FTSE Flat, Tullow Oil Still a Sell Despite Progress, Panmure Says

09/15/2021 | 06:25am

Tullow Oil Still a Sell Despite Progress, Panmure Says

Tullow Oil is moving forward, but there is more to do, says Panmure Gordon after the Africa-focused oil producer reported a first-half profit and narrowed 2021 production guidance toward the upper end of its range. While early signs of progress from its new strategy are encouraging, FTSE 250-listed Tullow remains a long way from restoring the dividend and offering the growth potential investors typically seek from exploration and production companies, Panmure says. "The company is fully valued at current levels and there are numerous better alternatives for investors seeking exposure to the E&P sector," Panmure analyst Ashley Kelty says, increasing the brokerage's target price to 45 pence from 44 pence, but reiterating its sell recommendation. Shares rise 7% to 48 pence.

 
Companies News: 

Pharos Energy Posts Net Profit, Decline in Revenue

Pharos Energy PLC said Wednesday that revenue declined in the first half but the company swung to a profit after an impairment charge hit earnings in the same period of the previous year.

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AssetCo Appoints Campbell Fleming as CEO

AssetCo PLC said Wednesday that Campbell Fleming will be the company's chief executive officer from Oct. 2.

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Trackwise Designs Swung to Pretax Loss in 1H

Trackwise Designs PLC said Wednesday that it swung to a pretax loss in the first half of the year, although revenue rose.

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Trinity E&P Swung to 1H Net Profit as Oil Prices Rose

Trinity Exploration & Production PLC on Wednesday reported a swing to net profit for the first half, as its underlying performance was boosted by stronger oil prices.

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Anpario 1H Pretax Profit Rose But Logistics Costs Hit Gross Margin

Anpario PLC said Wednesday that its pretax profit rose in the first half of 2021 but revenue was largely flat and logistics costs hit its gross margins.

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Panoply Shares Rise as Five-Month Performance Tops Expectations

Shares in Panoply Holdings PLC rose sharply on Wednesday after it said business was significantly ahead of expectations for the first five months of its fiscal year and raised its guidance for the year.

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Restore Says 3Q Marked By Positive Trading Momentum

Restore PLC has backed its growth target for the year after positive trading momentum so far in the third quarter.

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Actual Experience Appoints Kirsten English as Chairwoman

Actual Experience PLC said Wednesday that Kirsten English will replace Chairman Stephen Davidson, who will retire after the company's next annual general meeting in March.

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Fintel Signs Fintech, Distribution Agreement With Tatton; Sells Verbatim for GBP5.8 Mln

Fintel PLC said Wednesday that it has signed a fintech and distribution agreement with Tatton Asset Management PLC, which includes the sale of Verbatim, its fund management business, for a cash consideration of up to 5.8 million pounds ($8 million).

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Renewables Infrastructure Group to Raise GBP200 Mln

Renewables Infrastructure Group Ltd. said on Wednesday that it will raise 200 million pounds ($276.9 million) by issuing about 161.3 million ordinary shares.

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TinyBuild Posts Lower 1H Pretax Profit

Videogames company tinyBuild Inc. said Wednesday that pretax profit for the first half of the year fell on one-off costs, as it acquired Russian development studio Bad Pixel.

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Science in Sport Booked 1H Pretax Loss; 2H Started With Strong Sales

Science in Sport PLC said Wednesday that it booked a pretax loss in the first six months of 2021, while sales were dynamic in July and August.

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HgCapital Trust Agrees to Sell Achilles to Bridgepoint

HgCapital Trust PLC said Wednesday that it has agreed to sell its supply-chain risk and performance management company Achilles to Bridgepoint Group PLC for an undisclosed sum.

 
Market Talk: 

Fevertree's Margin Outlook to Cause 2022 Consensus Downgrades

0946 GMT - Fevertree's first-half results were unsurprising but its relatively cautious stance on margin improvement in 2022 is likely to bring down consensus forecasts, Citi says. The drinks manufacturer said it expects a marginal improvement in its Ebitda margin. Citi says consensus forecasts currently assume a 140-basis-point improvement, so the guidance is set to cause a low-single-digit cut to consensus earnings per share forecasts. "We don't see the results today as a catalyst for the shares' performance to improve near-term. We continue to think that further share price outperformance relies on Fevertree delivering ahead of the sales guidance," Citi says.

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Fevertree 1H Profit Rises, But Costs, Supply Woes Weigh

0941 GMT - Fevertree Drinks gains 1% after the mixer-maker reported higher first-half pretax profit, though rising costs and supply issues weighed. Fevertree sales have benefited from the re-opening of bars and continued strong sales in shops and supermarkets, Hargreaves Lansdown says. "However, like many businesses, Fevertree has had to contend with rising logistics costs--especially in shipping product across the Atlantic," HL analyst Nicholas Hyett says. "With input costs also rising and heavy-goods vehicle shortages creating some bottlenecks, disruption could get worse before it gets better. New bottling partners across the pond will help reduce the headwind next year, but in the short term, it's weighing on margins and means profit growth has been slower."

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BOE Likely to Maintain Stimulus, Supporting Corporate Profits, Stocks

The Bank of England is unlikely to speed up scaling back stimulus, despite a steep increase in consumer prices in August, which should be supportive for the rebound of corporate profits and the equity market, says Ben Laidler, global markets strategist at multi-asset investment platform eToro. U.K. annual CPI inflation surged to a 9-year high of 3.2% in August, marking the biggest monthly jump in the annual rate on record. Yet Laidler expects the Bank of England to remove policy stimulus slowly as bank officials remain keen to support the economic recovery. "We see this stimulus staying for an extended period, whilst growth uncertainties remain high, and much of the inflation acceleration one-off," he says.

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Tullow Oil Makes Progress, But Debt-Cutting Stays Key

0920 GMT - Tullow Oil gains 6% after the Africa-focused oil producer reported a first-half profit and narrowed 2021 production guidance toward the upper end of its range. Tullow has made good progress in 1H to stabilize the business by completing its debt refinancing, while also improving operational performance from its key assets in Ghana, Citigroup says. Still, balance-sheet gearing remains high, with debt reduction still a key priority. "Tullow's new strategy looks the right approach, targeting lower-risk opportunities to enhance value from its West African portfolio. However, the FY21 cashflow guidance, despite the higher macro environment, highlights the continued challenge to balance re-investment in its core Ghana assets and de-leverage the balance sheet," Citi says.

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Trustpilot's 1H Likely to Prompt Revenue Forecast Upgrades

0904 GMT - Trustpilot's first-half results were solid and Goodbody said it is likely to upgrade its 2021 revenue forecasts by 4.5% after the company guided for its 2021 performance to mirror 1H constant currency growth. After a subdued 2020, results for the consumer-reviews platform reflect the business's increased momentum and reacceleration toward historic growth rates, Goodbody says. Its improved retention rates are also a sign of the quality of its product offering, the Irish brokerage says. "Given a strong market position of the brand both in the U.K. and growing demand for its platform as penetration rates grow globally, we see Trustpilot as a strong play in this space," the broker says. Goodbody rates the stock at a buy.

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Strong UK Inflation, Jobs Data Add Pressure on BOE to Cut Monetary Support

0824 GMT - Consumer prices in the U.K. grew at their fastest pace in almost a decade in August, adding more pressure to the Bank of England to scale back pandemic-era monetary policy support, says Shane O'Neill, head of interest rates for Validus Risk Management. Commenting on annual CPI inflation accelerating 3.2% in August, he says inflation and Tuesday's solid jobs data "will give some support to those members of the Monetary Policy Committee who want to starting reducing stimulus sooner rather than later." Yesterday's labor data showed the number of payroll employees back above pre-pandemic levels.

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Jump in UK Inflation Unlikely to Sway Next Week's BOE Decision

0814 GMT - The surge in consumer prices in the U.K. in August was not unexpected and is unlikely to trigger a monetary policy reaction at the Bank of England's policy meeting next week, says Derrick Dunne, chief executive officer of YOU Asset Management. "Given that the spike was not unexpected, inflation itself is unlikely to spur a shift in monetary policy this month," he says, adding that the next week's meeting will more likely focus on Tuesday's employment data. Still "the current rate of quantitative easing can't last forever, and savers and investors should continue to anticipate a rise in interest rates at some point next year, if not before." Annual CPI inflation accelerated to 3.2% in August, beating expectations in a WSJ poll.

Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka Halas at sarka.halas@wsj.com

(END) Dow Jones Newswires

09-15-21 0624ET

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