Tribal dips after profits warning By Geoff Foster
THERE was little in the way of festive cheer for shareholders of Tribal Group as shares of the education support services company sank to the bottom of the class following a profits warning. They fell 15p, or 9pc, to 148p after it said full-year profits will miss expectations following contract delays. Broker WH Ireland immediately slashed its current year pre-tax profit forecasts by 15pc to £13.5m and its target price to 245p from 275p.
The Tribal board said it was ‘unlikely that certain key milestones and completions will be achieved’ before the close of the financial year. However, deferred contracts would be recognised early next year and underpin expectations for 2015.
Softening the blow for miffed shareholders though was news of two more contract wins. Firstly, to provide a student management system across all technical and further education institutes in the state of Queensland, Australia, and, secondly, with the University of Alberta in Canada.
WH Ireland’s Nick Spoliar remains a buyer and believes the Queensland contract could almost be a second SALM – the schools contract in New South Wales which has generously outperformed its original target.
Australian fashion flash sale group MySale, which on Monday crashed 91.75p or 53pc on a shock profits warning, rallied 3.5p to 69.5p on bid hopes. The group, which is 25pc owned by TopShop and BhS billionaire Sir Philip Green, announced that chief executive Carl Jackson is considering acquiring, directly or indirectly, additional shares in the company worth up to £3m.
Jackson is part of a concert party with James Jackson, founder and vice-chairman, and certain other parties, who already holds 34.81pc of the equity. If any member of the concert party were to buy more shares it would normally trigger a general offer under Rule 9 of the Takeover Code. However, note 5 of the code states that the requirement for a bid under Rule 9 can be waived, where holders of shares carrying 50pc or more of the voting rights put it in writing that they would not accept such an offer.
MySale is currently now seeking such written statements from shareholders holding 50pc of more of the stock, none of whom are part of the concert party, and none of whom will sell any shares to Carl Jackson or anyone else. Watch this space!
The fragile Footsie was all over the shop again as the UK market remained in the vicelike grip of global economic and political uncertainties. Apart from worries about the bombed- out Russian rouble and oil price, fund managers were also nervous on expectations that the Fed would last night amend its forward guidance on interest rates by deleting the phrase ‘for a considerable time’ and replace it with ‘patient’ or ‘patience’. If it does, how would Wall Street react?
London’s elite index traded 91 points lower before rallying sharply towards the close to finish 4.65 points better at 6336.48, bolstered by an opening 130-point recovery on the Street of Dreams.
Reflecting a firmer oil price, Tullow Oil put on 13.7p more to 395.1p, BP 13.6p to 397.55p and BG Group 27.5p to 854.7p. But British Airways owner International Consolidated Airlines drifted 18.6p lower to 443.6p.
Insurer Catlin, operator of the biggest syndicate in the Lloyd’s of London market, soared 63p to 645p after a bid approach from XL Group, that values the group at a meaty £2.53bn. The possible offer is for 410p in cash and 0.130 shares per Catlin share. Amlin jumped 19.1p to 460.9p in sympathy.
The dire situation in Russia dragged miner Petropavlovsk 10.6pc down to 7.15p and Raven Russia 2.75p lower to 46.25p.
Buyers chased leisure and technology investment vehicle YOLO, which is run by ex-Thomas Cook boss Simon Robinson and has entrepreneur Chris Akers as a 5.55pc shareholder, up to 2.58p before it closed 0.4p better at 2.49p. YOLO owns a 2.3p stake in Gfinity, a gaming platform that allows competitive gaming for ‘ professional’ gamers, which is floating on AIM on Tuesday, raising £3.5m in the process.
Aminex rose 11pc to 1.88p after it progressed with the sale of up to 13pc of the Kiliwani North Development Licence in Tanzania to Solo Oil. Contract news helped Tricorn put on 1.75p to 14p. The tube manipulation specialist has signed a five-year agreement with a major British equipment manufacturer which is expected to generate £10m.
Following a £3.3m placing of 6m shares at 55p a pop, Safestay closed 2.5 off at 60.5p. The owner and operator of a luxury hostel brand, plans to use £2m to finance the renovation and refurbishment of its recently leased Holland Park property. A further £500,000 will be used to repay part of a shortterm loan provided by Bredbury Ltd. ÷ HEAVY-hitting fund manager Neil Woodford, with 20pc, and his successor at Invesco Perpetual, Mark Barnett, with almost 30pc, have put their weight behind Mercia Technologies which floats today on AIM. Placed at 50p by broker Cenkos Securities, the shares should attract good demand. Mercia is focused on the creation, funding, incubation and development of high-growth technology businesses.