Broker Upgrades and Downgrades & Key UK Corporate Snapshots 17 December 2015

UK Broker Upgrades / Downgrades

US Broker Upgrades / Downgrades

Key UK Corporate Snapshots Today

Adgorithms Limited (ADGO.L) Announced, in its trading and business review, that the Board has recently completed a detailed review of the company’s strategy in light of market conditions. In accordance with its long term plan, the company continues to be focused on: accelerating deployment of its primary SaaS business (‘direct’ revenue) which provides brands with greater control and higher ROI from their online advertising campaigns; and strengthening and de-risking ‘indirect’ revenue which flows from activity on online advertising exchanges, by broadening its customer base and supply partners. Management report a marginal improvement in the online advertising market with the return of inventory volumes for online advertising exchanges and demand from media buyers returning. This improvement however is still below anticipated volumes expected within the Company’s indirect revenue channels. Despite this, the company is pleased to report that revenue for FY2015 is currently tracking broadly in line with expectations however, the EBITDA margin in Q4 will be below expectations and this will be reflected in the EBITDA outcome for the full year. The year-end cash balance is expected to be in line with expectations of approximately $29 million. Meanwhile, increasing demand from brands for better visibility, control and ROI of their online advertising budgets, has reinforced the Board’s belief that Alber as a SaaS platform, is the right solution to create significant long term value for brands. The company continued to make good progress in the last three months on business development fronts and is pleased to announce the addition this week of Harley Davidson of NY to its growing list of major brands who are now using its SaaS solution. With regards to the Company’s indirect business, management has been successful in significantly diversifying the indirect revenue base in Q4. The company’s Board of Directors remains confident in the overall long term growth prospects of the business.

AstraZeneca Plc (AZN.L) Announced that it has entered into an agreement to invest in a majority equity stake in Acerta Pharma, a privately-owned biopharmaceutical company based in the Netherlands and US. The transaction provides AstraZeneca with a potential best-in-class irreversible oral Bruton’s tyrosine kinase (BTK) inhibitor, acalabrutinib (ACP-196), currently in Phase III development for B-cell blood cancers and in Phase I/II clinical trials in multiple solid tumours. Under the terms of the agreement, it will acquire 55% of the entire issued share capital of Acerta for an upfront payment of $2.5 billion. A further unconditional payment of $1.5 billion will be paid either on receipt of the first regulatory approval for acalabrutinib for any indication in the US, or the end of 2018, depending on which is first. The agreement also includes options which, if exercised, provide the opportunity for Acerta shareholders to sell, and AstraZeneca to buy, the remaining 45% of shares in Acerta. The options can be exercised at various points in time, conditional on the first approval of acalabrutinib in both the US and Europe and when the extent of the commercial opportunity has been fully established, at a price of approximately $3 billion net of certain costs and payments incurred by AstraZeneca and net of agreed future adjusting items, using a pre-agreed pricing mechanism.

Atlantis Resources Limited (ARL.L) Announced that it has agreed to acquire two projects from ScottishPower Renewables (UK) Limited (“SPR”) for its Scottish tidal development company, Tidal Power Scotland Limited (“TPSL”). The transaction is subject to the satisfaction of certain conditions precedent which are expected to be achieved in early 2016. The consideration payable for the projects, which the Company values at £6.6 million, is 3,859,703 shares in TPSL, which equates to 6% of the issued share capital. Atlantis owns the remaining 94% of TPSL.

Avanti Communications Group Plc (AVN.L) Announced that the company had significant new order intake during the first half of the financial year, particularly in the Broadband and Government sectors, which will feed into the current financial year. The Group is expected to show strong growth in continuing business revenue in the second quarter versus the first quarter and has visibility of further strong growth into the third quarter. This underpins the expectation that the company will meet its full year target of approximately 50% growth over the 2015 recurring revenue of $60 million. Non-recurring revenue opportunities that could augment this core business growth are targeted and assessed on their contribution to cash flows. This strong trajectory revenue growth supports our fully funded business plan to launch HYLAS 3 and 4 in 2017. The company also mentioned that Enrico Leonardi will join Avanti as Global Sales Director in February 2016 reporting to the Chief Executive.

Bluecrest Allblue Fund Limited (BABS.L) BlueCrest Capital Management LP announced that it intends to return capital to investors with effect from the 4th January 2016 dealing date. This includes the return of the capital of BlueCrest AllBlue Fund Limited (BCAB) invested in AllBlue and the leveraged version of AllBlue. Thereafter, BlueCrest would become a private investment partnership. Based on the information provided to the board by BlueCrest, approximately 70% of the redemption proceeds would be received by the company by the end of January 2016, 85% by the end of April 2016 and the balance as soon as practicable thereafter.

Brady Plc (BRY.L) Announced three new contract wins. Two top tier global Japanese-owned trading companies have selected Brady Cloud solutions to support their trading and risk management requirements across base and precious metals, soft commodities and freight, covering the complete trade lifecycle for both derivatives and physical trading activities. Both of these customers will be using the Brady Cloud Service to reduce their total cost of ownership and ensure maximum availability. Additionally, a European energy supply company, focused on delivering clean energy to large industrial and commercial consumers has selected Brady Energy Trading and Risk Management solution to manage its renewable energy trading, position, risk, and back-office operations.

Chariot Oil & Gas Limited (CHAR.L) Announced, in its pre-close operational update, that throughout the year, the Company has continued to focus on its risk management strategy, protecting its portfolio and cash position and further maturing its technical understanding of its assets. Chariot is seeking third party technical validation and participation in its assets in order to drill its priority prospects and accordingly data rooms across the portfolio remain active. In terms of portfolio management and maturation, in Morocco, Chariot and its partners have agreed a nine month extension on the Rabat Deep licence to provide adequate time for the partnership to complete analysis of the recent seabed coring programme, prior to entering the next phase of exploration. This work is important in helping to support the understanding of hydrocarbon migration and subsequently to determine the best location for drilling priority prospect JP-1. Capital discipline is an ongoing focus and Chariot remains fully funded for all of its commitments. At year end, the unaudited cash position of the Company is expected to be approximately $39 million. The team remains active in evaluating new venture opportunities to look to balance the risk profile with assets of suitable fit.

Coal of Africa Limited (CZA.L) Announced that its acquisition of Universal Coal Plc has been unconditionally approved by the South African Competition Commission after its intended offer for the entire issued and to be issued share capital of Universal Coal was announced on 26 November 2015.

Debenhams Plc (DEB.L) Announced that Nigel Northridge is to be appointed as a Non-Executive Director of Hogg Robinson Group plc with effect from 1 January 2016.

Elementis Plc (GHS.L) Announced, in its trading update for the full year ending 31 December 2015, that markets continued to be challenging while it projects the earnings per share for the current year to be at the lower end of its previously stated range. The company anticipates the group’s year end net cash balance to be higher than the previous year’s balance of $64.2 million due to its cash generating nature and its ongoing focus on cash management. The management expects Specialty Products to make better progress in 20165 against the current year’s performance, based on its strong and diverse market positions, new product launches and strong contribution margins.

Entertainment One Ltd (ETO.L) Announced that the Group has extended its output agreement with DreamWorks Pictures through the creation of a new partnership. The new partnership will see eOne expand its successful film distribution relationship across additional territories and extend its collaboration into television production and distribution as well as into licensing and merchandising. eOne will handle the direct distribution of Amblin Partners’ films on a multi-territory output basis including Australia/New Zealand and Spain as well as the United Kingdom and the Benelux, where it previously had a successful output arrangement with DreamWorks Studios. As part of the deal eOne will hold a small equity stake in Amblin Partners. Amblin Partners will create content using the Amblin, DreamWorks Pictures and Participant brands and leverage its power and broad awareness to tell stories that appeal to a wide range of audiences. Amblin Partners will be led by CEO, Michael Wright, and President and COO, Jeff Small. In addition, Amblin Television will become a division of Amblin Partners.

Faroe Petroleum Plc (FPM.L) Announced the award of a rig contract for the drilling of the company-operated, Brasse exploration well in the Norwegian North Sea and the recommencement of oil production from the Enoch field. The company has entered into a contract with Transocean Offshore (North Sea) Ltd on behalf of the PL 740 joint venture for the lease of the semi-submersible Transocean Arctic drilling rig. The company has budgeted its net share of the well costs after tax to be less than £2 milion, and the well is expected to be drilled in the summer of 2016. Brasse will test a structure immediately to the south of the producing Brage field and if successful could be tied-back to Brage or alternatively to other nearby installations. The co-venturer in the PL740 licence is Core Energy AS (50%). Production from the Enoch field in the UK North Sea has recommenced following an extended period of shut-in for repair and maintenance. Initial production rates have been encouraging.

Fulham Shore Plc (FUL.L) Announced, in its unaudited interim results for the six months ended 27 September 2015, that revenue stood at £13.90 million, compared to £5.50 million in the same period last year. Operating profit stood at £0.23 million, compared to £0.77 million. Profit after tax was £0.13 million, compared to £0.63 million. Diluted earnings per share stood at 0.0p, compared to 0.3p.

Halma Plc (HLMA.L) Announced that it has acquired Visiometrics, S.L, (located outside Barcelona, Spain) and Visual Performance Diagnostics, Inc, (located in Aliso Viejo, California, USA) from private shareholders and Atlas Capital. The company will pay €18 million (£13.1 million) at the closing of the deal while a deferred contingent consideration up to €69 million (£50.4 million) will be paid based on the profit performance of Visiometrics over the next three years and a deferred contingent consideration up to €40 million (£29.2 million) will be paid in royalties over the next five years with a maximum total consideration of €125 million (£91.2 million).

Hardide Plc (HDD.L) Announced that its Hardide-A coating met the Airbus’ technical performance requirements which will be a potential alternative for hard chrome plating and currently is available for consideration by design engineers and sub-contractors on some specific Airbus aircraft components. It met the technical performance level after eight years of the company’s development and testing of the coating as a potential alternative to hard chrome plating, used extensively on airframe and landing gear components. Hardide-A, a variant of the company’s tungsten/tungsten carbide coating range, successfully passed necessary tests and met technical performance requirements defined in the Airbus Process Specification for thick CVD (Chemical Vapour Deposition) Tungsten Carbide coatings.

Inspirit Energy Holdings Plc (INSP.L) Announced the successful conclusion of operational testing on its first Inspirit Charger microCHP appliance for field trial use. First Inspirit Charger has completed more than 1,500 hours of rigorous testing at Sheffield facility. During this period of testing the company has sought to demonstrate that the appliance not only meets market requirements but also our quality objective of creating a product that is “sealed for life”. Testing proved the performance of the smart electronic controls system, the dry gearbox, the robustness of the helium seals, the simultaneous production of heat and power, the suitability for real world field trials and the overall efficiency achieved which was in excess of 90%. The board is delighted to report that the appliance has met or exceeded all internal quality requirements for safety, reliability and durability. In recognition of this success and commitment, the board has promoted Paul Booker to the senior management team in the role of Design & Development Director of Inspirit Energy Ltd, our wholly owned subsidiary. At this juncture the company has agreed with Enertek International, which is based in Hull and is one of only two engineering laboratories capable of fully testing microCHP appliances in the UK, that the appliance will be delivered to them in the second half of January 2016 for independent third party testing.

London Stock Exchange Group Plc (LSE.L) Announced, in its pre-close trading update for the eleven months ended 30 November 2015, that the company achieved good performance across each of the Group businesses. In Information Services: continued momentum in the integration of FTSE Russell and delivery of synergies, ETF assets benchmarked to FTSE Russell up 4%. Demand for other information products, including UnaVista and SEDOL, remained strong, while trend in professional users of real time market data broadly unchanged. In Post Trade Services, LCH.Clearnet has delivered a good performance in all OTC areas: increased use of compression services through LCH.Clearnet, with $304 trillion compressed in total in the period, helping reduce IRS notional outstanding to $263 trillion, down 27%. Global client swap clearing up 67% – with 612,000 trades cleared. CDSClear notional cleared up 165% – to €155 billion. ForexClear notional cleared up 19% – to $974 billion while fixed income clearing broadly unchanged at €67 trillion. Cash equities and listed derivatives clearing up 22% and down 19% respectively, reflecting a continued decline in derivative trading levels in customer venues. In Capital Markets: primary markets were robust with £40 billion equity capital raised on the Group’s markets for the period – down just 2% on last year in more challenging market conditions – with 161 new issues (2014: 193). Secondary markets saw average daily UK equity value traded up 9%; Italian average daily volumes up 7%; derivatives contracts traded on IDEM in Italy rose 14%; MTS money markets (repo) value traded increased 21% and fixed income cash markets value traded declined 4%. It also made announcement of CurveGlobal, a new interest rate derivatives venture with a number of major dealer banks and CBOE, in line with our open access and partnership approach. Products to be traded on London Stock Exchange Derivatives market and cleared through LCH.Clearnet.

Lookers Plc (LOOK.L) Announced that Sally Cabrini has been appointed as a Non-Executive Director of the company with effect from 1 January 2016.

Marechale Capital Plc (MAC.L) Announced, in its interim results for the six months ended 30 September 2015, that revenues rose to £0.30 million from £0.24 million recorded in the same period a year ago. Loss after tax widened to £47,898 from £45,943.

Noricum Gold Limited (NMG.L) Announced that it has commenced its drilling programme at Kvemo Bolnisi, one of two priority targets at the Bolnisi Project located in the Republic of Georgia. It is targeting an outcropping shallow secondary quartzite high grade gold mineralisation. The new drilling campaign will test the continuity between historic diamond drilling and trenching around EKBDDH003 and EKBDDH005. Its near term production potential has been strengthened significantly through the presence of a 30 year mining licence, the current excess capacity at the local partner’s mine processing operation and the excellent existing infrastructure in the area.

NWF Group Plc (NWF.L) Announced, in its trading update for the half year ended 30 November 2015, that net debt will be lower than November 2014. In the Feeds division, trading was impacted by lower milk prices as expected and demand in the autumn was reduced due to the mild weather conditions. In Food, the business utilised overflow capacity to meet increased demand from customers. Service levels were maintained at 99.7% and the Wardle warehouse remains fully utilised. The Fuels division performed better than expected through the summer months, however has yet to benefit from colder conditions and the resultant increased demand for heating oil. The recent acquisitions of New Breed and Staffordshire Fuels have performed as expected and are being integrated as planned. It will announce its results for the half year ended 30 November 2015 on Tuesday 2 February 2016.

Pets at Home Group Plc (PETS.L) Announced the appointment of Graeme Jenkins as Chief Financial Officer (CFO). Graeme will become an Executive Director of the Company and member of the Board, upon his commencement date, which will be announced in due course. Ian Kellett, the current Group CFO, will transition fully into the role of Chief Executive Officer of Retail (CEO of Retail) upon Graeme’s appointment. Graeme is currently CFO of Australian department store business, Target Australia Pty Ltd, a position he has held since 2013. Pets at Home Group Plc will publish a third quarter trading statement on 20 January 2016.

Providence Resources Plc (PVR.L) Announced, in its trading update, that despite the continued fall in commodity prices, the company has seen a marked increase in interest in its portfolio and work continues with a number of parties to progress the Barryroe farm out to a satisfactory conclusion. The drop in costs, most notably drilling costs, which are now at a 7 year low, is helping to drive this activity. During the year, it expanded its participation in a number of licences offshore Ireland, including the acquisition of a further 26% in Spanish Point, the acquisition of a further 4% stake in Dunquin and an increase in our interest in Kish Bank to 100%. In early December, the company also announced that it secured an option over 60% of the southern portion of OPL 1, which lies adjacent to and east of the Barryroe oil field, which we believe hosts a potential material extension to the Barryroe field. During 2015, the company continued its evaluation of the extensive 2D and 3D seismic data acquired in 2014 over a number of its key exploration prospects in the Porcupine Basin resulting in a series of important technical updates. In September, it entered into a strategic exploration collaboration agreement with Schlumberger, designed to unlock the potential of our licences in the southern Porcupine and Goban Spur Basins. The company also participated in the 2015 Atlantic Margin Licence Bidding Round, which attracted a record number of bids. It also continued with its efforts to attract investment into some of our other assets.

Proxama Plc (PROX.L) Announced that a leading U.S. financial services technology company, who is an existing client, has signed a new contract to facilitate the roll out of EMV processing services to the clients’ own customer base of financial institutions. With EMV migration from magnetic stripe credit/debit cards to the more secure chip and PIN cards now fully underway in the US, the client has agreed to an upfront payment of close to $1 million to have total access to the company’s EMV processing services. In addition, the client has requested that the company continues to provide support and maintenance services and the ability to use other the company products such as PIN Manager and Payment Application Manager. Additionally, the company also announced in its trading update, that both digital payments and proximity marketing divisions have had a stronger second half in 2015, resulting in the group achieving income in excess of £3 million for the full year. Income in the second half has increased twofold against H1 and contracted income for 2016 has increased to £2.2 million creating improved forward visibility. The company looks forward to making a more detailed trading statement in January 2016.

Publishing Technology Plc (PTO.L) Announced that David Montgomery, who was appointed acting Chief Executive Officer (CEO) on October 15, has been confirmed as the company’s permanent CEO. Executive Chairman, Martyn Rose will now revert to the role of Non-Executive Chairman. These changes take place with immediate effect.

Redde Plc (REDD.L) Announced that the Group’s strong start to the year has continued through into December with increasing trading volumes. The FMG group has traded well since acquisition with a good pipeline of new business opportunities. Its trading profits for the six months to 31 December 2015 are now likely to exceed the company’s earlier expectations and will be materially ahead of the corresponding period last year. The Board expects to announce the results for the 6 months to 31 December 2015 at the end of February 2016. Based upon trading to date the Board would expect to declare an interim dividend at that time of not less than 4.40p per share.

ReNeuron Group Plc (RENE.L) Announced that it has held the inaugural meeting of its newly-established Scientific Advisory Board (“SAB”), which comprises nine leading academics and industry executives with a world-class breadth of expertise across the Company’s areas of operation. The meeting was chaired by Dr Mike Owen, who was recently appointed as a Non-executive Director of the Company.

Restore Plc (RST.L) Announced the acquisition of Diamond Relocations Limited, a commercial relocations business based in Croydon, Greater London. Diamond was purchased for a consideration of £971,000, funded from the company’s existing bank facilities.

Summit Germany Limited (SMTG.L) Announced in its trading update for the financial year 2015 to date that it made two acquisitions for €95 million were completed in the second half of the year. The acquired portfolios include 8 office properties with lettable area of 131,800 sqm at average net initial yield of 10.5%. In July 2015, it completed the purchase of a loan facility on a portfolio of six office properties in good locations in Germany. The total cost of the acquisition was €40 million, while the loan facility had a face value of €78 million. It has an aggregate lettable area of 68,400 sqm and occupancy rate of 72%. The properties currently generate an aggregate net annual rent of €5.5 million, reflecting a rental yield of 13.8% on the acquisition cost and in August 2015, it completed the acquisition of an office building complex in Stuttgart, at a total purchase price of approximately €55 million. The site of 135,000 sqm includes 63,400 sqm of lettable area at a current occupancy rate of 95% and bears rights for further development of additional 55,000 sqm. It is multi let to strong tenants with a current WALT of 9 years and has an aggregate current rental income of approximately € 4.5 million, with expected NOI of €4.1 million which reflects an average rental yield of 8.2% on acquisition costs. Following recent acquisitions, the company owns 103 assets with lettable area of. 857,000 sqm and net rent of €57 million p.a. (€63 million p.a. in full occupancy). The occupancy rate across the portfolio is 87%. Also, total rental income on annual basis increased from €46.5 million to €57.1 million mainly due to the recent acquisitions. The net rent on a like for like basis remained stable as income from new leases in 2015 was offset against decreases in rent resulting from the insolvency of a tenant and other lease expires. The rent level of new leases and renewals is 11% higher than the average rent rate across the portfolio in 2014. The company is focusing on long term holding of the majority of its portfolio while continuously seeking to improve its portfolio by either selling small and non-strategic assets or assets that maximize their upside potential. During the last 12 months the Group has sold 4 small assets for ca. €2.3 million. In addition, 3 additional small properties are in the process of sale with a total consideration of ca. €3 million. All sale prices are in the range of the properties’ book value. Further successful progress in thecCompany’s joint venture residential development in Berlin with pre-sales of 98%, 64% and 37% of the three projects, respectively.

Ted Baker Plc (TED.L) Announced that on 16 December 2015, it entered into a contract with Leysin Investments Limited to purchase Block B, Canal Reach, St Pancras Way, London (also known as The Ugly Brown Building) through Big Lobster Limited, a wholly owned subsidiary of Ted Baker (the “Acquisition”). The Ugly Brown Building is a 78,920 sq. ft. building currently occupied by Ted Baker as its head office. It has agreed to purchase the freehold property for £55.25 million plus costs of £3 million, which includes stamp duty and relevant acquisition costs. The Acquisition will be financed by the addition of a £60 million secured term loan to the company’s existing multi-currency revolving credit facility with The Royal Bank of Scotland and Barclays. The facilities contain appropriate financial covenants that will be tested on a quarterly basis. Meanwhile, British Airways Property Trustees Limited (“BAPTL”) has agreed to purchase Blocks A and C, Canal Reach, St Pancras Way, London, which are adjacent to The Ugly Brown Building, from Leysin Investments Limited.

Tlou Energy Ltd (TLOU.L) Announced, in its Lesedi CBM project update, that the Scoping Report which was submitted in 2014 was subsequently approved by the Botswanan Department of Environmental Affairs (DEA) in November 2015. After a preliminary work and DEA approval of the Scoping Report, the company submitted its final Environmental Impact Statement (EIS) on 15 December 2015. A review and approval of EIS by the DEA is in its final stages for the environmental process. The company expects the EIS approval to be received in the first half of 2016.

TP Group Plc (TPG.L) Announced that it has won two defence sector orders amounting to £1.95 million from Babcock International Group. The orders are for the overhaul of Submarine Atmosphere Control Systems during the refit of two UK Submarines. The work will be undertaken in Portsmouth for a period of over next two years.

Trinity Capital Plc (TRC.L) Announced, in its interim results for the period ended 30 September 2015, that Loss after tax was £1.3 million, compared £3.0 million. Basic and diluted loss per share stood at 0.6p, compared to 1.4p. It indicated that progress remains painfully slow in realising the three remaining Indian assets held by the company. Cash from sales of the property investments is the catalyst essential to permit the final resolution of the various issues faced by Trinity. However, the Company continues to be frustrated by a combination of the poor state of India’s property markets, our complicated relationship with the German funds managed by SachsenFonds and the inefficiencies of the Mauritian judicial system. Trinity’s net asset value declined by 7.3% to £17.2 million (8.2p per share) at 30 September 2015 from £18.6 million (8.8p per share) at 31 March 2015. The value of Trinity’s share of investments declined by 6.7% to £13.6 million (6.4p per share), caused largely by the 7% depreciation of the Indian Rupee against Sterling during the first half of the financial year. Due to commercial sensitivities, Trinity does not publish the value of its individual investments in India.

Tritax Big Box REIT Plc (BBOX.L) Announced, in its trading update as it enters the close period for the year ending 31 December 2015, that £1,261 million (net of acquisition costs) was invested in 25 Big Box assets let to 21 tenants. 20 standing assets and five pre-let forward funded developments with a combined floor space of 13.0 million sq. ft. (of which 2.8 million sq. ft. is under construction). 11 new investments were made in 2015. 3.0p per share dividend was paid for the six months ended 30 June 2015; targeting fully covered aggregate dividend of 6.0p per share for the year ending 31 December 2015. Share price total return of 20.9% over 2015 YTD and 35.7% since IPO in December 2013. £569.5 million of committed debt financing in place of which £375.1 million is currently drawn (34% LTV). Weighted average term to maturity of debt facilities of 4.7 years, increasing to 6.4 years with extension options.

Workspace Group Plc (WKP.L) Announced that it has been granted planning permission for the redevelopment of the Marshgate industrial estate (“Marshgate”) on Marshgate Lane in Stratford, E15 2NH. The two and a half acre site currently consists of 93,000 sq. ft. of light industrial space and was valued at £14 million at September 2015. The scheme will increase the employment density of the site and provide much needed housing for the Stratford area.