Plus500 Ltd (DI) (PLUS) announced revenues and profits yesterday that were better than expected, raising hopes among investors that it is recovering from the regulatory clampdown. Revenues at Plus500 rose by 10% to $110.6 million in the three months to the end of September compared with a year earlier, while adjusted profits climbed by 39% to $70.1 million. Regulators have grown concerned about CFDs because most amateur traders who use them lose money. In August last year the European Securities and Markets Authority introduced stricter rules on CFDs that have hit Plus500 and IG Group and CMC Markets, its rivals. Australia, which accounts for 15% of Plus500’s revenues, has proposed similar restrictions.
BP (BP.) fell to a $351 million loss in the third quarter after writing down billions of dollars of value on old oil and gasfields that it is selling in the United States. The company, which made a $3 billion profit in the same period last year, also was hit by lower oil and gas prices and by the impact of Hurricane Barry, which forced the shutdown of several highly profitable Gulf of Mexico platforms for a fortnight in July. A strong performance in its refining and marketing division offset these factors to deliver underlying profits of $2.3 billion, excluding the divestment impairments. That was down from $3.8 billion a year earlier, but was significantly better than the $1.7 billion that had been forecast by analysts. BP shares fell by 3.8% yesterday after Brian Gilvary, its chief financial officer, suggested that it was unlikely to raise its dividend until after Bernard Looney takes over as chief executive in February.
Britain will be a big beneficiary from a $7 billion update to a contract to cover 114 F-35 aircraft for the American military and foreign governments. Of the 114 aircraft covered by the agreement awarded to Lockheed Martin by the Pentagon, America will receive 77 aircraft, while 15 will go to Australia, 12 to Norway and ten to Italy. The supply of parts, software data, safety items and engineering services are included in the deal. The Maryland-based Lockheed, which was founded in 1926 and merged with Martin Marietta in 1995, will work in partnership with BAE Systems (BA.) and Northrop Grumman on most of the work.
Shoppers at Marks & Spencer Group (MKS) will be able to delay paying for online purchases by six weeks after the retailer signed a deal with a “buy now, pay later” company. The new service is part of a drive by M&S to attract more shoppers by allowing them to spread the cost of purchases across monthly instalments. The offer, launched with payments business Clearpay, will apply to all online clothing and home purchases over £30. After paying 25% of the order upfront, customers will be able to pay the rest in three instalments at no extra cost. Late payment will incur a £6 fee and no-payment charges are capped at 25% of the order, or £36, whichever is lower, M&S confirmed.
Royal Mail (RMG) has offered to hold talks with the Communication Workers Union if a planned strike is delayed until after Christmas. The union has dimissed the company’s offer as a “total sham”. About 110,000 members of the CWU took part in a ballot this month, representing a 76% turnout, and more than 97% voted to strike in a dispute over pay, security and working conditions. Royal Mail said that it would hold talks without preconditions and would extend the life of the ballot result if the union made a binding commitment to remove the threat of strike action until after the key Black Friday and Christmas sales periods.
The government has cleared a consortium’s $3.4 billion acquisition of Inmarsat (ISAT) after it accepted undertakings relating to national security. Apax Partners, Warburg Pincus, and two Canadian pension funds agreed in March to buy the provider of satellite communications to shipping, aircraft and governments. The government said it had received assurances that sensitive information was protected and that enhanced security controls were in place to ensure the continued supply of services used by the Ministry of Defence.
Royal Bank of Scotland Group (RBS) declines helped to push the financial sector to its lowest level in two weeks. RBS was knocked by analysts at UBS, who cut their rating of the stock from “buy” to “neutral” and lowered their price target from 255p to 235p. They noted that the bank was “well managed and positioned well to deliver substantial dividends and buybacks”, but added that the cost of restructuring Natwest Markets would hinder cash returns in the near term.
Housebuilders were in the red after a downbeat report from Nationwide on property prices. Britain’s largest building society said that average prices had risen by £800 over the past 12 months, a sharp slowdown compared with the year to October 2016, which included the Brexit referendum. Persimmon (PSN) fell 33p to £23.27; Taylor Wimpey (TW.) shed 2¼p to 167¼p, and Barratt Developments (BDEV) dropped 5¾p to 642½p.
Smurfit Kappa Group (SKG) was dragged down by underwhelming results from Stora Enso, a Finnish peer, which said that demand growth was likely to slow, forcing it to lower its forecast for earnings before interest and taxes to €100 million to €180 million, compared with analysts’ consensus of €218 million.
William Hill (WMH) dropped ¾p to 199¼p despite optimism from RBC Capital Markets, which said that though the FTSE 250 bookmaker had been outplayed in a consolidating market, it had the biggest opportunity of its sector in the United States.
Analysts at Peel Hunt advised investors to stock up on Fuller Smith & Turner (FSTA), which had poured some of the proceeds from the sale of its brewing business into buying Cotswold Inns & Hotels. The £40 million deal includes seven country inns and hotels and eight cottages in the Cotswolds, as well as two bars in Birmingham.
I3 Energy (I3E) rose after a “transformational” discovery of oil at its Serenity well in the North Sea. Eckoh, a secure payments company, said that trading in the first half was in line with its expectations and that it had delivered double-digit sales growth in Britain and the United States.
Bloomsbury Publishing (BMY) said that it had been hit by a surprise US tariff of 15%, imposed at the start of last month, on books printed in China and shipped to the United States. This had affected 50 titles. Analysts at Peel Hunt, the broker, advised investors to buy the shares, noting that despite a weaker first half, dividend growth was robust and the group ended the period with a solid net cash position. Bloomsbury expects a strong second half, especially with an illustrated version of the fourth Potter book to be published this month. Its digital division has also moved into profit.
Tempus – Menzies(John) (MNZS): Buy. Weakness in share price looks to be an attractive entry point. The long-term market fundamentals are encouraging. Dividend should rise steadily
