Despite the holiday season, there’s plenty for stock market investors to digest today.
A bounce for Network International Holdings (LSE:NETW) shares at the expense of short-sellers alongside a return to form for Hochschild Mining (LSE:HOC) helped keep the FTSE 250 index on the front foot today.
Mid-cap investors were further lifted by a £50 million buyback of shares at flow control and instrumentation business Rotork (LSE:ROR), while on AIM there was a much-needed revival for shares in Novacyt (LSE:NCYT) after the Covid-19 testing firm's recent fall back to earth.
The FTSE 250 index remained at a record level, with the latest rise of 75 points to 23,772.36 also reflecting the 5% improvement for shares in housebuilder Redrow (LSE:RDW) and further rallies for outsourcer Capita (LSE:CPI) and corporate merchandise firm 4imprint.
Payment solutions firm Network International was the biggest riser in the second tier after its new guidance for annual revenues slightly higher than in 2019 sent shares up 9% or 31.4p to 384p.
The company, which is focused on the Middle East and Africa markets, listed in April 2019 and has been one of London's most shorted stocks with 4.4% of shares currently out on loan.
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Chief executive Nandan Mer said the majority of the company's key performance metrics are now ahead of pre-pandemic levels, including the signing of new merchant and bank customers.
At the same time, however, the company is yet to see a full recovery in its merchant solutions business, due to exposure to international spending and strong competition. Mer said: “This provides us with the opportunity to more proactively improve our performance and accelerate growth in this area.”
Mining gains for this mid-cap
The latest results from Peruvian miner Hochschild sent shares up 3.8p to 155.3p, although they remain a long way short of the 254p seen before the election of the socialist candidate Pedro Castillo in the country's presidential election.
The election result raised the prospect of higher mining taxes for a company with two underground mines in southern Peru and one in southern Argentina.
Analysts at RBC Capital said today's half-year results were slightly weaker than expected, with the pre-announcement of production, underlying earnings and net debt in a recent update meaning the only new information was on profitability and free cash flow.
The miss to RBCs numbers came from higher than expected taxes, finance and exceptional costs but the broker said the overall performance showed shares at an attractive level based on their 260p target price. Hochschild has delayed announcing an interim dividend while it works through an accounting issue relating to its historical reserves.
Rotork shares, meanwhile, were 3.6p higher at 338.8p after revealing it plans to buy back up to 2% of its market cap starting over the next month. The company said the move to return excess cash would not dampen its appetite for strategic investments as it confirmed it is also looking for suitable opportunities.
Peel Hunt raised its price target to 424p from 416p following the announcement.
Novacyt aims high
On AIM, there was relief for Novacyt supporters after the stock bounced off recent lows — lifting 12%, or 35p, to 337p — thanks to an encouraging half-year trading update.
With the company still in a contract dispute with the Department of Health and Social Care (DHSC) over sales worth £40.8 million, there was encouragement in the figures showing the generation of £54 million sales from overseas and the growing UK private market for Covid-19 testing in film, media, travel and corporate industries.
Novacyt reiterated its guidance for £100 million of revenues this year, excluding the DHSC contract, and said the potential for higher infection rates as winter approaches in the northern hemisphere should increase the need for Covid-19 testing.
It also announced new contract agreements, including one with DHSC worth £4.7 million for the supply of its PROmate Covid-19 tests to the NHS.
Novacyt's shares were 1,190p in January, having risen from 13p at the start of 2020 on the back of its early mover advantage on testing. But they fell below 300p last week due to the impact of the DHSC dispute and the roll-out of the Covid-19 vaccine programme.
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