Thursday’s Stock Market report featuring Bellway, easyJet, ADVFN and Scisys

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The Markets

The Bank of England’s Financial Policy Committee has said that UK markets could be destabilised by a slowdown in China or the ongoing Greek crisis crisis in its latest quarterly report. The body also said that its annual stress tests for the banking sector would focus on such international factors. The board wrote that “these risks could trigger abrupt shifts in global risk appetite that in turn might lead to a sudden reappraisal of underlying vulnerabilities in highly indebted economies, or sharp adjustments in financial markets”.

At the London close the Dow Jones had decreased by 22.83 points to 17,695.71 and the Nasdaq fell by 12.85 points to 4,316.44.

In London the FTSE 100 closed down by 95.64 points at 6,895.33 and the FTSE 250  fell by 246.09 points to 17,256.22. The FTSE All Share had decreased by 52.72 points to 3,795.61 while the FTSE AIM Index shrank by 0.43 points to 716.97.

Broker Notes

Numis Securities has rated solid state battery manufacturer Ilika (IKA) as a “buy” after the firm ran a pilot test of its production process. The broker finds this progress encouraging and believes that Ilika should be able to release samples to commercial partners during 2015 and puts the business on track to benefit from increased demand for solid state power sources in the near future. The shares grew by 7p to 79.5p.

Sterling Energy (SEY) has retained its “buy” rating and 31p target price from Westhouse Securities despite the oil producer booking a $12.3 million (£8.2 million) loss for 2014 due to impairments and experiencing little exploratory success over the year. Westhouse says that its position is based on the firm’s incredibly strong cash position and limited obligations. Sterling shares rose by 0.75p to 17.75p.

Beaufort Securities recommended a “buy” on housebuilder Bellway (BWY) after the publication of a positive set of half year results showing enhanced profitability and a healthy order book and land bank. The broker believes that stronger wage growth and low inflation will allow the firm to maintain growth despite the general cooling of the UK housing market in recent months. The shares fell by 19p to 2,040p.

Blue Chips.

Budget airline easyJet (EZJ) has revised guidance for the six months to 31st March upwards and management now believe that the firm may make a profit of up to £10 million pounds for the period. Income per seat rose faster than expected, as did passenger capacity on the company’s routes. A favourable shift in interest rates contributed to the improved incomes. The shares dropped by 53p to 1,837p.

Mid Caps

Engineering and design outfit Amec Foster Wheeler (AMFW) has published its first set of results since AMEC acquired a 95.3% controlling interest in Foster Wheeler in November. Revenues for 2014 (including 7 weeks of trading by Foster Wheeler) were slightly up on the prior year and management believe that it will benefit from shifting to a multi-market model during 2015. The shares fell by 22.5p to 950.5p.

Small Caps

Shares in ADVFN (AFN) fell by 6.5p to 116p in reaction to the financial website owner releasing a dire set of interims after market close last night. While sales grew by 7.8% to £4.8 million in the six months to December operating losses soared by 89% to £647,000. More ammunition then for Mr Zack Keinan, the firm’s 25.7% shareholder who has requested a general meeting to remove the board.

IT services provider Scisys (SSY) increased operating profits by 88% to £3.2 million over the course of 2014 after it purchased Xibis and secured a number of new contracts. Operating margins improved by 70 basis points and profits before taxation doubled to £3 million from £1.4 million in the prior year. Management remain cautious about 2015 guidance despite the fresh deals. Shares in the firm declined by 9.5p to 84p.

Specialised industrial and ruggedised computer and electronic components designer Solid State (SOLI) announced that its Steatite division has been granted £1.1 million in funding to develop the next generation of Lithium based batteries for deep sea use as part of a consortium including cell manufacturer OXIS and underwater technology experts MSubs and National Oceanography Centre. The shares dropped by 17.5p to 622.5p.

Employee benefits and financial services firm Personal Group  (PGH) recorded revenues of £47 million in 2014, a 65% increase over the prior year as the company expanded by buying Let’s Connect in March. Statutory profits before tax were up by almost 150% to 9.2 million pounds. The board is confident that 2015 will be a strong year. The shares grew by 12.5p to 560p.

Crop nutrition specialist Plant Impact (PIM) more than doubled revenues to £2.5 million in the six months ended 31st January following the first commercial season after its Veritas line was made available in Brazil. The company also tipped into operating profits, after it made a loss of £0.6 million in the comparative period of 2013. Plant Impact shares fell by 0.5p to 50p.

Corero Network Security (CNS) launched its Smartwall defense system last year and secured a number of large orders, but annual revenues slipped to $7.5 million (£5 million). The company’s loss before taxation was $10.1 million (£6.8 million), a substantial fall from the $8.2 million (5.5 million) profit recorded a year earlier. The board expect orders to improve as organisations become more of DDoS attacks. The shares fell by 1.12p to 11.38p.


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