Tuesday’s Master Investor Market Report featuring ARM, Utilitywise and SKY

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Tuesday’s Master Investor Market Report featuring ARM, Utilitywise and SKY
  • Unnamed EU Officials have informed the press that it will be incredibly to difficult to reach a deal regarding Greece by the 30th April deadline, with some outlets flagging the 30th of June as the new critical date. Local authorities throughout the country are protesting against a recent decree that requires all funds held in state-owned operations to be immediately available to the central government as short term loans. Analysts are contrasting this cash shortage with the glut of liquidity elsewhere in the Eurozone and the Greek banks could face further challenges as the ECB discusses reining in its emergency assistance programme.
  • The Russian economy shrank by 2% during the first 3 months of 2015 according to comments made today by Prime Minister Dmitry Medvedev, the first drop in the country’s GDP since 2009. Mr Medvedev blamed the effects of Western sanctions and falling oil prices for the decline, as well as currency instability over the same period.
  • The FTSE 100 closed up by 10.80 points at 7,062.93 points; the FTSE 250 grew by 109.08 points to 17,712.55; the FTSE All Share ended the day 8.71 points higher at 3,813.40; and the FTSE AIM Index advanced 1.89 points to 750.94.

Chip manufacturer ARM Holdings (ARM) beat management forecasts as revenues for the quarter ended 31st March grew by 22% to £227.5 million, driven by significantly improved royalty incomes. Profits before taxation rose by 24% to £120.5 million. Lorne Daniel, an analyst at finnCap, said that “this is a strong start to the year as the mobile industry continues to expect strong progress in 2015, demonstrated at the Mobile World Conference in February“, but some other watchers, including Julian Yates at Investec, were disappointed by the relatively slow growth in licence income. The shares rose by 45p to 1,195p.

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Energy and water consultancy Utilitywise (UTW) posted a 42% improvement in revenues to £29.9 million during the 6 months ended 31st March driven by a strong performance in the core Enterprise arm. The company also announced the acquisition of power monitoring and control specialist T-Mac for a £10 million initial cash consideration with an additional cash and share payment possible depending on performance. Liberum Capital opened coverage of the stock with a “buy” rating. The shares grew by 10p to 218p.

Floor covering retailer Carpetright (CPR) said that full year profits before taxation will beat market expectations due to strong UK sales and improved like-for-like trading in the rest of Europe during the 12 weeks ended 18th April. However, gross margins were slightly below the prior year and foreign exchange conditions meant that the actual contribution from Europe will be lower than in 2014. Shore Capital reiterated its “buy” position on the firm, despite recent improvements in the share price. Carpetright ended the day at 460.5p, a 28.5p rise.

Broadcaster and entertainment outfit Sky (SKY) saw 70% more new customers sign up to its services in the 9 months ended 31st March than in the comparative period a year earlier, which helped contribute to a 5% increase in group revenues and a 20% rise in operating profits to £1,025 million. The UK and Ireland performed particularly strongly, but the recently acquired German and Italian operations also posted good numbers. Augustin Eden, an analyst at Accendo Markets, said that “Sky’s linkup with Spain’s Telefonica, facilitating its expansion into quad-play, has also proven extremely successful with consumers increasingly bored of keeping track of multiple bills for their home technology services.” Shares in the company climbed 53p to 1,105p.

Primark owner Associated British Foods (ABF) said that its clothing retail outfit performed well in the 24 weeks to 28th February, offsetting declines in its Sugar and Grocery businesses. Group adjusted profits before tax for the period fell by 4% to £450 million. The company confirmed that plans to expand its retail operations to North America were well advanced, with leases signed for 8 locations in the North East USA. David Alexander, a retail analyst at Conlumino, said that the results were “another barnstorming performance from wallet-friendly, fast-fashion kingpin Primark”, despite relatively poor like for like growth. The shares fell 151p to 2,712p.

Tomorrow’s News Today

Tesco (TSCO), Fenner (FENR), Sports Direct International (SPD) and Ladbrokes (LAD) will be among the firms publishing updates and results tomorrow morning.

Additionally, the Bank of England will release the minutes of the latest Monetary Policy Committee Meeting.

Quote of the day

“Practice does not make perfect. Only perfect practice makes perfect.”
― Vince Lombardi

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