From UK-Analyst.com: Monday 23rd August 2010

Brand new tip out tomorrow and another on Thursday - only on t1ps.com
Plus, listen to 4 new CEO webcasts recorded last week
Join t1ps.com now for 20 new tips a year and hundreds of updates
Click here to sign up now and get Tom's brand new tip tomorrow.

The answer to Friday's competition is Aviva. Congratulations to John Shrimpton who wins a copy of the Master Investor 2010 DVD. Watch out for another competition this Friday.

Treasury cuts are leading to a surge in insolvencies among public-sector suppliers, according to one analysis. With billions of pounds in government contracts already cancelled or put on hold, 168 businesses in health, social services, education and defence collapsed in the first six months of this year, according to Wilkins Kennedy, the accountancy firm. Meanwhile, as many as 47% of households in August expected their personal finances to worsen in the next 12 months, almost twice as many as the 25% who forecast an improvement, according to the Markit/YouGov Household Finance Index. Elsewhere, the euro-zone's rapid growth spurt lost some momentum in August with a robust performance by Germany failing to make up for a weaker pace of expansion in France and near stagnation elsewhere in the 16-country region. At the London close the Dow Jones was down by 15.22 points at 10,198.4 and the Nasdaq was down by 15.02 points at 2,164.74.

In London the FTSE 100 rose 39.56 points to 5,234.84; the FTSE 250 climbed 65 points to 9,826.15; the FTSE All-Share advanced 17.21 points to 2,698.33; and the FTSE AIM Index finished 2.95 points higher at 691.14.

Brokers' Notes

Evolution Securities reiterated its "buy" recommendation for the platinum group metals producer Sylvania Resources (SLV) with a 77p target price. Notwithstanding the tailings disposal issues at Lannex, the group appears to be making solid headway rolling out its Samancor dump operations. However, the company's work in the background is arguably the most interesting, the broker commented. Sylvania aims to release an updated resource statement for the northern area of the Volspruit project on the Northern Limb. In addition, Evolution is also encouraged that the arbitration gearing from the Everest North dispute has been postponed indefinitely as progress has been made to reach a favourable settlement for both Sylvania and Aquarius. The shares finished flat at 45p.

Arbuthnot downgraded its recommendation for the engineering company Bodycote (BOY) from "buy" to "neutral" decreasing its target price from 262p to 246p. Following interim results for the firm that were considerably better than the broker had expected – partly because of the rate of progress in reaping the rewards of restructuring – Arbuthnot is making some adjustments to its estimates for 2010 and 2011. In making these estimates, it has built in a bit more caution about activity levels in the second half and less favourable exchange rates, especially between Sterling and the Euro, which, consequently, takes a slight edge off the rate of earnings growth. Nevertheless, an anticipated 50% drop-through from incremental revenues to profits continues to make this one of the most highly operationally-geared stocks in the sector, the broker added, with the recovery potential in operating margins amplified by the depreciation charge, which is essentially fixed. Bodycote shares fell 3.8p to 228.2p.

Read James Faulkner's weekend editorial here 

Panmure Gordon downgraded its recommendation for the engineering company Charter (CHTR) from "buy" to "hold" cutting its target price from 1,010p to 770p. After the bright start in the first quarter of 2010 the company flagged a more challenging order environment for the remainder of the year and beyond that threatens to create a revenue shortfall. In addition, the broker commented that it has been a frustrating experience for shareholders during the past three years as it outlines reasons for the thinning fan base. These issues include: the holding structure; its guidance record; and a wish-list of more detailed disclosures. A recovery in power sector orders at some stage during 2011 provides some hope but until then Panmure believes the disappointments are set to continue. Charter shares slipped 15p to 607p.

Seymour Pierce retained its "outperform" recommendation for Braveheart (BRH) on news the investment group has purchased Envestors, a specialist corporate finance advisory business, for a maximum consideration of 2.45 million pounds. The broker views the acquisition positively since it will significantly extend the firm's potential investors through the business angel networks and increase the geographical reach importantly into London but also in the Channel Islands, Manchester and the Home Counties. The role of angel investors is becoming more prominent in small company financing given the lack of debt funding currently available from banks and this should lead to a varied and active deal flow, Seymour added. The shares rose 0.5p to 23.5p.

Blue-Chips

Petrofac (PFC) shares rallied 48p to 1,410p following the oil and gas services company forecasting net profit growth of 20% for the 2010 full year as its backlog of contracts continued to grow. The company, whose activities range from designing and building oil and gas infrastructure to safety training, reported the backlog stood at 6.9 billion dollars (4.4 billion pounds) on 30th June and had grown by another 1.1 billion dollars (0.7 billion pounds) in July and August. Petrofac said excluding a gain made from spinning off its North Sea exploration assets into a separate company, Enquest, in April, its 2010 first-half net profit rose 42% to 206.3 million dollars (132.6 million pounds) compared to the same period last year.

FTSE 100 trading calls by text message
2-3 big calls a week by SMS from ex-investment banker Mark Austin
Recommended by "psycho trader" and best-selling investment author John Piper
To sign up to Mark's FTSE Service, or for more information, click here.

Old Mutual (OML) shares climbed 3.9p to 124.9p after the financial services group announced that it has received a proposal from HSBC Holdings to acquire a 70% controlling shareholding in Nedbank group. Nedbank accounted for more than 12% of Old Mutual's revenue in 2009 and was the biggest money maker for the group outside of the firm's insurance business. A sale to U.K. bank HSBC may be the largest banking deal in Africa this year given Nedbank's market value of 67.1 billion rand (5.8 billion pounds). The insurer, which has given HSBC exclusivity, added that it has had "preliminary discussions" with South African regulators.

Mid-Caps

Residential property owner and manager Grainger (GRI) has entered into a 50:50 joint venture for Sovereign Reversions, the equity release investment firm, with a wholly owned subsidiary of Moorfield Real Estate Fund II. Grainger Equity Release Management, a unit of Grainger, will manage the assets on behalf of the joint venture partners, for which it will receive an annual management fee based on the prevailing gross asset value. Grainger, which acquired Sovereign in early August, will receive 17.5 million pounds for the 50% stake plus an additional sum to cover the associated acquisition and integration costs. The shares rose 3.7p to 105.9p.

Lamprell (LAM) shares dipped 3.5p to 260.4p on news the oil services group expects to meet its targets in the second half of 2010 as customers start to invest again. The UAE-based firm, which specialises in rig refurbishments and construction, reported its order book at the end of July stood at 836 million dollars (537 million pounds), compared with 417 million dollars (268 million pounds) a year ago. This comes in spite of the fact that the group reported a 39% fall in underlying net profit for the six months to end June 2010 to 19.3 million dollars (12.4 million pounds) on a 27.2% fall in revenue to 189.3 million dollars (121.7 million pounds). With an increasing amount of work, Panmure Gordon anticipates greater utilisation rates at the group's manufacturing facilities which should allow a solid increase in profits. The broker maintained its "buy" recommendation with a target price of 290p.

RBS Markets introduces to you to MARKETS Direct - Free subscription

Subscribe to our free magazine and keep up to date with the market information, hot topics and expert views that can help you make your investment decisions.

This edition's hottest topics include:

The election special, an interview with Ross Walker, Are Emerging Markets on the fast-track to recovery? Has gold hit its peak? Currency trends for 2010? Are interest rates set to rise globally? And much more.

Click here to download a preview of the magazine
Click here to receive your free copy of the first edition

Amlin (AML) shares slipped 13.7p to 408.2p after the insurance firm announced a 39% fall in pre-tax profits, hit by claims on natural disasters. For the six months ended 30th June 2010, the company reported a fall in pre-tax profits to 107.6 million pounds from 177.1 million pounds in the comparable period a year earlier. Underwriting conditions in the period were less benign than in 2009, with downward pressure on rates across a number of key markets and a significant increase in loss activity, including the Chilean earthquake in February. Weather experts think reinsurers may have to contend with another spate of hurricanes in the US in the coming months, but the firm is confident its business models would enable them to benefit from an eventual recovery in the reinsurance sector. Shore Capital expects some weakness in shares but views this as a "buy" opportunity, in this "excellent managed underwriter."

Bovis Homes (BVS) announced a return in profitability in its half-year results on the back of greater stability in the housing market and lower financing costs. Pre-tax profits were 3.5 million pounds, up from an 8.6 million pounds loss last year, despite sales falling to 115.6 million pounds from 122.6 million pounds. The group built 803 homes during the period, up from 754 homes. The average private home sale increased to 163,500 pounds from 160,400 pounds but that gain was offset by an increased contribution from social housing, which saw the average sale price decline slightly to 158,500 pounds from 159,700 pounds. Financing costs were considerably down to 1.3 million pounds from 6 million pounds, reflecting new bank lending facilities. David Ritchie, Bovis chief executive, added that the company will make further acquisitions in the second half. The shares fell 5.6p to 342.8p.

Small Caps, AIM and PLUS

Coms (COMS) shares advanced 0.375p to 3.25p as the internet telephony service company announced the launch of its first iPhone application, which enables users to connect and control their Coms account from their iPhone. The initial functionality enables users of the service to redirect calls from their mobile to wherever they are located. The firm is working on additional features that will bring live audio and video functionality to the iPhone app, as well as migrating it to other smart-phones, including those that use Google's Android operating system. "We expect that smart-phones will be a major driver in demonstrating the benefits of the Coms unified communications service to business users and increasing our number of connections," CEO Richard Bennett commented.

Horizonte Minerals (HZM), the exploration and development company, has signed an earn-in agreement on its Falcao gold project, located in the Carajas Mineral Province of northern Brazil, with gold producer and exploration partner AngloGold Ashanti. Under the terms of the agreement, AngloGold has the right to earn into a 51% participating interest in the project by funding the sum of 4.5 million dollars (2.9 million pounds) on project expenditure within a 36 month period from the commencement date. Upon successfully earning into 51% of the project, AngloGold may elect to earn into an additional 19% participating interest in the joint venture. "The earn-in agreement with AngloGold will allow a fast track drill programme to test the resource potential of the project, "Horizonte CEO Jeremy Martin said. The shares rose 1.125p to 10p.

Markets Move Fast. Keep up with GFT's Free Guide.

Learn to Harness Market Volatility.

Determine if a market is in trend or range (and what that means)
Identify potential trades using common trading patterns

Click here to download your Guide.

PowerFilm (PFLM), the developer and manufacturer of thin flexible solar panels, received a purchase order contract for its solar panels in the amount of 1.3 million dollars (0.8 million pounds). The purchaser is understood to be a returning customer who had been a significant customer prior to the commencement of the recession. The application area is solar recharging of remote oil and gas exploration seismic data collection systems, the group added. The shares climbed 3.5p to 31p.

RCG Holdings (RCG) shares dipped 1.75p to 45.5p after the biometrics developer and solutions provider announced a marginal drop in first-half pre-tax profit on increased selling and distribution costs. For the six-months ended June 2010, the company reported a pre-tax profit of 31.7 million pounds, down by 3% in the comparable period of 2009. Revenue for the first half rose 11.5% to 121.6 million pounds. Commenting on this, Dato' Lee Boon Han, CEO of RCG, said: "The board remains cautiously optimistic about the second half of 2010, and will continue to drive growth through the business segments and key geographical regions." 

Gold set to head higher - will it be $1500 or $3,000
Or $6,000 an oz?
Mining shares are the geared play on that.
For more details on a Unit Trust established to gain from higher gold prices
Visit www.t1psim.com

Panther Securities (PNS) shares dropped 10p to 357.5p on news the property and listed companies investor swung to a loss for the six-months period ended 30th June 2010. The company reported a 1.7 million pounds loss for the period compared to a profit of 5.7 million pounds in the same period in 2009. This reflects the loss of 4.03 million pounds on derivative financial liability against a 5.8 million pounds gain in the comparable period a year earlier. Revenue for the period was 4.91 million pounds, up by 3%. Chairman Andrew Perloff believes "there is now more stability in the property market" which gives the group "greater opportunities."

San Leon Energy (SLE) shares rose 0.5p to 15.25p on news that the oil and gas exploration company has completed the 300 square kilometre 3D seismic acquisition programme covering the Slyne Basin exploration license along the Atlantic Margin, offshore Ireland. The program was completed in 15 days with 100% of the proposed survey successfully acquired under budget at 6 million dollars (3.9 million pounds). The data is currently being processed. The initial review of the preliminary 3D volume confirms the existence of the Inishmore prospect with estimated mean case recoverable reserves of 1.3 trillion cubic feet (TCF), the firm commented. Additional large structures have also been identified within the survey area with preliminary estimates of more than 3 TCF of natural gas recoverable across the license.

* The company is a corporate client of Rivington Street Holdings, the ultimate owner of this website.