From UK-Analyst.com: Wednesday 21st November 2012
The Markets
The UK government borrowed much more than forecast in October, denting hopes that the UK will reach its deficit reduction target in 2012-13. According to the Office for National Statistics, UK public sector net borrowing hit 8.6 billion pounds in October, a significant rise from the 5.9 billion borrowed in October 2011. On the continent, after 12 hours of talks in Brussels on how to reduce Greece's debt, ministers failed to reach an agreement. The French finance minister said the Eurozone "would be threatened if we did not reach a deal" before saying a deal was "very close". To date there has been a disagreement among ministers and the International Monetary Fund on how to make the debt more manageable. Over in Japan, exports have fallen for the fifth consecutive month after demand in China and the European Union (EU) softened further. Exports to China were down by 11.6% in October and exports to the EU were down by 20.6%. This is particularly significant as Japan's economy is heavily reliant on exports. Martin Schulz of Fujitsu Research Institute said "This is basically the new normal that we have to deal with, well into next year". At the London close the Dow Jones was up by 28.90 points at 12,817.41 and the Nasdaq crept up by 1.44 points to 2,596.10. In London the FTSE 100 closed up by 3.15 points at 5,751.25; the FTSE 250 finished 46.48 points down at 11,744.35; the FTSE All-Share lost 0.14 points to 3004.38; and the FTSE AIM Index crept up by 2.54 points to 687.12.  Broker Notes Canaccord Genuity maintained a "buy" recommendation on healthcare equipment firm Optos (OPTS) with an unchanged target price of 312p. The broker was impressed with the company's recent revenue announcement of 196 million dollars (123 million pounds) for the year to September, which was 3% ahead of general market expectations. The broker also believes in the company's plans to expand into new geographic territories and is of the persuasion that this would lead to continued revenue growth and improved operational margins. The shares grew by 8p to 173p. Panmure Gordon reiterated its "buy" recommendation on food group Greencore (GNC) with a target price of 95p. The broker forecasts that the company will announce a profit before tax figure of 54.4 million pounds for the current year, a 43% increase, as a result of the acquisition of Uniq and growth in "food to go" and prepared meals. The broker goes on to state its belief that Greencore remains well positioned to deliver future growth from these key sectors. The shares remained flat at 90p. N+1 Singer maintained its "buy" stance on Dialight (DIA) with a target price of 1,355p on the back of the firm's announcement that it has secured a major order worth $400,000 to provide LED lighting fixtures and installation to a solar thermal plant, with 125MW of capacity. The broker believes that this announcement highlights the strength and depth of Dialight's industrial lighting opportunity as well as its product's applicability in hazardous environments. The shares dropped 21p to 1,115p. 
Blue-Chips Platinum refiner Johnson Matthey (JMAT) reported a 17% drop in revenues to 4.9 billion pounds and a 6% fall in pre-tax profits to 183.4 million pounds for the 6 months ended 30th September. The fall in revenues was largely driven by a substantial fall in sales in the precious metal division. The company also warned that it does not expect the second half of the year to be much better and cites relatively low average precious metal prices as the reason for this gloomy forecast. The shares lost 135p to 2,190p. Catering giant Compass Group (CPG) posted a 9% increase in operating profit to just under 1.2 billion pounds for the year ended 30th September and attributed growth to strong performances in North America where there were good levels of net new business. As a result of these promising figures, the company, which serves on average 4 billion meals a year, increased the full year dividend by 10% to 21.3p. The shares were down by 9.5p at 699.5p. Professional support services company Capita (CPI) has signed a contract with the Northern Ireland Social Security Agency to deliver assessments for the new personal independence payment (PIP) in a deal worth 65 million pounds over 5 years. PIP is set to replace Disability Living Allowance from April 2013 as part of the government's welfare reform plans. This follows an announcement in August this year that Capita was awarded the contract to deliver PIP assessments across central England and Wales. The shares crept up by 3.5p to 722.5p. 
Mid Caps Cycle and autoparts retailer Halfords (HFD) announced a 0.4% increase in group revenue to 455.6 million pounds for the 6 months ended 30th September. The firm's retail performance improved in the second quarter after a shaky first quarter as the firm took advantage of the "summer of sport". Despite this, the company posted a 22% drop in pre-tax profits to 42.4 million pounds yet maintains its full year group profit guidance of between 66 million pounds and 70 million pounds. Halfords also maintained its interim dividend at 8p per share. The shares fell by 2.8p to 342.2p. Aerospace and defence company QinetiQ (QQ.) announced a 7% drop in revenues to 685.5 million pounds for the half year ended 30th September reflecting continuing contract delays in its US Services sector. Despite this drop the company was able to report a 9.1% jump in pre-tax profits to 80 million pounds as the operating margin in the UK services industry more than offset slightly lower margins in the US. The shares inched up by 0.8p to 196.5p. Infrastructure investment company HICL Infrastructure Company (HICL) announced a 37% increase in pre-tax profits to 42.2 million pounds for the six month period ended 30th September. Significantly, the company has paid back all of its debt and is now completely ungeared after the conversion of its C shares in March. This, together with a "healthy pipeline of opportunities", should provide good news for investors. The shares decreased by 3.5p to 121.6p. 
Small Caps & AIM Medical diagnostics company Omega Diagnostics (ODX) reported that revenues, gross profits and gross margins are all in line with last year. However, the firm's adjusted profit before tax was down by 12% to 0.38 million pounds. This was driven by a drop in sales in Germany amid the weakening of the euro. This news comes after Seymour Pierce Research reiterated its "buy" stance on the firm with an unchanged target price of 25p earlier this week. The shares climbed up by 0.13p to 13.88p. Imaginatik (IMTK), the technology and consultancy firm, reported a 8% increase in revenues to 1.75 million pounds and a 16.3% drop in losses to 0.36 million pounds for the half-year ended 30th September 2012. The hike in revenues was primarily driven by a significantly higher level of new customers during the period (17) whereas in the same period last year the firm only added 3 clients to its customer base. Broker Northland Capital reiterated its "buy" recommendation on the shares with a target price of 1p. The shares were up by 0.04p at 0.32p. Software provider to the creative media industry, Zoo Digital (ZOO), reported a 5% increase in revenues to 6.2 million dollars and an operating profit of $200,000, swinging from a loss of $1.1 million, for the six months ended 30th September. The move to a profitable position was driven by an enhanced portfolio and a focus on higher margin areas. The shares increased by 0.25p to 15.75p. 
Clean energy company Acta S.p.A (ACTA) has signed a five year supply agreement with FutureE Fuel Cell Solutions GmbH in a deal worth over 3 million euros (2.4 million pounds) in revenues. The deal relates to Acta's low-cost EL500 series electrolysers, a hydrogen generator which is planned to be integrated into FuturE's future cell and electrolyser system for back-up and off-grid power. The shares gained 0.375p to 6.125p. Financial services company BCB Holdings (BCB) reported a swing into profit for the second quarter ended 30th September as it revealed a net income from operations of 2.6 million dollars (1.63 million pounds) after a net loss of 6.3 million dollars (3.96 million pounds) last year. BCB'S current operations are principally comprised of the parent company, which operates through Belize Bank, the largest bank in the Central American country. The shares rose by 3.25p to 20p. Gold production company Peninsular Gold (PGL) announced a 9% increase in gold production from its Raub mine in Australia to 18,100 ounces for the financial year ended 30th June, with revenues of 18.7 million pounds. The firm also revealed the identification of several new mineralised bodies, located relatively near the Tersang Deposit. which are all now subject to detailed exploration by means of ridge & spur, and rock sampling. The shares remained flat at 18.875p. | 
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