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News & Tips: NMC Health, BCA Marketplace, Inmarsat & more

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With Donald Trump set to meet Kim Jong-Un tomorrow, traders have quickly shrugged off a fractious end to the G7 summit over the weekend. Click here for The Trader Nicole Elliott’s latest thoughts on the markets. 

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Shares in Middle East-focused healthcare provider NMC Health (NMC) added almost 5 per cent after it announced a joint venture in Saudi Arabia. The deal with Hossana Investment Company, which is the investment arm of Saudi’s largest pension fund General Organisation for Social Insurance (GOSI), will see the creation of a new national healthcare company in the Kingdom. GOSI will transfer its 39 per cent stake in the National Medical Care Company into the joint venture which, when combined with NMC’s existing interests will have 1,489 private beds in the country and be strongly positioned to participate in the expected privatisation of healthcare in Saudi Arabia in the coming years as well as building on NMC’s existing offering. We retain our buy recommendation.

Shares in XL Media (XLM) plummeted 27 per cent in morning trading after the online marketing specialist downgraded its revenue and adjusted cash profit expectations for this year. The closure of the Australian market last year and regulatory uncertainty over certain European markets this year means management expects revenue to come in at $130m, down on $138m the prior year, and “marginally” lower adjusted cash profits than 2017. We place our buy recommendation under review.  

BCA Marketplace (BCA) said that it has rejected a takeover proposal from private equity investment group Apax Partners LLP. The owner of webuyanycar.com said Apax had approached the company with a conditional all-cash offer of 200p a share, an effective 5 per cent premium to the previous trading day’s closing price for BCA. Recommendation under review.

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Inmarsat (ISAT) shares climbed a further 12 per cent this morning, following Friday’s news it had rejected a takeover proposal from US peer Echostar. However, the satellite telecoms giant rejected the proposal, asserting that it “very significantly undervalued” the company and its prospects.

More bad news for Rolls-Royce (RR.), as news emerged that a costly problem affecting the durability of a certain type of Trent 1000 engine had spread to another model and would require further inspections. The Derby-based engine maker has been struggling to remedy a problem with the compressor in the Trent 1000 package C engines that power Boeing’s 787 Dreamliner jet, forcing planes to be grounded while remedial actions are taken.

Quilter – formerly Old Mutual Wealth – has unveiled the price range for its IPO later this month as between 125 and 155p a share. With around 9.6 per cent of the share capital to be made available, that would give Quilter a market capitalisation of between £2.4bn and £2.9bn. The IPO is part of the managed separation of Old Mutual (OML), with the shares ceasing trading on 22 June.   

Full year results from IG Design Group (IGR) exceeded analyst expectations. The group has managed to expand profits well in advance of sales growth, with underlying operating profit up 33 per cent in constant currency to £22.8m. The US, Europe and Australia were the standout performers, with the UK business returning to growth. The year end cash position was also improved at £4.4m. 

Shares in Redcentric (RCN) continued to fall this morning after a trading update on Friday afternoon sent the price down almost 10 per cent. The IT services provider has been seeing cancellations of public sector hosting contracts and weakness in new business sales. Efforts to mitigate the impact of the slowdown are underway, but will not be enough to prevent reductions in FY19 profits. This taken with the front-loaded costs following the group winning a network contract with Yorkshire and Humber has led management to revise revenues and cash profits down 5 and 10 per cent for FY19, respectively. 

A potential new float announced today could give investors an easy way to access cryptocurrency mining. Argo Blockchain, which wants to raise £20m as part of a main market listing, offers ‘Mining as a Service’ which means cryptocurrency fans can mine one of four cryptocurrencies, including Bitcoin and Ethereum, via a subscription payment to Argo which does the mining itself at its facility in Canada. Users can pay a subscription to access Argo’s facilities rather than have to spend time and considerable money setting up their own server. 

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