FTSE 100 Finishes Friday Up, Ending Quarter on -2-

Jersey Oil & Gas Can Expect Upside Potential From North Sea Farm-Out Deal

1109 GMT - Jersey Oil & Gas' farm-out announcement with a significant U.K. North sea operator should be well received by investors, finnCap analyst Jonathan Wright says in a note. Despite the oil industry's backlash to the U.K. Energy Profits Levy, the fact remains that for large North sea producers the Greater Buchan development offers a highly commercial project, the economics of which are supercharged by the major tax shelter the investment provides as under the EPL 91% of new investment can be used to offset tax, Wright says. "While there is always value leakage in farm-outs, even under our conservative assumptions there is significant upside potential for the shares from a successful deal," he says. Shares are up 48% at 227 pence. ([e-mail])

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Computacenter Sees Another Year of Progress

1056 GMT - Computacenter's outlook for 2023 highlights buoyant top line trends so far this year, with margin challenges nowhere near those of 2022, Jefferies says in a note after the British IT group posted strong 2022 results. "The outlook comments acknowledge some puts and takes but the overall message is confidence in the business prospects and expectations for another year of progress in 2023," the brokerage says, adding that it continues to believe investors undervalue the scope for cash-backed growth. Jefferies rates the stock buy. Shares rise 1.5% at 2,116 pence, and have risen 10.7% year to date. ([e-mail])

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Inchcape's Deal for Mercedes' Indonesian Business Is Positive, Says Citi

1039 GMT - Inchcape's deal to buy Mercedes-Benz's Indonesian distribution business highlights its strategic opportunity, says Citi in a note after the automotive distributor said it had agreed to acquire the subsidiaries of the German car maker in a joint venture with local partner Indomobil. "This should be taken positively, as it continues to highlight the willingness of [original equipment manufacturers] to work with Inchcape," says analyst Arthur Truslove. Citi rates the stock buy and has a target price of 1,125 pence. Inchcape shares edge up 0.5% at 782.5 pence. ([e-mail])

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NCC Group Shares See Worst Fall Ever After Guidance Cut

1035 GMT - NCC Group shares fall 37% at 96 pence, paring losses after opening down 45% to its lowest price since late 2010, as the U.K. cybersecurity group cut its adjusted operating profit guidance on increased market volatility. "Despite the overall demand for regulatory/compliance advice, it appears NCC isn't immune from the general macroeconomic headwinds and as a result delayed investment by corporates," says Goodbody analyst Patrick O'Donnell in a note on the "disappointing" update, which implies a very low weighting to the second half. Goodbody had been cautious on fiscal 2024, seeing short-term demand patterns at play outweighing longer-term prospects and now pulls this caution back to fiscal numbers. Goodbody rates the stock buy. ([e-mail])

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FireAngel Should See Strong Demand Continue in Coming Years

1030 GMT - FireAngel's new contract win underlines strong demand which looks likely to continue in the longer term, Shore Capital analyst Rob Sanders writes in a research note. The U.K. supplier of home-safety products has signed a three-year contract worth GBP6.0 million with British Gas Services Ltd. This adds further weight to the sentiment that there will be strong demand for FireAngel's products in the coming years, Shore Capital says. "We continue to see substantial potential upside in the share price longer term," Sanders says. Shore Capital acts as broker to FireAngel and as such doesn't provide recommendations on the stock. Shares are up 5.2% at 10.13 pence. ([e-mail])

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HealthBeacon's New Launch Seen as a Key Near-Term Catalyst

1024 GMT - HealthBeacon's upcoming specialty pharmacy distribution launch is a key near-term catalyst, Goodbody analyst Adam Barker writes in a research note after the Irish digital therapeutics company posted its 2022 results. "Importantly, the company note that there is outlook for significant revenue growth in the near term given the launch of specialty pharmacy distribution in 2Q 2023, which should deliver momentum through to 1Q of 2024," Barker says. Goodbody keeps a buy rating on the stock. Shares are up 5.8% at EUR0.91. ([e-mail])

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Vanquis's Rapid Growth Faces Rising Risk

1018 GMT - Vanquis Banking's growth in an uncertain environment continues though its cost of risk is set to increase, Peel Hunt says in a note after the consumer-finance business posted an adjusted pretax profit for 2022 ahead of consensus. The investment case hangs on its rapid growth potential and a possible earnings rebasing against high impairment risks, it says. Macro risks are also unusually high for Vanquis given its fast growth in a weak economy, much of which is on an unsecured basis, the brokerage notes. "Our conviction levels in estimates are relatively low," it adds. Peel Hunt has a hold rating on the stock. ([e-mail])

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Ocado Gains After Winning Patent-Infringement Case

1009 GMT - Ocado Group gains 2% after the U.K. online grocer and retail-technology supplier said the U.K. High Court had ruled in its favor in a patent-infringement lawsuit brought by AutoStore Holdings Ltd. Norwegian robotics company AutoStore had been highly unlikely to win its claims against Ocado, Jefferies says. AutoStore's shares drop 10%, though the Norwegian company said the ruling would not affect its business or operations. While the ruling was likely to put AutoStore's stock under pressure, any impact on its commercial success, guidance or long-term opportunity looked set to be limited, Jefferies analysts say, adding that Autostore is likely to face a small cash outflow to pay Ocado's legal fees. ([e-mail])

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March UK House Price Fall Shows Further Market Rebalancing

0947 GMT - With March seeing a further decline in U.K. annual house price growth, the adjusting and rebalancing of the market continues, OnTheMarket Chief Executive Jason Tebb says, citing building society Nationwide's new data. Rising interest rates and a higher cost-of-living contributed to a slower activity, inevitably hitting the short-term confidence of the average property-seeking consumer, the online property portal's boss says in a market comment. Pressure on household budgets has been considerable and hasn't yet eased, although many believe inflation and interest rates are close to peaking, Tebb says. "Despite these challenging conditions, there are those buyers and sellers who simply have to move and are getting on with it," Tebb says. Shares in Barratt Developments and Taylor Wimpey are both down 0.3%, while Persimmon shares fall 1%.([e-mail])

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Vanquis Banking's Transition Reduces Risk While Increasing Market Opportunity

0933 GMT - Vanquis Banking's recent transition to become a specialist banking business focused in the mid-cost credit space has significantly increased the size of its market opportunity while also reducing risk, Shore Capital says in a note after the consumer-finance company posted a 2022 results beat and confident outlook. Management's expectation to maintain its net interest margin at 2022 levels in 2023 reflects its ability to use cheap retail deposits to support the vehicle finance business and replace more expensive wholesale, analyst Gary Greenwood says. Shore has Vanquis--previously Provident Financial--as a house stock. Shares rise 2.1% to 237.2 pence. ([e-mail])

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Beazley Upgraded by UBS Amid Strong Balance Sheet

0923 GMT - The pullback in Beazley's stock was too severe and the specialty insurer now has a stronger balance sheet, UBS says in a note, double-upgrading its rating on the stock to sell from buy. "Viewing with a clean lens, we do believe the capital surplus is higher in absolute terms, reserve buffers remain robust--albeit less so than peers," analysts at the brokerage say, adding that earnings-per-share growth is strong in the near-medium term, and that its price-to-earnings ratio can rerate from its historically low current level. Shares rise 2.2% to 598 pence but are down 12% year to date, which UBS attributes to a higher implied cost of capital surrounding the November equity raise and also consensus EPS downgrades given a lower premium exit level. ([e-mail])

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(END) Dow Jones Newswires

03-31-23 1215ET