Market Report: Snake anti-venom puts bite into BTG
Thursday 04 October 2012
Brisk summer business usually comes in the shape of holidays, barbeques, and ice cream sales. But for BTG the summer sun boosts the flogging of snake anti-venom. BTG, the pharmaceutical group which was first created by the Government to protect British inventions back in the 1940s, shot up the FTSE 250 index after reporting that it had outperformed in the first half and was increasing its revenue expectations for the full year.
The group, which buys patents for new technologies and licenses them out, discovered a place at the top of the mid-caps with a share price rise of 30.1p to 363.2p.
The company said it expected sales of up to £215m for the year to March 2013, ahead of the £190m expected previously. Strong demand for its anti-venom CroFab, a good start to sales in the US of its cancer drug Voraxaze and growth in royalties from a prostate cancer drug helped it have a better six months than anticipated.
The update, ahead of its full-year results next month, was followed by upgrades from analysts at FinnCap and Panmure Gordon who raised their rating to hold from sell. Panmure scribes hiked their share price target to 400p from 328p.
When Liverpool's Criminal Records Bureau merges with the Independent Safeguarding Authority to form the oddly named Disclosure and Barring Service later this year, outsourcing group Capita's staff will no longer be working with them. The Home Office has picked a new supplier and Capita is out after 10 years. The decision sent Capita's shares spiralling down 12.5p to 763p.
Meanwhile, red-faced civil servants' mishandling of the West Coast rail contract prompted FirstGroup to slump more than 20 per cent.
Punters took the express train out of FirstGroup's shares, which lost 50.6p to 193.4p, following the Government's admission that due to "significant technical flaws" in the bidding process, the transport group's contract to run the franchise has been cancelled and the competition will have to be re-run.
FirstGroup won the 13-year contract on 15 August with a £5.5bn bid, promising new, faster trains and cheaper tickets.
The decision to pick the company prompted outrage from incumbent Virgin Rail and entrepreneur Sir Richard Branson, while investors at the time also feared that FirstGroup had submitted a risky bid and its shares lost 6 per cent in one session.
Jefferies' Joe Spooner said the "direct impact clearly falls on FirstGroup", while adding that for Virgin Group's partner on the line, Stagecoach, "West Coast was only ever a small opportunity... a second chance to compete for the franchise is a small positive". In response, Stagecoach steamed up 5.5p to 288.8p. Mr Spooner added: "In our opinion, delays in the franchising process are small negatives for Go-Ahead and National Express as they are shortlisted in other contests where the timetables look likely to slip."
Go-Ahead shares spluttered during the day but ended up 2p to 1,343p while National Express retreated 0.2p to 210.3p.
In an attempt to make up some of yesterday's falls, the FTSE 100 edged up 16.36 points to 5,825.81 as better-than-expected US services sector figures contrasted with the UK's disappointing slowing growth in the sector.
Traders on both sides of the pond gossiped about Astrazeneca's planned M&A activity. Earlier this week it suspended its share buyback programme to save money for new acquisitions and dealers think New York-based Forest Laboratories would be a good addition to its medicine cabinet. Astrazeneca's shares piled on 14.5p to 2,908p.
On Aim, Africa-focused agricultural business Agriterra has agreed a deal to sell off its legacy oil assets in Ethiopia to US oil major Marathon Oil for around £30m, but its shares lost 1.23p to 3.77p on the news. Meanwhile, oil explorer Bowleven, which has a block close by to the Ethiopian South Omo block, is the subject of vague bid rumours. Its shares gushed up 4.75p to 84p.
Private equity group EME Capital's approach to jeweller to the stars Theo Fennell has won an extension from the Takeover Panel. It has until 31 October to make a formal offer for the Aim-listed jeweller. Theo Fennell's shares gently sparkled up 0.25p to 12.25p.
Management consultancy and software group 1Spatial booked gains of 1.38p to 3.88p after confirming it has signed a five-year sales contract with an unnamed US government bureau.
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