From UK-Analyst.com: Friday 16th November 2012
Competition
The UK-Analyst Friday Competition is back! This week's prize is a pair of tickets - courtesy of our friends at Yakult - to the Taste of Christmas Show, London, ExCel. To enter, send your funniest caption for the picture below to richard.gill@t1ps.com by 9am on Monday morning. 
A Taste of Christmas with Yakult & UK Analyst.com Win a pair of tickets courtesy of Yakult to the Taste of Christmas Show, London, ExCel 7-9 December. Pop to see us on Stand 125 where our friendly staff will be on hand giving out free samples.
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The Markets Hours after Prime Minister Yoshihiko Noda dissolved parliament, Japanese officials approved a crucial bill to ensure government does not run out of funds at the end of this month. The decision to allow the government to borrow money by selling bonds comes amid fears the country may be slipping into recession. In the US, output from manufacturers, mines and utilities rose by 0.2% in October according to the median projection of 84 economists surveyed by Bloomberg. After a 0.4% rise in September, the anticipated slowdown in growth is due to hurricane Sandy which, amongst other disruptions, caused widespread power outages which hindered production significantly in the affected regions. Here in the UK, a report from LSL Property Services suggests that the cost of renting a home in England and Wales reached a new average high in October of 744 a month, up 0.4% on September. In response to the new figures Campell Robb, Chief Executive of housing charity Shelter said that the figures prove "life is becoming more difficult for renters. In a week when inflation figures revealed a tighter squeeze on family budgets, every rent rise piles on the pressure". At the London close the Dow Jones was down by 66.46 points at 12,475.92 and the Nasdaq fell by 28.36 points to 2,496.00. In London the FTSE 100 decreased by 72.16 points to 5,605.59; the FTSE 250 finished 106.52 points lower at 11,576.98; the FTSE All-Share lost 35.48 points to 2,933.15; and the FTSE AIM Index slipped 4.34 points to 681.38.  Broker Notes Panmure Gordon upgraded its "hold" recommendation for Halfords (HFD) to a "buy" with a target price of 400p, increased from 350p. The broker believes that the bicycle company has the capability to unlock the potential within its fragmented markets. This, the broker believes, should lead to earnings growth that is well above consensus. The shares lost 2.5p to 341p. Seymour Pierce maintained its "sell" stance on home improvement retail company Kingfisher (KGF) with a target price of 240p. This comes after retail figures in France were released suggesting sales volumes in DIY were down by 7.1%, confirming a significant drop off in trade since the French elections. The broker believes that Kingfisher's like-for-like quarter sale figures will be down between 2.5%-3%, in line with the anticipated Banque de France quarterly figures. The shares fell by 1.2p to 274.2p. N+1 Singer reiterated its "buy" recommendation on Lavendon Group (LVD), the aerial platform operator, with a target price of 185p. The broker cites the fact that trading seems to be in line with expectations according to the recent IMS and that rental values are up on average 5% in the period from the 1st of July to 15th November. The research body was also impressed with strong growth exhibited in the Middle East region and anticipates this will more than offset any weaknesses in the European business. The shares dropped by 11p to 127.5p. 
Blue-Chips Outsourcing specialist Serco (SRP) announced an improved performance, in line with market expectations, since 30th June. A 2% decline in revenues in the first half of the year has since been offset due to the winning of 5.6 billion pounds worth of new contracts. Despite challenging conditions in the U.S, full-year operating margins should be similar to the level achieved in 2011, as revenue growth increases and underlying efficiency improvements kick in. The shares increased by 5.5p to 550p. IMI(IMI), the engineering group, reported that revenues for the period between 1st July to 15th November were 3% ahead of the corresponding period last year. This has been boosted by a 15% increase in revenues in the company's Severe Service business where shipments have remained at a strong level. Despite the promising news, volumes in IMI's largest division, fluid power, which accounted for a third of group sales last year, weakened by 4% in the period. The shares rose by 16p to 958p. 
Also in the engineering sector Melrose (MRO) reported that the sales outlook for 2013 has become uncertain as revenue trends have slowed considerably. The weekly rate of order intake between July 1st and November 15th fell by 8% from the first half. One particular subsidiary experiencing difficulties is Harris, as it is exposed to the US scrap steel cycle which is experiencing drastic drops in revenues and orders as market conditions remain tough. The shares tumbled by 27.1p to 208.9p. Mid Caps London Stock Exchange (LSE) posted a 7% increase in revenues to 349.8 million pounds for the six months ended 30th September and a 1% increase in profits to 217.2 million pounds. The improved figures were driven by good performances from the Information, Post trade and Technology Businesses. Although market conditions remain challenging, the exchange is positioned in a decent position to profit from market improvements and the opportunities brought about from industry changes. The shares gained 6p to 936p. Provider of thermal processing services Bodycote (BOY) reported that revenue growth for the four month period to the end of October was 2.6%, driven by a surge in sales in Aerospace, Defence and Energy. The firm, which improves the properties of metals, performed particularly well in North America as organic revenues in the region were up by 6.5%. One slight disappointment was that emerging market revenues were weak in all territories. The shares increased by 13.7p to 376.4p. 
Media company Aegis (AGS) posted growth in revenues of 6.3% for the third quarter ended 30th September. The growth rate is well ahead of rival media agencies such as Carat and Vizeum who recently reported third quarter rates of around 2%. However, growth has slowed from 9% in the second quarter, driven by a marked slowdown in the Asia Pacific region, down from 14.4% in the second quarter to just 4% in the third quarter. The shares were up 1.2p to 235p. Small Caps & AIM Digital games group Zattika (ZATT) announced a profits warning for the year to December 2012 as delivery from its four acquired businesses has been slower than expected. While growth in revenues has begun, most notably at the Hattrick business, pro-forma revenues for 2012 are now expected to be in the range of $10 million to $11 million. In its initiation of coverage note in June broker Cannacord Genuity was looking for sales of $13.33 million this year. The shares fell by 5p to 102.5p. Ultrasis (ULT), the provider of interactive health care services, announced that revenues fell by 62% to 1.07 million pounds for the year ended 31st July due to difficult trading conditions. This resulted in the company making a loss before tax of 1.4 million pounds, a swing from a 26,000 pounds profit last year. Although management has focused hard on cost reduction, the largely fixed nature of the group's cost base meant that the reduction in costs was insufficient to hit break-even. The shares were slashed by 0.08p to 0.3p. W Resources (WRES), the tungsten exploration company, announced it has received authorisation from the department of the environment of the regional authority to develop the La Parillia tailings project in Spain. The site in question is in the south-west of Spain, 310km southwest of Madrid and comprises a tungsten mine and a tungsten tailings project. The historic mine resource estimated in 2008 was 36 million tonnes at 0.09% WO, making it one of the largest tungsten deposits in the world. The shares were down by 0.005p at 0.35p. Vialogy (VIY), the geophysical imaging business, has started working on a North Sea project for one of the largest geosciences companies. The project, which will call upon Vialogy's QuantumRD technology, involves the company attempting to discover producible hydrocarbon bearing sand bodies that remain undiscovered to date. The project could be a lucrative one for the company as the government has recently highlighted that there are up to 24 billion recoverable barrels of oil equivalent remaining in the North Sea. Shares in the firm remained flat at 2p. 
Telecommunication software provider Artilium (ARTA) expects results for the 12 months to June to be lower than market expectations, primarily due to changes to revenue recognition under International Financial Reporting Standards and delays in customer orders. During the audit process the firm decided to only partly recognise revenues from a software license in the hope that this will have a positive impact on future financial years. The shares were up by 0.125p at 8.625p. Stratex International's (STI) joint-venture partner NTF Insaat Ticaret has decided to sell its holding in the Inlice project in Turkey following a change in its business strategy away from mining. Gold explorer Stratex owns 45% of the project and has agreed to the sale after significant interest has been expressed by several third-parties. The shares gained 0.25p to 4.875p, although broker Northland Capital has a 17.1p target. Parkmead (PMG), the oil and gas investment company, posted a 21.6% drop in revenues to 2.9 million pounds for the year ended 30th June. However, the group's total assets increased by 86% to 22.9 million pounds after a series of acquisitions in the North Sea and onshore Netherlands. Also, in October the group was awarded interests in a total of 25 offshore blocks across the United Kingdom Continental Shelf . The shares were up by 0.25p at 14p. Stadium Group (SDM), an electronic technology group, reported a further softening in demand on top of the slowdown already indicated in its previous interim statement. The firm expects revenue and normalised profit before taxation for the second half of the year to be below the first half, meaning that full year results will be significantly below current market expectations. As a result, the company is reviewing existing capacity in the UK and looking into reducing fixed operational costs in the UK and Asia. The shares tumbled by 12.5p to 39p. | 
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