From UK-Analyst.com: Wednesday 30th January 2013
The Markets The U.S economy contracted by 0.1% in the final quarter of 2012 according to initial official estimates as it suffered its first decline in over 3 years. The contraction comes largely as a shock to analysts on Wall Street who had been expecting 1.1% in growth with the White House pointing the finger at spending decreases (primarily in defence) and Hurricane Sandy. Alan B. Kruegar, the chairman of the Council of Economic Advisers said, "Both international trade flows and inventory accumulation could have been affected by disruptions caused by Hurricane Sandy, although a precise estimate of the effect of the hurricane on GDP is not available" The Spanish economy took another turn for the worse in the last three months of 2012 as government figures revealed a 0.7% drop in GDP on the previous quarter in an acceleration of the pace of contraction in Europe's fourth largest economy. The country currently suffers from excessive household and company debts as well as a struggling banking sector and the highest unemployment rate in Europe. Citigroup strategist Jose Luis Martinez commented, "These sharp falls leave a tough scenario for the first two quarters of this year. The question is how market improvements can soften the falls, but it's still too early to tell." In the UK, the government is cranking up the pressure on the country's biggest firms to include more women on their boards. There are only 2 female bosses of FTSE 100 companies at present although, according to the government, the number of all-male boards has fallen 66% to 7 in the past two-and-a-half-years. Business Secretary Vince Cable argued that a more diverse board is the way forward for companies and said, "The evidence supports this-diverse boards are better boards benefiting from fresh perspectives, opinions and new ideas which ultimately serve the company's long-term interests." Over in Asia, Singapore's government said it expects its population to grow by 30% to 6.9 million by 2030 as the ramifications of the country's controversial immigration policy continue to take effect. The country's government has been widely criticised for letting too many people come and live in the country resulting in inflated property prices and living costs. However the government argued that immigration was key in the future of the country's economy: "If we do too little to address the demographic challenge, we risk becoming a steadily greying society, losing vitality and verve, with our young people leaving for opportunities elsewhere" Â At the London close the Dow Jones was down by 5.31 points at 13,949.11 and the Nasdaq grew by 7.94 points to 2,751.52. In London the FTSE 100 decreased by 18.79 points to 6,320.40; the FTSE 250 finished 69.97 points down at 13,037.59; the FTSE All-Share fell by 10.88 points to 3,307.09; and the FTSE AIM Index was down by 3.88 points to 733.10.  Broker Notes Panmure Gordon reiterated its "buy" recommendation on temporary accommodation provider Snoozebox (ZZZ) with a target price of 86p. The broker was impressed with the group's recent trading statement which showed that 2012 revenue is anticipated to be ahead of expectations. In its outlook for the firm Panmure believes that 2013 will be a strong year with bookings for all B2C events currently running at encouragingly high levels. Additionally, according to the broker's forecasts the group will be trading on a EV/EBITDA of 5.6x by 2015, compared to the hotel sector at 9.8x, an unwarranted discount in the eyes of Panmure Gordon. The shares slipped 0.5p to 68.5p. N+1 Singer Equity Research maintained its "buy" stance on Engineering services group Renew Holdings (RNHW) with a target price of 120p. The broker noted the firm's recent Q1 update, which showed that trading has been in line with expectations, and was especially impressed with the 9 million pound increase in the order book to 340 million pounds. The broker also cited the "attractive" reduction in the group's prospective P/E of 6x in 2015 as further justification for its "buy" stance. The shares remained flat at 91p. Shore Capital retained its "buy" recommendation on F&C Asset Management (FCAM) despite a 1.6 billion pound decline in AUM (assets under management) for the last 3 months of 2012. The broker acknowledges that this drop in AUM is a result of previously notified strategic partner outflows which command very low management fees. Shore Capital went on to explain that its faith in the company is underpinned by the increase in funds under management within its consumer and institutional division which is consistent with management's previously outlined strategy of focusing on higher yielding money. Furthermore, the broker believes the company's successful cost-cutting programme will be a positive catalyst for the shares in the future. The shares were down 0.8p to 106.2p. 
 Blue-Chips Tobacco producer Imperial Tobacco (IMT) reported a 2% hike in tobacco net revenue for the 3 months ended 31st December 2012 despite worsening market conditions in important markets such as Russia and the EU. However, due to the group's current investment in new territories it expects to post a drop in year-on-year operating profits, while other key metrics for the full year should be in line with expectations as a result of a cost optimisation programme. The shares fell by 105p to 2,361p. Chemicals company Johnson Matthey (JMAT) posted a 19% decline in pre-tax profits to 84.3 million pounds for the 3 months ended 31st December 2012 driven by lower volumes in its precious metals division. Also to blame for the slump was a 10% reduction in vehicle catalyst sales as demand dropped from high value diesel products in Europe and Japan, the latter benefiting last year from the strong recovery following the earthquake and tsunami. The shares were down 102p to 2,306p. A judge in the U.S has sanctioned the agreement by oil giant BP (BP.) to plead guilty for its role in the Deepwater Horizon disaster back in 2010 and pay 2.5 billion pounds in criminal penalties. The group pleaded guilty to 11 felony counts in relation to workers' deaths and will now face 5 years of probation and the imposition of two monitors who will oversee its safety and ethics for the next four years. The Deepwater Horizon disaster was a result of an explosion on a oil rig off in the Gulf of Mexico and resulted in a total of 4.9 million barrels of oil being released into the Gulf over 87 days. The shares inched up 0.25p to 475.90p.
Mid Caps Manufacturers for the healthcare industry Reinshaw (RSW) announced an 18% jump in revenue to 144.2 million pounds for the 6 months ended 31st December 2012 driven by a significantly increased contribution from China-sourced revenue. Divisionally, revenue from its metrology sector was up by 20% as a result of growing demand for products in its tool product line and a good growth in sales was also exhibited by its encoder products. The shares lost 100p to 1,860p. Builders merchants Travis Perkins (TPK) has acquired renewable energy distribution specialists Solfex Energy Systems for an initial cash consideration of 8 million pounds with further payments due depending on performance. Soflex operates as an integrator of renewable energy systems, using its distribution platform to integrate and supply components to the UK's renewable companies and was listed as the UK's fifth fastest growing private company in the Sunday Times Fast Track 100. The shares fell 14p to 1,196p. Iron ore pellet producer Ferrexpo (FXPO) saw pre-tax profits plunge by 57% to 228 million dollars (145 million pounds) for the 9 months ended 30th September 2012 due to a combination of increased costs and a reduction in demand. The Ukraine-focused firm reported that costs rose from 49.4 dollars (31.40 pounds) per tonne to 59.9 dollars (38 pounds) per tonne while iron was subject to a worldwide fall in selling price. This news comes after broker Seymour Pierce reiterated its "buy" recommendation on Ferrexpo while lowering its target price to 373p. The shares decreased by 14.9p to 257p. 
Small Caps & AIM International interior design specialists Aukett Fitzroy Robinson Group (AUK) announced a 6% hike in revenues to 9.15 million pounds for the year ended 30th September 2012 due to improved trading from all four of its geographic territories. As a result of this uplift in revenues the group was able to post a pre-tax profit figure of 210,000 pounds in a turnaround from a loss of 1.2 million pounds in the previous corresponding period. The shares soared by 1p to 3.63p. Highland Gold Mining (HGM) announced that group wide production grew by 18% to a record 216,885 ounces of gold from its three flagship gold mines in Russia in 2012, exceeding its guidance estimates set out at the start of the year. The group now has 13 Moz of JORC compliant resource under its control, an increase of 2.2 Moz reflecting the contributions from the acquired Unkurtash, Klen and Lyubov sites. On the back of this news Westhouse Securities reiterated its "buy" stance on the group with a target price of 160p. The shares remained flat at 112.75p. Neos Resources (NEOS), the Asian focused producer of oil seed complexes, announced it will cancel its listing on AIM on 28th February 2013. The decision has been taken as means to negating the significant costs in both cash and management time that the listing imposes. However, cancellation is still conditional on 75% of shareholders agreeing to the measure, which will surely raise concerns for investors. The shares plummeted 0.12p to 0.16p. 
Mineral exploration company Great Western Mining Corporation (GWMO) announced that after applying to commence drilling operations at target M2, a plan of operation to drill has now been approved by the Bereau of Land Management in Nevada. The group say that it has recognised the potential of the M2 target for some time but has been held back because of inaccessibility. However, after uncovering an abandoned country road which has made access considerably easier, the company has now prioritised this project. The shares remained flat at 0.11 euros. Livestock auctioneer John Swan & Sons (SWJ) reported a pre-tax loss of 135,000 for the 6 months ended 31st October 2012 after virtually breaking even in the prior year. The Edinburgh-based firm partly attributed this loss to a heavy reduction in demand for lamb in southern Europe amid economic uncertainties. The company also cited adverse weather conditions and the adverse effect this had on the quality of livestock it could put forward to sale as further reason for the shift to a loss-making position. The shares remained flat at 350p. Software provider Sopheon (SPE) revealed it expects to report revenues above market expectations of 12 million pounds for 2012 in an increase from 10.3 million pounds in 2011. In addition, 50% of the company's revenue last year came from new customers in a significant increase from the 21% share in 2011. The company attribute this uplift in performance to "key" new hires which have accelerated the growth plans of the business. The shares gained 0.5p to 7.25p. | 
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