The stockmarket report from UK-Analyst.com for Thursday 22nd July
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From UK-Analyst.com: Thursday 22nd July 2010
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companies UK retail sales rose robustly in June, helped by a boost from the World Cup, sunny weather and shops holding down prices. Meanwhile, both manufacturing and services output in the euro zone grew faster than expected in July, according to the latest purchasing managers’ indices, driven by a strong performance in both sectors in Germany and in the services industry in France. The growth in services suggests further improvement in private consumption in the heart of the euro zone, coming in spite of a slight weakening in export orders. Elsewhere, first-time filings for jobless benefits continued to climb in the US, as redundancies remained stubbornly high, according to the Labour Department. At the London close the Dow Jones was up by 230.22 points at 10,350.75 and the Nasdaq was up by 60.15 points at 2,247.48. In London the FTSE 100 rallied 94.16 points to 5,308.80; the FTSE 250 jumped 148.81 points to 9,995.11; the FTSE All-Share climbed 46.57 points to 2,738.02; and the FTSE AIM Index put on 3.59 points to reach 679.12. Brokers' Notes GE&CR issued a "STRONG SPECULATIVE BUY" recommendation for the electrical components supplier Cinpart* (CINP) with a 16.1p target price. The roll-out of its operations is set to accelerate following the completion of a 1.3 million funding and the consummation of a key relationship with a division of Scottish & Southern Energy. The immediate focus is on the U.K market but the research house believes that the voltage optimisation product-set, VoltageMaster, has even greater opportunities in the U.S. GE&CR commented that, even though competition is likely to grow, this should not detract from the opportunity to build on its UK market presence, firstly into the U.S. and subsequently into Asian and Middle East markets. The shares rose by 0.875p to 8.875p. Collins Stewart upgraded its recommendation for the facilities management group Connaught (CNT) to "HOLD" and retained its target price at 150p. This is on the back of management indicating that the review of its accounting treatment of mobilisation costs is likely to result in a change in accounting estimate rather than a change in policy. Consequently, this will result in a 30 million pound write-off net of tax. Moreover, given the decision not to carry on with planned maintenance work, the broker is concerned that order intake could deteriorate further. Nevertheless, the broker thinks sentiment could worsen pending a change in accounting estimates, which it says means "the stock continues to trade at a discount to fair value." Connaught shares moved 1p higher to 104p.
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t1ps.com Fox-Davies Capital maintained its "BUY" recommendation for the Peruvian precious metals company Hochschild (HOC), with an unchanged target price of 368p. This follows the release of its production figures for the three months ending 30th June 2010, which was very much in line with the broker's expectations, with a 10% increase in production at both Pallancata and San Jose mines. Fox-Davies added that far more important is the steady progress being made with company maintainers - deposits of the same size as those currently being mined - and the fact that two more targets have been acquired which have the potential to be of a much larger size, also known as 'company makers.' The shares advanced by 0.8p to 307.4p. Arbuthnot issued a "STRONG BUY" recommendation for the international technology consulting group Sagentia (SAG), with a 71p target price. Following the group's interim results, the broker increased its profit before tax forecast by 33% to 1.2 million pounds for the 2010 financial year. This increase, which is double its previous estimate, follows the restructuring undertaken in late 2009 and better trading in 2010. A new management team has been put in place over the last 12 months and the balance sheet transformed by an 8 million pounds placing. Sagnetia shares finished flat at 52p. Blue-Chips Capita Group (CPI) shares climbed by 27p to 737p after the business process outsourcing company announced making "good progress in 2010." In the six months ended 30th June 2010, turnover increased by 4% to 1,361 million pounds, whereas profits for the period fell slightly by 0.5% to 98.2 million pounds. Revenue growth has been impacted by the lower number of new major contracts secured last year by an unusually high level of contract completions and lower client expenditure on project activity. The group added that it is well placed to continue its growth and is now enjoying a very healthy flow of new business opportunities. Believing the company will be one of the beneficiaries of more government outsourcing, Collins Stewart reiterated its "BUY" recommendation and 916p target price. Markets Move Fast. Keep up with GFT's Free Guide. Learn to Harness Market Volatility.
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means) Click here to download your Guide. Autonomy Corporation (AU.) shares tumbled 164p to 1,649p as the British software firm announced seeing a "gentle" improvement in the market, with the Original Equipment Manufacturers (OEM) business continuing to be the fastest growing revenue stream. In a trading update, the company reported revenues of 415 million dollars (272 million pounds) for the six months ended 30th June 2010, up 28% from last year, due to strong organic growth. Gross profits were 363 million dollars (238 million pounds), up 26%. Commenting on the results, Dr Mike Lynch, CEO of Autonomy, said that the firm faces the rest of the year with a strong balance sheet and is confident in delivering strong growth for the full year. Kingfisher (KGF), Europe's biggest home improvement retailer, said second-quarter sales declined as the U.K. B&Q chain offered fewer promotions and Britons cut spending on large items such as bathrooms and kitchens. Revenue at stores open at least a year fell 0.8%, excluding currency swings, in the 10 weeks ended 10th July. The decline was led by the U.K., where same-store sales dropped 4.4%. Commenting on this, Ian Cheshire, Kingfisher's CEO, believes that the group is well-placed to continue its "good progress" during the balance of the year. The shares rose by 1.8p to 225.3p. Mid-Caps Petropavlovsk (POG) said second-quarter gold output fell by 16% to 100,700 ounces and full-year production will be at the "bottom end" of its plans. Output was hampered by delayed equipment deliveries and "extreme" cold in the Amur region of Russia's far east. Separately, the firm announced that it has won an auction for gold exploration and mining right in the Amur region for an area which extends its existing license area around the Pioneer deposit by 420 square kilometres. Despite the gold production coming in lower than previous periods, Evolution Securities believes that the company has made "solid progress" in terms of developing its new gold and iron ore mine during the last six months. Consequently, the broker retained its "BUY" recommendation and 1,600p target price. Shares in the firm rose by 9p to 1,106p.
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Report! Click here and find out how VectorVest values companies in your portfolio. Sports Direct International (SPD) shares eased by 1.1p to 116p despite the sports retailer performing strongly throughout the year, achieving sales and profit performances ahead of initial expectations. In a trading update, revenue increased by 6.2% to a record 1.5 billion pounds for the full year ended 25th April 2010 compared to the previous year. The increase was due to strong performance in the retail division where revenues rose by 10.8% to 1.3 billion pounds. The group’s underlying profit before tax also increased by 49.8% to 102.1 million pounds, as a result of the 23.6 million pounds increase in EBITDA together with a 12.8 million pounds reduction in interest payable. Underlying earnings per share increased by 56.2% to 12.39p compared to the previous year. Commenting on the performance, the group said it believes that it is well placed for the next phase of growth. International Personal Finance (IPF) reported that its first half profits more than trebled as tighter lending criteria drove down bad debt charges. The group made a pre-tax profit of 30.5 million pounds in the six months to 30th June, up from 9.1 million pounds a year earlier. The improvement reflected improved credit quality, with impairment charges falling to 32.1% of revenues from 36.2% a year earlier. Consequently, interim dividend increased by 10% to 2.53p. Commenting on this, John Harnett, group CEO, said that the increased dividend reflects the good first half results and that the firm is on course to deliver a "good performance" for the year as a whole. IPF shares climbed by 4.3p to 208.1p. Small Caps, AIM and PLUS Karelian Diamond (KDR) shares surged 1.95p to 3p after the diamond exploration group concluded a confidentiality agreement with Rio Tinto Mining and Exploration. Under the agreement, Rio Tinto will disclose to Karelian confidential information and physical geological samples relating to exploration in Finland. In consideration, Karelian has agreed that Rio will have the option to earn a 51% interest in any project identified by Karelian in Finland by Rio paying the direct cash expenditures incurred in developing the project. Shares in The Weather Lottery (TWL) soared by 1.35p to 3.125p subsequent to the lottery operator signing a multi-year contract with Sheffield Wednesday Football Club to become its gaming partner. Under the contract the group will provide a full package of on-line gaming products to the club and its supporters. In addition, it will run the Sheffield Wednesday Club Lottery under the new themed 'FC Lotto' brand which the firm has created especially for the football market. The board expects to make further announcements of similar contracts with other leading clubs.
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$3,000 Japan Leisure Hotels (JPLH) shares slipped 3p to 38.5p following an announcement that revenue and EBITDA levels for the year ending 31st December 2010 will be lower than current market expectations. This is as a result of the Yokkaichi hotel being closed for renovation for the majority of the first six months of the current financial year. Furthermore, certain other hotels were experiencing reduced occupancy due to competitors aggressively reducing prices and some hotels nearing their scheduled refurbishment, the company said. The asset manager said that it is taking steps to address these issues, where possible, and is confident that it will be "quickly resolved." Oil and gas explorer Faroe Petroleum (FPM) said it discovered oil in well 6406/3-8 T2 on the Maria prospect, sending its shares up by 30p to 159p. The group, which has a 30% stake in the Maria well, said preliminary analysis indicates a thicker-than-expected gross oil column of 210 feet in a better-than-expected reservoir. The analysis also indicates volumes in place between 250 million barrels of oil equivalent (mmboe) and 520 mmboe with recoverable volumes for Faroe estimated to be between 22 mmboe and 46 mmboe. The company, which drilled its second successful well on the Halten Terrace, said it planned three exploration wells in the Atlantic Margin in 2010. Panmure Gordon reiterated its "BUY" recommendation with a price target of 200p, which it believes is now looking increasingly conservative after the two (out of two) exploration successes.
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ALTERNATIVE! Uniq (UNIQ) shares climbed 1.25p to 11.25p as the chilled convenience food group reported narrower pre-tax losses. In a trading update, the firm saw sales increase by 7.4% to 156.3 million pounds in the half-year to 30th June 2010. It also saw pre tax losses, from continuing operations, reduced to 8.6 million pounds compared to 12.5 million pounds last year. Commenting on the performance, Geoff Eaton, CEO of Uniq, said that the "decision to focus on the U.K. is delivering the expected benefits." In addition, the board, whilst conscious of the risk to volume of the unavoidable price increases in desserts, expects “the good first half momentum to continue into the second half.” Microgen Holdings (MCGN) shares rallied 5p to 87p after the IT services company announced strong operating performance with growth in revenue and profitability led by the Mircogen Aptitude Solutions division. In a trading update, the firm reported adjusted operating profit, from continuing operations, increased by 50% to 3.8 million pounds for the six months ended 30th June 2010 compared with the previous year. Revenue from continuing operations was up by 19% to 16.1 million pounds compared to 2009, with revenue growth of 66% from the Mircogen Aptitude Solutions division. Consequently, adjusted basic earnings per share increased to 3.3p, up from 2.2p in 2009. The board added that the business remains on track to meets its expectations for the year. * The company is a corporate client of Rivington Street Holdings, the ultimate owner of this website; the T1ps Smaller Companies Growth Fund owns shares in Cinpart.
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