Evolution staff jump ship to Cenkos
COINCIDENCE? Maybe. Only 24 hours after broker and investment bank Evolution revealed it has entered into exclusive talks with Dutch bank ING to buy stockbroker Williams de Broe, its top small-cap sales team led by Jeremy Warner-Allen resigns to join Cenkos Securities, the specialist broking firm set up by Andy Stewart, the racehorse enthusiast who founded Collins Stewart.
Evolution fell 5½p to 164p as dealers heard rumours that another six people on the small-cap side could soon follow Warner-Allen and his men out of the door.
'It's like a veiled profits warning as far as Evolution is concerned,' said one trader. 'The team must have made about £30m in commission last year and will be very hard to replace'.
It is certainly a coup for Stewart as he builds Cenkos up towards a stockmarket float. He set the business up with Jo Nally, who for about 20 years was Williams de Broe's fundraiser for mining and energy groups.
New Smith Capital Partners, the specialist fund headed by ex-Merrill Lynch ' heavyweights' Michael Marks, Stephen Zimmerman and Paul Roy, owns 13% of Cenkos.
The selling pressure on Evolution shares also reflected fears that it could end up paying too much for Williams de Broe. Altium suggests it will fork out around £30m for the business, which would require restructuring costing £10m-£15m. Should Evolution swallow WdeB, it is less likely to become a takeover target.
Investec, which has often been mentioned in the same breath as HSBC (12p easier at 955p), soared 124p to a record 3220p following an upbeat trading statement ahead of annual results on May 18. The group has experienced a strong performance from all of its business units in the second-half of the year. Earnings per share for the year ended March are likely to be between 50%-60% higher at 215.4p.
Profit-taking in the wake of excellent interim results left Numis Corporation, the holding company of investment bank Numis, 14p easier at 357p. Pretax profits leapt 51% to £18.6m and the dividend doubled to 1.25p. Its corporate client list has jumped to 101 from 83 and £443m was raised for clients during the six month period.
Stronger than expected US data stoked inflation and interest rate concerns across the pond. New orders for US-made factory goods rose 4.2% in March, the biggest gain in orders in 10 months. Wall Street fell 53 points in the early stages which exerted downward pressure on a flat Footsie. The close in London was 72.1 points down at 6010.0.
Mortgage bank Northern Rock resisted the malaise, closing 26p higher at 1096p. Deutsche Bank lifted its target price to £13 from 1070p, stating the bank's long-term growth prospects are undervalued. It is also a prime takeover target.
Insurer Friends Provident shed 6¼p to 191¼p after unlisted Dutch insurer Eureko placed 77.4m shares at 191p a share with institutional investors.
Alexander Mining firmed 1½p to 27½p after appointing Arbuthnot Securities as its nominated adviser and stockbroker, replacing Evolution.
Severn Trent, which plans to demerge its UK waste management business Biffa this year, jumped 21p to 1182p on vague takeover talk.
Fashion retailer Next rose 24p to 1670p after Panmure's Philip Dorgan upgraded to buy. His target price is 1850p. It has been the most aggressive and consistent returner of capital shareholders in the retail sector and has the financial clout to still do far more.
After top broker UBS downgraded troubled iSoft to reduce and slashed its target price to 62p, shares of the company behind the National Health Service's computer software dropped a further 5½p to 112¾p. Despite recent denials, dealers are convinced that a heavily discounted rights issue is just around the corner.
TV production company Shed Productions lost 5p to 132½p on hearing that it has not been recommissioned to produce a sixth series of the popular drama Footballers' Wives for ITV. Chief executive Eileen Gallagher said the company is confident of meeting its forecasts for the current year.
• Aim-listed Gold Oil gushed ½p to 7⅜p on hefty buying which swelled turnover to 3.4m. Management are next week travelling to Peru and expect to get approval from the Peruvian government to commence drilling onshore.
It is the only independent oil company with interests in Peru and its exploration well in the Sechura Basin is apparently in an area the size of 14 North Sea oil blocks.
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