Thursday's Stock Market Report from UK-Analyst: featuring Tullow Oil, Ladbrokes and Omega Diagnostics

From UK-Analyst.com: Thursday 26th September 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 It was confirmed by the Office for National Statistics that the UK economy grew by 0.7% over the second quarter of the year, in line with the body's original calculations. Growth was boosted by the quickest expansion of the construction and industrial sectors for three years. The current consensus is that the pace of the recovery has quickened further in the third quarter of the year as a raft of recent economic indicators have suggest growth across a multitude of industries and sectors. Chris Williamson, Chief Economist of researchers Markit, commented, "The UK economic recovery gained momentum in the second quarter, and a further acceleration of growth looks likely in the third quarter in what's looking like an increasingly broad-based and sustainable looking upturn." New data from the Confederation of British Industry (CBI) revealed that UK retail sales increased at the quickest annual rate in over a year during September. The CBI distributive trades survey's balance rose from +27 to +34 in August in a surge which was at odds with the average analyst estimate for a fall to +24. A breakdown of the figures revealed that the majority of the increase was a result of a hike in demand for furniture and carpets, consistent with the well-documented improvement in the UK housing market. Barry Williams, Asda's Chief Merchandising Officer for food, said, " It's encouraging to see the high street on the road to recovery, with particularly strong growth from furniture and carpet retailers.. But the retail sector is not out of the woods yet with consumer confidence still fragile despite the rise in spending." ADVERTISEMENT Join Zak Mir and other top traders at the latest Traders Forum in London on Saturday 5th October CLICK HERE for more details At the London close the Dow Jones was up by 31.93 points at 15,305.19 and the Nasdaq was up by 16.37 points to 3,224.92. In London the FTSE 100 closed up by 7.86 points at 6,559.39 and the FTSE 250 dropped by 15.91 points to 15,012.84. The FTSE All-Share was up by 2.83 points to 3,491.69 while the FTSE AIM Index grew by 4.34 points to 793.64. Broker Notes Beaufort Securities stuck with its "speculative buy" recommendation on oil exploration group New World Oil & Gas (NEW) after it emerged yesterday that Niel Petroleum has acquired a major stake in the company. The broker feels that this move could benefit New World in terms of a strong network in the Middle East and Africa and believes that the deal could provide proper financial backing to finance its aggressive drilling operations. Beaufort also cites New World's "commercially attractive asset base with a significantly reduced geological risk" as a reason to look at the shares. The shares were up by 0.15p at 1.15p. N+1 Singer upgraded its "hold" recommendation to a "buy" stance on retailer Mothercare (MTC) with a target price of 450p. The broker feels that management's transformation and growth plans remain firmly on track and that key initiatives in the UK should increasingly be gaining traction. Furthermore, N+1 Singer sees scope for sales and margins to trend better over the the short term and is also encouraged by the closure of some of the group's loss making stores. The shares grew by 13.25p to 396.5p. Canaccord Genuity retained its "buy" recommendation on engineering consultancy WS Atkins (ATK), increasing its target price from 1,100p to 1,400p. The broker notes that the company today released an update which revealed that trading so far this year has been in line with expectations. Canaccord believes strengthening margins will now come as a result of more favourable utilisation rates now the company is expanding and hiring again. The shares were down by 8p at 1,174p. Blue Chips Catering firm Compass Group (CPG) claimed that its expectations for the full year ended 30th September remain unchanged after a "good performance in the fourth quarter". The firm - which operates in around 50 different countries - went on to say that it expects revenue growth of 4.5% including the impact of acquisitions made over the period and believes that its operating profit margin will be over 7% for the first time. Compass said that the bulk of this improvement was driven by new business wins, good retention rates and modest price increases. The shares swelled by 19.5p to 849.5p. Tour operator Tui Travel (TT.) is now confident of delivering at least 11% growth in operating profits for the year ended 30th September, ahead of its previous estimates. The Thompson owner said that it benefitted from strong high-season summer 2013 trading in the UK and Nordics with revenues up by 8% and 10% respectively. The impact of increased demand for "unique holidays" was also outlined by the firm. The update comes a day after Deutsche Bank retained its "hold" recommendation and 355p target price on the shares. The shares grew by 14p to 370.4p. Oil exploration firm Tullow Oil (TLW) has made a new oil discovery in Block 13T in Northern Kenya. Results of drilling, wireline logs and samples of reservoir fluid indicated a potential net oil pay in the Auwerwer and Upper Lokone sandstone reservoirs of between 60 and 100 metres. The well in question is located between the Ngamia-1 and Twiga South-1 oil discoveries and, according to Tullow, the reservoir properties at this location appear similar to those previously encountered. The shares increased by 8p to 1,061p. Mid Caps Pub operator Mitchells & Butlers (MAB) expects to deliver on its expectations for the year ended 30th September, with total sales growth coming in at 2.1% so far. The Harvester and Toby Carvery owner said that the improvement was partly the result of its efforts to improve "team engagement, operational practices and guest service." Looking ahead, the group says its pipeline for new sites in FY14 and FY15 is looking good and it expects its most successful brands to open around 50 new sites a year over the medium term. The shares slipped by 19.8p to 408.9p. Bookmaker Ladbrokes (LAD) conceded that full year profit is expected to miss expectations as a result of a poor performance from its online arm. Instead of the originally anticipated 27.5 million pounds in operating profit from the online unit, profits are now likely to come in at around 10-14 million pounds despite an extensive marketing campaign. The update marks the second profit warning in quick succession for the Chris Kamara-endorsed company, as last month it said that a slowdown in gaming machine revenues dented its profits. The shares slid by 14.3p to 173.8p. Diploma (DPLM), the technical product supplier, claimed that revenues for the year ended 30th September are likely to come in around 10% ahead of last year. The driver of this growth was a strong performance in the life sciences sector and underlying growth in seals. Looking ahead, the group maintained that it remains on the look-out for suitable acquisitions in order to accelerate its growth over the medium term. The shares increased by 17.5p to 650p. Small Caps Peer TV (PTV), specialists in internet powered television, announced that its operating loss for the period ended 30th June had fallen by 63% to $475,000 (297,000 pounds). The firm was quick to praise additional the delivery of the first order for its Android Set Top Box to its "major traditional customer" and stressed that significant additional orders are expected late this year and beyond. The shares swelled by 0.625p to 3.25p. Software provider Geong International (GNG) claimed that it gained two new SaaS clients in the second tier of the banking sector since the beginning of April. Geong went on to say that trading over the last 5 months has been generally in line with expectations with trade receivables down on the previous year and net cash of 2.9 million pounds at the end of August. Looking ahead, the group expects to announce further contract wins by the end of the year. The shares were up by 1.75p to 4.625p. Media editing group Zoo Digital (ZOO) said that positive trading momentum has continued in recent weeks and that the benefits of restructuring in the face of a slump in the DVD market is beginning to feed through to overall results. Zoo Digital went on to highlight the growing popularity of its ZOOsubs cloud-based subtitle production and management system, which is now used by three out of six of the major production studios. The shares gained 1.625p, finishing the day at 10p. ADVERTISEMENT Get free trading guides from Evil Knievil (How to successfully short stocks), Zak Mir (Top AIM market picks for 2013) and other top financial commentators by CLICKING HERE Meat retailer Crawshaw (CRAW) announced a 5% increase in like-for-like sales for the 6 months ended July, with pre-tax profits trebling to 300,000 pounds. The group attributed the upturn in results to an increased sales push and said that the hot-weather fuelled a rise in sales of barbecue food. Crawshaw went on to say that trading so far in the second half of the year has been encouraging, with like-for-like sales for the first eight weeks of the second half up 10%, As a result of this success, the company hinted that it could embark on an expansion programme but did not give specifics. The shares rose by 0.625p to 8p. Irish mobile commerce group Zamano (ZMNO) saw its revenues fall by 4.7% to 9 million euros (7.6 million pounds) over the first 6 months of 2013 but operating profit grew by 14% to 1.245 million euros (1.05 million pounds). Zamano said its Irish sales - which are largely made up of non-subscription and business to business services - fell by 41.6% to 2.179 million euros (1.84 million pounds) partly due to a new ComReg code of practice The increase in profitability however, came mainly as a result of a fall in administrative expenses. The shares dropped by 2.5p to 10.75p. Medical diagnostic group Omega Diagnostics (ODX) admitted that there was more variability than expected in its results for testing its CD4 HIV detective technology. By Omega's own admission this set back will cause some additional work as it "refines the production process" but it maintains its confidence in its product. The technology in question uses finger prick blood sampling and generates results within 40 minutes. The shares were down by 1.75p at 15p.

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