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From UK-Analyst.com: Tuesday 21st May 2013
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The Markets UK inflation fell by more than expected in April, driven by a downturn in the price of petrol and diesel. According to the Office for National Statistics the retail prices index (RPI) was down from 2.8% in March to 2.4% in April - the first fall since September last year. The fall was largely attributed to a 2.1p fall in the price of petrol and a 3.9p fall in the price of diesel, which more than offset an increase in average food prices, which were driven by cold weather stunting crop production. Gerard Lane at Shore Capital explained, "We anticipate that if the CPI fuel measure continues to decline then the backdrop for UK consumer spending will improve, and the general retail sector can continue its outperformance." The UK government stuck with its guns as it braces itself for a report from the International Monetary Fund (IMF) tomorrow which is expected to suggest that Britain should diverge away from widespread austerity policies in order to return to growth quickly. The IMF had originally supported George Osborne's ideas on how best to cut the budget deficit but last month warned that austerity was not having the desired effect and argued that it was now a time to consider a new approach. However, a spokesman for Prime Minister David Cameron insisted. "Our view is that the economy is healing and we are on the right road, but we have to stick to it. The government believes it has the right economic approach." Global stock markets have recorded substantial gains in recent months, with investors seemingly unconcerned with issues such as the Eurozone debt crisis, a Chinese slowdown and the US economy's fragile recovery. The FTSE 100 is a prime example of this resounding investor confidence, as it currently trades around 13-year highs, constantly confounding City expectations of a major "correction" - for now. Lee McDarby, head of dealing at Investec Corporate Treasury, explained that, "The surge in equities has been partly down to (central banks') quantitative easing programmes and calling the top of this rally is proving increasingly difficult" ADVERTISEMENT Claim your complimentary book "Investing with Anthony Bolton", one of Britain's most successful investment managers
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At the London close the Dow Jones was up by 30.11 points at 15,365.39 and the Nasdaq grew by 2.76 points to 3,023.73. In London the FTSE 100 grew by 48.24 points to 6,803.87; the FTSE 250 finished 84.53 points higher at 14,805.45; the FTSE All-Share was up by 17.42 points at 3,580.47; and the FTSE AIM Index slid by 0.71 points to 727.80.  Broker Notes Panmure Gordon retained its "buy" recommendation on food group Greencore (GCG) with a 125p target price. The broker believes that Greencore continues to be well placed to capitalise on the long-term trends towards convenience food. Panmure also cited the fact that Greencore continues to trade at an "undeserved" discount to its peer group - on a P/E multiple of 8.5 and a EV/EBITDA multiple of 7.3 for 2013 - as further reason for its "buy" stance". The shares gained 10.25p to 128.25p. Cantor Fitzgerald retained its "hold" recommendation on fashion retailer Burberry (BRBY) with a target price of 1,362p. The broker believes that the firm's 2013 results demonstrated a "strong operational performance" and feels the figures are indicative of the brand being well positioned for growth. However, Cantor retains its "hold" recommendation on the group to reflect continued uneven trading patterns, which it sees as risky. The shares rose by 78p to 1,541p. N+1 Singer retained its "buy" recommendation on electrical retailer Darty (DRTY) with a target price of 65p. The broker feels that any further news on group divestments could act as a positive catalyst for the shares, which have recently exceeded the broker's target price. Although its original target price has now been eclipsed, N+1 Singer remains a buyer of the shares as the firm moves into a key recovery phase with a competent new CEO now in position and with Italy/Spain exit risks behind it. The shares climbed by 6p to 72.5p. 
Blue-Chips Retailer Marks and Spencer (MKS) revealed a 14.3% fall in statutory pre-tax profits to 564.3 million pounds on flat revenues of around 10 billion pounds for the year to March 2013. A slump in general merchandise sales offset a 1.7% rise in like-for-like food sales in a trend which was blamed on a highly promotional clothing market and unseasonal weather. On a positive note, the group's international business grew sales by 4.5% as its businesses in both India and China delivered double digit growth, while its franchise in the Middle East also performed well. The shares tumbled by 27.4p to 467.9p. Outsourcer Capita (CPI) has been selected by O2 as its preferred bidder to form a 10-year strategic partnership for customer management services. The deal could be worth around 1.2 billion pounds over its term. The group, which yesterday secured a deal to outsource work for Barnet Council, has now secured over 2 billion pounds worth of major new and extended contracts to date in 2013 and now expects to achieve greater than anticipated organic growth for the full year. The shares climbed by 56p to 1,005p. Cruise ship operator Carnival (CCL) warned that it now expects full year 2013 revenues to be down between 2% - 3% on last year's figures as opposed to remaining flat - a trend which was previously forecast. Although Carnival's current pricing policy has seen increased booking volumes, it has also resulted in lower than anticipated net revenue yields, which has resulted in the reduced earnings guidance. Furthermore, the company conceded that group earnings are likely to be between $1.45 and $1.65 per share compared to its previous guidance range of $1.80 to $2.10, as high fuel prices and unfavourable exchange rates take their toll. The shares sunk by 143p to 2,267p.
Mid Caps Online gaming group Bwin Party Digital (BPTY) confirmed that clean EBITDA in the first three months of the year was in line with expectations despite a 17% fall in revenues. This fall in revenues was attributed to a 5% turnover tax on sports betting in Germany, a significant reduction in acquisition marketing in several countries and lower than expected player activity from its poker and casino games. Looking ahead, the group is adamant that it is ready to capitalise when more US states regulate following Nevada and New Jersey's recent adoption of betting regulations. The shares slid by 4.1p to 139.2p. Utility supplier Telecom Plus (TEP) reported a 12.7% hike in pre-tax profits to 34.6 million pounds for the year ended 31st March as revenues rose by 27.6% to 601.5 million pounds. The increase in profitability was driven by growth in customers coupled with increased energy consumption, impacted by the prolonged cold weather experienced in the UK at the start of 2013. The group, which provides gas, electricity, telephony and broadband services, currently has a market share of around 1.5% of UK households and intends on further simplifying its offering in an attempt to enjoy further growth. The shares were down by 40p at 1,245p. Homeserve (HSV), the home emergency repairs group, reported a 20% fall in pre-tax profits to 105 million pounds for the six months ended 31st March after a steep fall in UK customers following an investigation into alleged mis-selling by the Financial Conduct Authority. The fall was partially offset by a 6 million pounds increase in pre-tax profits from within the company's international business. The update prompted broker Espirito Santo Execution Noble to retain its "sell" stance on the group with a 185p target price. The shares were up by 23.2p at 250.2p. Small Caps Engineering services group Renew Holdings (RNWH) revealed a fall in revenues from 182.4 million pounds to 152.4 million pounds for the half year ended 31st March but pre-tax profits rose by 7% to 4.6 million pounds. The fall in revenues was attributed to the group's building division, which is expected to deliver increased revenues from the second half of the year as orders have been confirmed and site works gather momentum. At a meeting with the company today, management hinted at possible acquisitions in the short-medium term as a means of accelerating growth. The shares decreased by 0.5p to 101.5p. Film production company Intandem Films* (IFM) has been encouraged on the response it has had at the Cannes Film Festival on 11 films which the group has on its sales slate. The group gave a special mention on the response it has received for its "Killing Hasselhoff" film with buyer interest particularly strong. Looking ahead, the group re-affirmed that it is attempting to raise the required funds to ensure that it can remain a viable business in the future and confirmed that it will update the market on any developments. The shares leapt by 0.18p to 1.03p Construction consultancy Driver Group (DRV) revealed that pre-tax profits for the 6 months ended 31st March almost doubled to 1.4 million pounds as revenues rocketed by 74.5% to 18.5 million pounds. The Rossendale-based group attributed this growth to ongoing success from within its international operations, with African revenues up by 57% and sales levels increasing in the Middle East and Europe. The group stressed that the acquisition of Trett Consulting was pivotal in delivering this success. The shares gained 7p, finishing the day at 101p. Synety (SNTY), the telephony software and services specialist, confirmed that it has completed the integration of its CloudCall click-to-call, call recording and in-depth reporting package with GoldMine CRM, a Customer Relationship Management software package. Synety believes that the integration provides access to a "fantastic potential customer base". The shares fell by 35p to 247.5p. Construction group ISG (ISG) revealed that its UK retail business has secured 50 million pounds worth of new projects since it last updated the market. Subsequently, the group's order book has increased by 45% to 148 million pounds. The new work includes agreements with Primark, Morrisons and John Lewis and a 40 million pounds per year framework agreement with an unnamed leading high street chemist. The shares crept upwards by 3.5p to 146p. Software provider Fusionex (FXI) announced a 32% increase in revenues to 18.5 million pounds for the 6 months ended 31st March, while pre-tax profits were up by 14.2% at 6.54 million pounds. The uplift in figures was boosted by good performances from within the core transactional systems division as well as the business intelligence arm. Looking ahead, the group plans to capitalise on the increasing levels of IT spend in the Asia-Pacific market, building on its increasing reputation in the region. Broker Panmure Gordon retained its "buy" recommendation on the group with a 336p target price at the beginning of this month. The shares were up by 9p to 246.5p. * Intandem Films is a corporate client of Rivington Street Holdings, the ultimate owner of UK-Analyst. | 
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