| From UK-Analyst.com: Wednesday 5th June 2013 IMPORTANT: Are your UK-Analyst emails being delayed? Add UK-Analyst@news.t1ps.com to your safe senders/contact list to help resolve the problem The Markets The UK services sector expanded by more than expected in May, in yet a further data release which suggests that the UK economy is recovering. Markits' Purchasing Managers' Index (PMI) for services increased to 54.9 for the month, up from 52.9 in April, in a result which surpassed the average analyst estimate for a slight rise to 53. The figures come just a day after it emerged that the UK construction industry had returned to growth after a six month contraction. It is thought that the growth of the services sector - which accounts for more than 75% of the UK economy - was boosted by improved weather and a hike in the number of new businesses. Ross Walker, an Economist at Royal Bank of Scotland, was upbeat on the figures and said, "Once again the outturn is not only above expectations but above the top end of the City forecast range...It certainly re-enforces the notions that growth in Q2 is at least matching Q1." Over in Australia, data from the nation's Bureau of Statistics has revealed that the economy expanded by less than expected in the first three months of the year. According to the figures, the economy grew by 0.6% over the previous quarter but shortfalls in machinery and equipment investment partly offset good progress in household spending. On an annual basis growth over the period hit 2.5%, which was the first time it was below 3% since the last three months of 2011. Michael McCarthy of CMC Markets warned, "These are definitely disappointing numbers and there is surely going to be added pressure on the Reserve Bank of Australia to take steps to revive growth." Over in the US, it has emerged that U.S companies hired fewer workers than expected during May in numbers which were blamed on increased corporation tax and federal budget cuts. The 135,000 extra people that were in work over the month was below the widely anticipated level of 165,000. This did however build on April's gain of 113,000. Mark Zandi, Chief Economist at Moody's Analytics, commented, "The job market continues to expand, but growth has slowed since the beginning of the year. The softer job market this spring is largely due to significant fiscal drag from tax increases and government spending cuts." 
At the London close the Dow Jones was down by 120.87 points at 15,056.67 and the Nasdaq fell by 23.76 points to 2,949.93. In London the FTSE 100 was down by 139.27 points at 6,419.31 and the FTSE 250 lost 262.52 points to 13,996.88. The FTSE All-Share slid by 66.56 points to 3,392.81, while the FTSE AIM Index was down by 9.2 points at 722.41.  Broker Notes N+1 Singer maintained its "buy" recommendation on retailer Debenhams (DEB) with a target price of 110p. The broker appreciates that the market understandably harbours some doubts about the possibility of future profit growth in light of the company's recent disappointments. However, N+1 Singer notes that there are a number of strategic initiatives underway and feels that the business appears well set up to capitalise on the long overdue summer conditions, both operationally and in terms of the stores' offering. The shares shares fell by 1.85p to 92.85p. Shore Capital retained its "buy" recommendation on plumbing and heating equipment distributor Wolseley (WOS), suitably impressed with yesterday's third quarter trading update. The broker has upgraded its revenue forecasts as a result of unexpectedly good progress made in the US. Furthermore, Shore Capital cites the current PE multiple of 14.8 times - lower than the sector average - as further reason to argue that the shares continue to offer "attractive" value. The shares jumped by 15p to 3,160p. Canaccord Genuity retained its "buy" stance on price comparison website Moneysupermarket.com (MONY), with a target price of 226p. The broker acknowledges that recent trading has been disappointing but maintains that, with the annualisation of the Government's Funding for Lending scheme in Q3, comparables will get easier. Moreover, Canaccord highlights that momentum in the insurance sector and further cash returns to shareholders could act as catalysts for future share price increases. The shares were down by 10.7p at 197p. 
Blue-Chips Supermarket giant Tesco (TSCO) announced that like-for-like group sales were down by 2.2% over the first three months of the year, with European sales proving to be a significant drag on the overall figures. Here in the UK, like-for-like sales were down by 0.9%, a fall blamed on disruption caused by the firm's current store re-organisation programme, as well as the impact of the horsemeat scandal - an episode which forced Tesco to withdraw some goods and apologise to customers. Recent broker consensus on the stock has been on the negative side, with both Espirito Santo Execution Noble and Investec re-iterating their "sell" recommendations in the last couple of days. The shares tumbled by 18.85p to 345.6p. Mid Caps Plastic packaging company RPC Group (RPC) announced a 7% fall in revenues for the year ended 31st March, while net profits fell from 44.7 million pounds to 25.5 million pounds as restructuring costs took their toll. The group delivered a "better sales mix" which benefitted from an exit from the European vending cup business, offset by a negative impact of increased competitive intensity and wage & cost inflation. Looking ahead, the group warned that its short-term growth prospects will be hampered by the lack of growth in Europe. The shares climbed by 8.1p to 407.7p. Outsourcer to the healthcare markets Synergy Health (SYR) announced a 15.8% increase in revenues for the year ended 31st March, while pre-tax profits were up by 19.6%. The group attributed the increase in profitability to the timing of its expansion into the US market which helped to offset the economic challenges in Europe. Looking ahead, Synergy expects growth to be driven from the Middle East, Asia and Africa in regions where it has recently taken steps to increase its presence. The shares increased by 37p to 1,108p. Engineering and construction group Kentz Corporation (KENZ) has secured a commissioning contract for the Point Thomson gas cycling and condensate production plant in Alaska. The three-year contract for the Technical Support Services arm marks the group's largest US contract to date and the associated work will involve working in Arctic conditions. The shares lost 11.1p, finishing the day at 382.8p. Small Caps Environmental support services group Silverdell (SID) confirmed a 103% revenue increase to 63.9 million pounds for the 6 months ended 31st March, while underlying pre-tax profits trebled to 3.3 million pounds. The bulk of this improvement was driven by the June 2012 acquisition of EDS, a plant decommissioning group, and complemented by "robust performances" in both Canada and Australia. The group went on to stress that the results could have been more impressive if it had not been for the deferral of a significant decommissioning contract into 2014 at very short notice. The shares were down by 0.625p at 14.125p. Mining group Vane Minerals (VML) recorded a 56.6% increase in revenues to 5.75 million pounds for 2012 and generated a maiden annual pre-tax profit of 50,000 pounds. The uplift in revenues were boosted by 11 months of production from its joint-venture with Met-Sin in Mexico and one month's worth of production from the Diablito Mine which resulted in higher gold and silver recovery rates. Vane went on to explain that its copper exploration programme is currently on hold as it searches for third-party finance. The shares were up by 0.075p at 0.625p. Lidco (LID), the medical group which specialises in cardiovascular monitoring, declared that its LiDCOrapid monitor product has been used successfully in a randomised clinical trial. The trial in question involved 91 patients and was conducted at the Royal Surrey Hospital. According to the results of the test, usage of the LiDCOrapid system reduces the length of stay by three days for patients undergoing open liver resection and post-operative complications were also reduced to 7% from 27%. The shares climbed by 1.75p to 11.375p. 
Energy efficiency company VPhase (VPHA) responded to speculation surrounding its falling share price and confirmed that it in the advanced stages of raising equity capital. The company went on to warn the market that if the placing is not successful, "the Company is unlikely to have sufficient funds for its present purposes, which may result in little or no value for shareholders..." The group went on to concede that there has been a notable slowdown in demand for its products and has therefore pledged to review its full year revenue and profit expectations. The shares plummeted by 0.2p to 0.25p. E-commerce marketplace @UK (ATUK) saw its pre-tax losses increase from 177,000 pounds to 850,000 pounds in 2012, a plunge which was driven by an increase in investment into overseas expansion, as well as certain delays in contracted payments. Despite this disappointing performance, management stressed that the international foundations it has laid, combined with a new partnership with Visa leaves it in good stead to grow this year. The shares dived by 1.5p to 6.75p. Outsourcer Quindell Portfolio* (QPP) has entered into a contract with "a major UK broker" for Personal Injury claims, Medical Reporting, Multi Disciplined Rehabilitation plus Auto Accident Repair including Vehicle Hire Services. The contract, to March 2014, has an annual run rate - a measure which indicates how much the contract would generate if it was running at full capacity for a year - of 25 million pounds and has further potential to grow in line with the broker's performance. The shares edged up by 0.02p to 8.84p. * Quindell Portfolio is a corporate client of a subsidiary of Rivington Street Holdings, the ultimate owner of UK-Analyst. | 
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