Monday’s Stock Market report featuring Rockhopper, AVEVA, Galliford Try and Rangers

The Markets

The UK construction sector grew at its slowest monthly rate since July 2013 in December according to the latest PMI data, but housebuilders’ confidence has remained buoyant despite falling mortgage approvals and slowing price growth. The year as whole was still a success for the industry and Tim Moore, Senior Economist at Markit, said that, “while new business growth moderated to its lowest for a year-and-a-half in December, UK construction firms are still highly upbeat about their prospects for output growth in 2015”.

The Euro slid to a nine-year low against the US dollar after European Central Bank President Mario Draghi made comments, during an interview with the German Handelsblatt, indicating that the ECB may institute a quantitative easing programme early this year. Fears that the Greek left-wing Syriza party could win the upcoming election also factored, with some analysts suggesting that this could lead to the country withdrawing from the Eurozone.

At the London close the Dow Jones had decreased by 246.06 points to 17,586.93 and the Nasdaq fell by 44.16 points to 4,186.16..

In London the FTSE 100 closed down by 130.64 points at 6,417.16 and the FTSE 250 dropped by 130.28 points to 15,921.68. The FTSE All-Share had decreased by 61.70 points to 3,462.39 while the FTSE AIM Index shrank by 3.54 points to 704.17.

Broker Notes

Shore Capital has maintained its recommendation that investor’s “sell” shares in private label manufacturer McBride (MCB) after the firm released an update for the last six months showing that performance that was broadly in line with expectations. The broker thinks that the company could benefit from falling oil prices, but weak consumer markets restrict any potential windfalls. The shares rose by 0.25p to 80p.

Westhouse Securities has rated Rockhopper Exploration (RKH) as a “buy” after the oil firm was awarded a 40% interest in Croatian Offshore Block 9, which is located in the Northern Adriatic and in a region with a history of gas discoveries. Work will now commence on a planned three year initial exploration programme, including seismic analyses, after which stakeholders will decide whether to proceed with an exploration well. The shares grew by 0.09p to 64.59p.

EKF Diagnostic Holdings (EKF) has kept its “buy” rating from Canaccord Genuity following the renegotiation of the earn-out terms for its acquisition of DiaSpect Medical. The revised deal reduces the total payments involved in the purchase from 4.25 million pounds to 1.425 million pounds. Canaccord has maintained its target price of 30p and said that it was looking forward to fresh details on a number of deals being released in the coming weeks from the diagnostic instruments business. EKF shares climbed by 0.25p to 21.25p.

Broker gives EKF positive diagnosis

Mid Caps

Engineering and information management firm AVEVA (AVV) has acquired contract risk management specialist 8over8 from its management for a cash consideration of 26.9 million pounds, with key management also promised future performance based incentives as part of the consideration. Management say that the purchase will better allow it to meet customers’ expectations around project control and capital discipline. The shares ended the day flat at 1,280p.

Housebuilding and construction outfit Galliford Try (GFRD) has reached financial close on a 45.2 million pound project to carry out the first phase of the redevelopment of the Royal Edinburgh Hospital. The work will also include managing the newly-built facilities over a 25 year concession period and the delivery of a cutting edge mental health facility to replace obsolete wards. The shares grew by 11p to 1,265p.

Galliford Try to care for Edinburgh hospital

Small Caps

Sweetener manufacturer PureCircle (PURE) reported that sales in the six months ended 31st December 2014 were $43 million (28.1 million pounds), a 24% increase over those achieved during the same period of the prior year as volume improved in all regions and major new products were launched. Management expect performance to accelerate in the second half of PureCircle’s financial year as the company works to expand its capacity. The shares rose by 11.5p to 531.5p.

Specialist development outfit 4D Pharma (DDDD) has successfully built a system for simulating humanised disease models to better predict outcomes for its live biotherapeutic products. In particular this relates to its Blautix project, aimed at treating irritable bowel syndrome, by more faithfully recreating the relevant conditions. Management expect to begin the first in human study in the second quarter of 2015. The shares dropped by 2.5p to 442.5p.

Amusement park services provider Galasys (GLS) has bought I Logic Solutions, a Malaysian software and training consultancy, for a maximum consideration of 1.3 million pounds, assuming that the firm hits financial targets. Galasys believes that it can leverage synergies from I Logic’s market share in the Malaysian theme park sector and the companies’ complimentary software expertise. The shares ended the day flat at 21.25p.

Glaswegian football club owner Rangers International Football Club (RFC) confirmed an approach from American businessman Robert Sarver regarding a potential takeover, which may be conducted via a new vehicle under his control. The firm said that no details were fixed and that additional information would be made public in the near future. Mr. Sarver, who is the majority owner of the National Basketball Association franchise Phoenix Suns, has until the 2nd of February to announce his intentions. The shares grew by 3.5p to 26p.

New owner out to net Rangers?