From UK-Analyst.com: Thursday 6th December 2012
The Markets The Labour party has labelled yesterday's Autumn Statement a direct attack on low-income workers, as working age benefits, tax credits and child benefit will only increase by a below inflation 1% in the next three years. Shadow Chancellor Ed Balls said, "Osborne somehow wants to attack people he thinks are workshy but if you look at the facts, 60% of the people who are affected by the 1% squeeze are in work". However, Chancellor George Osborne defended his position, stating that a 1 billion pound raid on the pension pots of the wealthy meant the "richest 20% have paid most". Staying in the UK, the government's failure to meet key public debt targets "weakens the credibility" of its AAA credit rating, according to the Fitch ratings agency. A cut to the UK's credit rating could seriously dent its growth prospects as the country would be seen as a more risky borrower, thereby raising the cost of borrowing from international investors. A spokesman for the rating agency said "In our view missing the targets weakens the credibility of the UK'S fiscal framework, which is one of the factors supporting the AAA rating". Over in Ireland the government announced similar debt-reducing measures in its budget for 2013, which included a new property tax of 0.18% of the value of a home worth up to 800,000 pounds. It was also revealed that the projected budget deficit of 8.2% next year would steadily fall to 2.9% in 2015. Irish Finance Minister, Michael Noonan said "There are signs that the country is emerging from the worst of the crisis and that the efforts of the Irish people, despite the hardship, are leading to success." At the London close the Dow Jones was up by 18.68 points at 13,053.17 and the Nasdaq rose by 18.58 points to 2,656.47. In London the FTSE 100 increased by 9.34 points to 5,901.42; the FTSE 250 finished 46.12 points up at 12,149.23; the FTSE All-Share gained 5.99 points to 3084.74; and the FTSE AIM Index crept up by 1.43 points to 689.47.  Broker Notes Canaccord Genuity has maintained a "buy" recommendation on childcare provider CareTech (CTH) with a target price of 1,320p. The broker noted that the firm is now moving away from its traditional core businesses to higher margin operations including residential services for young people and fostering and mental health which now make up a combined 33% of the company's revenue, up from 31% last year. The broker expects the company to continue with this shift in business and highlights the fact that these areas also require less capital expenditure than other operations. This led the broker to believe that net debt should remain under control while expansion continues. The shares were down 0.25p to 172p. Panmure Gordon has reiterated its "buy" recommendation on online retailer Asos (ASC), also increasing its target price from 2,800p to 2,875p. This comes after a site visit in which the broker was impressed with the "enormous potential" for top line growth at ASOS. The broker believes that the new senior hires are on track to deliver margin improvements across the business. The broker also sees the company's established presence in China and Russia as key to its predicted growth. The shares gained 9p to 2,492p. Shore Capital has maintained its "buy" recommendation on Johnson Service Group (JSG) after the sale of its Alex Reid dry cleaning business in a deal worth 2.1 million pounds. The broker notes that the business only had an EBIT of 0.2 million pounds, so expects the sale to have a negligible effect on its forecast's. The company can use the proceeds to reduce its debt and, according to the broker, the sale will help progress the company back towards profitable growth. The shares lost 0.13p to 33.63p. 
Blue-Chips Financial Services Group Standard Charetered (STAN) revealed that income for 2012 is expected to be up by a high single digit rate underpinned by the firm's diversity of business by product and geography. Pre-tax profits are expected to grow by a mid single digit rate for the year, a figure which will be negatively impacted by the firm's 340 million dollar (211 million pound) payment made to the New York State Department of Financial Services in relation to sanctions compliance. The shares climbed 12p to 1500.5p. Banking group Barclays (BARC) confirmed the agreement to combine the majority of Barclays Africa's operations with Absa Banking Group. The agreement has been made in an attempt to create foundations for future growth and when complete, the new business will serve approximately 14.4 million customers through a network of over 1,300 outlets in 10 African countries. The combination will come into effect by the acquisition by Absa Group Limited of Barclays Africa Limited for a consideration of Asba shares worth 1.3 billion pounds. Barclays shares rose 4.1p to 250.5p. 
Mid Caps Supplier of electronic components Premier Farnell (PFL) announced a 1.6% drop in revenues for the 3rd quarter of the financial year which will end 3 February 2013, as profits tumbled by 10.8% to 17.3 million pounds. The Leeds based business, which has shed 41 jobs this year, attached part of the blame to a poor performance in the Americas region partly due to Hurricane Sandy. In Addition, sales in Europe were down by 9.4% on the previous year as customer confidence remains low and smaller businesses continue to hold back on spending. The shares jumped by 5.6p to 182.7p. Software group Micro Focus International (MCRO) reported a 5.4% slide in revenues to 207.3 million pounds but a 0.8% increase in pre-tax profits to 76.4 million pounds for the 6 month period ended 31st October. The driver for this drop in revenues was a 35% decline in revenues generated by the firm's consultancy division as economic woes in Spain, Italy and Japan continued to dominate. However, the company was able to report a profit despite the decrease in income because of lower operating costs associated with delivery of consultancy revenues. The shares dropped by 4.5p to 566p. Packaging firm DS Smith (SMDS) revealed a revenue increase of 61.6% to 1.67 billion pounds and a corresponding 62.5% rise in pre-tax profits to 106.1 million pounds for the first half of the 2012/13 financial year. This improvement in performance was attributed to higher margins in the firm's corrugated and plastic packaging businesses and, more significantly, a cash synergy of 47.9 million pounds in relation to the integration of SCA packaging after the acquisition of the firm earlier in the period. The shares finished up 4.6p to 218.1p. 
Small Caps & AIM Online gambling firm Probability (PBTY) reported a revenue increase of 38% to 4.53 million pounds and a pre-tax loss of 658,000 pounds for the 6 month period ended 30th September. This increase in revenues was driven by a 44% rise in the deposits received but profits from these deposits were reversed by "intensive marketing investments". The company now seeks to intensify its international presence and completed the acquisition of smaller firm Playyoo in an attempt to accelerate entry into the regulated Italian gambling market. The shares fell by 0.5p to 70.5p. Luxury brand Mulberry Group (MUL) revealed a 6% rise in revenues to 76.5 million pounds but a 36% fall in pre-tax profits to 10 million pounds for the six month period ended 30th September. This fall in profits was due to a 4.7 million pounds increase in operational costs brought about by an increase in the number of directly operated international stores. Despite this fall, the group remain confident that full year revenue and profit will be in line with market expectations. The shares gained 20p to 1,175p. Supplier of image understanding products OMG (OMG) announced an 11.7% growth in revenues to 29.5 million pounds and a 157% increase in pre-tax profits to 1.8 million pounds for the financial year ended 30th September. This improvement in results was boosted by the company's House of Moves business, a business which offers state of the art motion capture cameras, as it doubled revenues to 4 million pounds over the period. The shares slipped by 1p to 33p. 
Escher (ESCH), a provider of software to the postal industry announced the agreement between itself and POS Malaysia, the postal service in Malaysia, to deliver its new postal retail system for an undisclosed fee. The agreement is for Escher to provide its Riposte software which is a package that covers all areas of postal service including retail, postal, payments and money transfer capabilities. Escher expect the contribution made from this contract to have a material effect on the group's revenues for the year ended 31st December. The shares rocketed by 40p to 242.5p. Endace (EDA), the technology company, has confirmed that it is subject to a takeover offer from El Dorado Research Ventures Limited, a 100% owned subsidiary of Emulux Corporation. The offer is for 5 pounds in cash for each share in the company which represents a 65% premium to the mid-market closing price on 5 December of 302.50p. There are a number of conditions attached to the offer including consent from the Ministry of Business Innovation and Employment in respect of the status of various grants received by Endace. The shares soared by 176p to 478.5p. UBC Media Group (UBC) announced its suite of mobile applications for the NRJ and Virgin radio networks designed for its client Astral Media Canada has now reached 1 million downloads in Canada. The iphone applications offer on demand music and video streaming services and make Astral Radio the only radio broadcaster in Canada to offer such a service. The company also announced that its "Rock off" game has been launched by Absolute Radio today, a game which tasks listeners to identify a song from a short clip of music. Absolute Radio will market the game and share the micro payments with UBC. The shares were up 0.38p to 2.63. | 
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