Broker Round Up Wednesday 20th August 2014

After announcing demerger of key assets, BHP Biliton (BLT.L) in focus, Deutsches bank ups target price to 1500p from 1450p reiterates BUY rating. Investec keeps BUY rating, revises target price upwards to 2205p from 2175p.

Multiple brokers revise targets for Cairn Energy (CNE.L)after announcing further costs cuts. Credit Suisse revises downward to 288p keeps OUTPERFORM rating, Canaccord downwards to 190p keeps HOLD rating and Deustches bank downwards to 260p keeps HOLD rating.

Recent Aquisitions at Provident Financial (PRG.L)prompts Berenburg to  increase target price to 2330p from 2200p, reiterates HOLD rating. Liberum ups target price to 1670p but keeps SELL recommendation.

Cantor Fitzgerald upgrades Debenhams (DEB.L) from SELL to HOLD, revises target price down to 65p from 70p.

Deutsches Bank ups target price on Persimmon (PSN.L) to 1500p from 1432p, keeps HOLD rating.

Keller Group (KLR.L)upgraded by Numis Securities from ADD to BUY. Target price 1070p.

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British Land Sells Soho building to Amazon Property

Property giant British Land (BLND.L) today announced news it has sold  its Soho office building at 52 Poland Street for £26Million to Amazon Property. The sale of the 20,500 square feet building deal represents a capital value of nearly £1300 per square foot. Amazon Property, as part of a joint venture, will buy the freehold of the building at 51% ahead of the March 2014 book value at a net initial yield of 2.5%.

Tim Roberts, Head of Offices, British Land said: “The expiry profile at 52 Poland Street means there is potential for vacant possession of upper parts in June 2015. The site attracted very strong interest, reflecting the strength and depth of the WE investment market. It is an opportune time to sell and focus on projects elsewhere in our portfolio.”

Chris Lanitis, Partner, Amazon Property said ”This is a strategic acquisition to add to our growing portfolio in an area where we see considerable growth prospects”

Broker Round Up Friday 15th August 2014

Berenburg moves target price from 254p to 261p on Direct Line (DLG.L) group, maintains HOLD rating.

St James Place (STJ.L) covered by Credit Suisse, reiterates NEUTRAL rating, moves target price from 785p to 830p.

More brokers covering Admiral Group (ADM.L), Canaccord reduces target price to 1220p reiterates SELL rating. Berenburg moves target price to 1168p from 1040p maintains SELL rating.

Carillion (CLLN.L) highlighted by the papers after another failed takeover of Balfour Beatty (BBY.L) Financial Times analysts think the company maybe “trying to bite off more than it can chew”.

Premier Oil (PMO.L) upgraded from HOLD to BUY by UBS, target price raised from 345p to 380p.

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Balfour Beatty turns down Carillion Approach

Builder Balfour Beatty (BBY.L) today announced news it has dismissed Carillion’s latest approach to takeover the company, branding it “opportunistic” and accusing Carillion of wanting to lower the companies exposure to UK construction amid a time of recovery for the UK building business.

In reaching its decision on the merger proposal, the Board has considered:

  • the potential for synergies;
  • cost and execution risks;
  • a reduced exposure to recovery in UK construction;
  • risk of revenue and cost leakage; and
  • the impact of terminating the Parsons Brinckerhoff sales process.

The Board has also considered the opportunities represented by pursuing its independent strategy, the benefits of which will accrue 100% to its shareholders. These include:

  • a recovering UK construction business;
  • the opportunity to deliver further efficiencies;
  • a strong US construction business in a growing market;
  • a leading Investments business;
  • material exposure to recovery in the UK; and
  • the anticipated successful sale of Parsons Brinckerhoff

Balfour Beatty said in a statement “In evaluating the proposed combination the Board also considered the right strategic approach to maximise value for shareholders. The Board believes this is the right time to sell Parsons Brinckerhoff, but believes Carillion’s approach for the entire Group at this stage of the construction cycle is opportunistic.”

Broker Round Up Thursday 14th August 2014

Glencore Xstrata (GLEN.L) downgraded by Credit Suisse from OUTPERFORM to NEUTRAL  target price 380p, Investec reiterates HOLD rating, moves target price from 316p to 360p

Game Digital (GAME.L) target price raised from 250p to 270p by Canaccord, reiterates BUY rating.

Deutsches bank reiterates HOLD rating on Balfour Beatty (BBY.L), target price moved from 250p to 245p. Also reiterates HOLD rating on Admiral group (ADM.L), target price lowered to 1260p from 1300p.

UBS lowers target price on Enquest (ENQ.L) to 125p from 140p, reiterates NEUTRAL rating.

BUY rating reiterated by Canaccord on Vernalis (VER.L), revises target price upwards slightly to 54p from 52p.

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Centamin Announces Maiden Dividend after Q2 results

Gold miner/producer Centamin (CEY.L) today announced results for the second quarter. During the period the company produced 81,281 ounces of gold, this was up 9% on the previous quarter, however still 13% lower from the same period last year. Despite this the company was unmoved on its guidance for production over the full year and expects higher quarterly total production for the remainder of the year. Centamin remains debt-free and un-hedged with cash, bullion on hand, gold sales receivables and available-for-sale financial assets of US$133.3 million as at 30 June 2014.

The company intends to expand production at its Sukari reserve and explore further drilling programmes in Ethiopia, Burkina Faso and Cote De Ivoire.

Josef El-Raghy, Chairman of Centamin, said: “Successful commissioning activities resulted in the  first material contribution from the Stage 4 plant expansion during the quarter, with the processing operation remaining at above target productivity levels to achieve the expanded 10Mtpa nameplate capacity during the second half of the year. Whilst underground development ore grades were below forecast, mining rates remain strong and the operation has opened up key high-grade areas for stoping. Therefore, with both plant throughput and average grade set to increase during the remainder of the year, we maintain our full year production guidance of 420,000 ounces in 2014 and continue to look forward to delivering Sukari’s long-term target of 450,000 – 500,000 ounces per annum from 2015 onward.

As foreshadowed in our announcement of 16 May 2014, we are pleased to announce that with the completion of construction and commissioning of Stage 4, dividend payments to our shareholders will now commence with an interim payment of 0.87 cent (US$ 0.0087) per share.”

Astrazeneca starts Phase III trial for asthma drug

Astrazeneca (AZN.L) today announced the start of the Phase III programme for tralokinumab, a potential treatment for patients with severe, inadequately controlled asthma.

The trial will evaluate the safety and effectiveness of the new drug and comes just a day after the company reported positive results for the trial of its Gout treatment drug Lesinurad.

“We are pleased to begin the tralokinumab Phase III programme in severe asthma, further strengthening the breadth of our portfolio in respiratory disease, one of AstraZeneca’s core therapy areas,” said Bill Mezzanotte, Vice President and Head of Inflammation, Neuroscience and Respiratory in AstraZeneca’s Global Medicines Development unit. “Patients with severe asthma currently have limited treatment options and need more effective therapies to control their disease. The development of tralokinumab underscores our commitment to a personalised treatment approach for these patients, to improve their lives. Severe asthma is highly heterogeneous; we are working to better understand patient subtypes, identify potential biomarkers, and tailor therapies to cellular and molecular phenotypes to achieve the best clinical outcomes.”

Broker Round Up Wednesday 13th August 2014

Credit Suisse downgrades Catlin Group (CGL.L) from NEUTRAL to UNDERPERFORM citing weaker earnings

Ladbrokes (LAD.L) target price cut to 125p from 150p by Morgan Stanley. Reiterates EQUAL WEIGHT rating.

G4S (GFS.L) first half results prompts Investec to reiterate BUY rating on share, target price 280p.

Target price cut from 569p from 679p on CSR (CSR.L) by Jefferies and downgrade to HOLD from BUY citing R&D cost concerns.

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Astrazena Gout Treatment trial reports positive results

Drugs giant, Astrazeneca (AZN.L) reported today that the recent phase 3 trial of its latest gout treatment drug, lesinurad, a selective uric acid re-absorption inhibitor (SURI) had hit its primary targets.

however the report did also highlight some possible side effects including respiratory tract infections and back pain though a full assessment of the safety of the drug is ongoing.

“Gout is a serious, chronic and debilitating inflammatory disease. There is a significant unmet need, with 40 to 70 percent of gout patients not reaching target levels of serum uric acid with the current standard of care,” said Briggs Morrison, Executive Vice President, Global Medicines Development and Chief Medical Officer. “We are encouraged by our initial review of the top-line results from the CLEAR1, CLEAR2 and CRYSTAL studies which provide important new information on the efficacy and safety of lesinurad in combination with febuxostat and allopurinol. These data indicate that combination therapy with lesinurad may be a potential treatment option for gout patients.”


G4S first half profits rise after contract wins

Security firm G4S (GFS.L) announced an increase in first half profits due to 26% more contract wins in the period. Underlying pretax profit rose 6.3% to £185Million helped by emerging markets growth, though UK performance was also up around 6%.

This comes despite recent critism and several issues, most notibly concerning the 2012 Olympic Games where the firm failed to provide enough security staff to cover the event prompting the government to step in.

Financial highlights:

• New contract sales with total value of £1.2bn (+26%)

• Organic revenue growth of 4.1%
Emerging markets +12.1%
Developed markets in line with the prior year

• Underlying PBITA1 6.3% higher at £185m (2013: £174m)
Emerging markets PBITA up 14.7%
Developed markets PBITA up 6.7%
Corporate costs of £28m an increase of £8m including £6m non-cash pension and LTIP costs

• Underlying Earnings1 of £86m (2013: £76m), up 13.2%, EPS up 3.7%

• Total cash generated by continuing operations of £212m (2013: £224m) included cash flow of £185m (2013: £148m) from operating businesses and one off corporate items of £27m (2013: £76m)

• Net debt position as at 30 June 2014 was £1,680m, reflecting the normal seasonal effect of lower cash flows in the first half which is expected to reverse in the second half of 2014 and the £109m electronic monitoring settlement

• Portfolio management: proceeds of £89m in six months. A further £37m due to be received in the second half of 2014 from the sale of business in Sweden

• Interim dividend maintained at 3.42p/share (DKK 0.3198)

Ashley Almanza, Group Chief Executive Officer, commented:

“The group made good progress and delivered a satisfactory financial performance in the first six months winning new contracts with a total value of £1.2 billion and producing a 13.2% increase in earnings. There remains much to be done to capture the full potential of our strategy and to strengthen the group’s performance. ”