FTSE 100 Falls After Weak Performance in Asian -2-

0950 GMT - Playtech posted another good update, with momentum across key markets remaining strong, Goodbody Research analyst David Brohan writes in a research note. "Playtech's valuation remains undemanding given the strong momentum in the group, the medium-term growth story, strong balance sheet and potential for value creation through its various structured agreements in Latin America, and a potential sale of its Snaitech business in the future," Brohan says. The Irish brokerage is likely to increase its full-year adjusted Ebitda by around 2% to EUR430 million on the back of the results, he says. Goodbody backs its buy rating on the gambling-software company's stock. Shares are up 2.3% at 536.50 pence. ([e-mail])

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Smurfit Kappa, WestRock Merger Offers Shareholders Compelling Value

0940 GMT - Smurfit Kappa has confirmed it is in discussions with WestRock to merge the two groups, a deal that offers shareholders of both companies compelling value, as the combined group would become the number one global integrated packaging provider, Goodbody says. The paper-based packaging company has a highly complementary portfolio with WestRock, and pretax synergies of $400 million are targeted, with an estimate one-off cash cost of $235 million, Goodbody analyst David O'Brien says in a research note. "Above and beyond the initial synergies targeted [there is] potential to drive value across complimentary product sets and take advantage of secular growth trends," the Irish brokerage says. Goodbody retains its buy recommendation on Smurfit. Shares in London are down 1.7% at 3,162.0 pence. ([e-mail])

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Direct Line's Canadian Deal Leaves It on Better Footing

0939 GMT - Direct Line Insurance Group's planned GBP520 million sale of its brokered commercial-insurance business to a subsidiary of Canadian P&C insurer Intact Financial makes sense, AJ Bell says. The disposal to RSA Insurance--for what Direct Line claims is an attractive price--will help to plug a gap in its financial position, Bell says. "The market probably shouldn't expect a return to the dividend list in the immediate future--news of the disposal accompanied the announcement of a sharp increase in first-half losses--but this sale does at least put the business on a more sustainable footing," Bell's investment director Russ Mould writes. Direct Line shares rise 17%. ([e-mail])

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NatWest's Incoming Chair Faces Daunting Job

0939 GMT - NatWest's new chair faces daunting tasks, interactive investor's head of investment Victoria Scholar says in a market comment after the British bank confirmed its appointment of Rick Haythornthwaite. He will succeed Howard Davies, whose planned retirement was accelerated in the wake of the Farage de-banking scandal. "Working with interim Chief Executive Officer Paul Thwaite, the job at hand is a daunting one, firstly helping NatWest to recover its reputational damage," Scholar writes, adding that Haythornthwaite will need to help find a permanent CEO to replace Alison Rose, who was forced to leave over the row. Other tasks facing the executive are revitalizing its share price--down 14% year to date--and dealing with the government's stake in the business, which also remains a major overhang. ([e-mail])

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Funding Circle's Resilient 1H Belies Weak Share Price

0926 GMT - Funding Circle showed resilience in challenging conditions, Peel Hunt says in a note after the U.K. loans platform for small and medium enterprises posted first-half results ahead of expectations despite a swing to pretax loss on higher costs, amid a deteriorating macro. Such a performance contradicts its weak share price since the start of the year as the stock's value has fallen 31% since then. Peel Hunt notes that shares seem supported by cash balances and decent originations momentum. "Upside is significant in our view when the business delivers consistent profitability," analysts write. The group's backing of its guidance suggests it should become sustainably profitable by 2025, they add. Peel Hunt rates the stock buy. Shares slip 6.2% at 38 pence. ([e-mail])

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Funding Circle Shows Resilience in Challenging Conditions, Numis Says

0923 GMT - Funding Circle delivered interim results ahead of Numis's estimates despite challenging economic climate, Numis analysts write in a research note. The U.K. loans platform for small and medium enterprises booked total income of GBP76.6 million, well above Numis' GBP66.3 million estimate, mainly due to higher returns on both new originations and outstanding loan balances, the analysts say. Loan originations, total repayments, adjusted Ebitda all came in better than Numis's forecasts, they say. "We believe that the group market share has been largely stable or slightly increasing over the 1H period...we continue to see significant upside to the current market valuation," they say. Numis keeps a buy rating and a 250-pence price target on the stock. Despite Numis's optimism, shares are down 6.2% at 38.00 pence. ([e-mail])

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Eurowag Still Well Placed Despite Softer Outlook

0909 GMT - W.A.G Payment Solutions continues to be well-placed to benefit from the increasing digitalization in the freight and road transport sector, Citi says in a note after the integrated payments and mobility platform--known as Eurowag--posted mixed first-half results. "The core business is growing well (particularly mobility solutions), but the focus will likely be on the softer outlook comments/expectations for the remainder of the year (slightly below consensus) driven by the macro headwinds," analyst Pavan Daswani writes, pointing to the company's revised net revenue growth view in the near and mid term. Citi rates the stock buy. Shares slip 1.3% at 91.4 pence but are up 15% year to date. ([e-mail])

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Energean's Interim Results Underwhelm, Berenberg Says

0906 GMT - Energean posted first-half revenue and Ebitda significantly lower than Berenberg-compiled consensus expectations, and could see downgrades as a result, analysts from the German bank write in a research note. "We expect the slow ramp-up and production downgrade to disappoint and FY23 consensus expectations will likely reduce as a result," they say. However, there should be limited changes to medium-term forecasts as the oil-and-gas company's asset portfolio is seen as performing in-line, they add. Berenberg keeps a buy rating and a 1,570-pence price target. Shares are up 0.7% at 1,125 pence. ([e-mail])

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(END) Dow Jones Newswires

09-07-23 0631ET