From UK-Analyst.com: Monday 11th February 2013
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Competition Congratulations to Mark Hutchins whose caption (below) has been voted the funniest and has won the UK-Analyst Friday competition. Watch out for another contest at the end of the week. 
Merkel: "You are always wanting to be different from everyone else. Now for lunch you want your lasagne without the meat." The Markets The economy in Scotland has improved since the start of the year, according to a Bank of Scotland PMI report, as business activity in the country reached a seven month high in January. The report indicated that output and new work picked up for businesses last month as pressure on operating capacity led to firms creating more jobs. Bank of Scotland Chief Economist, Donald MacRae said, "This result suggests that the Scottish economy not only started the year in growth mode but has maintained moderate growth throughout January 2013". Economic data for the Eurozone due to be released this week is set to show the harsh reality of the sovereign debt crisis across the block, with many analysts predicting a 0.4% quarterly drop in GDP. If true, this would represent the biggest quarterly decline since the first quarter of 2009 after GDP fell by 2.8% on the back of the collapse of Lehman Brothers. Gilles Moec, co-chief European economist at Deutsche Bank in London commented, "The fourth quarter was a double whammy for Europe, with austerity and exports to the U.S falling off". The Australian Parliament has called for technology giants Apple, Microsoft and Adobe to appear before a committee in an investigation centred on disproportionally highly priced products in the Australian market. Consumer bodies have argued for some time that Australians are constantly overcharged for goods in the country. Ed Husic, a member of parliament, argued that this was an important issue for the country's economy and said, "Getting downward movement in I.T prices and easing the bite of price discrimination should be an important micro-economic priority-so I'm looking forward to hearing from these firms about their pricing approaches". 
At the London close the Dow Jones was down by 18.52 points at 13,974.45 and the Nasdaq was up by 0.05 points to 2,775.61. In London the FTSE 100 increased by 13.13 points to 6,277.06; the FTSE 250 finished 1.62 points down at 13,373.63; the FTSE All-Share gained 4.03 points to 3298.30; and the FTSE AIM Index crept up by 1.19 points to 747.55.  Broker Notes Panmure Gordon maintained its "buy" recommendation on security group G4S (GFS) and increased its target price from 295p to 320p. The broker noted that the volume of work for the sector is likely to increase in the years approaching the next general election in 2015 and believes G4S is in a good position to capitalise on this. Panmure goes on to say that the valuation looks undemanding, with G4S trading at a 14% 2013E P/E discount to its outsourcing peers. The shares inched up by 0.9p to 280.3p. Canaccord Genuity retained its "buy" recommendation on recruiter Hays (HAS) with a 9% increase in target price to 110p. The broker cites the recent positive jobs data in the UK as pivotal in its belief that Hays' UK business will return to net fee income growth in the early summer this year. Canaccord expects this growth to be driven by a recovery that will occur in the group's accountancy and finance division, a division which accounts for 30% of Hays UK net fees at present, in a reflection of the latest and more promising jobs forecasts in the sector. The shares were up by 0.45p at 93p. Daniel Stewart reiterated its "buy" stance on medical group Beximco Pharmaceuticals (BXP) with a target price of 42p. This comes on the back of Bexicmo announcing that it has commenced exporting its products to Europe, in a initiative that the broker sees as a step which could potentially open up a reliable long-term recurring revenue stream. The products in question are for the treatment of eye disorders and Bexicmo expects to launch more products into the EU later this year, enhancing Daniel Stewart's long-term view of the company. The shares gained 1.375p to 22.25p. 
Blue-Chips Engineering giant Rolls Royce (RR.) has secured a $97.3 million (62 million pounds) contract to support the US Air Force's C-130J transport fleet. Under the agreement Rolls Royce will support and service the aircraft's engines and propellers as well as providing technical data support for the fleet. The shares decreased by 8.5p to 967.5p. Aberdeen-based oil services group John Wood Group (WG) also reported a significant contract win. The firm will be tasked with the engineering and design of an offshore platform in the Norwegian sector of the North Sea after being awarded a contract by Singaporean Contractor SMOE. Wood Group's Mustang subsidiary will design the 13,700 tonne topsides facility for the Ivar Aasen oil and gas platform which will then go on to be operated by Norwegian exploration group Det Norske. The fees involved were not disclosed. The shares fell by 10p to 808p. UK property investor British Land (BLND) has acquired a portfolio of properties in London from Wareldhave for a grand total of 183.6 million pounds. The bulk of this deal relates to Ealing Broadway shopping centre, which accounted for 142.5 million pounds by way of share acquisition. Other properties in the acquired portfolio include office space in Baker Street and Great Portland Street. The shares were up by 3p at 570.5p.
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Mid Caps Software provider to the financial services industry Fidessa (FDSA) announced flat revenues of 278.6 million pounds for 2012, while pre-tax profits fell by 1% to 42.5 million pounds. The group attributed these stagnant results to difficult conditions in the global financial markets, with the value of equities traded falling by 20% on the already subdued levels seen in 2011. Although these results do not seem too promising, broker Jeffries has faith in the business and reiterated its "buy" stance on the shares, increasing its target price from 1,510p to 1,690p. The shares climbed by 50p to 1,577p. Balfour Beatty (BBY), the infrastructure services group, has been appointed preferred bidder for Aberystwyth University's 45 million pound student accommodation project. When finished, the project will provide accommodation for 1,000 students as well as enhanced learning and communal facilities as the university attempts keep pace with other higher education institutes across the UK. Balfour Beatty already has a significant presence in the UK student market, with its most recent contract win coming back in November as it secured work relating to the University of Westminster's 110 million pounds student accommodation project. The shares gained 2p to 272.60p. 
Small Caps & AIM Cloud based video technology group Forbidden Technologies* (FBT) has entered into an agreement with Atos Ltd, a systems integrator in South Africa. Under the deal Atos will add Forbidden Technologies' flagship FORscene video editing platform to its South African portfolio of products, providing the product to media clients in South Africa and across the whole of the African continent. Although there will be a small up-front payment received by Forbidden Technologies, the majority of revenue generated will be through royalties as Atos clients take up the platform from Atos. The shares jumped by 2.5p to 24.25p. Online games group Zattikka (ZATT) announced that its flagship web browser football game, Hattrick, is extending its international reach into Russia via a partnership with Championat, a Russian sports website. Crucially, Hattrick will be promoted on the site through a series of campaigns in what Zattikka hopes will increase cross selling opportunities for the game. The partnership is in line with Zattikka's strategy of enhancing the game's presence in Russia in what it sees as a key market for growth. The shares gained 0.5p to 45.5p. Risk management company Active Risk Group (ARI) expects its performance for the financial year ended 31st March 2013 to be below market expectations. The group attributed its underperformance to difficult trading conditions in the company's core markets and deferrals in some significant contracts, especially in the US defence sector and the Australian mining market. The group stressed that it has since adjusted its cost base as it looks to focus on profitability. The shares fell by 2.5p to 14p. 
Metals miner firm Noventa (NVTA) admitted that 2013 production levels of Tantalum Pentoxide (a metal widely used in electronic products) from its Marropino mine in Mozambique will be significantly lower than initially projected. As a result it is now doubtful that the company will be in a position to pay back the medium-term loan agreement it entered into with Richmond Partners Master Limited back in August. Production in December and January dropped to an average of 1,642lbs compared to an average of 5,360lbs in December and November in a drop off which was attributed to unreliable electricity and adverse weather conditions, amongst other factors. The shares plummeted by 2.57p to 1.1p. Drug development company e-Therapeutics (ETX) revealed that it intends to raise 40 million pounds via the issue of new ordinary shares at a price of 32p, a premium of 4% to the closing mid-market price on Friday. The group plans to spend around 25 million pounds of the proceeds on completing phase 1 trials for its cancer-fighting ETS2101 drug and on ultimately taking the drug to market. If the placing goes through the company expects to have adequate resources to support all of its planned discovery and development activities up until 2017. The shares were up by 1.5p at 32.25p. Following on from Blinkx's (BLNX) positive trading update in November, in which the company revealed it had an excellent first half, the group confirmed that trading continued to be strong over the third quarter. The video search engine went on to say that revenues for the full year will now be above market expectations at between $180-$185 million (115-118 million pounds). The primary driver of this performance was increased campaign spending in the U.S election cycle. The shares climbed by 17.5p to 85.5p. * Forbidden Technologies is a corporate client of Rivington Street Holdings, the ultimate owner of UK-Analyst. | 
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