Market Report: Halfords is revving up after UBS boost - Sharewatch - Business - The Independent

Market Report: Halfords is revving up after UBS boost

 

Investors piled into Halfords yesterday following an upgrade from analysts at UBS, which sent shares in the car repair-to-bikes retailer racing up 19p to 329p. The company has had a mixed time of late and last week admitted profits will fall over the next two years while it invests £100m to turn around its performance.

Matt Davies, the former boss of Pets at Home, who joined Halfords last October, said that about half of this investment would be spent on refurbishing its stores, which customers have criticised for being “tired” looking, often short of stock and offering “variable” levels of service.

However, UBS still seemed convinced about the company’s potential: “Halfords is a brand with high market share in its core markets, good resonance with consumers, and finally is undertaking some of the investment required to succeed as a specialist retailer,” its analysts said.

“The level of investment required, in addition to the dividend cut, came as a surprise, but we consider that this will put Halfords on a path to sustainable earnings growth in the medium term.”

Higher up the scale, investors flirted with Smiths Group shares after the company admitted it had received an approach for its medical division, which some reckon could fetch a cool £2bn.

The FTSE 100 engineering group said it was in “early-stage” talks with an unnamed suitor, believed to be United States healthcare group CareFusion. The division, which made about 35 per cent of the group’s operating profit last year, supplies equipment to hospitals and emergency services.

Most of its products are manufactured in the US, Britain, Mexico and Italy. Shares in the company rose more than 3 per cent at one stage before falling back 11p to 1379p.

Smiths was one of the standout performers on a rather uninspiring day of trading on the London Stock Exchange. The FTSE 100 index fell 73.9 points to 6,583.09 and the wider FTSE 250 lost 91.82 points to 14,350.92.

Despite the drop, experts said we have not yet seen the back of the market rally, which has seen the Footsie threaten to break through its all-time high  of 6,930.20.

“On balance, I think we are stabilising now,” said Peter Garnry, a strategist at Saxo Bank. “I still think if we look in the medium term, the momentum in equities is still intact, valuations are still benign and there is still an interest to get exposure to equities. For this momentum to stop, it would require some kind of a political or market hiccup in Europe.”

Insurers Old Mutual, Legal & General, Standard Life  and Prudential were among the biggest fallers on  the market.

Further down the scale, Gem Diamonds’ shares were in sparkling form after the miner sold a 164-carat diamond for  $9m (£6m). The company said the precious stone was discovered at its flagship Letseng mine in Lesotho last month. The shares rose 3p to 140p.

“The recovery and sale of this high-quality white diamond reinforces Letseng’s position as the premier source of exceptional diamonds,” its chief executive Clifford Elphick said.  

The diamond will almost certainly head to Antwerp. It is reckoned that 70 per cent of the world’s diamonds pass through three streets in the Belgian city, which is the world’s largest diamond-dealing centre.

Gem Diamonds said that another gem discovered at the mine, a 103-carat diamond, which is not of the same high quality as the 164-carat one, will be sold next month. News of the sale came after brokers at Liberum reiterated a “buy” call on the stock earlier this week.

“We reiterate Gem Diamonds as our top pick within the small to mid-cap miners, with the diamond market showing stronger signals of a structured recovery,” Liberum said.

Elsewhere, film distribution group Metrodome said it planned to delist from London’s junior AIM. The company, whose films include A Royal Affair, starring Mads Mikkelsen and Alicia Vikander, will  seek shareholder approval from investors at its annual meeting on 25 June.

Looking ahead to the next few working days, Nick Lewis, head of risk at Capital Spreads, was upbeat.  “Perhaps next week, with a plethora of US economic data due to be released, culminating in the non-farm payroll numbers next Friday, the market can pick out some clearer direction,” he said.

Buy

Harvey Nash

Pile into Harvey Nash, if you want to follow the advice of Numis’s Steve Woolf. He notes the recruiter’s fourth-quarter figures yesterday showed “trading trends remain unchanged from the update a month ago” and has stuck to his “buy” rating and 90p price target (the stock is currently 72p). Saying “there is greater value in the niche/specialist staffers”, he adds that Harvey Nash’s shares are “looking attractive as further optimism of recovery continues to drip into the market.”

Sell

Wolseley

Ditch Wolseley, is the call from Panmure Gordon. The heating and plumbing giant releases its third-quarter figures next Tuesday and the broker’s analyst, Andy Brown, kept his “sell” advice and 2,500p target price for shares trading at 3,378p. He believes “the valuation is up with events and uncertainty surrounding its European operations is more likely to cause a negative surprise”.

Hold

LondonMetric

Keep LondonMetric, says Oriel Securities. After the newly merged property company’s full-year results yesterday, the broker reiterated its “hold” recommendation. While pointing out the shares have underperformed the sector and the market in 2013, it adds this “is likely to continue until the combined business/management gains a stronger following and the dividend cover is restored”.

Life and Style
tech
Arts and Entertainment
Robin Thicke's video for 'Blurred Lines' has been criticised for condoning rape
music
News
Paper trail: the wedding photograph found in the rubble after 9/11 – it took Elizabeth Keefe 13 years to find the people in it
newsWho are the people in this photo? It took Elizabeth Stringer Keefe 13 years to find out
Voices
Yes supporters gather outside the Usher Hall, which is hosting a Night for Scotland in Edinburgh
voicesBen Judah: Is there a third option for England and Scotland that keeps everyone happy?
PROMOTED VIDEO
Arts and Entertainment
Matt Damon as Jason Bourne in The Bourne Ultimatum (2007)
filmMatt Damon in talks to return
News
peopleThe report and photo dedicated to the actress’s decolletage has, unsurprisingly, provoked anger
Arts and Entertainment
Evil eye: Douglas Adams in 'mad genius' pose
booksNew biography sheds light on comic genius of Douglas Adams
Life and Style
tech... and together they're worth at least £100 million
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
filmsDaniel Craig is believed to be donning skies as 007 for the first time
Arts and Entertainment
Fringe show: 'Cilla', with Sheridan Smith in the title role and Aneurin Barnard as her future husband Bobby Willis
tvEllen E Jones on ITV's 'Cilla'
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
Bono and Apple CEO Tim Cook announced U2's surprise new album at the iPhone 6 launch
tech(but you can't escape: Bono is always on your iPhone)
Sport
Tim Wiese
sport
Life and Style
Kim Kardashian drawn backlash over her sexy swimsuit selfie, called 'disgusting' and 'nasty'
fashionCritics say magazine only pays attention to fashion trends among rich, white women
Arts and Entertainment
TVShows like Agents of S.H.I.E.L.D are little more than marketing tools
Arts and Entertainment
Hit the roof: hot-tub cinema east London
architectureFrom pools to football pitches, rooftop living is looking up
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Sales Executive

£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

Payroll & Accounts Assistant

£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...

SQL Developer - Watford/NW London - £280 - £320 p/d - 6 months

£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Senior BA - Insurance **URGENT**

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week