Market report: Wednesday close
ENTERPRISE INNS led the FTSE 100 index upward today after Deutsche Bank suggested the shares are significantly undervalued.
Deutsche, Enterprise Inns' house broker, has reiterated its buy rating, but lifted its price target to 1200p from 1060p on the back of higher growth assumptions and its view that the pubs operator will increase its share buyback programme to £1bn by the end of 2007.
Blue-chips were on the front foot overall after a rise of 18 points by the Dow. The FTSE 100 advanced 41.0 points to 5929.3 even though oil prices shifted back above $70 a barrel ahead of tomorrow's United Nations deadline for Iran to halt its nuclear programme.
Despite the rise, oil shares were mostly weaker. Royal Dutch Shell eased 6p to 1898p and BG Group was off 3.5p at 689p. BP - which was under pressure yesterday in the wake of news that chief executive Lord Browne had been ordered by a Houston judge to testify in a case relating to the fatal 2005 fire and explosion at the company's Texas City refinery - held steady at 593p.
Antofagasta was buoyed yesterday on the back of robust first-half results, but ABN Amro thinks that there is not much further to go. With the shares unchanged at 442p, the broker has cut its recommendation on the Chilean copper producer to hold from buy. Its 480p target suggests there is only about a 9% upside for the shares.
Anglo-Dutch computer services firm LogicaCMG, off 6¼p at 153½p, demonstrated its case for European domination today following its agreed £882m bid for Nordic rival WM-data last week. A similar deal, the £630m takeover of France's Unilog, last year has boosted first half revenues by 40% to £1.24bn.
Chief executive Martin Read said underlying operating profits rose by 22% to £77.1m before the costs associated with integrating Unilog. He added that demand for IT services continues to rise across Europe but the UK remains the most competitive market.
LogicaCMG has so much demand in this country and the Netherlands that it is once again having to take on subcontractors to supplement its own staff.
Construction group Costain was 3p lower at 47½p after announcing an interim pre-tax loss of £20.7m compared with a profit of £7.5m a year ago. The company also incurred 'significant writedowns' in the first half.
However, analysts remained positive, arguing that with underlying profit rising to £10.1m from £7.7m, the loss should be seen in the context of the management's attempt to refocus the business.
Johnston Press, the country's second-largest local newspaper publisher, sees no early end to the current drought in advertising. Only property ads were up in the last six months with employment worst-hit, and more recently motors showing a sharp decline as dealerships continued to merge or be taken over.
However, despite a 3% dip in interim pretax profit to £79.8m, analysts were encouraged that the advertising market had not deteriorated further and the shares picked up 19½p to 402p.
Defence technology group Radstone Technology leapt 47p to 372p after receiving a £109.2m hostile takeover approach from Italian computer company Eurotech.
It is the third time the Italian firm has made an all-cash offer for the British manufacturer, and this time Eurotech has the support of several of Radstone's major shareholders.
AIM-listed platinum company Ridge Mining jumped 2½p to 38½p after securing $42m (£22m) in financing for its Blue Ridge development in South Africa in exchange for a 50% stake in the project. It said the deal paved the way for production to start in 2008.
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