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Market Update

AA Profit Jumps on Cost Control, Cobham Rights Issue at 41% Discount


Author: Sarla Buch
ticker.com
Last Update: 6:57 AM ET March 28 2017

4:00 PM Frankfurt – Roadside assistance provider AA raised dividend after pretax profit jumped and membership rose for the first time in nine years. Evotec revenues surged. Ladbrokes net swung to a loss on impairment charges. Tesco agreed to pay fine. Wolseley to exit from Nordics.

In London trading, FTSE 100 index rose 9.76 to 7,303.26 and in Frankfurt the DAX index increased 68.35 or 0.6% to 12,064.20.

In Paris, CAC 40 index edged down 3.1 to 5,014.51.

AA Plc soared 5.4% to 269.60 pence after the U.K.-based roadside assistance provider said revenues in the year ending in January fell 1.1% from a year ago to £973 million.

Net income in the period tumbled 91% from a year ago to £6 million from £69 million and diluted earnings per share declined to 1 penny from 13.3 pence.

AA said operating profit in the year plunged 6.4% to £326 million while the roadside assistance provider said pretax profit surged to £100 million from £9 million in a year ago period and added additional 4,000 individual members in 2016.

Cobham Plc gained 1.5% to 128.65 pence after the U.K.-based defense products supplier said it will raise as much as £512.4 million through the sale of 683.1 million new ordinary shares at 75 pence per share in a right offering. The company plans to use proceeds to pay down debt.

The issue price is a 41% discount to closing price of 126.8 pence of Monday.

Evotec AG soared 9.8% to €8.89 after Germany-based drugs and biotechnology products maker said total group revenues in the year ending in December jumped 29% from a year ago to €164.5 million.

Net profit in the year surged 63% from a year ago to €26.8 million form €16.5 million and diluted earnings per share increased to €0.20 from €0.12.

Ladbrokes Coral Group Plc slipped 1.8% to 132.90 pence after the U.K.-based gambling services provider reported group revenues in the year ending in December soared 25% from a year ago to £1.5 billion.

Net in the year swung to a loss of £204.3 million from profit of £5.1 million in the year ago period and diluted loss per share swung to 17.5 pence from diluted earnings per share of 0.5 pence.

The gambling services provider said net loss in the year was linked to non-trading items including £194.9 million non-cash impairment charge and £128.7 million related to merger and integration costs.

Newly merged £2.2 billion Ladbrokes Coral said pro forma revenue in the year jumped 11% to £2.4 billion and pro forma operating profit surged 22% to £264.3 million from a year ago period.

Tesco Plc slid 0.1% to 189.75 pence after the U.K.-based food retailer agreed to pay financial penalty of £129 million to settle the investigation set by the U.K. Serious Fraud Office for accounting manipulation in 2014.

Tesco said it will take a one-time charge of £235 million in its fiscal year 2016 results that are scheduled to release on April 12.

""""What happened is a huge source of regret to all of us at Tesco but we are a different business now,"""" chief executive officer Dave Lewis said.

Shareholders Schroders and Artisan Partners, each controlling 9% stake in the retailer, argued the £3.7 billion bid for wholesaler Booker Group Plc is “too high.”

Schroders fund manager said it’s an “expensive option” and chief executive Dave Lewis said the company is """"completely committed"""" to the Booker deal.

Wolseley Plc jumped 5.1% to 5,130 pence after the U.K.-based plumbing and heating products supplier reported revenues in the first-half ending in January surged 24.5% from a year ago to £8.5 billion.

Net income in the period declined 19.1% from a year ago to £216 million from £267 million and diluted earnings per share slumped to 83.1 pence from 103.6 pence.

The company booked an impairment charge of £102 million and decided to exit from the Nordic region.

Separately, building materials supplier proposed to change the name to Ferguson Plc effective end of July, subject to shareholder approval.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc