New data from the Confederation of British Industry showed that retail sales exceeded expectations in July. Over 46% of surveyed businesses said that sales were better than in 2013, compared with 25% which experienced a decline on last year. The sectors with the strongest performances were food, clothing and furniture, as consumers took advantage of the summer weather. Barry Williams from the CBI said that, “retailers expect an even faster rise in sales volumes next month, and are stocking up in anticipation of growing demand”.
Minutes from the last meeting of the Bank of England’s Monetary Policy Committee show that the members agreed unanimously to hold rates at 0.5%, noting that while “employment had continued to increase robustly […] wage growth had been surprisingly weak”. The Institute of Directors has criticised the decision as it believes that economic recovery is strong enough to begin movement towards interest rates of 3-4%, despite the Bank noting signs of potential weakness in the global recovery. However, Governor Mark Carney today said that, “the Bank is well aware that a prolonged period of historically low interest rates could encourage other risks to develop. In the UK, the biggest risks are associated with the housing market,”
At the London close the Dow Jones had declined by 16.99 points to 17,096.55 and the Nasdaq had grown by 26.78 points to 3,987.40.
In London the FTSE 100 closed up by 2.81 points at 6,798.15 and the FTSE 250 increased by 75.23 points to 15,725.96. The FTSE All-Share grew by 3.94 points to 3,623.13 while the FTSE AIM Index finished up by 0.82 points at 773.38.
Panmure Gordon increased its target price on Provident Financial Group (PFG) from 1,700p to 2,000p after the lender announced first half profits were higher than had been anticipated. The broker believes the home credit division’s performance will be fairly flat in the near future, whilst the provision of credit cards to subprime borrowers will continue to provide strong growth. The shares rose by 11p to 2,084p.
Westhouse Securities reiterated its “buy” rating and 220p target for ITV (ITV) ahead of the publication of the broadcaster’s interim results. These are likely to deliver a year-on-year improvement in performance, despite disappointing fall in the firm’s share of viewers. However, the broker believes that Liberty Global’s recent move to take a position in the company indicates its strategic value and that the fundamentals of the stock justify a price higher than the current market level. The shares fell by 0.6p to 206.8p.
Chariot Oil & Gas (CHAR) has been rated as a “speculative buy”, with a target price of 16p by analysts at Beaufort Securities. This is on the basis of the firm’s diverse range of licences in proximity to major firm operations and the company’s track record of farm-down success. Rival broker Northland Capital reiterated its “buy” rating on the shares but cut its target price from 40.5p to 28p. The shares closed flat at 15.5p.
Beaufort thinks Chariot is worth a bet
Capita (CPI) increased revenues for continuing business by 13.9% over the six months ended 30th June, with organic revenue growth of 11%. Over 1.3 billion pounds in new contracts have been acquired through the sales pipeline, with a success rate on major bids of more than 66%. Pre-tax profits grew by 16% to 238 million pounds and management are confident that the support services outfit will hit its full year targets and continue to trade strongly through 2015. The shares rose by 55p to 1,210p.
GlaxoSmithKline (GSK) saw turnover fall to 5.56 billion pounds over the six months to 30th June, a drop of 16% in sterling terms against the pharmaceutical firm’s performance in the same period last year. Operating profits declined by a quarter to 1.13 billion pounds as new products are launching at lower prices than earlier comparables and key drugs are facing stronger than anticipated competition from generic rivals. The shares declined by 73.5p to 1,481p.
GSK facing a tough prescription?
Healthcare services provider Synergy Health (SYR) reported revenues over the three months ended 29th June that were 1,1% lower than the same period last year due to negative currency effects. On an underlying basis, revenues grew 2.6% as sales in the sterilisation techniques division rose by 13.6%, despite hospital sterilisation sales and healthcare solutions falling. Operating margins declined slightly due to increased research spending. The shares fell by 6p to 1,360p.
Renishaw (RSW) had it’s strongest sales yet over the year ended 30th June, with total revenues of 355.5 million pounds and a particularly strong performance in the 1st quarter. The metrology firm launched a number of new products through the year and received FDA approval to enter the US market with some existing product lines. Profits before tax increased by 17% to 96.4 million pounds. The shares rose by 331p to 1,801p.
Renishaw achieving measured success?
The emerging markets focused media company Mobile Streams (MOS) saw revenues fall from 53.9 million pounds to 47 million pounds over the year ended 30th June, with 84% being generated from Argentina. EBITDA also fell due to changes in the currency markets, but remained positive and cash generative. The company is looking to expand its business in Africa and Asia to provide fresh growth. The shares fell by 1.625p to 18.125p.
Recruitment firm Staffline (STAF) increased revenues by 11.1% to 208 million pounds over the six months ended 30th June. Pre-tax profits were 1.9 million pounds, which is a significant drop from the 3.4 million pound profit in the same period last year due to investment costs as the firm opened a number of new divisions. The board believe that their offering continues to outperform the sector and remains committed to a substantial divided increase this year. The shares rose by 50p to 1,010p.
Oil exploration outfit Tangiers Petroleum (TPET) commenced drilling in the Tarfaya offshore block, with the cost of the well fully covered by the firm’s current agreements and resources. The well is testing for two potential stacked objectives, with there being the possibility of deepening the well to look for a 3rd possible deposit contingent on results. The shares grew by 0.25p to 12.25p.
Revenues at EKF Diagnostics (EKF) over the six months ended 30th June were 12% ahead of the same period last year as the medical firm integrated three acquisitions. Sales in June were 5.4 million pounds, the highest ever in a single month, and the firm is confident that it will meet full year expectations. The has been particularly strong performance in the Diabetes and Haemoglobin units following regulatory approval for a number of products in Asian markets. The shares fell by 1.25p to 26p.
Waste management firm Augean (AUG) saw revenues rise by 6% to 24.9 million over the six months ended 30th June. All five major divisions increased sales, with the Energy & Construction departments performing particularly well. During the period the firm also completed two transactions: the sale of its former Waste Network assets and the purchase of the East Kent site. Management said that “the Group continues to trade in line with market expectations for the full year”. The shares closed flat at 26p.
The shares in online gaming firm 32Red (TTR) moved up by 0.25p to 52p after the company reported gross gaming revenues of 22.6 million pounds for the six months ended 30th June. The Italian operation more than doubled its gross revenue to 1 million pounds compared with the same period in the prior year. Given the strong performance in the first half of the year, the board intend to commit further resources to strategic marketing in order to maintain momentum through the second half.
32Red on a winning streak in Italy