9th November 2016

WINNERS & LOSERS SUMMARY: Construction And Drug Stocks Get Trump Bump

LONDON (Alliance News) – The following stocks are the leading risers and fallers within the main London indices on Wednesday.

FTSE 100 – WINNERS

Ashtead Group, up 9.3%, CRH, up 6.6%, Wolseley, up 3.8%. All three stocks were benefiting from US president-elect Donald Trump’s statement in his acceptance speech that he will ramp up infrastructure spending in the US. Ashtead, an equipment rental company, and building materials concerns CRH and Wolseley all have big exposure to the US construction market, so any uptick in infrastructure spending is likely to bring significant benefits for all three companies.

Hikma Pharmaceuticals, up 7.6%, Shire, up 7.3%. Hikma, a generic drugmaker, and Irish pharmaceutical firm Shire were both higher on Trump’s victory. Trump’s defeated rival, Democrat Hillary Clinton, had said during her campaign that she would seek to combat high prescription drug prices in the US. In the FTSE 250, mid-cap drugmaker Indivior was up 6.4%.

FTSE 100 – LOSERS

J Sainsbury, down 5.2%. The grocer said it intends to cut further costs from the business as profit in the first half of its financial year rose, though like-for-like sales dipped. Sainsbury’s said it made a GBP372.0 million pretax profit in the 28 weeks to September 24, up 9.7% from the GBP339.0 million made a year before. Total group sales, excluding value-added tax but including fuel, rose 1.8% to GBP12.64 billion from GBP12.42 billion. Sainsbury’s declared an interim dividend of 3.60 pence per share, down 10% from the 4.00p paid a year before, in line with its policy of paying an interim dividend equal to 30% of its full-year dividend for the previous financial year. Sainsbury’s said its like-for-like sales fell 1.0% in the first half year-on-year, though total transactions on a like-for-like basis grew across its sales channels, it said. Rivals Tesco, down 2.1%, and Wm Morrison Supermarkets, down 2.0%, were being hit by the read-across.

Experian, down 4.0%. The information services firm said it is beginning the process of disposing of its email/cross-channel marketing business, as it reported an increased profit for the first half of its financial year. Experian reported a pretax profit of USD520 million for the six months to September 30, up by 14% from USD458 million for the same period in 2015. Revenue for the period was broadly flat year-on-year at USD2.24 billion, although Experian said it had seen 5% growth in revenue from ongoing activities. The company declared a first interim dividend per share of 13.0 US cents.

FTSE 250 – WINNERS

Workspace Group, up 5.1%. The flexible office space provider hiked its interim dividend substantially, after reporting an increase in its trading profit and rental income over the first half of its financial year. Workspace reported pretax profit of GBP7.1 million for the six months to September 30, down from GBP163.4 million year on year. However, the company’s adjusted trading profit increased to GBP23.6 million from GBP20.4 million. Workspace declared an interim dividend per share of 6.80 pence, increased from 4.86p in 2015. Chief Executive Jamie Hopkins said the 40% hike to the dividend was driven by the “strong operating momentum” in the business.

FTSE 250 – LOSERS

Tate & Lyle, down 8.2%, International Personal Finance, down 7.0%. Charles Pick, an analyst at Numis, said short-term sentiment on sugar producer Tate & Lyle was likely to take a hit from Trump’s victory, due to the UK company’s Mexican business. The Mexican peso has fallen to an all-time low against the dollar, given Trump’s campaign pledge to rip-up the US’s trade agreement with Mexico and to build a wall along the border between the two countries to stem the flow of illegal immigrants into the US. International Personal Finance, a sub-prime lender, also has a significant business in Mexico.

MAIN MARKET AND AIM – WINNERS

Mosman Oil & Gas, up 65%. The junior oil and gas firm said it has agreed to acquire an 80% stake in a producing oil asset in the US. Mosman said that, through its newly-formed Cue Energy Resources subsidiary, it will buy an 80% stake in the Pine Mills oil field in Wood County, Texas. It will pay USD975,000 in cash to acquire the asset. The field has 15 producing well and gross oil production averaged in excess of 100 barrels per day for the past four months at the site, Mosman said. Pine Mills has proven reserves of 373,000 barrels of oil and the acquisition will include all the equipment and infrastructure needed to operate the field.


By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance

Copyright 2016 Alliance News Limited. All Rights Reserved.

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