Afren Suspends Directors amid Payment Investigation

Afren (AFR.L) the oil explorer listed in FTSE250 this morning announced the suspension of its chief executive officer (CEO) and chief operating officer (COO). The suspensions relate to an investigation surrounding unauthorized payments. The company in a statement said ”evidence has been identified of the receipt of unauthorised payments potentially for the benefit of the CEO and COO”.

The announcement has forced the postponement of interim results due on the 4th august and has hit the share price hard in todays trading. the company said “Whilst the board has no reason to believe that this will negatively affect the company’s stated financial and operational position, the publication of the company’s half-year results due on 4 August 2014 will be postponed.”

 

Thomas Cook increases Quarterly Earnings

Travel giant Thomas Cook Group (TCG.L) today announced that the last quarter has seen a rise in quarterly earnings. Earnings before interest and tax for the quarter were £33M compared to £1M for the same period last year.

The company cites strong increase in margins plus a stronger late Summer 14 bookings in the UK, Germany and Northern Europe and encouraging bookings for the Winter 14/15 and Summer 15 seasons.

Thomas cook also said in its interim statement that improvements in the customer booking process and in particular its redesigned online presence have helped accelerate growth and bookings on mobile and tablets are improved “markedly” since the new service was made live at the end of may 2014.

Harriet Green, Chief Executive of Thomas Cook said “Our transformation is progressing very well. Today’s announcement of a £32 million rise in underlying EBIT, represents our eighth consecutive quarter of increased profits.  Every business improved and the UK delivered the most significant contribution, accounting for over three quarters of the total rise, as we start to realise its full potential.      

Twenty four months into our transformation, we are confident that our deliberate actions to improve operating efficiency and yield management, digitise our business and develop new exclusive products that build on the strength and trust that our brand represents, will significantly improve Thomas Cook’s profitability and growth trajectory. As a stronger and more resilient business, our operational performance remains in line with our expectations for FY14 and we look forward to delivering more value in FY15 and onwards.”

Broker Round Up Thursday 31st July 2014

UBS reduces target price on Rightmove (RMV.L) to 2980p, reiterates BUY rating.

BUY rating reiterated on Barclays (BARC.L) by Deutsches Bank, moves target price to 285p from 275p.

Daily Telegraph covers British American Tobacco (BATS.L) with HOLD rating, citing income yields.

Oriel Securities withdraws rating and target price from Afren (AFR.L).  Will review future rating.

Deutsches Bank reiterates HOLD ratings on Tullow Oil (TLW.L) and Vedanta Resources (VED.L).

Jefferies moves target price for Travis Perkins (TPK.L) from 1430p to 1500p reiterating UNDERPERFORM rating.

Times coverage tips Jupiter Fund management (JUP.L) rates as HOLD citing increased dividend potential.

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Polymetals Ups Production Guidance

Miner Polymetals (POLY.L) announced news that it will surpass current gold production guidance levels by around 5%. In the first half of the year the company increased production by 17%.

Quarterly gold equivalent production in the second quarter was 335 Koz, up 4% year-on-year. Continued robust performance at the Amursk POX as well as improved grades and throughput at Dukat and Omolon more than offset planned grade erosion at Varvara and Khakanja. Quarterly gold production was 196 Koz, up 3% year-on-year. Silver production in Q2 was 8.1 Moz, up 8% year-on-year.

Net debt at 30 June 2014 decreased by US$ 7 million compared to 31 December 2013 to US$ 1,038 million while the Company paid dividends of US$ 31 million during the period. Free cash flow generation is expected to be significantly stronger in the second half of the year due to the planned de-stockpiling at Mayskoye and the seasonal reduction of the gap between production and sales.

The Company has announced the signing of the definitive agreement to purchase Kyzyl Project, a large gold deposit in Kazakhstan with JORC-compliant reserves of 7 Moz of gold at 7,5 g/t. The circular to shareholders on the proposed acquisition was mailed on 14 July 2014 and the General Meeting of Shareholders will take place on 14 August 2014. If approved by shareholders, the transaction is expected to close in Q4 2014.

“Polymetal is consistently delivering robust operating performance”, said Vitaly Nesis, CEO of Polymetal, commenting on the results. “We generate meaningful free cash flow at the current commodity prices and expect this trend to strengthen in the second half of the year, which should allow us to continue paying regular dividends, subject to Polymetal’s stated dividend policy.”

 

British Land Secure New Letting at the ‘Cheesegrater’

today British Land (BLND.L) announced news that with joint venture partner Oxford properties they have secured a letting with Rothesay Life, a specialist pensions provider. This is the fourth letting for the Leadenhall building, still in its construction phase, which will provide office space in the city of London (the building is affectionately known as the ‘Cheesegrater’). British Land has now already pre-let 53% of the office space available.

Head of Offices at British Land, Tim Roberts, said: “Rothesay’s decision to come to The Leadenhall Building is a further endorsement of the building’s distinctive qualities. It is the fourth letting we have completed during the construction phase, all to companies that are leaders in their fields.”

Easyjet Confirms It Expects Profit Rise

Easyjet (EZJ.L), the budget airline has confirmed that it expects its full year profit to rise at least 14% – this is in line with current city forecasts.

The airline today issued its Q3 interim statement, which showed Total revenue grew by 8.6% to £1,240 million, passengers carried increased by 9.4% to 17.9 million, and the load factor increased by 2.2 percentage points to 90.4%. Also the timing of Easter provided a boost this quarter.

the company also demonstrated a solid balance sheet with net cash at £603Million at the end of the period.

Commenting on the results, Carolyn McCall, easyJet Chief Executive said:”EasyJet has again delivered a solid performance in the quarter carrying 17.9 million passengers and growing revenue by 8.6% to £1,240 million.

We will continue to invest in building leading network positions and this combined with a compelling customer proposition, low cost base and strong balance sheet leaves easyJet well positioned to continue to deliver sustainable growth and returns.

With 77% of second half seats now booked, easyJet expects to grow profit before tax from £478 million for the year to 30 September 2013 to a range of £545 million to £570 million for the year to 30 September 2014 assuming no further significant disruption.  This range includes the impact from the situations in Israel, Egypt and Moscow.”

Broker round up Wednesday 23rd July 2014

Nomura has raised target price on ITV (ITV.L) to 235p and reiterates BUY rating.

Target price on Serco Group (SRP.L) has been revised downwards by Jefferies. New target price is 340p down from 435p. HOLD rating maintained.

Credit Suisse cuts target price on Standard Chartered (STAN.L) to 1150p. UNDERPERFORM rating reiterated.

After ARM holdings (ARM.L) news yesterday, brokers have been lowering target prices. Credit Suisse lowers target price to 1100p from 1125p. Deutsches Bank lowers target price from 975p to 950p.

Jefferies raises target price of BskyB (BSY.L) from 860p to 940p. HOLD rating reiterated.

Coverage of Poundland (PLND.L) started by Deutsches Bank. Initial HOLD rating and target price of 330p.

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Rolls Royce lifted by Airlines trent powered aircraft order

Hawaiian Airlines has announced news of orders of the Airbus A330-800neo which is powered by the Rolls Royce (RR.L) Trent 7000 engine. The Airline has ordered 6 new aircraft instead of 6 of the A350-800 aircraft that the airline has on order.

Eric Schulz, of Rolls-Royce, said: “We welcome Hawaiian’s decision to select the A330neo, powered by our Trent 7000 engines. Hawaiian has experience of operating Trent 700 engines and we now look forward to delivering a step change in performance and economics with the Trent 7000.”

TalkTalk Reports First Quarter Revenue Growth

Telecoms company TalkTalk (TALK.L) today announced that for the sixth year in a row it has increased first quarter revenue. Revenue was up 3.1% for the period and the company says it is confident in its 2015 full year guidance. TalkTalk also stated that it sees full year dividend up by no less than 15%.

Over the period the company recieved a boost from new customers, during the period the group added 24,000 new mobile customers, 185,000 new TV customers and 34,000 new fibre customers.

Financial Highlights

  • Total revenue up 3.1% year-on-year to £434m (Q1 FY14: £421m)
  • On-net revenue up by 5.2% year-on-year to £322m (Q1 FY14: £306m)
  • Corporate revenue up by 10.0% to £88m (Q1 FY14: £80m)
  • On-net ARPU stable at £26.36 (Q1 FY14: £26.28)
  • £819m refinancing completed; new RCF and successful US Private Placement

Operating Highlights

  • 23,000 on-net net adds , taking total on-net base to 4.08m
  • 24,000 new mobile customers added, taking base to 308,000
  • 34,000 new fibre customers added, taking base to 241,000
  • 1,800 new EFM/Ethernet lines added, taking base to 19,000

Dido Harding, Chief Executive of TalkTalk commented:
Our strategy for growth continues to deliver according to plan, and we are delighted to report another quarter of base growth and year-on-year revenue progress, including continuing strong momentum
in new products such as TV, and data services in TalkTalk Business. Importantly, we have also continued to reduce churn on our on-net base, with a third consecutive quarter of improvement, as we continued to improve our customers’ experience and drive increased loyalty through new products. We expect revenue growth to again, build through the year and we are on track to deliver our FY15 revenue and margin guidance, and medium term financial targets.