Updates from Serco, Weir Group and Amlin
Filed under: Investing
The FTSE 100 climbed a further 26.6 points yesterday to 5,961.5 points yesterday. CRH was the biggest riser, up +4.88% while Bunzl saw the largest slip, down -4.32%.
Overnight, the Nikkei 225 saw a -1.19% slip to 10,039 while the Hang Seng dipped -0.25% to 22,566 as US debt worries again came to the fore.
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First, Serco. The international services operator says it remains on track to meet expectations for 2012. In other words, it claims it expects a year of strong total revenue growth, including further good organic growth, together with an increase in adjusted operating margin similar to that achieved in 2011.
It confirms the necessary consents and statutory approvals for the purchase of DMS Maritime have been received, with the transaction recently completing at an acquisition cost of £82m (comprising cash consideration paid of £69m and incremental net debt acquired of £13m).
Serco will release its 2012 full year results on Wednesday 6 March. Serco increasingly generates income away front the UK, like many outsourcers. 2013 will also see several main contracts up for renewal.
Next, Weir Group. It's agreed to acquire Mathena, Inc, a provider of pressure control rental equipment and services for onshore oil and gas drilling applications. Consideration will be via an initial payment of US$240m (£148m) with a maximum deferred consideration of US$145m payable over two years, contingent upon meeting profit growth targets.
"This deal is a close strategic fit with our existing pressure control business and gives us a larger suite of products which we can sell to the expanded customer base," says Weir chief exec Keith Cochrane. "The business has strong growth potential and increases our exposure to shale oil and gas, markets with attractive long term structural growth prospects."
The goodwill on acquisition, says Weir, will be tax deductible, with the net present value of the cash tax benefit related to the initial payment expected to exceed U$40m.
Finally, insurer Amlin, the leading specialist insurer, has released an estimate of its possible losses from Hurricane Sandy which made landfall in the North-East of the United States on 29th October.
Amlin estimates its losses from Sandy, net of estimated reinsurance recoveries and inward reinstatement premiums, at £145 million.
"Senior claims staff," says chief exec Charles Philipps, "have already visited the territory to further develop our loss response efforts. While Sandy is a major loss for Amlin, we expect to be only modestly above our catastrophe budget for the year."