Renew Holdings Could Capitalize on GBP640 Bln UK Infrastructure Spend

Renew Holdings is a good opportunity for investors looking to benefit from the U.K. government's commitment to invest GBP640 billion in infrastructure, Shore Capital says. What's more, the U.K. engineering-services company's variable cost-plus contracts leave it well positioned to pass inflationary pressures on to customers and its public-sector-driven revenue protects it from economic downturns, Shore adds. "We continue to believe Renew has a lower risk profile than the market perceives, possibly due to associations with peers servicing much larger fixed contracts," the U.K. investment group says. Shore Capital has a buy rating on the stock. Shares trade up 3.8% at 736 pence.

 
Companies News: 

Sage Group Says 1Q Was in Line; Backs FY 2022 Guidance

Sage Group PLC said Wednesday that growth was in line with expectations in the first quarter of its fiscal 2022 and it backed its guidance for the full year.

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U.K. Watchdog Issues Enforcement Order on National Express, Stagecoach Deal

The U.K. Competition and Markets Authority on Wednesday issued an initial enforcement order on National Express Group PLC's planned takeover of Stagecoach Group PLC, preventing the companies from fully combining while it considers the deal.

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Fresnillo Operations in Mexico Hit by Omicron Variant, New Labor Rules

Fresnillo PLC on Wednesday said that the pandemic and the new labor reform in Mexico is hampering its mining operations, and forecast lower gold production for this year.

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Brewin Dolphin 1Q Total Funds Under Management Rose

Brewin Dolphin Holdings PLC said Wednesday that its total funds under management rose in the first quarter of fiscal 2022, benefiting from growth across both its direct and indirect business.

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Playtech Notes Media Speculation on Future; Reiterates Support for Aristocrat Bid

Playtech PLC said Wednesday that it has noted recent media speculation on its future strategy and that it reiterates its recommendation that shareholders vote in favor of the offer from Aristocrat Leisure Ltd.

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Wizz Air 3Q Pretax Loss Widened; Warns on 4Q Results

Wizz Air Holdings PLC on Wednesday reported a widened pretax loss for the third quarter of fiscal 2022 after booking significantly higher prices and seeing the average revenue per passenger decrease, and warned of a hit from the impact of the Omicron Covid-19 variant in the last quarter of the year.

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Tullow Oil Sees 2021 Free Cash Flow Ahead of Guidance

Tullow Oil PLC said Wednesday that it expects to report better-than-expected free cash flow for 2021, reflecting supportive oil prices, focus on costs and favorable working capital movements.

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Bloomsbury Publishing Says FY 2022 Revenue, Profit to Beat Expectations

Bloomsbury Publishing PLC said Wednesday that it expects to report revenue and profit ahead of market expectations for fiscal 2022.

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Digital 9 Infrastructure Raises GBP95.2 Mln via Share Placing

Digital 9 Infrastructure PLC said Wednesday that it has raised 95.2 million pounds ($128.6 million) via the share placing announced earlier this month.

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Pets at Home Expects FY2022 Underlying Pretax Pft to Beat Market Views After Strong 3Q

Pets at Home Group PLC said Wednesday that revenue increased in the third quarter of fiscal 2022, and that it expects to post a full-year underlying pretax profit above market expectations.

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Quilter 4Q Assets Under Management Rose 13%

Quilter PLC said Wednesday that assets under management rose 13% in the fourth quarter of 2021.

 
Market Talk: 

Abrdn's Interactive Investor Deal Might Spark Growth Fears

1142 GMT - Abrdn's planned acquisition of investment firm Interactive Investor makes sense, but it might prompt questions about the fund manager's growth outlook, Berenberg says. The deal is logical as the U.K. investment-platform market is fast-growing with strong structural trends, though it might compound concerns about Abrdn's investment-management business, Berenberg says. "If Abrdn used the GBP1.5 billion paid for II to buy back shares, it would be 40% EPS-accretive. Without meaningful buybacks, investors may question whether the core business can achieve long-term growth," Berenberg analysts say, downgrading Abrdn to hold from buy. Meanwhile, Berenberg says Amundi is its preferred asset manager with a buy rating, but keeps its sell rating on Ashmore Group due to concerns about flows. (philip.waller@wsj.com)

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Tullow's 2022 Guidance Seen as Cautious

1059 GMT - Tullow Oil has released a trading update which includes a positive end to 2021 and cautious forecasts for 2022, RBC analyst Al Stanton says. Production for 2021 was in line with expectations, but free cash flow was ahead of guidance and year-end net debt was lower than expected, he says. As for 2022, production guidance is in line with expectations, although clouded slightly by the Occidental Petroleum deal in Ghana, Stanton says. Moreover, the capital and abandonment expenditure budget is ahead of forecasts, and the company's hedging strategy limit exposure to oil price surges, Stanton says. Shares slip 0.8% to 56.38 pence.

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Sage Seen as a Long-Term Holding With Revenue Growth Potential

1057 GMT - Sage Group's organic revenue growth should accelerate to around 6% for FY 2022, Shore Capital says, as a shrinking base of declining revenues has less of a drag and cloud migration continues as the product portfolio improves. The U.K. investment group does warn though that it doubts whether the software company can deliver a positive surprise for the period without remarkably strong new customer acquisition. Shore Capital says Sage is a sound long-term holding as it continues its transition to software subscription and Shore has a hold rating on the stock. Shares trade down 3.9% at 733 pence.

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Wizz Air Yet to Find Post-Pandemic Rhythm, Davy Says

1042 GMT - Wizz Air Holdings has yet to find its post-coronavirus rhythm, Davy says after the European budget airline reported a widened third-quarter pretax loss and warned of a hit from the Omicron Covid-19 variant in the last quarter of the year. The results were weak, with a net loss of EUR268 million compared to consensus of EUR235 million and Davy's estimate of EUR237 million, the brokerage says. "Another set of underwhelming financials shows its high-capacity growth needs to be matched with strong in-market demand and its cost base needs full aircraft utilization to generate positive economics," Davy analysts say. "The long-term growth story is intact, but we see a more unpredictable and prolonged financial recovery than most." Shares rise 3.7%.

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Wizz Air's Future Seen as Bright if Expansion Plans Are Successful

1041 GMT - Despite Wizz Air posting a 3Q loss, this can be largely attributed to its ambitious expansion plans which include trebling aircraft to 500 by the end of the decade, Adam Vettese at eToro says. Although rapidly rising fuel prices and weaker demand due to Omicron mean the budget airline expects further losses in the coming months, it expects to recover by the summer, and looking beyond that its future looks particularly bright if the expansion is successful, Vettese says. "It's been a difficult pandemic for airlines, but there seems to be light at the end of the tunnel for the sector, particularly those that operate at the budget end of the market," Vettese says. Shares are up 3.6% at 4,410 pence.

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Fresnillo Should Bounce Back After a Likely Very Weak 2022

Fresnillo's guidance for 2022 is 23% lower than consensus, reflecting reduced labor availability after a new contractor law in Mexico and delays at the Juanicipio project, RBC Capital Markets says. Shares in the precious-metals mining company fall 12% after the announcement. Fresnillo has a long life set of assets, however, which should see material improvement following what seems will be an extremely poor 2022, the Canadian bank says. "This leaves the shares in an interesting position considering there has already been a derating, the balance sheet remains strong, and considering the wider volatility in capital markets, potential for its gold/silver optionality see improving pricing as the year progresses," RBC says

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Fresnillo May Face Consensus Downgrades After 4Q

0946 GMT - Fresnillo's fourth-quarter results fell short of hopes, raising the prospect of consensus downgrades for the Mexican silver miner, Citigroup says. Operational results were below expectations as the mining company reported multiple headwinds at its Mexican operations, including higher-than-expected labor shortages due to reforms announced by the government coming into effect from Sept. 1, Citi says. "Production guidance for 2022 for both silver and gold is weaker than our expectations, which could drive consensus downgrades, in our view," Citi analyst Krishan Agarwal says.

 

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

(END) Dow Jones Newswires

January 26, 2022 07:05 ET (12:05 GMT)

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