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Broker tips: Friends Provident, Goals Scoccer
Mon, 06 Sep, 2010
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Broker tips: Friends Provident, Goals Scoccer
Fri, 3 Jul 2009, 12:39:00
The demerger of <b>Friends Provident</b>'s asset management subsidiary F&C has received court approval and has taken place today, resulting in a downward adjustment in the share price. Broker Panmure Gordon believes that having offloaded its 52% stake in F&C Asset Management the life assurance company could well be involved in consolidation activity within the sector, though it suggests that had buy-out specialist Resolution been interested in Friends it would have made its move before the demerger. "We maintain the view that Friends Provident is strategically hampered by its positioning in the UK Life market, where its key product lines are Group Pensions (a competitive market place) and Protection (housing market exposed)," the broker's analyst Barrie Cornes said. Cornes rates the shares a "hold". "Although the valuation appears attractive with a 2009E dividend yield of 6%, we think that there are better opportunities elsewhere in the UK life sector, and would highlight Prudential and Aviva as the obvious switch candidates," Cornes concludes. Broker KBC Peel Hunt has reiterated its "buy" recommendation for five-a-side football pitch operator <b>Goals Soccer Centres</b> after Friday morning's trading update, saying the company's trading and openings programme are on course to meet the broker's expectations. "The pipeline of over 40 sites continues to strengthen as a result of the brand's increasing recognition, and the path to opening has improved as a result of reduced workflow through local authority planning departments. Spontaneous enquiries are increasing as public spending cost constraints reduce the range of alternative local authority projects and we believe this trend is likely to continue," KBC analyst Paul Hickman said. "We continue to forecast pre-tax profit growth of 16% to £9.5m this year. Allowing for the placing, forecast earnings grow 9% to 13.9p. We expect similar growth in 2010E to £11.0m and 15.2p respectively. From 2011, when the additional sites trade for a full year, we expect profit and earnings growth to accelerate to 20%," the broker said. KBC Peel Hunt has left its price target unchanged at 230p.
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