Broker Upgrades and Downgrades & Key UK Corporate Snapshots 14 December 2015

UK Broker Upgrades / Downgrades

US Broker Upgrades / Downgrades

Key UK Corporate Snapshots Today

AA Plc (AA..L) Announced that it has extended its current relationship with Trakm8, the AIM-listed telematic car data provider to the global market. Trakm8 has now worked with the AA to develop a new business-to-business fleet management system. The new product will be offered to the AA’s business-to-business fleet customers, enabling them to help manage both the cost and logistics of running their fleets. The solution is expected to be attractive to large fleet operators as well as SMEs running fleets of five or more vehicles. The system allows individual vehicle data to be tracked, including fuel consumption, driver behaviour and routes taken.

Audioboom Group Plc (BOOM.L) Announced, in its trading update on its key performance indicators (KPIs) for the company’s fourth financial quarter from September to end-November and an update on the financial year ended 30 November 2015, that total listens for the fourth quarter exceeded 94 million (a new quarterly record), with November setting a new monthly record of 33 million. Total listens for the year exceeded 300 million (12 months to 30 November 2014: 180 million). 859 new content channels were added during the fourth quarter, resulting in a total of 6,862 content channels at the year end. This represents an increase of 60% over the year (November 2014: 4,293). Notable new partners include: Yahoo! Sports, News International, EMI, UTV and RadioX. There were approximately 2,400 active content partners1 during the fourth quarter. Approximately 4.6 million at the end of November, with over 275,000 new registered users signing up in the quarter. This represents an increase of 46% over the year (November 2014: 3.1 million). Over 690,000 total mobile app installs during the quarter (Android and iOS), again driven by organic growth as the direct marketing spend was reduced. Over the year there were a total of 2.6 million mobile app installs (12 months to 30 November 2014: 360,000). Overall operating performance measured at the EBITDA level and the financial position for the year ended 30 November 2015 were broadly in line with market expectations. The year-end cash balance was c. £3.1 million. Revenues increased significantly on the previous year but are below market expectations. The company will provide a detailed update on progress with Cumulus, other revenue generating opportunities and Q1 2016 KPIs in the final results for the year ended 30 November 2015. This is expected to be in early March 2016.

BG Group Plc (BG..L) Announced the confirmed receipt of unconditional merger clearance from the Chinese Ministry of Commerce (“MOFCOM”) of the recommended cash and share offer for the Company to be made by Royal Dutch Shell Plc (“Shell”). This approval from China is the final regulatory clearance that is a pre-condition to the Combination. Other pre-conditional clearances have already been received from the authorities in Australia, Brazil and the European Union. The company also announced that in accordance with Rule 2.10 of the City Code on Takeovers and Mergers (the “Code”), BG Group Plc confirms that it has in issue outside treasury 3,417,877,232 ordinary shares of 10p each that are admitted to trading on the main market of the London Stock Exchange. The ISIN for BG Group plc’s shares is GB0008762899.

BTG Plc (BTG.L) Announced that it has received 510k clearance from the US Food and Drug Administration for LC Bead LUMI™, the first commercially available radiopaque embolic bead, for the embolisation of hypervascular tumours and arteriovenous malformations (AVMs). The company separately announced that the data from the RENEW study of PneumRx® Coils was positive and the outcome was successful while it met all the primary and secondary endpoints of the study.

Cable & Wireless Communications Plc (CWC.L) Announced the details of the Exchange Ratio and the Alternative Exchange Ratio as if the Exchange Ratio Calculation Time were 14 December 2015. The company shareholders should note that this is for illustrative purposes only and that the Exchange Ratio Calculation Time is not, and will not be, 14 December 2015. If the Exchange Ratio Calculation Time were 14 December 2015 (being the date of this announcement), under the terms of the Transaction, the Exchange Ratio and the Alternative Exchange Ratio would be calculated such that: under the Recommended Offer, the company shareholders would be entitled to receive, for each company Share, 0.008301 New Liberty Global Class A Ordinary Shares and 0.020321 New Liberty Global Class C Ordinary Shares, as well as the Special Dividend; under the First Dual Share Alternative, the company shareholders would be entitled to receive, for each company Share, 0.005593 New Liberty Global Class A Ordinary Shares, 0.013693 New Liberty Global Class C Ordinary Shares, 0.002343 New LiLAC Class A Ordinary Shares and 0.005739 New LiLAC Class C Ordinary Shares, as well as the Special Dividend; and under the Second Dual Share Alternative, the company shareholders would be entitled to receive, for each company Share 0.004601 New Liberty Global Class A Ordinary Shares, 0.011265 New Liberty Global Class C Ordinary Shares, 0.002343 New LiLAC Class A Ordinary Shares and 0.005739 New LiLAC Class C Ordinary Shares, as well as the Special Dividend. At such illustrative Exchange Ratio and Alternative Exchange Ratio: the consideration under the Recommended Offer would represent an indicative value of 78.47p per company share (including the Special Dividend and using the Closing Price of Liberty Global Shares on 11 December 2015); the consideration under the First Dual Share Alternative would represent an indicative value of 74.09p per company share (including the Special Dividend and using the Closing Price of Liberty Global Shares on 11 December 2015); and the consideration under the Second Dual Share Alternative would represent an indicative value of 65.08p per company Share (including the Special Dividend and using the Closing Price of Liberty Global Shares on 11 December 2015).

Circle Oil Plc (COP.L) Announced its interim financial results, noting that it had reached agreement in principle with International Finance Corporation (‘IFC’) to extend its Reserve Based Lending (‘ RBL’) facility by one year to June 2019. Despite Circle’s low cost operations, trading remains very challenging due to a further weakening of global oil prices, varying production levels in NW Gemsa and the impact of macro events on payments from EGPC. As a result, and in conjunction with both the RBL extension and the December 2015 redetermination, discussions are ongoing regarding the borrowing base of the RBL facility under which $57.5 million is currently drawn. In light of the above, Circle is considering a number of options including a debt restructuring and/or an equity raise to right-size the balance sheet and ensure that the Company has sufficient cash flows to fund operations.

CLS Holdings Plc (CLI.L) Announced that it has completed the sale of a 250 year leasehold interest in a car park on Miles Street, Vauxhall, SW8 for £24.8 million to Urbanest, the specialist central London student accommodation developer and operator. The car park site has planning consent for a 454 room, 30 storey student building as part of CLS’s 147,000 sqm (1.58 million sq ft) Vauxhall Square development scheme. The sale proceeds were £3.2 million higher than the car park’s book value at 31 December 2014.

Cohort Plc (CHRT.L) Announced, in its unaudited results for the six months ended 31 October 2015, that revenue stood at £49.67 million, compared to £37.58 million in the same period last year. Operating profit stood at £0.05 million, compared to £1.27 million. Profit after tax was £0.07 million, compared to £1.01 million. Diluted earnings per share stood at 2.71p, compared to 2.78p. Interim dividend increased by 19% to 1.90p per share (2014: 1.60p per share).

CSF Group Plc (CSFG.L) Announced, in its half year results for six months ended 30 September 2015, that revenues fell to £5.1 million from £7.1 million posted in the same period preceding year. The company’s profit before tax stood at £0.267 million, compared to a loss of £0.953 million reported in the previous year. The basic and diluted earnings per share stood at 0.11p compared to loss of 0.62p reported in the previous year. The board has not proposed any dividend of for the period. The company’s cash and cash equivalents stood at £7.3 million (2014: £4.7 million). The company separately announced that it has completed its negotiations with the freeholder of the CX1, CX2 and CX5 data centres and has agreed heads of terms to restructure the lease rental payments.

Diageo Plc (DGE.L) Announced that Guinness Nigeria Plc, a company listed in Nigeria in which Diageo has a 54.3% shareholding, will become the exclusive distributor of its international premium spirits brands with effect from 1 January 2016. Guinness Nigeria Plc has made a statement to the Nigerian stock exchange. The terms of the agreement are not material for Diageo Plc. In the year ended 30 June 2015, Diageo’s international premium spirits net sales in Nigeria were £20 million.

easyHotel Plc (EZH.L) Announced that it has been granted the planning permission for its property, 47 Castle Street in Liverpool, for construction of a 77-room hotel. It expects the hotel to open in 2016/2017 financial year.

Electrocomponents Plc (ECM.L) Announced the appointment of David Egan as Group Finance Director of the company with effect from 1 March 2016.

Entertainment One Limited (ETO.L) Announced that it has issued £285 million in aggregate principal amount of 6.875% senior secured notes (the “Notes”), due 2022, and entered into a new £100 million revolving credit facility (the “RCF”), which matures in 2020. The net proceeds from the offering have primarily been used to repay the company’s previous credit facilities, and pay fees and expenses related to the Notes and the RCF.

Hargreaves Services Plc (HSP.L) Announced, in its pre-close trading update, that current trading conditions and the outlook in the coal and steel markets have continued to deteriorate. In addition, the continuing warm weather has added further short term volume and margin pressure across almost all of the Group’s major coal markets. Whilst the Company remains in a robust position in terms of gearing and cash generation, the deterioration in the coal and steel markets will further impact trading and outlook in all three divisions. Debt at 30 November 2015 was £31.8 million.

Iofina Plc (IOF.L) Announced the recent decline in the company’s share price and provides the following update on the company’s iodine production in the State of Oklahoma in order to reassure and update shareholders on the company’s current operations. The board confirms that, despite production levels being impacted by downtime due to its partners’ work on the Salt Water Disposal (SWD), coupled with recent weather-related power outages, the company expects to meet its forecasts and produce between 276-286 metric tonnes (MT) of crystalline iodine in H2 2015, resulting in full year production of 570 to 580 MT of crystalline iodine (2014: 328 MT), a like-for-like increase of 75%. As reported on 23 November 2015, the company informed the market of actions taken by the Oklahoma Corporation Commission (OCC) with respect to curtailing some SWD Injection Wells in areas where larger magnitude seismic activity had recently occurred. Currently the company’s two partners are disposing of in excess of 500,000 barrels of brine water per day (bwpd) in the Mississippi Lime play. The company is currently processing near 100,000 bwpd. The company’s partners continue to expand operations in the company’s production area with relative downtime at plants IO#4 and IO#6 recently due to brine diversion for fracturing operations.

Man Group Plc (EMG.L) Announced that the potential appointment of Lord Livingston as its new Chairman is currently subject to FCA review and it will make an announcement when the process is complete.

Morrison(Wm.)Supermarkets Plc (MRW.L) Announced the appointment of Rooney Anand, the current Chief Executive Officer of Greene King Plc, as Non-Executive Director and as Senior Independent Director, with effect from 01 January 2016.

National Express Group Plc (NEX.L) Announced that it has begun operating services on its first two German rail contracts, on the Rhine Munster Express route. The two lines serve the North Rhine-Westphalia region, including the important commuter cities of Cologne and Bonn. National Express launched with 34 new Talent 2 electric trains built by Bombardier. The new trains were procured by National Express on behalf of the local authorities. National Express won the two contracts in February 2013. The contracts are for 15 years and will generate revenues of around €1.6 billion across the period.

Petrofac Limited (PFC.L) Announced that it has secured contract extensions from its customers on the UK Continental Shelf (UKCS), worth approximately $400 million. Petrofac has recently secured a two year extension from Centrica Storage Limited to its Services contract on the 8A platform in the Rough field which will commence in January 2016. It has also secured a five-year contract extension from EnQuest, combining the services of an existing Facilities Management Agreement that will see Petrofac continue as Duty Holder of the Kittiwake platform, with a brownfield engineering modifications contract.

Petroneft Resources Plc (PTR.L) Announced, in its operational update, that the T-501 well at the Tungolskoye development completed drilling at a depth of approximately -2,500 metres TVD with a horizontal segment of 997 metres in the Upper Jurassic horizon, of which approximately 590 metres is in effective net pay. It also completed the drilling of the T-505 well at a depth of approximately -2,508 metres TVD with a horizontal segment of 466 metres, of which approximately 265 metres is effective net pay. Production from the new wells drilled at Arbuzovskoye development earlier this year declined to more than expected levels. However, the company expects superior results in 2016 at the south Arbuzovskoye pad.

PHSC Plc (PHSC.L) Announced that it completed the acquisition of Camerascan CCTV Limited (“Camerascan”). Camerascan is a business that specialises in the supply and installation of Closed Circuit Television systems, predominantly via third party lease finance agreements, to a commercial client base and is well positioned to renew existing lease contracts where clients require replacement or upgrade due to technical obsolescence or other operational reasons. Consideration for the acquisition is GBP75,000 in cash paid on completion along with the issue of 300,000 Ordinary Shares of 10p each in PHSC plc to the vendors (“Acquisition Shares”). A further GBP50,000 in cash is payable before 31 March 2016. This acquisition strengthens the Group’s presence in the CCTV sector, which we first entered through the purchase of B to B Links Limited (B2B) in 2012. Post-acquisition, Camerascan will become an operational division of B2B, with one of the two sellers retained in a sales management capacity under a contract of employment. Colin Warnock, Managing Director of B2B, will oversee the integration of Camerascan into the Group. Application will be made for the Acquisition Shares to be admitted to trading on AIM. Admission is expected to become effective and dealings are expected to commence on AIM on 18 December 2015.

Premaitha Health Plc (NIPT.L) Announced, in its half year results for six months ended 30 September 2015, that revenues climbed to £0.624 million from £0.083 million posted in the seven months ended 30 September 2014. The company’s loss before tax stood at £4.4 million, compared to a loss of £4.3 million reported in the previous year. The basic and diluted loss per share stood at 0.02p, compared to loss of 0.04p reported in the previous year. The company’s cash and cash equivalents stood at £6.6 million (2014: £5.2 million). The company separately announced that it has signed an agreement in which Thermo Fisher Scientific will invest £5 million in the company. This investment will enable it to offer enhanced commercial solutions to clinical laboratories across Europe and other international territories, enabling more pregnant women to access the benefits of the company.

President Energy Plc (PPC.L) Announced, in its operational update in Argentina, that the two workovers which were planned for the period to the end of the year have proceeded as per the plan and within the budget limits. It achieved an initial two-day rate of 175 bopd of production during the well testing in the workover and stimulation programs, which were more than previously expected. The company also stated that David Jenkins and David Wake-Walker will retire as the Non-Executive Directors of the company at the end of the year while Rob Shepherd will become the Senior Non-Executive Director.

Rambler Metals & Mining Plc (RMM.L) Announced, in its unaudited financial results and operations highlights for the quarter ended 31 October 2015, that revenue stood at C$11.20 million, compared to C$12.30 million in the same period last year. Operating profit stood at C$0.87 million, compared to C$2.30 million. Profit after tax was C$0.36 million, compared to C$0.28 million. Basic and diluted earnings per share stood at C$0.003, compared to C$0.002.

Royal Dutch Shell (RDSA.L) Announced that its recommended combination with BG Group Plc (“BG”) has received unconditional merger clearance from the Chinese Ministry of Commerce (“MOFCOM”). Following previously announced approvals in Brazil, the EU and Australia, MOFCOM clearance marks the final pre-conditional approval required for the combination.

RPC Group Plc (RPC.L) Announced the proposed acquisition of GCS Group, a leading global manufacturer and provider of closures and dispensing systems, for an enterprise value of €650 million (approximately £470 million) on a cash-free, debt-free basis, which represents a multiple of 6.8 times the GCS Seller group’s EBITDA for the 12 month period ended on 30 September 20152. On Completion, the cash consideration payable to the GCS Seller will be €186 million (approximately £134 million). The company proposes to fund the acquisition through a mixture of equity and debt. The Rights Issue at a price of 460p per share will raise gross proceeds of approximately £232.6 million. The Rights Issue will be on the basis of 1 New Ordinary Share for every 5 Existing Ordinary Shares held on the Record Date. The balance will be funded through drawings on the company’s existing Revolving Credit Facility (RCF), which has been increased from £490 million to £770 million. The board expects the Enlarged Group’s opening leverage at 31 March 2016 to be approximately 2.1 times the Enlarged Group’s EBITDA for the period ending 31 March 2016.

Serica Energy Plc (SQZ.L) Announced, in its operational update, that the Erskine field and associated infrastructure have continued to perform strongly, averaging over 3,300 barrels of oil equivalent (boe) per day net to Serica for October and November compared to 3,100 boe per day reported for the period from mid-year to end September. The operators of Erskine and the Lomond facilities continue to work on cost reductions to improve near-term profitability and extend field economic life. Half of Erskine gas production to September 2016 is sold under contract at pre-determined prices mitigating the impact of potential spot price volatility. In October, the Company announced the acquisition of the southern area of the Columbus Field. The remaining Columbus partners are now in a much stronger position to progress the field development and are working closely with the Erskine and Lomond operators to this end. In the Central North Sea, planning is actively underway for the high pressure, high temperature, exploration well in the Rowallan Prospect on block 22/19c (Serica 15%) in preparation for an anticipated summer 2017 spud date. In the East Irish Sea, in block 113/27c (Serica 20%), the partners are working towards drilling an exploration well on the Doyle gas prospect, now also scheduled for 2017. In Namibia and Ireland, it continues to pursue ways in which we can unlock the major potential which we believe lies in our blocks.

Sunrise Resources Plc (SRES.L) Announced, in its audited results for the year ended 30 September 2015, that operating loss stood at £3.02 million, compared to £7.02 million. Loss after tax was £3.01 million, compared £7.0 million. Basic and diluted loss per share stood at 0.05p, compared to 0.17p. In early December 2015 a lease agreement was signed with EP Minerals, LLC. The agreement allows EP Minerals to continue its evaluation of the Company’s 109 claims for an 18 month period. Before the expiry of this period, should EP Minerals wish to continue the Lease, it must nominate no more than 60 contiguous claims to which the Lease will then apply and make an initial payment to the Company of US$450,000. In December 2015 The Company staked claims over an extensive deposit of volcanic ash in Nevada having potential as a source of pozzolan (see inset box) for use in cement and concrete mixes.

Telit Communications Plc (TCM.L) Announced that, further to the announcement on 5 December 2014, the appeal filed by its Italian subsidiary, Telit Communications SpA (“Telit Italy”), with the Italian tax court of first instance, against three VAT assessments raised against Telit Italy by the Italian tax authorities, have been upheld by the tax court and the assessments were therefore annulled.

Tertiary Minerals Plc (TYM.L) Announced, in its results for the year ended 30 September 2015, that revenue stood at £0.18 million, compared to £0.16 million in the same period last year. Operating loss stood at £4.16 million, compared to £3.63 million. Loss after tax was £6.75 million, compared £3.59 million. Basic and diluted loss per share stood at 0.37p, compared to 0.22p. 6 of the 7 key stakeholder groups have given their support to the Storuman Exploitation (Mine) Permit area including approval from both the Storumans Kommun (local municipality/council) and the County Administration Board of Västerbotten (regional council). The highlight of the resource drilling programme was the identification of the newly designated Western Area where a 300m thick zone of fluorspar mineralisation was intersected. This exploration success validates the Company’s exploration strategy and follow-up drilling is now in progress in this Western Area.

Volga Gas Plc (VGAS.L) Announced, in its operational update, that as of 11 December 2015, the Vostochny Makarovskoye (VM) #4 well, in which the group drilled a successful sidetrack earlier in 2015, has been hooked up and is ready to be put on production. With the inclusion of this well to the existing stock of producing wells on the VM and Dobrinskoye fields, there is sufficient capacity for full utilization of the current planned operational capacity of 750,000 m3 per day of gas processing at the Dobrinskoye Gas Plant. The exploratory well on the Yuzhno Mironovskaya prospect, as announced on 7 December 2015, was drilled to a total vertical depth of 940 metres within a time of 21 days, a record drilling rate for the group. After running logs, the principal and secondary target zones in the Cretaceous post salt Albian and Aptian formations were found to be water bearing and the well is being plugged and abandoned. With the efficient well drilling, the total cost of this well was limited to approximately $800,000. As stated in the 2015 Interim Report, sidetracks were being drilled on Sobolevskaya-11 and Uzen-8 sidetracks currently non-producing oil wells with the aim of recovering production. Unfortunately significant mechanical difficulties were encountered in both of these wells and the operations on both have been temporarily suspended. At Sobolevskaya-11, there is an ongoing contractual dispute with the drilling contractor. At Uzen-8, which at 1,000 metres has a shallower reservoir, it is believed that a re-drill would be required. For the time being this operation is to be deferred. During November and December 2015, the group exported its first two cargoes of 500 tonnes each of condensate from its gas plant.

WPP Plc (WPP.L) Announced that it has agreed to merge its Australian and New Zealand businesses with STW Communications Group Limited (STW) and increase its shareholding from 23.6% to 61.5%. STW, Australia and New Zealand’s leading marketing and communications group, is a publicly listed company, whose shares are traded on the Australian Securities Exchange (ASX: SGN). The merged group will have pro-forma LTM revenues of c.A$1billion and EBIT of A$142 million and will become the primary vehicle for WPP in Australia and New Zealand. Following the merger, STW will change its name to align it with WPP.