It may be billed as a merger but analysts are clear which of National Express Group PLC (LSE:NEX) and Stagecoach PLC will be in control if the deal to put the two together goes through.
AJ Bell investment director Russ Mould said: “National Express is trying to buy Stagecoach, plain and simple. The benefits of parking the two businesses together include operating synergies, economies of scale and a bigger footprint for National Express in growth areas such as private coach hire and corporate transport.
“The starting gun on Stagecoach being a bona fide takeover target was fired in April when founders Sir Brian Souter and his sister Dame Ann Gloag sold just over 2% of the business. This was part of a plan to reduce the family ownership from 27.1% to 5% over the coming decade. In doing so, they have removed a major hurdle for any would-be suitor by declaring their intention to sell down the bulk of their holding.
“While the pair still have a significant stake, their willingness to start selling down should make it easier for National Express to convince them to accept its all-share offer.
“The competition authorities might have something to say about the two public transport operators coming together, but otherwise the deal looks fairly sensible.”
The share prices seem to bear this out.
Stagecoach has accelerated 24.91% to 85p while National Express is up “just” 9.24% at 243.6p.
2.14pm: Alliance Pharma sees jump in revenues and profit
Alliance Pharma PLC (AIM:APH, FRA:DVL) is looking healthy after strong first half results.
The group said revenues had risen 24% to GBP80.9mln while underlying profit before tax climbed by the same percentage to GBP20.1mln.
It said there was a good performance from scar treatment Kelo-cote, a rise in revenues from prescription medicines and a significant contribution from recently acquired Amberen, which provides relief for menopause symptoms.
Chief executive Peter Butterfield said: “The group has delivered another strong performance in the first half of 2021, with the uplift in revenue from our enlarged Consumer Healthcare business flowing through to pre-tax profits. We expect this core part of our business to continue to grow strongly during the remainder of the year, led by Kelo-cote and Amberen.
“We were very pleased with the first half performance from Amberen, which was acquired in December 2020 and has traded in line with our expectations. With the integration of the brand into our US-based operations now complete, we can focus on maximising the value of this key brand.
“Trading for the remainder of the financial year remains in line with market expectations.”
The company’s shares have climbed 3.85% to 104.89p.
11.59am: Real Good Food slumps after unveiling plans to delist from AIM
Real Good Food PLC (LSE:RGD) has moved back into profit and is upbeat about the outlook. But its shares have slumped after it said it was considering delisting from AIM.
The company sold its Brighter Foods business to The Hut Group for GBP35.6mln allowing it to cut debt and eliminate the pension scheme deficit.
Its remaining cake decoration businesses, Renshaw and Rainbow Dust Colours, made full year earnings of GBP0.8mln, allowing the overall group to move from a GBP1.6mln loss to a GBP0.2mln profit despite the impact of COVID-19.
It said in the first five months of the new financial year, revenues were up 33% on the same period last year and profits are ahead of the previous two full year figures. It said this was despite the short-term challenges and increased costs of logistics due to driver shortages and limited availability of shipping containers.
It has also launched new products with Marks and Spencer, Tesco, Asda, Aldi and more recently with Lidl.
Mike Holt, executive chairman, said: “Much has happened since 31 March 2020 in terms of making progress and restoring shareholder value. The Group has coped with the challenges of COVID-19 and has continued to improve underlying profitability. In addition, the debt burden was halved following the successful sale of Brighter Foods. Renshaw and Rainbow Dust Colours, our two remaining businesses, continue to improve their performance, and after a good start to the year, prospects are encouraging.”
But its shares are down 19.85% at 2.72p and this is why.
It said: “As stated at the time of announcing the sale of Brighter Foods Limited on 22 April 2021, the board has been considering all options to save costs and to return shareholder value.
“At the AGM, the independent directors, with the support of the rest of the board, will be proposing that the company cancels the listing of the company’s shares on AIM. This will save approximately GBP150,000 a year in costs and provide greater agility and flexibility to maximise shareholder value. The volume of shares traded is very small and an AIM listing adds a disproportionate expense and burden on the company. The company has arranged for a matched bargain facility to be in place by JP Jenkins.”
10.38am: Caspian Sunrise brightens after oil price surge brings it back into profit
Caspian Sunrise PLC (AIM:CASP) has seen its shares gush higher after it returned to profit.
The central Asian oil and gas company said it made a US$3.4mln first half profit compared to a US$14mln loss, despite a 16% drop in production.
It said: “The principal catalyst for the recovery in the group’s fortunes has been the dramatic improvement in both the world oil price and the price at which domestic production has to be sold in Kazakhstan.
“International prices have recovered from a low in the second quarter of 2020, of approximately US$16 per barrel to the current approximately US$75 per barrel and for the majority of the period under review were in excess of US$50 per barrel. The domestic price also recovered from a low of approximately US$6 per barrel to the current approximately US$20 per barrel, although this increase came too late to have much impact on the period under review.
“The outlook for world prices remains positive and we have no reason to expect anything other than further upwards movement in the domestic price.”
The company’s Caspian Explorer drilling vessel completed its first charter and negotiations for a second are at an advanced stage.
Caspian’s shares are up 6.67% at 3.2p.
9.59am: M&C Saatchi expects full year profits to beat forecasts as clients return after pandemic
Advertising and marketing group M&C Saatchi PLC (AIM:SAA) is in demand after a surge in half year profits and a prediction that the full year figures would beat forecasts.
First half revenues rose 21% and profits jumped from just GBP2mln to GBP10.5mln as its business recovered from the pandemic.
It said it had seen greater activity among existing clients and it also won new projects and new clients, helped by an increased focus on digital.
It added: “Whilst the onset of the pandemic created uncertainty around client investment, we are now seeing a renewed belief in marketing as the key lever for growth. Marketing spend levels are increasing as brands take advantage of stronger economic indicators and the recovery in consumer spending.”
The momentum from the first half has continued with important client retentions and new wins so full year profit before tax is expected to be “substantially” ahead of consensus.
Chief executive Moray MacLennan said: “These results mark a key turning point for M&C Saatchi. We have returned to growth with first half profits not only substantially ahead of 2020, but also surpassing 2019. Our focus on simplification and control, has continued to strengthen both our operating margin and balance sheet, which enables us to successfully pursue our strategy for growth.
“We have made rapid progress in the implementation of this strategy, most notably in accelerating M&C Saatchi’s proven expertise in providing digital and connected marketing solutions to meet the demands of a growing market.
“Our confidence in the future is reflected in the post-period-end decision to settle current put options in cash with the expectation that this continues thereby eliminating dilution for shareholders”.
The company’s shares have climbed 5.21% or 7.61p to 153.61p.
8.40am: Botswana Diamonds upbeat on Thorny River prospect after drilling programme
Shares in Botswana Diamonds PLC (AIM:BOD) are sparkling after positive drilling news from its Thorny River property in South Africa.
Nine holes were drilled to see if two kimberlite blows (or small pipes) were one contiguous body of ore, thus increasing the overall resource and improving the commercial prospects of the project.
The company said one hole intersected 19.1 metres of kimberlite zone, which was the biggest thickness found in all three drilling programmes to date. Another hole intersected a thickness of 13.5m of kimberlite zone.
It has begun work to create a model of the combined blows to estimate the potential resource with plans for a possible open cast mining.
Two new additional targets have been identified close to the current area. These could also be blows, thus increasing resources. They will be drilled.
Chairman John Teeling said: “This is an excellent set of results. The two blows are, as we hoped, connected – thus increasing the resource. The two thickest intersections close to the River Blow are particularly exciting. Given these results, we are now examining commercial mine alternatives”.
The shares are up 10.47% at 1.19p.
Also heading higher is gift-voucher provider Appreciate Group PLC (LSE:APP).
Its shares have added 7.97% to 29.8p after the company said trading had improved in the second quarter and was now ahead of the same period in the last two financial years.
In a statement for the annual meeting Laura Carstensen – who will be stepping down as chair of the company – said: “Corporate and Gifting billings in the second quarter are 14.6% ahead of levels seen in the 2020 full year (the last normal trading year before the pandemic) with year to date…billings now up 3.6%, a considerable improvement on the first quarter, which was 6.0% lower than the same period in 2020.
“Performance is also significantly better than the same period in the 2021 full year, which was severely impacted by the first lockdown. Corporate and Gifting billings for the year to date are up 28.1% on the comparable period in 2021. Billings of GBP40.7mln for the second quarter are broadly similar to the second quarter of 2021 GBP40.9mln) which benefitted from involvement in the free school meals initiative.
“Having enjoyed a strong third quarter peak trading in 2021, including our best ever December (boosted by corporate clients choosing to reward staff over traditional Christmas parties), we are focused on driving another strong performance in this key period for the current financial year.”
The Christmas savings business is expected to fall by 14%, but it plans a marketing campaign to boost next year’s business.