The promise of new jobs and big expansion plans has failed to lift Whitbread (WTB) out of its share price rut. The stock dipped 2.3% to £25.52 despite the company reporting an 11.4% rise in full-year pre-tax profit at £356.5 million and hiking the dividend by 12%. It wants to keep expanding its Premier Inn hotel chain and Costa coffee outlets, yet the market wants to see large earnings upgrades for the share price to start rising once again.
Interestingly, Whitbread flags weak performance from its Costa chain in Poland – the subject of 2009's acquisition of Coffeeheaven. It bought the Polish cafe business to speed up expansion of Costa in central and eastern Europe. Whitbread today blames a rise in tax on milk-based drinks and a weak consumer environment for the country's disappointing turn.
BP (BP.) rose 3.8% to 474.25p on the back of first-quarter results. Adjusted earnings have fallen from $4.6 billion a year ago to $4.2 billion. Charles Stanley analyst Tony Shepard, who has an 'accumulate' rating on the stock, says BP 'remains in transition'. He adds: 'Although there are continuing uncertainties over the Deepwater Horizon accident liabilities, BP is repositioning itself both in the upstream and downstream activities and this has yet to be recognised in the share rating and a prospective dividend yield of about 5%.'
Investors welcomed a refinancing by van hire group Northgate (NTG), sending the shares up 7.5% to 342.25p. Although it will cost £54 million to arrange the facility and exit the old borrowing agreement, Northgate reckons it will lead to a 'significant reduction' in future interest payments.
Aquarius Platinum (AQP) jumped 8.3% to 42.5p after showing a reduction in costs and better-than-expected production figures. Its platinum mining sector peer Lonmin (LMI) wasn't so lucky, dropping 3.2% to 276.3p after reporting operational problems. Just as one of its main furnaces was stopped for upgrade work, an undisclosed incident has forced a second furnace to be shut down.
A forecast-beating first quarter for audio chip designer Wolfson Microelectronics (WLF) was overshadowed by its reserved steer on the near-term future, lopping 5% off the share price at 195.5p. The Edinburgh firm reckons second quarter revenue will be somewhere between $44 million and $54 million, a range that suggests somewhat blinked visibility. Longer-term prospects remain bright though, as flagged in Shares last week.
Shares in Davidoff-to-Golden Virginia maker Imperial Tobacco (IMT) puffed up 3p to £23.02 as half-year results met the market's lowly expectations. While the £22.7 billion cap's numbers are being impacted by testing conditions in Spain and competition in the US, investors took heart from an 11% increase in the dividend to 35.2p as well as news the company's cost cutting push will deliver £300 million per annum of cost savings from 2018.
High Street mobile phone seller Carphone Warehouse (CPW) dialled up a near-13% gain at 230p on news of its proposed acquisition of Best Buy's 50% share in their CPW Europe joint venture. Carphone Warehouse is paying £471 million for full control of CPW Europe, which generated 6.5% like-for-like sales growth for the fourth quarter to March, bringing a five-year joint venture to an end.
Transport group Stagecoach (SGC) edged up 0.3% to 307.8p after saying that earnings for the year to 30 April were in line with expectations. The £1.7 billion cap rail and bus operator reported like-for-like revenue growth of 3.6% in UK regional bus operations for the 48 weeks to 31 March; London bus operations turnover grew by 1.2 in the same period with UK rail growing by 5.4% while Virgin rail revenues grew by 3.1%. The group's US business grew by 9.7%.
It was a case of buy on the rumour and sell on the confirmation with online video steaming specialist Perform (PER). The £1.2 billion cap’s first quarter interim management statement revealed revenue growth of 37%, ahead of Numis’ 36% first-half growth rate projection, but the stock was unmoved, although it has risen 5% in the past week.
Shares in Incadea (INCA:AIM) rose 2% to hit a record 134.5p after unveiling impressive 2012 results. The Salzburg-based supplier of software to motor dealers saw revenues jump 49% and earnings before interest, tax, depreciation and amortisation (EBITDA) more than double to €6.4 million. Cash generation was down, €1.2 million against €2 million in 2011, although that's due to increased working capital needs to drive its accelerating expansion (read Shares' feature here). The stock has risen nearly 80% rise on its 75p AIM debut almost exactly a year ago.
Retail-to-manufacturing software group Sanderson (SND:AIM) nudged down 0.5p to 49p, a seemingly unfair reaction to really impressive first-half trading. Revenues, profits and the dividend (up 25%) all increased, while the £21.5 million cap also demonstrates an important swing to recurring revenues. Investors are still sweating on the trading backcloth, however, with Sanderson seeing little sign of a change for the better in its key end markets.
Zoo Digital (ZOO:AIM), the provider of workflow management software and services for creative media production, pleased with its year-end trading update, up 3.7% to 7p. The company revealed its underlying business is set to generate cash this year and expects to report adjusted EBITDA of approximately $700,000.
All change at the top, once again, for Vane Minerals (VML:AIM). Chief executive officer David Newton is leaving after less than two years in the job. He was tasked with growing a copper business which has struggled to date. Vane originally set up shop to become a uranium miner and the small cap is now seeking to sell all assets relating to this commodity. Vane has also announced that gold and silver production from its small operation in Mexico is disappointing with low grades, declining selling prices and unfavourable foreign exchange rates. These issues have pulled the shares down 18.2% to 0.45p.