Ariana Share News (AAU)

LONDON (Alliance News) - The following stocks are the leading risers and fallers within the main London indices midday Thursday.
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FTSE 100 - WINNERS
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Royal Dutch Shell, up 3.8%. The oil and gas giant said its pretax profit jumped in its second quarter due to lower purchase charges, divestment gains and higher interest payments. It said its pretax profit increased 70% to USD9.12 billion for the three months to end-June from USD5.37 billion the previous year. The company said its revenues for the quarter fell 1.3% to USD111.22 billion from USD112.67 billion. However, purchase payments by Shell also fell, to USD85.30 billion from USD88.90 billion, and interest and other income payments into the company increased to USD2.34 billion from USD246 million previously. Shell said its upstream earnings took a USD902 million charge reflecting impairments of USD1.94 billion related mainly to dry gas properties in the US. These losses were offset by gains of USD1.23 billion related to the sale of its Wheatstone LNG asset in Australia and the sell-down of shares in Woodside Petroleum Ltd in Australia. The company increased its second quarter dividend by 4% compared to the previous year, to USD0.47 per share.

Intu Properties, up 2.6%. The shopping centre owner has seen its shares rise after strong investment demand for prime shopping centres drove up property valuations, and it said the UK's economic recovery was encouraging retailers to let more space. The company's net asset value per share rose to 372 pence on June 30, from 346 pence a year earlier, buoyed by a GBP573 million, or 44 pence a share, property valuation gain. That represented a 7.6% like-for-like valuation gain, ahead of the benchmark IPD monthly index, retail, which was up 3.5% on the year. Intu also said that the broader shop letting market is showing encouraging signs of improvement as the UK economy recovers. It signed 98 long-term leases during the first half of the year, for GBP15 million new annual rent. That was 4% above previous passing rent and in line with valuation assumptions, it said. It also has about 140 lettings in the hands of solicitors. Its pretax profit rose to GBP567.8 million, from GBP179.9 million a year earlier, buoyed mainly by the property revaluation gain.

BG Group, up 1.9%. The natural gas company said its pretax profit soared in its second quarter due to strong performance at its liquefied natural gas division, allowing the company to increase its interim dividend by 10%. It said its pretax profit jumped 47% to USD2.13 billion for the three months ended June 30 from USD1.45 billion the previous year as revenues increased 25% to USD5.51 billion from USD4.41 billion. The company said its liquefied natural gas operations achieved additional cargoes and favourable oil prices during the period, pushing up its revenues by 44%, while it deferred certain planned maintenance shutdown activity in the UK until later in the year. It said its LNG division delivered volumes were 29% higher. The company increased its interim dividend by 10% to 8.47 pence per share when compared to the previous year.

BT Group, up 0.8%. The telecommunications company has maintained its outlook for the full-year, as it saw pretax profit rise in its first quarter to the end of June on lower costs, despite seeing a decline in revenue. It posted a pretax profit of GBP546 million, up from GBP449 million, despite seeing revenue decline to GBP4.35 billion from GBP4.45 billion, as operating costs lowered and it posted fewer exceptional charges. Revenue was hit by GBP71 million from the strength of sterling, and a GBP46 million reduction in transit revenue.
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FTSE 100 - LOSERS
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Weir Group, down 4.2%. The engineering company said its pretax profit declined 6% on a reported basis to GBP182 million from the GBP193 million last year. While this was in line with analyst expectations and leaves Weir retaining its guidance for the full year, it wasn't enough to impress investors, given challenging end markets and expected continued hit from a strong pound. Moreover, net debt of GBP751 million is higher than analysts has expected. Weir shares had risen by 25% year-to-date up until Thursday's announcement, putting them on an estimated 2015 price-to-earnings ratio of 17x. Liberum Capital says the valuation looks full and reiterates a Hold rating on the stock.

Schroders, down 3.3%. The company's shares have fallen as concerns over the outlook of its assets under management have trumped a hike in its dividend payout. Schroders first-half pretax profit increased to GBP233.9 million from GBP221.7 million, and the asset manager hiked its dividend payout by 50% to 24.0 pence per share. However, while the dividend rise was a positive surprise, analysts are less impressed by the outlook on asset flows. Group net inflows were GBP4.8 billion in the first half, which looks light when compared to Liberum Capital's full year forecast for GBP14.4 billion.

Lloyds Banking Group, down 2.6%. The part-government-owned bank said its first-half underlying profit increased by 32%, boosted by a significant reduction in impairment charges as the bank comes closer to the end of a three-year turnaround plan. However, the shares have lost ground as investors digest the extra provisions the bank continues to make for legacy issues. As well as paying a GBP226 million fine for benchmark rate rigging, Lloyds has set aside another GBP600 million in provisions for miss-selling payment protection insurance, leading to a 50% fall in its statutory pretax profit to GBP863.0 million.

Rolls-Royce Holdings, down 2%. The aircraft and marine engine maker has reported lower profit for the first half of the year as it had predicted, blaming lower defence spending and weaker trading in marine, and said its recovery would take time as it invested in revamping its plants and delivering its order book. Its profit before tax and financing fell GBP491 million for the six months to end-June, from GBP848 million a year earlier, as revenue dropped to GBP6.63 billion from GBP7.35 billion. It actually swung to a net profit for the period of GBP544 million, from a loss of GBP385 million a year earlier, but this was almost completely down to a GBP1.4 billion increase in the mark-to-market value of derivative contracts it holds.
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FTSE 250 - WINNERS
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Laird, up 6.8%. The electronics and technology company said it was on track to meet expectations for the full-year after posting upticks in revenues and profits in the first half, though its results were impacted by currency movements. It said that pretax profit rose to GBP16.0 million from GBP10.2 million a year earlier, as revenue rose 4% to GBP252.6 million, from GBP243.5 million a year earlier, though this was offset by an 8% currency headwind, the company said. Laird said it would pay a dividend of 4.27 pence per share, up 4% from the 4.10 pence per share paid last year.

Bodycote, up 2.5%. The engineering company posted a decline in revenue but a rise in pretax profit for the first half of 2014. Revenue declined 1.3% to GBP312.3 million in the six months to end-June, down from GBP316.5 million in the same period a year earlier. It said revenues were up 4.6% on a constant currency basis. Still, pretax profit rose by 8.5% to GBP52.6 million against GBP48.5 million a year earlier, despite the company taking a GBP3.2 million hit from foreign-exchange movements. The firm will pay an interim dividend of 4.6 pence, up from 4.4 pence the year before.

Countrywide, up 1.8%. The estate agency and property services company has seen its shares rise solidly after promising bigger payouts to its shareholders, and as the recovery in the UK housing market fuelled a three-fold jump in pretax profit before exceptional items in the first half of the year. It said it will pay an interim dividend of 5.0 pence, up from 2.0 pence last year, alongside the special dividend of 9.0 pence on September 15. It also said it is now targeting an ordinary dividend of between 35% and 45% of annual reported profit after tax but before amortisation, up from the 25% to 35% target it had set at the time of its IPO. The company reported a pretax, pre-items profit of GBP37.1 million for the six months to end-June, up from GBP12.3 million a year earlier, as revenue jumped to GBP334.5 million from GBP258.8 million, and margins increased as cost efficiencies offset higher staff costs.

Inchcape, up 1.5%. The company said that it expects to deliver a "robust underlying constant currency performance" in its full-year as broad-based growth across its markets and categories drove sales and pretax profit higher in its first-half. In the six months to end-June, the company said reported sales rose 9.2% at constant currency to GBP3.3 billion, a 0.7% rise in actual currency. Profit before tax for the period came in at GBP162.1 million, up from GBP138.5 million last year. The company increased its interim dividend for the period to 6.3 pence per share from the 5.7 pence per share paid in 2013. It also announced a new GBP100 million share buy back programme over the next 12 months. Inchcape said that in light of the "continued strong trading momentum and strong cash generation, the board has concluded that there is scope to return additional surplus cash to shareholders."

Thomas Cook Group, up 1%. The travel operator said it continued to see strong demand in the UK, Germany and Northern Europe in the third quarter of its financial year. On an underlying basis, Thomas Cook said all of its businesses delivered improved results in the quarter, contributing to a GBP32 million increase in underlying group earnings before interest and taxes. Its underlying EBIT margin increased to 1.5%, compared to flat the prior year. Despite reporting lower revenue and a bigger EBIT loss on a statutory basis, Jefferies analyst Mark Irvine-Fortescue believes that "today's IMS should do a good job of soothing investor nerves." Overall, the analyst believes that trading is little changed since the first-half update in May, which is reassuring given some of the recent "noise" in the sector.

Essentra, up 0.6%. The speciality plastic and packing products supplier said that revenue and adjusted pretax profit rose in its first-half, buoyed by more sizeable business wins, the successful commercialisation of new products and further cost reduction and efficiency plans in its second quarter. In its half-year results for the six months to June 30, Essentra said revenue rose 12% at actual exchange rates to GBP431.1 million from GBP384.6 million in the comparable half in 2013, a 20% rise at constant currency. The company maintained its positive trading momentum during the period with adjusted pretax profit up 6% to GBP64.2 million from GBP60.3 million at actual exchange rates, a 16% rise at constant currency. Essentra increased its interim dividend for the period to 5.7 pence per share, up 19% on the 4.8 pence per share paid last year.
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FTSE 250 - LOSERS
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Afren, down 25%. The oil and gas explorer and producer has seen its shares fall off a cliff after its board suspended the chief executive and chief operating officer pending an investigation into alleged evidence of unauthorised payments that were potentially for the benefit of the executives. It said that in the course of an independent review on the board's behalf by Willkie Farr & Gallagher (UK) LLP of the potential need for disclosure of certain previous transactions to the market, evidence had been identified of the receipt of unauthorised payments potentially for the benefit of CEO Osman Shahenshah and COO Shahid Ullah. The company said Non-Executive Chairman Egbert Imomoh has agreed to become executive chairman, and the board has appointed Senior Independent Director Toby Hayward as interim CEO while the investigation continues.

Balfour Beatty, down 3%, and Carillion, down 2.9%. The two companies' shares have fallen after Balfour Beatty said it has ended its merger talks with Carillion because Carillion had demanded that Balfour halted its planned sale of US project management business Parsons Brinckerhoff, a demand it called unexpected and contrary to early agreements. In a tersely worded statement that comes just a week after news of the potential GBP3.05 billion merger of the British infrastructure and construction companies broke, Balfour accused Carillion of misleading it. Balfour said it would continue with its planned sale of Parsons Brinckerhoff, adding that a competitive sale process was already well under way.

Kazakhmys, down 2.4%. The mining company said its copper production fell in its second quarter and first half as the company reduces activity as part of its ongoing restructuring plan. It said its copper cathode equivalent production fell 2.8% to 69,700 tonnes for the three months ended June 30 from 71,700 tonnes in the previous year, with particular falls in production at its Khezkazgan region in Kazakhstan as mining activity was reduced in its high cost zones. In the first half, Kazakhmys copper cathode equivalent production fell 3.6% to 139,200 tonnes and its copper in concentrate production fell 3.4% to 152,500 tonnes. The miner also said zinc production fell 2.3% to 61,700 tonnes, silver production fell 27% to 5.2 million ounces and gold production increased 0.3% to 51,000 ounces in its first half.
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AIM ALL-SHARE - WINNERS
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Ariana Resources, up 47%. The gold exploration and development company has secured a financing agreement to bring the Kiziltepe Gold-Silver Mine in western Turkey into production. The Turkish mine is a joint venture between Ariana and Proccea Construction. The financing deal has been secured through Zenit Madencilik, the pair's joint venture entity. The USD33 million, 5-year financing deal has been provided through Turkish investment bank Turkiye Finans Katilim Bankasi AS. The joint venture has completed the first drawdown of GBP236,000 on the facility. Proccea will make an additional equity contribution to the project of approximately USD5 million.

Croma Security Solutions, up 22%. The company said its results for the financial year to the end of June would be ahead of market expectations. The company has seen growth in its Croma Vigilant arm, which provides premium ex-military security services, and was seeing encouraging prospects for the Fastvein biometric identity management system, said Chairman Sebastian Morley.

Chamberlin, up 15%. The company said that it expects profitability for the full-year to come in "significantly above current market expectations" as it reported trading in line with management forecasts in its first quarter. In a statement released ahead of its annual general meeting Thursday, Chairman Keith Butler-Wheelhouse said that group revenue in the first quarter has been in line and that its cost reduction programme, initiated by Chamberlin's new management team in the last quarter of 2014, is generating a "more positive outcome for the group."

Pure Wafer, up 13%. The semiconductor firm said trading in the year to the end of June was in line with market expectations and said it would pay its maiden dividend. It said underlying profits were in line with market forecasts, adding that the impact of exchange-rate fluctuations had been mitigated in part by its forward currency purchasing policy. The group also said the pricing pressure reported in January, driven by adverse dollar-yen movements, has stabilised. It added cost controls, restructuring and an improvement in process yields meant there was no material impact on profitability from the currency shifts. In addition, the company said it intends to recommend the payment of a maiden final dividend to shareholders for the year to June.

Gulfsands Petroleum, up 12%. The oil and gas exploration and production company said it has discovered a strong region of gas at its Lalla Yetou Updip-1 well at the Rharb Centre permit in northern Morocco. It said the well has been successfully drilled to total depth of 1,182 metres and flowed gas to the surface at an estimated rate of 6.6 million standard cubic feet per day with no formation water. It said the well is currently being monitored for pressure build up, after which it will be temporarily suspended as a future gas producer.
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AIM ALL-SHARE - LOSERS
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Redhall Group, off 20%. The specialist engineering support services group said that lower volumes in its Nuclear Contracting business will lead to "significant" losses in the current year, causing the company to lower its forecasts for a third time, now expecting operational profit to broadly break even. It has also provided for further exceptional contract losses and restructuring costs across the group, bringing exceptional charges for the year to GBP2.7 million.

Global Energy Development, down 18%. The company said a blockage is causing it to only be able to achieve low fluid recovery after fracking at its Catalina #1 Simiti formation in the northern section of the Magdalena Valley in Colombia. The Catalina 1 well was fracked earlier this year using 27,000 barrels of water pumped into the Simiti formation at the site but only 6,750 barrels of the injected fluid has been recovered since then, with its productivity rate as low as 75 barrels of fluid per day to 125 barrels per day. Hydraulic fracturing, often called 'fracking,' involves fracturing rock via a pressurised liquid to release oil or natural gas. The fluid is then pumped back out of the well along with the gas or oil.

Arden Partners, down 14%. The stockbroker said it swung to a loss on the back of lower revenues in a first half, hit by two separate transactions which impacted its fee revenue. Arden's revenue fell to GBP3.5 million in the six months to end-June, down from GBP5.7 million a year earlier, pushing the group to a GBP500,000 pretax loss against a GBP1.0 million pretax profit a year earlier. On the back of the results, the firm scrapped its interim dividend, having paid out 1.25 pence per share last year. The company attributed the loss to two separate corporate transactions over the period, one where its client pulled back at the point of delivery and one hit by the change in sentiment in the IPO market. The two issues resulted in a total loss in fees to Arden of GBP1 million. In addition, long-term investments held by the firm saw a drop in mark-to-market book accounting values in the first half, impacting overall performance by another GBP0.3 million.

Sula Iron & Gold, down 8.6%. The iron ore and gold exploration and development company's shares are down, even though it said its Ferensola Project in Sierra Leone has not been impacted by the outbreak of ebola in West Africa. The update to shareholders was made after Sierra Leone's president, Ernest Bai Koroma, on Thursday declared a public health emergency in a bid to try and curb the outbreak of the deadly disease. According to the United Nations, more than 670 people have died in of ebola in West Africa since February, with 224 of them in Sierra Leone. Sula also noted the Ferensola Project, located in Diang Chiefdom, will be closed in August to coincide with the heavy rains expected in the area. It is currently on a care and maintenance status and will recommence exploration in early September.
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By James Kemp and Jon Darby; jameskemp@alliancenews.com; @jamespkemp

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