Stock Watch: 12-16 February 2018

Emma-Lou Montgomery
Emma-Lou Montgomery
Fidelity Personal Investing9 February 2018

Full-year results from Acacia Mining (ACA) will be the first update we get from the Tanzanian gold producer since Peter Geleta, the group’s former head of organisational effectiveness, took over as interim chief executive.

It has been a tough year for Acacia, which has been unable to export gold from Tanzania since March and has put its largest mine in the country on care and maintenance. The problems were compounded, it seemed, when back in November both its chief executive Brad Gordon and finance director Andrew Wray resigned from the FTSE 250 company.

The export ban is still on-going and is the result of a row over unpaid taxes. That has, unsurprisingly, hit both profits and the company’s share price hard. Last month, Barrick Gold, Acacia’s majority-owner, agreed to cede 16% of Acacia’s three mines in Tanzania to the state and pay $300 million as the first steps towards settling a six-month dispute over its subsidiary’s operations. But the dispute is far from over.

This month it announced that it has bought $2million worth of options to protect it against lower gold prices as it waits for a final agreement on the exports ban. It has purchased 120,000 ounce of gold put options at a price of $1,320 per troy ounce. The contracts will expire in instalments of 30,000 ounces every month between March and June, giving the company the option to sell the gold at that fixed price.

We also hear from Pan African Resources (PAF). It too has had a torrid time of it of late, but there is little that investors in Pan African can do about inflation or currency swings, except sit tight. All hopes are pinned on the output from the fully-funded, low-cost Elikhulu project. The sooner it can get that up and running - and 56,000 ounces of production start to arrive - the better.

Broker Peel Hunt expects adjusted pre-tax profits of £53.1 million and earnings per share of 2.4p in the year to June 2018, rising to £74.2 million and 2.9p in 2019.

Coca Cola HBC (CCH) reports full-year results on Wednesday and with a new sugar tax on soft drinks due to come into effect in April, investors will want to know what is being done to limit the impact. It has been a while in the offing though and many in the sector have already taken steps to reduce sugar levels, Coca Cola included.

In November, the company said it was confident of meeting full-year expectations and that trading was good in all three of its main geographical markets. Any comments on the possible acquisition of fellow bottling group Coca Cola Bottling Africa though could change the mood though. When the possible African acquisition was announced back in November, the shares saw their sharpest drop in two years.

Biotech and the negative sentiment continues, so we will have to see what happens when Shire (SHP) gives us its trading update on Wednesday. It has been top of the FTSE 100 fallers in the run-up to the statement being issued on the back of fears that what we hear will trigger a rash of downgrades to forecasts, because the consensus for 2018 sales looks to be at the top end. That’s just according to JP Morgan Cazenove, but it was enough to see the shares fall to a three year low.

Key company announcements in the week ahead

Monday

YouGov (YOU)

Tuesday

Acacia Mining (ACA)

Pan African Resources (PAF)

Oncimmune Holdings (ONC)

A&J Mucklow Group (MKLW)

Wednesday

Coca-Cola HBC AG (CDI) (CCH)

Shire Plc (SHP)

Galliford Try (GFRD)

Thursday

Indivior (INDV)

Lancashire Holdings Limited (LRE)

Primary Health Properties (PHP)

Relx plc (REL)

InnovaDerma (IDP)

Trifast (TRI)

Friday

SEGRO (SGRO)


Important Information

The value of investments can go down as well as up so you may get back less than you invest. Investors should note that the views expressed may no longer be current and may have already been acted upon. Overseas investments will be affected by movements in currency exchange rates. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to an authorised financial adviser.