Monday’s Stock Market report featuring Tate & Lyle, Hammerson, Playtech and Bahamas Petroleum

5 mins. to read

The Markets

The Japanese economy left recession during the final quarter of 2014 after contracting during Q2 and Q3 as a sales tax hike hit consumption. However, the 2.2% annualised rate of growth seen in Q4 surprised analysts who had forecast a level closer to 3.7%. Consumer spending and corporate investment remained sluggish, which some attributed to the lingering effect of the sales tax increase earlier in the year. Takeshi Minami, Chief Economist at Norinchukin said that, “these are somewhat disappointing figures. The situation remains weak and companies are clearly postponing investments”.

The Confederation of British Industry has upgraded its view on UK GDP growth for 2015 from 2.5% to 2.7%, giving credit to low inflation and a strong labour market. The business group did warn that the ongoing situations in Ukraine and Greece could have negative impacts on the UK, but that firms were able to invest more due to low fuel and energy costs after the recent oil price decline.

At the London close the Dow Jones had increased by 46.97 points to 18,019.35 and the Nasdaq rose by 36.06 points to 4,384.03.

In London the FTSE 100 closed down by 16.47 points at 6,857.05 and the FTSE 250 rose by 13.46 points to 16,861.24. The FTSE All-Share decreased by 6.42 points to 3,690.05 while the FTSE AIM Index climbed by 2.61 points to 702.79.




Broker Notes

Beaufort Securities maintained its “hold” position and 1,204.5p target price on mining outfit Anglo American (AAL) after the company released it preliminary results for 2014 at the end of last week. The broker said that it believes commodities prices could remain subdued this year and therefore Anglo American’s fortunes remain uncertain. Shares in the company rose by 16p to 1,220.5p.

Transplant products and services specialist Lifeline Scientific (LSIC) has been rated as a “buy” by Panmure Gordon. This follows the Chinese authorities granting approval for the firm’s organ preservation and flush solutions to be commercially sold to hospitals. The broker said that this would not have a vast immediate effect, but could be a significant driver for long term growth. Lifeline shares closed the day flat at 112.5p.

Canaccord has upgraded its position on ingredients specialist Tate & Lyle (TATE) from “sell” to “buy” on the back of a a rumoured takeover bid by global agribusiness Bunge and prices for key commodities having been set for the calender year. The broker said that it thought “Bunge could afford to offer a 40% premium to the current Tate share price”. Shares in Tate & Lyle grew by 19p to 577p.

Takeover hints sweeten deal for broker

Blue Chips

Real estate investment trust Hammerson (HMSO) earned net rental incomes of 305.6 million pounds during 2014, an 8.1% increase over the prior year, fuelled by a number of acquisitions as well as pro-active asset management. Following a revaluation of the group’s portfolio, statutory profits before taxation rose to 703.1 million pounds and the board recommended that the final dividend be raised by 7.4% to 11.6p. Hammerson shares dropped by 6p to 685p.

Hammerson nails rent increases in 2014

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Mid Caps

Financial information and software provider Fidessa Group (FDSA) saw revenues for the year ended 31st December drop by 1% to 275 million pounds as the strength of the pound hit overseas results. However, management were pleased that the firm returned to underlying growth and said that market conditions were improving. The board expects this growth to accelerate through 2015. The shares declined by 65p to 2,405p.

Renewable energy generation firm Infinis Energy (INFI) said that it has performed well over the period since 1st October, with increased wind speeds and the landfill gas arm continuing to exceed expectations. The company disposed of its hydro portfolio at the beginning of this month for cash proceeds of 20.5 million pounds. Management remain confident despite the effect of low oil prices on wholesale power rates. Infinis shares fell by 1.1p to 197p.

Internet gaming software provider Playtech (PTEC) has acquired Dundee-based Yoyo Studios for a initial cash consideration of $16.4 million (10.66 million pounds), which will be funded from existing reserves. Thirty percent of the consideration will be held in escrow for 36 months and further performance based payments may be made. Playtech believes the deal will help it diversify into new segments of the games industry. The shares grew by 3.5p to 741p.

Playtech rolls dice on diversification

Small Caps

Advertising and business communications outfit The Mission Marketing Group (TMMG) has acquired Scottish operation The Weather to complement existing operations in the country. Management said that the deal will be immediately earnings enhancing and that the entire initial consideration will be payable in shares, with room for further payments to be made in the future. Shares in the company ended the day flat at 39.5p.

Clinical services provider Retroscreen Virology (RVG) said that demand for early phase human trials in early 2015 is lower than anticipated as pharmaceutical research teams continue to focus their efforts on Ebola vaccines and treatments. This has had a negative effect on the company’s 2014 results and management now say that revenues in the current year will be similarly affected. The shares fell by 23.5p to 248p.

Carbon fibre reinforced ceramics manufacturer Surface Transform (SCE) increased its turnover to 0.62 million pounds in the six months ended 30th November, but pretax losses widened to 0.47 million pounds due to non-recurring payments received in the comparable period of the prior year. The board said that tangible progress would be made in 2015. Surface Transform shares dropped by 1p to 11.25p.

Oil & gas explorer Bahamas Petroleum (BPC) has said that a legislative package introduced to the Bahamian House of Assembly will shortly have its second and third readings prior to becoming law. Recent exploration analysis and economic studies have reduced the minimum feasible field size to roughly 200 million barrels and located promising drilling sites. The shares climbed by 0.175p to 1.85p.

Field management specialist ServicePower Technologies (SVR) has won two new contracts worth a combined 0.45 million pounds. One deal is with a new customer in the appliance industry, whilst the other is repeat business from a major UK retailer. Management said that the wins helped to validate the quality of ServicePower’s offering. The shares closed level at 5.125p.

ServicePower charges up with new deals

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