WINNERS & LOSERS SUMMARY: Wetherspoon Settles, Restaurant Group Soars

LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main ...

Alliance News 15 March, 2019 | 10:50AM
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LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices on Friday.
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FTSE 100 - WINNERS
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Berkeley Group, up 1.7%. The homebuilder reiterated its guidance for its current financial year ended April 30 and the two years after that due to a stable trading environment. Berkeley's guidance at the end of its previous financial year was for a pretax profit for the two years to April 30 of at least GBP1.58 billion, with guidance for the five years ending 30 April 2021 of at least GBP3.38 billion. Then, in its interim results, the company upgraded its pretax profit forecast for the current year "by more than 5%" with the split between its first and second half likely to be similar to its previous results, which were weighted 55% toward the first half. Its guidance for the next two years, however, was unchanged. "The trading environment for Berkeley remains consistent with that experienced over the last two years. This stability allows Berkeley to reiterate the updated pre-tax profit guidance it provided with its interim results in December 2018 for this, and the next two years, which represented an increase of around 8% in the guidance for the current year," the company said. The company had committed to returning GBP139.7 million by the end of March 2019, and completed this early via its 7.12 pence per share dividend paid January 16. Berkeley has committed to returning another GBP139.7 million to shareholders by the end of September 2019, thus far having returned GBP5.2 million via buybacks.
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FTSE 250 - WINNERS
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Restaurant Group, up 7.9%. The company, which owns dining brands such as Frankie & Benny's, Chiquito, Garfunkel's and only recently acquired Asian food chain Wagamama, reported a significant fall in its annual profit despite describing the year of 2018 as "pivotal". For the year to December 30, the restaurant franchise operator posted pretax profit of GBP13.9 million, more than halved from GBP28.2 million a year ago. This included a GBP39.2 million exceptional charge due to an onerous lease review and a GBP14.8 million charge related to the Wagamama acquisition. On an adjusted basis, excluding exceptional items, pretax profit came in 8.1% lower at GBP53.2 million from GBP57.8 million. Revenue meanwhile was up 1.0% to GBP686.0 million from GBP679.3 million a year prior, while total sales increase 1.0%. On a like-for-like basis, annual sales were down 2.0%. Higher administration costs rising to GBP42.1 million from GBP36.0 million and increased interests payable of GBP2.7 million from GBP1.7 million contributed to the profit fall. In the ten weeks to March 10, Restaurant Group's like-for-like sales are up 2.8%, in line with management expectations. The company said the enlarged group is "strongly orientated towards growth" as it remains focused on optimising its portfolio. "2018 was a pivotal year for the group. The acquisition of Wagamama and the development of our Pubs and Concessions businesses have accelerated our progress into growth sectors and we continue to make improvements to the customer proposition and our execution across our Leisure business," Chair Debbie Hewitt said.
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JD Wetherspoon, up 1.0%. The pub operator opened down 4.2% but then dramatically reversed those losses and was seen trading as high as 2.1% before settling in as a slight gainer as the session moved towards midday. In the morning, Wetherspoons reported a significant drop in profit for the first half of its financial year, hampered by higher costs, and warned of a similar outcome for the full year to July. For the six months to January 27, Wetherspoon's pretax profit fell 19% to GBP50.3 million from GBP62.0 million in the comparative period a year ago. Revenue was up 7.1% to GBP889.6 million from GBP830.4 million, with like-for-like sales increased 6.3%. The company attributed the fall in profit to cost increases in areas including labour, up by GBP33.0 million. Meanwhile, repairs increased GBP3.7 million, utilities by GBP2.5 million, and interest & depreciation by GBP5.7 million. The pub chain held its interim dividend at 4.0 pence per share. Looking ahead, Wetherspoon reported that in the six weeks to March 10, like-for-like sales increased by 9.6%, helped by "excellent weather" compared with snow and cold freezing temperatures last year. Total sales increased by 11%. "As previously indicated, costs in the second half of the year will be higher than those of the same period last year. The company anticipates an unchanged trading outcome for the current financial year," Chair Tim Martin said.
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Capita, up 2.7%. The outsourcer was gaining in early trading following Thursday's positive earnings results. Capita was big gainer at midday Thursday but slid back as the session continued. In 2018, Capita's profit was "slightly ahead" of expectations as it completed the first year of its five-year transformation programme. In 2018, Capita swung to a GBP272.6 million pretax profit from a GBP513.1 million loss the year prior. This was despite revenue falling 7.3% to GBP3.92 billion from GBP4.23 billion the year before.
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FTSE 250 - LOSERS
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Greencore, down 3.4%. Berenberg cut the Irish food company to Hold from Buy.
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OTHER MAIN MARKET AND AIM - WINNERS
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Interserve, up 13%. The support services company was adding to Thursday's gains after announcing yesterday it has raised GBP1.2 million following the exercise of warrants. Interserve said it issued 11.6 million shares on Wednesday, representing about 7.2% of its enlarged share capital. The transaction follows the refinancing, which Interserve undertook with its lenders and bond providers in April 2018. Under that deal, Interserve secured cash facilities of GBP196.6 million plus bonding facilities of up to GBP94.5 million, which will mature in 2021. At the time, Interserve said it would be issuing warrants to the providers of the cash and bonding facilities to subscribe for new shares at 10.00 pence each. At the end of February, Interserve launched a GBP435.2 million fully underwritten share placing and open offer under its deleveraging plan. This is pending shareholders approval at a general meeting on Friday.
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SThree, up 3.2%. The specialist recruiter said it made an "encouraging start to the new financial year" with its first quarter gross profit up 9%. For the three months between December 1 and February 28, the company posted gross profit of GBP78.1 million, increased from GBP70.3 million in the comparative period a year ago. Of this, GBP57.6 million was generated by the recruiter's Contract unit, up 12% year-on-year, while GBP20.5 million was generated from its Permanent unit, rising 1%. By geography, most of the company's profit is generated outside the UK & Ireland which saw a 7% gross profit drop to GBP11.7 million. Continental Europe's gross profit was up 12% year-on-year to GBP45.5 million. In the US gross profit rose 17% to GBP16.4 million while Asia Pacific & Middle East saw a 5% rise to GBP4.5 million.
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Origo Partners, up 71%. The company terminated its investment advisor, Origo Advisers, with immediate effect "for cause". "The board will continue to monitor the company's portfolio with a view to liquidating the company's remaining assets and returning excess capital to shareholders," Origo added. The private equity investor is currently evaluating whether to carry out this plan by itself or if appointing a new advisor.
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Proton Power Systems, up 11%. The fuel cell systems producer reported the signing of a letter of intent with electric drives and motor manufacturer Skoda Electric for the development of fuel cell electric buses. The electric buses will be developed, sell and services using Proton's modular HyRange systems, the company's hydrogen-based fuel cell used for battery-electric vehicles. Skoda Electric is part of Czech maker of electric locomotives and trams Skoda Transportation. The first buses will be brought into operation for European bus operators with a target of 10 vehicles by the first quarter of 2020.
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Symphony Environmental Technologies, up 11%. The company, which makes technology for biodegradable and anti-microbial plastics, said its annual profit fell due to increased marketing spend, but revenue from its d2w biodegradeable plastics unit more than doubled. Symphony Environmental Technologies' pretax profit came to just GBP38,000 in 2018, a fraction of its GBP430,000 profit the year before. This was due to a planned GBP360,000 increase in spending on Symphony Environmental's marketing, communication, and brand activities during the year. In total, administrative expenses increased to GBP3.9 million from GBP3.3 million. Revenue increased 6.0%, however, to GBP8.8 million from GBP8.3 million, with revenue from its d2p plastics unit - which adds properties such as flame resistance and antibacterial protection to plastics - more than doubled at GBP930,000 versus GBP320,000 the year before. Its oxo-biodegradable d2w unit revenue was slightly lower at GBP7.7 million from GBP7.8 million.
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OTHER MAIN MARKET AND AIM - LOSERS
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Bahamas Petroleum, down 31%. The oil & gas exploration company said it raised USD2.5 million in a share placing to assist the firm's operations until it secures a farm-in partner. The company issued 120.0 million shares at 1.6p each. Shares in Bahamas Petroleum were trading at 1.72 pence each on Friday morning, giving it a market capitalisation of GPB27 million. Bahamas Petroleum said it will use the placing proceeds to fund the company as it seeks to secure a farm-in partner to finance an initial exploratory well on its four southern licences in the Bahamas. The company's board believed the proceeds will be enough to fund operations for 12 months. The firm added it is confident it will be able to attract a farm-in partner after its licences have been extended until 2020.
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Zinc Media, down 15%. The TV and multimedia content maker swung to a loss in its first half, with its Popular Factual unit proving a significant drag on profit. For the six months to September 30, the company posted a pretax loss of GBP711,000, swinging from a profit of GBP2,000 the year before. Zinc Media said its Popular Factual unit had "not yet experienced the volume required to achieve profitability" in the period, but added that its has implemented a restructuring exercise in order to cut down on overheads and "plan a path back to profitability". Operating expenses increased to GBP3.2 million from GBP3.0 million; depreciation and amortization increased to GBP408,000 from GBP275,000; and the company swung to a GBP172,000 loss on exceptional items from a GBP182,000 gain. Revenue was slightly higher, hitting GBP9.9 million versus GBP9.8 million.
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By Paul McGowan; paulmcgowan@alliancenews.com

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar Rating
Wetherspoon (J D) PLC 1,321.00 -
Zinc Media Group PLC 0.24 -
SThree PLC 292.00 -
Origo Partners Ord 0.23 708
Restaurant Group (The) PLC 128.80 -
Proton Power Systems PLC 25.00 -
Symphony Environmental Technologies PLC 10.75 -
Greencore Group PLC 227.00 -
Bahamas Petroleum Co PLC 1.93 -
Berkeley Group Holdings (The) PLC 3,780.00 -
Capita PLC 113.55 -
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