Today I’m looking at two FTSE-listed stocks hitting the airwaves in end-of-week trade.
Solid numbers
Shares in Sanne Group (LSE: SNN) edged to fresh one-month highs on Friday following the release of positive first half numbers.
Sanne — which specialises in corporate, fund and private client administration — said that its core business lines had enjoyed “good growth” during January-June, with performance “driven by strong momentum from new business opportunities delivered in the latter part of 2015.”
Sanne said that this strong momentum had continued during the first half of 2016, with new business from new and existing clients totalling £6.5m on a projected annualised fee basis.
Meanwhile, Sanne also said it remains “well placed to continue to service the ongoing structuring and administration requirements of its clients,” despite the impact of Brexit on the wider economy. Indeed, the firm boasts “comprehensive and regulated operational capabilities in a number of premier European financial centres, both inside and outside the EU,” such as the Channel Islands, London, Dublin and Luxembourg.
And Sanne remains busy on the acquisition front to build market share and improve its services. The company also announced the acquisition of Dutch corporate services provider Sorato Trust today for €2m.
The City expects Sanne to keep earnings rolling with growth of 25% and 17% in 2016 and 2017 respectively.
Still, these readings create P/E ratings of 25 times for this year and 21.4 times for 2017, sailing above the big-cap forward average of 15 times. And given that Sanne can’t be considered immune from the impact of June’s referendum, I reckon investors can afford to give the firm a miss at current prices.
A delicious discovery
Fossil fuel giant Premier Oil (LSE: PMO) lit up the market with a positive operational update on Friday, the stock recently dealing 7% higher on the day.
Premier Oil has made a significant discovery at the Bagpuss prospect in the Outer Moray Firth project in the North Sea, the firm announced, noting that “the sands have between 25% and 33% porosity and indications are that the oil is heavy.”
The well has now been plugged and abandoned, Premier Oil added, and the driller will now analyse its findings to ascertain the well’s commercial potential.
The number crunchers expect Premier Oil to remain lossmaking right through to 2017, however, as the energy’s play’s capex-heavy work — allied with historically-low crude prices — pressure the bottom line.
Indeed, Premier Oil’s vast exploration and production costs continue to take chunks out of the balance sheet. Net debt registered at a bulky $2.6bn as of June, and the firm remains locked in renegotiation talks with its lenders. Tests on Premier Oil’s financial covenants have been put back yet again in recent days, this time until the end of August.
While today’s operational news is certainly promising, it doesn’t change my opinion that Premier Oil is a risk too far at present. I reckon crude prices are in danger of prolonged weakness as abundant supply growth keeps inventories locked at bursting point.
