Wednesday's most followed: JJB Sports, Roxi Petroleum, Avia Health Informatics, Lloyds, Standard Chartered, Vectura GroupReported by Proactive Investors on Wednesday, 15 August 2012 (on August 15, 2012)
Yesterday’s quarterly earnings report from Dick’s Sporting Goods drew the market's attention to struggling sportswear retailer* JJB Sports (LON:JJB)*, which was among the most searched for UK stocks on Google Finance today.
Shares in JJB tumbled 22.5 percent to 3.35 pence after Dick’s wrote off the value of its investment in the British group, whose performance failed to live up to its expectations.
Dick’s invested an initial £20 million in new shares and convertible loan notes in April. The American group also received an option to invest a further £20 million in convertible loan notes to become the main shareholder in JJB with a 61 percent stake.
Earlier this summer, JJB revealed that it was trying to secure more funding for its turnaround plan after seeing its like for like sales slump 8.7 percent in the 24 weeks to July 15.
Trading during that period missed expectations largely due to poor replica kit sales during the Euro 2012 football championship in addition to unusually wet weather in the UK.
The US$32.4 million impairment charge resulted in a 28 percent slump in Dick’s second quarter earnings. The report was otherwise bullish the group upping its full year profit forecast to US$2.51 per share from US$2.47, while the guidance for growth like for like sales was raised to between four and five percent from three to four percent previously.
Oil and gas group *Kea Petroleum (LON:KEA)*, which also showed up among popular Google searches, and sector peer *Roxi Petroleum (LON:RXP)* rose sharply in early trade after updating investors on their operations.
Kea said that during the initial clean up flow period of four days, oil flow rates from the well reached up to 290 barrels per day (bopd) and gas flow rates were 2.2 million cubic feet per day (mmcfpd).
The company noted that the well achieved these flow rates despite being choked back to ensure no formation damage, adding that no formation water was produced during the period.
The first shipment of oil from the Puka field was made on August 8 this year.
Well production is now temporarily halted until Thursday to establish initial pressure build up. The main flow period will then start and last up to 30 days.
It is expected that flow rates from the main flow period will be higher than the control rates recorded during the clean up.
Kea rallied 12.5 percent to 9.13 pence in early deals, while Roxi jumped 8.5 percent to 3.25 pence as it unveiled flow rates from well NK8 on the Galaz field in Kazakhstan.
The NK8 well has reached its total depth and has been tested, flowing at a rate of 161 barrels of oil per day (bopd) using a 5mm choke, 197 bopd on a 6mm choke and 251 bopd on a 7mm choke.
The company now plans to test a different interval.
Roxi noted that it has previously announced ongoing production of 156 bopd from the NK6 well and test production range to up to 620 bopd from the NK7 well using a 7mm choke.
NK7 is currently producing 180-190 bopd using a 5mm choke.
Aggregate gross production from the three wells is expected to reach around 500 bopd.
Today’s top riser on the London Stock Exchange was *Avia Health Informatics (LON:AVIA)*.
The maker of computer systems to help diagnose patients in remote locations, soared 83 percent to 8.25 pence after unveiling a proposed agreement for a US$2 million credit facility, with an initial US$425,000 draw down.
This facility should provide sufficient capital for Avia’s projected requirements.
The banking sector also generated plenty of interest today as *Lloyds (LON:LLOY)* announced the sale of a private equity portfolio for just over £1 billion, while *Standard Chartered (LON:STAN)* has reached a settlement agreement with US regulators.
The New York State Department of Financial Services (DFS) has fined Standard Chartered US$340 million for allegedly helping Iran launder as much as US$250 billion.
The DFS alleged that between 2001 and 2010, Standard Chartered’s US unit operated as a “rogue institution” allowing billions of dollars of money from Iranian institutions to flow through it.
The head of the DFS, Benjamin Lawsky, has called for the bank to appear before a hearing on August 15 to justify why its licence should not be taken away.
This means that the bank will be able to keep its New York licence. When the allegations were made a month ago, analysts suggested the Asia-focused bank could lose its clearing licence for US dollars, in effect wiping as much as 40 per cent off the group’s earnings.
Peer Lloyds, which is part-owned by the taxpayer, has sold a portfolio of private equity-related investments to Collar Capital for £1.03 billion in cash.
The part-nationalised banking group said the deal should result in a pre-tax gain and the sale proceeds will be used for “general capital purposes”.
The sale, which is expected to be completed in the final quarter of the year, is part of Lloyds’ strategy of de-risking its balance sheet and reducing its non-core assets.
In the first half of the year, Lloyds sold £23 billion of non-core assets, taking the total to £118 billion, which was ahead of expectations.
Other popular stock exchange announcements included an interim management statement from *Vectura Group (LON:VEC)*, which lifted its shares five percent to 75.75 in morning trade.
The biotech group said its performance has been in line with expectations so far in the financial year as its key pipeline products have made strong progress.
In addition, Vectura will achieve its first milestone under the VR315 licence agreement signed in August last year of US$3 million in revenues for the period to end September.
Vectura is eligible to receive up to a further US$32 million upon achievement of future pre-determined development milestones.
These milestones, together with the initial payment of US$10 million, total US$45 million.
Vectura will also receive a royalty from all VR315 sales.
“We anticipate a number of major catalysts in the second half of 2012, including the EU filing of QVA149 and the launch of NVA237 in Europe,” said chief executive of Vectura Chris Blackwell.
“As these programmes mature, we expect the resultant milestones and royalties to transform our revenue streams and financial profile.”
Links: Full news story
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