Broker Upgrades and Downgrades & Key UK Corporate Snapshots 03 November 2015

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Associated British Foods Plc (ABF.L) Announced, in its results for 52 weeks ended 12 September 2015, that revenue stood at £12,800 million, compared to £12,943 million in the same period last year. Operating profit stood at £947 million, compared to £1,080 million. Profit after tax was £524 million, compared to £783 million. Basic and diluted earnings per share stood at 67.3p, compared to 96.5p. Additionally, the company announced that a final dividend of 25.0p per share will be paid on 8 January 2016 to shareholders on the company’s register of members at the close of business on 11 December 2015.

Aureus Mining Incorporation (AUE.L) Announced that the company has agreed to acquire three exploration licences from Sarama Resources Limited. (“Sarama”). These licences are contiguous to the company’s Bea Mountain Mining Licence and are located close to the New Liberty Gold Mine. Following the completion of the acquisition, it will have 100% ownership of the licences and the Company’s total land portfolio will increase to 1,683 Km from 1,402Km.

Avanti Capital Plc (AVA.L) Announced, in its final results for the year ended 30 June 2015, that its loss net of tax was £0.21 million compared to £2.26 million. The company’s basic and diluted loss per share was 2.64p, compared to 28.18p.

Biome Technologies Plc (BIOM.L) Announced, in its trading update for the nine-month period ended 30 September 2015, that total Group revenues achieved in Q3 were £1.3 million, 169% ahead of the same quarter last year. This takes Group revenues for the nine months to 30 September 2015 to £3.3 million, 18% ahead of the prior year period. The Group’s cash position as at 30 September 2015 was £1.7 million.

Diamondcorp Plc (DCP.L) Announced the following update on the underground development at the Lace diamond mine in the Free State province of South Africa, that development work in the Upper K4 block is concentrating in kimberlite on the 310.0 million production level in preparation for production ramp up to commence before the end of the year. During September tunnelling activities advanced from heavily diluted low-grade K6 kimberlite on the southern side of the kimberlite pipe into a transitional zone into higher-grade K4 kimberlite in the centre of the pipe. As a consequence, ground conditions improved and kimberlite development rates exceeded the monthly call in October. Challenging ground conditions reported previously on the 290.0 million doming level have been overcome with the installation of steel arched sets which provide a safe canopy for employees and equipment from potential falls of ground. The void above the canopy is now being back-filled to cushion any potential falls of ground. Processing of K6 kimberlite and K4 kimberlite recovered from the production level drives and bulk test sites continued with further encouraging results. Positive test results have been received from initial bulk tests undertaken on an optical/x-ray waste sorting system for the processing plant to optimise processing of the Lace kimberlites.

Direct Line Insurance Group Plc (DLG.L) Announced, in its interim management statement for the first nine months of 2015, that the company’s gross written premium for ongoing operations was up 1.3% for the first nine months with 4.1% growth in Motor partially offset by Home, and for the third quarter up 3.1% with 6.8% growth in Motor. Also, motor own brands in-force policies increased by 0.8% in the first nine months of 2015, while Home own brands in-force policies were stable. Continued investment in customer propositions, with the inclusion of guaranteed hire car in all its comprehensive motor policies. This builds on the seven day car repair service and the removal of amendment fees for all the company’s branded products. Total costs for ongoing operations reduced by 7.0%, while investment income yield increased to 2.4%, in comparison to the first nine months of 2014. The company reiterates expectation to achieve a 2015 combined operating ratio3 in the range of 92% to 94% for ongoing operations after normalising for claims from major weather events. Underlying trends remain broadly in line with prior expectations of a combined operating ratio in the range of 94% to 96%.

Egdon Resources Plc (EDR.L) Announced, in its final results for the year ended 31 July 2015, that its reported revenue stood at £2.07 million, compared to £2.96 million in the preceding year. Loss net of tax was £4.47 million compared to £0.46 million. The company’s diluted loss per share was 2.02p, compared to 0.30p.

Faroe Petroleum Plc (FPM.L) Announced, in its operational update following completion of its 2015 drilling campaign, that production is continuing to perform above expectations and therefore 2015 full year guidance has increased to 9,500-10,500 boepd. The company’s planned E&A drilling programme continues with an exciting programme for 2016 consisting of one frontier exploration well in the Barents Sea and two near field exploration wells, one in the Norwegian North Sea and the other in the Norwegian Sea. The 2016 total exploration programme cost is expected to be significantly lower than the 2015 programme. The Njord Future Project is progressing to plan with tow-in expected in Q2 2016. The Butch oil field development project has passed concept selection and will be advanced as a cost effective subsea tie-back to the Ula field. Balance sheet remains strong with significant cash position, healthy cash flow, low debt and material undrawn debt capacity to assist in funding growth opportunities. Additionally, the company also announced the results of the Blink exploration well in the Norwegian Sea (Faroe 25%). The objective of well 6406/12-5S was to test the hydrocarbon potential of the Upper Jurassic reservoirs analogous to the Pil, Bue, Boomerang and Draugen field reservoirs. The well encountered a 557 metre gross section of Upper Jurassic sandstone following a technical sidetrack (6406/12-5S T2). The well reached a total vertical depth of 3,710 metres below sea level and preliminary analysis from wireline logs, pressure and fluid sampling shows that the well encountered clean water-wet sandstones with good reservoir properties but with no indications of hydrocarbons.

GETECH Group Plc (GTC.L) Announced, in its final results for the year ended 31 July 2015, that revenues surged to £8.6 million from £6.6 million posted in the same period preceding year. The company’s profit before tax stood at £2.0 million, compared to a profit of £0.968 million reported in the previous year. The basic earnings per share stood at 5.77p compared to earnings of 5.21p reported in the previous year. The company further stated that the board has proposed a final dividend of 1.74p per share (2014: 1.76p), which will be paid on 17 December to shareholders on the register of members on 20 November.

Gusbourne Plc (GUS.L) Announced, in its harvest report, that the quality of the grapes were excellent, with optimum levels of natural sugar and acidity, both of which met its own exacting quality standards. Yield volumes were also better and in line with the expectations. The onset of harvest was delayed due to below average temperature and sunshine hours in August and September. However, fair weather in October helped the grapes to ripen to the desired level of maturity. Its harvest is dependent on the local community like in the previous years and hence it remains grateful to the local residents who helped to hand pick the grapes.

Hunting Plc (HTG.L) Announced, in its trading statement, that trading during Q3 2015 remained subdued for most businesses across the Group as the global energy industry continued to cancel or defer capital expenditures. Overall, the Group’s profit from continuing operations declined by 85% in the year to date compared to the comparative period in 2014. The Company continues to report a strong balance sheet, with no significant change to the financial position of the Group since the publication of the Half Year Results in August 2015. Given these weak market conditions and on the assumption that current levels of profitability prevail for the remainder of the year, its 2015 full year results are likely to reflect a year on year profit from continuing operations decline in the region of 90%.

Imperial Tobacco Group Plc (IMT.L) Announced, in its preliminary results for the year ended 30 September 2015, that its reported revenue stood at £25,289 million, compared to £26,460 million in the preceding year. Profit after tax was £1,723 million compared to £1,445 million. The company’s diluted earnings per share was 176.9p, compared to 148.1p.

Intercede Group Plc (IGP.L) Announced, in its half year results for six months ended 30 September 2015, that revenues rose to £5.5 million from £4.0 million posted in the same period preceding year. The company’s loss before tax stood at £0.432 million, compared to a loss of £1.1 million reported in the previous year. The basic earnings per share stood at 1.0p compared to loss of 1.4p reported in the previous year. The company’s board has not recommended any dividend for the period. The company’s cash and cash equivalents stood at £5.8 million (H12014: £6.3 million).

Jardine Lloyd Thompson Group Plc (JLT.L) Announced, in its interim management statement for the period 1st July 2015 to 2nd November 2015 that the group’s risk and insurance businesses continued to trade in line with our expectations despite the ongoing challenges of a weak insurance and reinsurance rating environment and falling levels of capital investment by corporates. The group expects the net investment spend in its US Specialty business in 2015 to be lower than indicated previously. On the outlook front, the group anticipates the full year organic revenue growth of its Risk and Insurance businesses to be in line with historical levels.

Just Eat Plc (JE..L) Announced that the strategy of ongoing investment in technology and marketing to drive order growth has delivered orders ahead of management expectations with an acceleration in order momentum over the period. The group reported accelerated UK order growth of 50% year-on-year (H1 2015: 49%), benefitting marginally from poor weather over the summer. More than 74% (H1 2015: 69%) of UK orders in Q3 were made via mobile devices, of which more than 41% were by app (H1 2015: 38%). EBITDA for the full year remains on track and in line with current expectations.

K3 Business Technology Group Plc (KBT.L) Announced a major contract win for its “axlis fashion” solution with K – Mail Order GmbH & Co, one of Germany’s largest online fashion retailers. The contract has been secured through the company’s channel partner network and will help to underpin the results for the current financial year and generate ongoing revenues from software licence and support renewals. The contract is the company’s second channel partner win in Germany, following the agreement with TriStyle Mode GmbH announced on 15 September 2015, and has been secured through a new channel partner relationship. The expansion of the channel partner network remains a key area for the company alongside its direct sales.

LGO Energy Plc (LGO.L) Announced, in its update on corporate activities following its announcement on 19 October 2015 concerning the loss of well GY-678 at the Goudron Field in Trinidad, that as previously announced, the loss of well GY-678, the downhole equipment it contained and the anticipated production from that well, has significant cost implications for the company. Delays are occurring in settlement of the remaining capital costs of the recent drilling program, in particular well GY-678, amounting to approximately $4 million, for which the company requires BNP Paribas approval to release specific funds previously drawn-down. Nevertheless, in line with the terms of the banking facility, payments under the pre-paid swap arrangements with the bank continue to be made as initially planned. The company has now reviewed a wide range of options to bridge the funding gap that this loss has created with regards existing drilling creditors as well as future capex and the company has decided to appoint Wellford Capital Markets, LLC and Height Securities, LLC to jointly advise on strategic investments in the business.

Mondi Plc (MNDI.L) Announced that it is hosting a Capital Markets Day in London today to give investors and analysts further insight into the company’s business, growth strategy and capital expenditure programme. Presenters include the group Executive Committee and CEOs of the group’s business units.

National Grid Plc (NG..L) Announced that Steve Holliday has informed the Board that he wishes to retire as Chief Executive Officer (CEO) and leave the company in 2016. He will be succeeded as CEO by John Pettigrew, currently Executive Director of the Group’s UK operations. Steve will remain CEO until the end of this financial year (31 March 2016) and on the Board until July 2016, to support John with the transition.

Orchard Funding Group Plc (ORCH.L) Announced, in its full year results for the year ended 31 July 2015, that revenue stood at £3.41 million, compared to £2.99 million in the same period last year. Profit after tax was £1.03 million, compared to £0.75 million. Basic and diluted earnings per share stood at 8.77p, compared to 6.87p.

REGUS Plc (RGU.L) Announced, in its trading statement for the period to 30 September 2015, that the group has enjoyed good trading in the quarter to 30 September 2015, continuing the momentum reported at the time of the interim result. In the three months to 30 September 2015, Group revenue increased to £478.8 million compared with £413.6 million in the corresponding period last year, an increase of 17.3% at constant currency rates. Underlying cash generation has been strong, increasing 54% year-on-year to £137.8 million (nine months to September 2014: £89.6 million), reflecting the good trading performance. The Group had net debt at 30 September 2015 of £146.4 million, a small increase on the 30 June 2015 position of £136.9 million, reflecting the £10.9 million property purchase described above as well as £4.7 million of additional share purchases. Looking forward to the remainder of 2015, the group remains confident in the outlook.

Royal Dutch Shell Plc (RDSA.L) Announced, in its strategic update, that a new, simpler upstream organisation that reflects recent changes in the company’s portfolio, facilitates our planning for the integration of BG post-completion of the recommended combination and that will facilitate subsequent streamlining of the portfolio. The changes will come into effect on January 1, 2016. It is pulling all levers to manage through the current oil price downturn, underpinning our intention to continue to pay attractive dividends for shareholders. The company is delivering our commitments to reduce costs and spending – $11 billion reduction in 2015 while reorganisation of the company’s upstream increases accountability for performance and aligns us to deliver on the strategy. Also, it has been able to further analyse its integration planning work, to de-risk its initial synergy estimates and increase the expected level of identified and reported on pre-tax synergies from $2.5 billion to $3.5 billion in 2018, an increase of 40% compared to earlier guidance. Also, the recommended combination with BG should enhance company’s free cash flow, enabling debt reduction, and further improvement in the company’s capacity to pay dividends and fund share buybacks.

Sirius Petroleum Plc (SRSP.L) Announced that Guarantee Petroleum, one of its local partners in the Ororo Field, received the approval for drilling the proposed Ororo-2A well on the Ororo Field from the Department of Petroleum Resources in Nigeria. The Ororo-2A well is the company’s first appraisal well in the Ororo Field, which was named according to the chronological number of the drilling sequence for the field. The company separately announced that it has completed the acquisition of its second multi-let business park located in Aachen. The business park is the fifth and final site in the acquisition portfolio which was announced by the company on 04 June 2015.

Stagecoach Group Plc (SGC.L) Announced that it welcomes the decision of the Tyne and Wear Quality Contract Scheme Review Board that the bus franchising scheme proposed by the North East Combined Authority (NECA) has failed to meet the necessary statutory tests. The company also believes the decision has clear implications for bus franchising powers linked to the government’s devolution programme. The forthcoming Buses Bill must provide a legislative framework for enhanced partnerships, and ensure any franchising proposals are subject to proper safeguards and a transparent public interest test. Nexus, the transport executive of NECA, had proposed that bus services should be franchised in Tyne and Wear through the letting of contracts, with local taxpayers assuming the risk of the local bus network. The independent Review Board’s remit was to provide an opinion on whether the proposed scheme – which has a 10-year operating cost of £1.6 billion – meets statutory public interest criteria, and whether due process has been followed.

Standard Chartered Plc (STAN.L) Announced, in its interim management statement for the third quarter of 2015, that the Group’s disappointing third quarter operating loss reflects the previously announced business divestments and de-risking initiatives, combined with challenging conditions in the Group’s key markets including due to depressed commodity prices and the broader impact of the slowdown in China. Loan impairment charges remain at elevated levels. Income of $12.2 billion year to date was down 12%, or 8% on a constant currency basis. Third quarter income of $3.7 billion was down 18% year on year or 10% from the previous quarter, reflecting a decline in client activity as a result of volatile market conditions and the impact of de-risking actions. Operating expenses excluding regulatory and restructuring costs were $2.2 billion in the third quarter, down 3% year on year and down 3% on the previous quarter. It remains on track to deliver on the first year of its cost efficiency programme which we announced earlier this year and has further tightened its risk tolerance levels and have reduced some of its higher portfolio concentrations with its commodity exposure down 21% and China exposure down 15% for the year to date. Customer loans and advances were down 5% in the quarter as it focusses on disciplined balance sheet management and more selective asset origination. Also, it continues to take action to further strengthen our capital position and position the Group for improved returns. Subsequently, it also announced the outcome of its strategic review and a £3.3 billion (net of expenses), or approximately $5.1 billion, capital raise. The company will be hosting an update for investors and analysts at its headquarter office in London. A live audio webcast of the event, which starts at 9.30 a.m. GMT, will be available at www.sc.com along with all presentation materials.

The People’s Operator Plc (TPOP.L) Announced that it has signed a new wholesale contract with Three UK to provide network coverage of voice, text and data to its UK customers. The agreement is an advantage to the company, both from an operational and commercial perspective. It will make a significant contribution to its stated goal of UK profitability by the end of 2016. The agreement also enables it to give its UK customers access to the award winning Three network, including LTE 4G services.

ULS Technology Plc (ULS.L) Announced, in its trading update for six months ended 30 September 2015, that the group traded better during the first half of the financial year, wherein its revenues and profits were marginally more than that of the board’s expectations. Revenue growth is expected to be around 18% to £9.75 million while the underlying profit before tax is expected to rise by 35% to £1.84 million. The group’s underlying operating profit growth (excluding Legal Eye) was seen at 21%. The company also stated that Nigel Hoath has been moved to a Non-Executive role while Ben Thompson, group’s Managing Director, is now the Chief Executive.

Weir Group Plc (WEIR.L) Announced, in its interim management statement for the period to 2 November 2015, that full year earnings expectations were broadly in line with current market consensus. Third quarter input was 29% lower than the prior year period and 8% lower than the second quarter of 2015, primarily driven by a significant drop in activity levels across oil, gas, power and industrial markets. Net debt at 2 October 2015 was higher than that reported at 3 July 2015. The Group remains confident of delivering strong cash generation in 2015, with inventory reduced by over £30 million in the third quarter. Looking ahead, it expects trading conditions to remain challenging through the fourth quarter with further declines in upstream oil and gas activity. Also, it continues to expect a sequential improvement in its second half performance with its full year earnings expectations broadly in line with market consensus. Separately, the company announced that Andrew Neilson, Director of Strategy and Corporate Affairs would become interim Company Secretary of The Weir Group PLC with effect from 18 December. The appointment is in addition to Andrew’s other responsibilities. A recruitment process is underway to select a successor to Keith Ruddock, current Company Secretary and General Counsel, who it was announced in September, would be retiring from the Group at the end of 2015.

World Careers Network Plc (WOR.L) Announced, in its final results for the year ended 31 July 2015, that its reported revenue stood at £7.86 million, compared to £8.58 million in the preceding year. Profit after tax was £0.94 million compared to £1.93 million. The company’s diluted earnings per share was 12.04p, compared to 24.82p.