Wednesday’s Master Investor Market Report, featuring Brewin Dolphin, De La Rue, Fusionex International and Secure Property Development

HM Government has pledged that future increases to the income tax personal allowance will track increases in the minimum wage. With the minimum wage set to rise 3% this October, we can expect a commensurate increase in allowances around the same time, and some experts believe that this may be echoed upwards through the tax brackets to counteract so-called “fiscal drag” where taxpayers are pulled in to the upper brackets over time due to a lack of inflation adjustment.

The Office for National Statistics has said that household disposable incomes rose fastest in the Scottish Borders, West Cumbria and the Western Isles during 2013, but Westminster retained its overall crown for the wealthiest inhabitants. The report, which was published today, also showed that there were falling incomes in some northern cities including Manchester and York.

The FTSE 100 rose by 84.34 points to 7,033.33 points; the FTSE 250 grew by 138.66 points to 18,237.47; the FTSE All Share increased by 41.83 points to 3,821.13 points; and the FTSE AIM All Share finished the day up by 1.04 points at 765.90 points.

Profits before tax for the 6 months to 31st March rose by 72% to £37.9 million at Brewin Dolphin (BRW), but Panmure Gordon issued a “sell” rating on the shares as analyst Jeremy Grime commented that the share price had been inflated by the speculated takeover bids and was not yet matched by performance. The company’s transformation plan is ongoing and management said that the £1 million raised from the sale of its Stocktrade execution service this month would allow reinvestment. The shares dropped by 37.8p to 315.1p.

It seems even printing money offers no guarantee of returns as De La Rue (DLAR) slashed its dividend from 42p to 25p after a disappointing set of results for the year ended 28th March. Reported pre-tax profits dropped 34.9% to £38.9 million due to difficult market conditions and increased investment in research and development. Investec cut its rating from “add” to “hold” and said that it had cut its forecast EPS for the 2016 financial year by 8% to 33.5p. De La Rue shares plummeted 49.5p to 504p.

Data analytics firm Fusionex International (FXI) earned revenues of 31.6 million Malaysian Ringit (£5.6 million) in the five months ended 31st March after it secured a number of new contracts for its GIANT package. These new client wins have continued into current trading with a major new deal signed with Brother Industries last week. Profits before tax also rose to 14.3 million Ringit (£2.54 million), but markets were disappointed by the firm’s progress and the shares closed the day down by 22.5p at 375p.

Secure Property Development & Investment (SPDI) shares climbed by 25.45% to 34.5p after operating profits more than quadrupled during the year ended 31st December 2014 to €0.8 million (£0.57 million) driven by improved rental incomes. The portfolio’s value was also boosted by acquisitions in Greece and Romania. CEO Lambros Anagnostopoulos commented, “I look forward to the year ahead, as we continue to implement our strategy towards our goal of creating the leading institutional South Eastern European income producing and dividend yielding property company”.

Thursday’s news today

On Thursday we are expecting full-year results from Tate & Lyle (TATE) and Porta Communications (PTCM) as well as interims from Lake House (LAKE).

On the economic front, there will be UK GDP estimates and service indices as well as US jobless claims and EU business sentiment information.

Quote of the day

“The difference between playing the stock market and the horses is that one of the horses must win.”
― Joey Adams