Citywire for Financial Professionals
Share this page:
Stay connected:


Citywire printed articles sponsored by:

View the rest of this gallery online at

The Expert View: Old Mutual, Travis Perkins and Admiral

Our daily roundup of analyst commentary on shares, also including Hunting and Abcam.

by Michelle McGagh on Mar 08, 2016 at 05:00

If you would like to receive news alerts on any of the stocks mentioned in The Expert View, click on the star icons below to add them to your favourites.

Key stats
Market capitalisation£9,480m
No. of shares out4,929m
No. of shares floating4,548m
No. of common shareholdersnot stated
No. of employees61583
Trading volume (10 day avg.)9m
Profit before tax£607m
Earnings per share12.74p
Cashflow per share23.52p
Cash per share100.75p

*Correct as at 7 Mar 2016

Private equity firms eye Old Mutual

Shore Capital believes there is a ‘distinct possibility’ of Old Mutual (OML) announcing a demerger or disposal of the wealth arm.

Shore Capital analyst Eamonn Flanagan reiterated his ‘hold’ recommendation but does not have a target price on the stock following rumours that the group was to be split up. The shares jumped 6.1% to 190.7p yesterday.

‘We note the media speculation…regarding the future of Old Mutual Wealth, with a number of private equity firms rumoured to be interested in bidding for it,’ he said. ‘In addition, we note [yesterday’s] announcement from the company that the results of its strategic review will be announced with its results on Friday.

‘We believe that such a disposal or demerger of Old Mutual Wealth is a distinct possibility. The interaction with the South African life and banking operations is pretty limited and, indeed, probably introduces the conglomerate discount that the stock has traded on for quite a while. In addition, we remind readers of the group’s previous record of such radical moves, such as the sale of Skandia’s Scandinavian business a few years ago, and the subsequent return of capital.’

Key stats
Market capitalisation£1,266m
No. of shares out202m
No. of shares floating169m
No. of common shareholdersnot stated
No. of employees782
Trading volume (10 day avg.)1m
Profit before tax£37m
Earnings per share18.57p
Cashflow per share22.57p
Cash per share28.38p

*Correct as at 7 Mar 2016

Abcam results show strengthening position

Strong sales growth at antibody supplier Abcam (ABC) shows the company has strengthened its competitive edge.

Peel Hunt analyst Charles Hall retained his ‘buy’ recommendation but put the target price ‘under review following first-half results. The shares tumbled 8.1% to 627.5p yesterday.

‘Abcam delivered impressive sales growth in H1 of 17.2% in constant currency, which is ahead of company guidance and our forecast,’ he said. ‘Abcam continues to grow at 3-4x the rate in the market. The shares have continued to perform well and have gone through our target price.

‘Abcam continues to strengthen its competitive position, which is demonstrated with the strong sales growth. The step-up in investment in product development, e-commerce, marketing and infrastructure will hold back profit growth in the short term, but the strong top-line performance should reassure that the company will return to healthy double-digit earnings growth.’

He added that acquisitions ‘should continue to be a key feature of the growth story and the cash on the balance sheet provides significant firepower’.

Key stats
Market capitalisation£5,495m
No. of shares out282m
No. of shares floating195m
No. of common shareholdersnot stated
No. of employees6917
Trading volume (10 day avg.)1m
Profit before tax£300m
Earnings per share107.14p
Cashflow per share109.31p
Cash per share94.22p

*Correct as at 7 Mar 2016

Admiral reports ‘striking’ UK growth

Insurer Admiral (ADM) has reported stronger than expected UK growth, which analysts expect to continue.

Numis analyst Nick Johnson retained his ‘add’ recommendation and increased the target price from £20.00 to £21.45. The shares edged 0.9% higher to £19.62 yesterday.

‘Admiral’s full-year 2015 results showed stronger than expected growth in UK motor customers and striking growth in early-stage UK home insurance business,’ he said.

‘We think both segments will achieve continued good growth, driven by Admiral’s proven margin advantage, ongoing rate rises in UK motor and start of cross-sell initiatives in UK home. Our earnings per share forecasts increase by 8% for full-year 2016 and full-year 2017. We remain positive on the shares based on value creation from UK growth and longer-term potential for the international businesses.’

Key stats
Market capitalisation£612m
No. of shares out149m
No. of shares floating119m
No. of common shareholdersnot stated
No. of employees4182
Trading volume (10 day avg.)1m
Turnover570m USD
Profit before tax-162m USD
Earnings per share-1.10 USD
Cashflow per share-0.70 USD
Cash per share0.28 USD

*Correct as at 7 Mar 2016

Hunting downgraded: market ignoring US slowdown risks

Oil industry energy provider Hunting (HTG) has been downgraded following weak 2015 results.

Liberum analyst Andrew Whittock downgraded his recommendation from ‘hold’ to ‘sell’ with a 310p target price. The shares fell 4.6% to 410.3p yesterday.

‘The 2015 results were as weak as expected and the dividend maintained,’ he said. ‘Cash flow looked good and net debt is a manageable $110 million.

‘US markets are challenging and no guidance for 2016 was provided. The balance sheet offers flexibility for new ventures but revenues and margins in H2 2015 were weak and may have deteriorated. We reflect these in our forecasts and our fair valuation remains around 310p.

‘The market is ignoring the risk of a prolonged US slowdown.’

Key stats
Market capitalisation£4,478m
No. of shares out250m
No. of shares floating242m
No. of common shareholdersnot stated
No. of employees23480
Trading volume (10 day avg.)1m
Profit before tax£168m
Earnings per share66.25p
Cashflow per share106.21p
Cash per share33.55p

*Correct as at 7 Mar 2016

Travis Perkins on track in the long term

Builders’ merchants Travis Perkins (TPK) is expected to reward investors in the long term.

Jefferies analyst Sam Cullen retained his ‘buy’ recommendation but reduced the target price from £24.50 to £23.90. The shares rose 12p to £17.95 yesterday.

‘With markets recovering post the H2 slowdown last year and the group delivering on its longer term strategy, Travis remains our top pick in the distribution space,’ he said.

‘We continue to believe the investment in the supply chain and e-commerce will pay long term dividends, helping the group grow ahead of the underlying market.’

He added the longer term strategy was on track despite small changes to estimates.

‘Slower growth in the final two months of 2015 lowers the base for 2016 and beyond and a higher interest charge and greater number of shares in issue further dilutes earnings,’ said Cullen.

‘The reduced price target is a reflection of these changes and a higher debt figure, a results of freehold property purchases. However, the longer term strategy remains on track. Growth is greatest in those verticals most exposed to e-commerce and omni-channel, giving us confidence in the current direction of travel.’

More about this:

Look up the shares

  • Old Mutual PLC (OML.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Abcam PLC (ABCA.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Hunting PLC (HTG.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Admiral Group PLC (ADML.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them
  • Travis Perkins PLC (TPK.L)
    Register or Sign in to receive email alerts for items in your favourites whenever we write about them


More galleries

 See all

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

Sorry, this link is not
quite ready yet