| From UK-Analyst.com: Thursday 3rd October 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 service sector exhibited solid growth in September, rounding off the sector's strongest quarter in over 16 years. The main Markit/CIPS Purchasing Managers' Index (PMI) for services - which accounts for over 75% of the UK economy - came in at 60.3 last month, well above the 50 threshold which separates contraction and expansion. This data means that the whole of the UK economy is likely to have grown by a rate of 1.2% over the July-September quarter, a pace of growth last seen back in 2007. It is thought that the revival of the housing sector is helping to offset a continued slump in other consumer-facing industries as people remain reluctant to spend on certain non-essential items. Chris Williamson, Chief Economist at survey compilers Markit, commented, "The buoyant data follow similar upbeat surveys of the manufacturing and construction sectors, and collectively the surveys suggest the economy will have expanded by as much as 1.2% in the third quarter; its fastest growth rate since the pre-crisis days of 2007." Staying with the services sector, but this time over in Asia, new data revealed that the Chinese services sector grew at the fastest rate in 6 months as the world's second largest economy continues to show signs of momentum. The official purchasing managers index (PMI) for the non-manufacturing sector rose to 55.4 - the highest reading since March - from 53.9 in August. The services sector is becoming increasingly important within the context of the Chinese economy as the traditionally larger manufacturing sector has recently had to contend with a slowdown in several key export markets. Cai Jin, vice chairman of the China Federation of Logistics and Purchasing argued, "The index reflected strong growth in consumption services represented by retail thanks to the holiday factor in September. It also showed the restructuring policies had boosted demand in the service sector." At the London close the Dow Jones was down by 134.11 points at 14,999.03 and the Nasdaq was down by 31.96 points at 3,221.29. In London the FTSE 100 closed up by 11.54 points at 6,449.04 and the FTSE 250 dropped by 38.22 points to 14,853.04. The FTSE All-Share was up by 3.49 points at 3,435.72 while the FTSE AIM Index slipped by 0.79 points to 781.21.  Broker Notes Beaufort Securities stuck with its "buy" recommendation on pizza maker Domino's Pizza (DOM) after the company yesterday released an IMS. The broker notes the firm's decision to hand over most of its German operations to the franchisees and feels this is likely to help the company in developing its footprint in this market further. On the whole, Beaufort sees "immense potential" for the company given its aggressive marketing and expansion strategy in the UK. The shares fell by 8p to 602.5p. Shore Capital retained its "sell" stance on oil and gas services company Intertek (ITRK) after it announced the acquisition of Global X-Ray & Testing Corporation for 45 million pounds. The broker does not criticise this acquisition and instead argues that its sell stance purely reflects its view of valuation for the stock, with the company trading on a current year earnings multiple of 23. The broker argues that this is a particularly demanding multiple given the lack of acquisition prospects on the horizon. The shares plunged by 65p to 3,201p. Cantor Fitzgerald retained its "buy" stance on homeware retailer Dunelm Group (DNLM) with a target price of 1,020p. The broker acknowledges its concern of the high single digit decline in sales in July, in a trend which was blamed on the hot weather. Looking ahead, Cantor now argues that the company should start to benefit from a pick-up in the housing market which should help to develop online sales and increase margins in the process. The shares were down by 5.5p at 874.5p. 
Blue Chips Bookmaker William Hill (WMH) hinted that it did not trade as profitably as it expected over the three months ended 1st October after it experienced a particularly quiet July. This, coupled with football results generally going in favour of the punter, saw revenues slump by 4% on an underlying basis over the 14 weeks ended 1st October while gross margin was squeezed by 0.8 percentage points. Although management stressed that it still has confidence in the overall business, it conceded that it was now uncertain if this profit shortfall could be recovered by the end of the year. The shares ticked upwards by 1.7p to 413p. Airline operator easyJet (EZJ) increased its full-year profit forecasts from 450-480 million pounds to 470-490 million pounds for the period ended 30th September and expects revenues to come in 6% above the previous year's numbers. The company attributed the improvement to a tight control on costs and an "unusually benign capacity environment". These results were achieved despite the political unrest in Egypt and the unfavourable timing of Easter. The update prompted Investec to retain its "buy" recommendation and 540p target price on the company. The shares slid by 6p to 1,308p. Insurance group Aviva (AV.) has completed the sale of Aviva USA, its US life and annuities business, in a deal worth around $2.6 billion (1.6 billion pounds). The fee is $0.8 billion (0.5 billion pounds) higher than initially announced, representing estimated earnings and other improvements in statutory surplus over the period from 30 June 2012 to 30 September 2013. Aviva management argues that the transaction simplifies the business and helps it to create an entity which is "focused on cash flow and growth". The shares grew by 5.6p to 413.1p. Mid Caps Transport specialist FirstGroup (FGP) said that trading over the six months ended 30th September 2013 has come in consistent with management expectations. The company reserved special praise for its UK rail business which delivered growth in like-for-like passenger revenue of 5.7%. FirstGroup also confirmed that it had just signed an agreement with the Department for Transport to extend its First Great Western franchise to September 2015. The shares were up by 3p at 123.7p. Healthcare company BTG (BTG) increased its full-year revenue guidance on the back of a string of recent acquisitions. For the year ended March 2014, the firm currently expects revenues to be in the range of 275 million pounds to 285 million pounds, up from the prior guidance of 235 million pounds to 245 million pounds. Looking ahead, the group said it was excited about its prospects over the up and coming months, especially once the integration of Ekos and TheraSphere is complete. The shares increased by 2.6p to 383.1p. Clothes designer Ted Baker (TED) saw revenues surge by 31% to 155.2 million pounds for the 28 weeks ended 10th August, while pre-tax profits grew by 33% to 12.5 million pounds. The growth was driven by a good performance in the US which saw revenues increase by around 53% to $25.6 million (15.83 million pounds), in a trend which helped to push international sales up to 20% of the group's total sales. Jefferries international retained its "buy" recommendation and 2,150p target price on the company in the latter half of last month. The shares dived by 69p to 1,851p. Small Caps Phorm Corporation (PHRM), the internet personalisation group, announced that it has started a nation-wide opt-in process in China. The firm - which works with advertisers in order to target certain consumers - said that its first week in operation in China has seen an average of 4.3 million users per day. Separately, Phorm revealed that negotiations with publishers and advertisers are currently on going. The shares soared by 3.125p to 6.375p. Valirx (VAL), the life sciences company, said that it expects to obtain "significant results rapidly" from tests on its VAL201 anti-cancer treatment. The trial - which will be conducted at University College London will be conducted using prostate cancer patients and will not require healthy volunteers. It is hoped that the trial will help establish the maximum dose comparable with the safety and tolerability of VAL201 and explore the biochemical and physiological effects of the drug. The shares ticked up by 0.05p to 0.44p. Communications service provider Alternative Networks (AN.) said that trading over the 6 months ended 30th September 2013 has returned to growth while profits and cash flow for the full year have been delivered in line with expectations. The company said that growth has been achieved across the majority of its operations, particularly in IP data switch installations in the Enterprise market. However, the positive sounding update did not stop Westhouse Securities from downgrading its positive stance to a "neutral" recommendation on the group. The shares swelled by 12.75p to 347.75p. 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 
Mining player Thor Mining (THR) said that tests on its Molyhil tungsten project in Australia's Northern Territory has delivered positive results. Thor is embarking on ore sorting as a low cost pre-concentration process which upgrades ore prior to the more expensive fine crushing and grinding of the ore processing circuit. The subsequent reduction in throughput at Molyhil achieved via ore sorting generates reduced operating costs with potential to deliver significant benefits for the project. The shares were down by 0.005p at 0.28p. Oil exploration group Desire Petroleum (DES) has agreed to be acquired by Falkland Oil and Gas in a deal worth around 61 million pounds. The two companies, both operating in the Falkland Island Basins, said that both boards believe the deal will diversify the activities of both companies and improve finances. Falkland will now embark on an enhanced drilling programme of five other wells in the Falkland Basins. The shares shot up by 4p to 16.25p. Housebuilding firm Inland Homes (INL) posted pre-tax profit of 5.2 million pounds for the period ended 30th June, up from 1.6 million pounds it posted a year earlier, while revenue surged to 31.1 million pounds from 6.1 million pounds in the previous year. The company attributed the strong performance to an increased number of plots sold to other developers as well as a significant contribution from the development and sale of new homes built by the group. The shares fell by 0.75p to 39.625p. | 
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