| From UK-Analyst.com: Tuesday 5th March 2013
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The Markets Britain's service sector grew at its fastest pace in five months in February, suggesting that the economy could narrowly avoid a triple dip recession. The Markit/CIPS Purchasing Managing Index (PMI) for services grew from 51.5 in January to 51.8 in February, a figure which was above the average analyst forecast of 51 (any reading above 50 indicates growth while a reading below 50 reveals contraction). The figures will provide some relief for the UK economy, which has already been dealt poor February figures in both the manufacturing and construction sectors. Chris Williamson, Chief Economist at Markit said the surveys so far indicate a 0.1% increase in GDP in the first quarter but added, "Growth could turn out stronger than this as there is good reason to believe that at least some of the weakness in manufacturing and construction was due to business being disrupted by bad weather, meaning a brighter picture may emerge in March" Staying in Britain, retail sales were up by 4.4% in February year-on-year and were boosted by increased demand for big-ticket items and household goods. Figures from the British Retail Consortium (BRC) also revealed that like-for-like retail sales were up by 2.2%. Both of these figures illustrate the fastest rate of growth since April 2011. In particular, the survey revealed that clothes sales rose at their fastest pace in five months, which helped to offset sluggish food sales thought to be negatively impacted by the horsemeat scandal. Despite the positive tone of the survey, Helen Dickinson, the BRC Director General, warned, "It is too soon to assume this represents the permanent turnaround we need. This month's budget gives the government a great opportunity to act to secure real and lasting revival from what could be no more than a short-lived lift." Over in Asia, China will boost expenditure in 2013 in an attempt to deliver economic growth of 7.5% according to outgoing premier Wen Jiabao. The world's second largest economy has seen expansion slide after a slowdown in both its domestic market and the markets of key trade partners such as the US and Europe. The government plans to improve the country's infrastructure, with measures including the laying of 3,225 miles of new railway this year as it looks to make it easier to transport goods around the vast country. Dariusz Kowalczyk from Credit Agricole CIB in Hong Kong commented, "The Chinese economy will decelerate from the second quarter, but the slowdown will not be significant enough to derail the economic recovery" At the London close the Dow Jones was up by 146.19 points at 14,274.01 and the Nasdaq increased by 34.99 points at 2,794.52. In London the FTSE 100 was up by 86.32 points at 6,431.95; the FTSE 250 finished 186.75 points up at 13,861.28; the FTSE All-Share gained 44.20 points to 3,385.66; and the FTSE AIM Index crept up by 1.87 points to 738.04.  Broker Notes Canaccord Genuity retained its "sell" recommendation on scientific research group Abcam (ABC) with a 344p target price. The broker is cautious on the widespread concerns on levels of future research funding in the US, particularly so because the US makes up over 40% of the group's revenue base. Canaccord goes on to say that the EV/EBITDA multiple of 14.8 times on which the shares trade is unjustifiably higher than the average sector multiple of 8.9. The shares shares gained 1.5p to 431.25p. Panmure Gordon maintained its "buy" recommendation on refurbishment and construction firm Interior Services Group (ISG) with a target price of 170p. The broker is impressed with the group's recent H1 results which revealed a 9% increase in the order book, with a heavy private sector focus. Panmure acknowledges that the UK market remains challenging but feels as if the group is in a good position to react to opportunities that may arise, while maintaining a tight control of costs. The shares remained flat at 137.5p. N+1 Singer re-iterated its "buy" stance on Moneysupermarket.com (MONY) with a target price of 220p. The broker increased its earnings forecasts for 2013 and 2014 by 3-5% based on the group's pre-close update in January and can see further upside to its numbers as a result of operational gearing. However, the broker notes the 30% increase in share price so far in 2012 and would not be surprised if the shares moved sideways in the near-term as the markets pause for breath. The shares were down by 4.1p at 199.1p. ADVERTISEMENT Want to learn what some of the UK's most successful investors think of the current markets?
Then make sure you come to this year's Master Investor show. Speakers include the UK's 112th richest man Jim Mellon, Innocent Smoothies founder Richard Reed and infamous bear raider Evil Knievil, amongst many others. To claim a free pair of tickets (worth £40) CLICK HERE and enter the promo code UKA2013 Blue-Chips Mining giant Xstrata (XTA) reported a 37% fall in profits to $3.65 billion (2.4 billion pounds) for 2012, a result which turned out to be better than the average $3.49 billion (3 billion pounds) profit estimate by analysts. The company, whose $33 billion (21.8 billion pounds) takeover by Glencore should be completed next month, attributed the fall in performance to a decline in commodity prices, ongoing inflationary pressure on operating costs and strong producer currencies relative to the US dollar. The shares increased by 78p to 1,177.5p. Engineering group Meggit (MGGT) posted a 10% increase in revenues to 1.6 billion pounds for 2012 while pre-tax profits grew by 12% to 362.8 million pounds. The firm, which supplies flight displays and wheels to Airbus and Boeing, attributed the increase partly to growth at its civil aerospace unit and a "resilient" showing from its military arm which grew sales by 7%. However, the group warned that revenues from its military unit would be flat at best in 2013 as a result of further cuts in US defence spending. The shares climbed by 10p to 471.4p. British outsourcer Serco (SRP) announced a 6% increase in pre-tax profits to 278.1 million pounds for 2012 as revenues grew by 6.2% to 4.9 billion pounds. The increase in performance was driven by new back office and Australian immigration contracts, which helped to offset weak markets in the US. As with Meggit, the group warned that business in the US - where Serco makes approximately a fifth of its sales - is likely to remain subdued and will be adversely affected by government cuts during 2013. The shares surged by 52p to 631p. Energy services group John Wood Group (WG.L) announced a 20% uplift in revenues to $6.8 million (4.5 million pounds) for 2012, with pre-tax profits up by 43% at $362.7 million (239.45 million pounds). The group, which builds and maintains oil and gas facilities, cited increased spend by oil and gas producers as reason for its encouraging results, a trend which it expects to continue during 2013. On the back of these promising figures the company has increased its full-year dividend by 26% to 17 cents per share. The shares were up by 61p at 819p. ADVERTISEMENT Spreadbet on the UK banks at t1pspreadbetting.com
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Mid Caps Provider of flexible workplaces Regus (RGU) revealed a 72% increase in pre-tax profits to 85.1 million pounds for 2012. This was driven by increased demand for its ready-to-use offices as companies look to cut spending on real estate. The firm, which offers office space for rental periods as short as half a day, opened 243 new centres in 2013, taking the total number of sites to 1,411, while customer numbers increased by 37% to 1.35 million. The recent consensus amongst analysts has not been overwhelmingly positive, with a host of brokers giving neutral stances in the past 2 weeks, while UBS has issued a "sell" recommendation with a target price of 80p. The shares soared by 20.20p to 149.7p. Perform (PER), the distributor of sports content across digital platforms, has acquired Voetbalzone.nl, a sports website in the Netherlands, for an initial consideration of 2 million euros (1.7 million pounds). The fees involved have the potential to grow by an additional 10.5 million euros (9.04 million pounds) depending on the EBITDA of the website for the next three years. The acquired website covers football news and attracts an average of 2 million unique users per month. The shares jumped by 6.6p to 421.6p. Construction equipment rental firm Ashtead Group (AHT) grew pre-tax profits from 20.6 million pounds to 53.8 million pounds in the three months ended 31st January. The main driver was growth within the firm's Sunbelt business, the second largest equipment rental business in the US market, which grew revenues by 27%. Furthermore, the quarter benefited from hurricane Sandy, as people and businesses required equipment on a short-term basis to deal with the aftermath of the storm. The shares leaped by 36.5p to 561p. 
Small Caps & AIM Transense Technologies (TRT), the provider of sensor systems, declared that its IntelliSAW business has been chosen as provider of wireless sensor systems for the monitoring of 340 switchgears at the Fuxin Special Steel Plant of Fujian Province, China. The deal marks the first fit out of an entire facility with IntelliSAW sensors, which will be installed to help ensure a safe supply of electric power throughout the site by continuously monitoring 2000+ critical points inside the switchgears. In addition to the deal, the group revealed that 5 pilots for the same product have either begun or will commence within the coming weeks in regions spanning the U.S, China and Abu Dhabi. The shares shot up by 1.625p to 8.875p. Back office software provider Access Intelligence (ACC) announced an 11% increase in turnover to 8.05 million pounds for the year ended 30th November 2012, yet losses grew by 23,000 pounds to 114,000 pounds. The company pointed to an increase in operational costs as reason for this as well as an increase in research and development investment. On the back of the results broker Merchant Securities initiated coverage on the shares with a "buy" recommendation and a 7p target price. The shares edged up by 0.125p to 3.5p. Fruit and vegetable distributor Total Produce (TOT) reported a 8% increase in pre-tax profits to 37.1 million euros (31.94 million pounds) for 2012, driven by good trading across all divisions. Revenues from the group's fresh produce division increased by 11.2% to 2.708 billion euros (2.33 billion pounds) helped by a relatively low comparable second half period in 2011 which was impacted by the EHEC scare. The group, whose operations have recently expanded into North America and Africa, went on to stress that trading has been satisfactory in the start of 2013. The shares were up by 0.01 euros to 0.60 euros. 
Earthport (EPO), the provider of cross-border payment services, has entered into an agreement with hyperWALLET Systems inc, a global payment provider which facilitates company payments to employees and other beneficiaries. The integration of hyperWALLET's services has been completed and the corporate payments service is now live. The update comes just days after the company revealed it experienced a 73% increase in transactions during 2012.The shares gained 0.13p to 20.12p. Biotech research and development company Silence Therapeutics (SLN) announced that it has received formal approval from the German authorities to commence trials of its pancreatic cancer drug. The trials will focus on the effectiveness of Silence's AUT027 compound, which prevents the spread of cancer from one organ to another, when combined with Gemcitabine, a tumour-fighting drug. The company went on to hint on a possible fundraise as it looks to accelerate its plans surrounding the drug. The shares finished ahead by 0.9p at 4.95p. Oil and gas exploration and production company Sefton Resources (SER) revealed that February oil production in California was marginally up on January's figure of 111 bopd at 118 bopd, while production from its six wells in Kansas currently stands at 300 bopd. The group was keen to stress that it hopes to increase production levels in Kansas as ongoing infrastructure improvements continue. The shares fell by 0.1p to 0.78p. | 
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