the Novus well in which it has a more significant stake. We flagged Faroe's exciting programme here.
Energy supply upstart Flow (FLOW:AIM) shoots 17% higher to 18p after agreeing a three-year framework deal with National Grid (NG.) to use its Pnu Power compressed air technology battery kit. That could speed up the Pnu Power arm's divestment to fund Flow's core emerging energy supply business, backed by its micro-combined heat and power boilers, as Shares explained last month.
A deal to install its DSS fatigue management technology with one of the world's biggest copper producers is excellent news for Seeing Machines (SEE:AIM). Seen as underpinning current 2014 expectations rather than raising the growth bar, the shares stay flat at 5.88p, but this is more encouraging noise as the microcap breaks into the black and moves to towards regular profits.
Housebuilder Redrow (RDW) sheds 4% to 264.5p on profit taking after the group's interim management statement reveals rises across most metrics. Private reservations are up 52% on the same period a year earlier, while average selling prices increase 11% to £271,000. Ongoing investment in the £1 billion cap's landbank sees 2,000 new plots added leading to net debt increasing from £91 million in June to c£120 million now, representing gearing of 20%.
Dublin-based insulation-maker Kingspan (KGP) nudges 1.8% higher to €13.24 after reporting a 13% increase in turnover in the nine months to 30 September to €1.32 billion. Net debt in the period at €146.8 million was €75.3m lower than at the same point in 2012 and Kingspan expects to deliver trading profit growth of approximately 10% for the year.