Shore fortunes spur shareout
TOTTENHAM Hotspur fanatic Howard Shore was an ambitious 25-year-old when he founded Shore Capital 30 years ago as an independent stockbroker with an initial investment of £10,000.
Back in 2013 when the shares were changing hands at a friendless 22p, some dealers were adamant that they deserved a rerating solely because Shore sat on a majority 58pc stake in Spectrum Investments, owner of DBD, a German telecoms business, which holds licences to cover regional wireless and broadband services across Germany.
They were confident an industry giant would dial up a telephone number deal that would be hard for Shore to refuse.
That happened earlier this year when Shore Capital booked a profit of £9.1m from the sale of some national and regional radio spectrum licences to Deutsche Telekom. Howard Shore had acquired DBD for £2.885m in March 2011.
Shore Capital’s shares rose 10p to 417.5p yesterday, valuing the group at £101m, following impressive interims and after 41pc shareholder and executive chairman Shore announced cash from the sale of DBD would be distributed among loyal shareholders.
Shore’s financial arm saw pre-tax profits in the half-year to the end of June rise to £9.5m, almost double the £5m made a year earlier.
During the period, its capital markets team advised on two initial public offerings and six secondary fundraisings, including the €92m float by Applegreen, the Irish petrol forecourt retailer, which was the biggest IPO fundraising on AIM this year. Shore also won Wm Morrison Supermarkets, its first Footsie 100 client.
The closing of some hefty short positions at the end of what has been a traumatic thirdquarter, the worst since 2011 which has seen more than £6trillion wiped off share values, helped the Footsie rally an impressive 152.37 points to 6061.61 and the FTSE 250 by 240.53 points to 16683.02.
Wall Street reflected the better trend with an early gain of 170 points with fund managers in New York waiting for further clues on the timing of a rate hike when Federal Reserve boss Janet Yellen and St Louis Federal President James Bullard addressed a conference in St Louis late on Wednesday.
Commodity trader Glencore, which had dragged the fragile Footsie forever lower during the quarter amid fears about its debt levels, recovered a further 11.3p to 91.55p, some 37pc above Monday’s all-time low of 66.67p. Broker JP Morgan Cazenove advised clients that Glencore is undervalued on fundamentals and it has a target price of 150p. Chairman Tony Hayward also bought 100,000 shares at 90.8p a pop.
Supermarkets were also boosted by a 31.7p or 14pc gain in J Sainsbury after boss Mike Coupe said he expected the group to be ‘moderately’ ahead of the £548m full-year profits forecast by sector analysts. Rivals Tesco added 11.9p to 183.2p and Wm Morrison 10p to 166.1p in sympathy.
Insurer Aviva advanced 23.6p to 452p after analysts at Barclays forecast that the group can return £1bn on annual buybacks from 2017, on top of £1.2bn of dividends, an effective yield of 12.5pc. Aviva is its top pick in the sector and its target price is 627p.
Victrex, which is the world’s leading producer of PEEK, a high performance plastic with strong substitution growth potential for industrial and medical applications, jumped 110p to 1772p on a Liberum Capital recommendation and price target of £22. The broker reckons it’s a great time to buy.
Workspace rose 10.5p to 938p following the acquisition of a former Mecca Bingo site in London which adjoins an existing 100,000 sq ft office and workshop building. The combined site provides nearly six acres of land with significant redevelopment potential.
Further consideration of Sports Direct entrepreneur Mike Ashley’s purchase of an 18.9pc stake lifted Findel 15p further to 243p. Ashley has his sights set on Kitbag, Findel’s online sports retailing business. He has taken a stake in Findel potentially to launch a takeover of the group or scupper any plans Findel may have of selling Kitbag to anyone else.
Impellam rose 10p to 805p in the wake of a recent City roadshow where management banged the drum about prospects. The AIMlisted provider of managed services and specialist staffing expertise bought technology staffing firm Lorien for £22.3m last November. Lord Ashcroft is a major shareholder.
Vague rumours of a Chinese bid attracted buyers to Australian miner Thor Mining, 0.01p dearer at 0.05p.
Zoltav Resources, in which Arkadiy Abramovich, the eldest son of Chelsea owner Roman, owns a controlling 40pc stake, gushed 4.5p or 11pc to 44p.
Buyers climbed aboard on hearing that Alexander Gorodetsky, the former boss of TNK-BP Ukraine, has joined the board. GATWICK-based aerospace services company Strat Aero flew 37pc or 1.62p higher to 6p on acquisition news. It has bought a leading UAV/drone surveying and inspection company, Geocurve Holdings, which enhances the board’s strategy to build a technology company specialising in drones. The stock still has a long way to go to reach the November 2014 high of 15p but further deals could follow.