Wednesday’s Stock Market report featuring Apple, Filtronic, AG Barr and Ebiquity

The Markets

The Greek financial markets were volatile today after the winners of the recent election reiterated their defiance towards international creditors. Five year bond yields rose to 13.5% and shares in the Greek banking sector lost on average 22% of their value. New Prime Minister Alexis Tsipras said that he was determined to restructure the country’s €240 billion (179.5 billion pounds) bailout package. The Germany Finance Ministry has already made criticisms of the new government’s policies.

Technology giant Apple recorded the highest quarterly profits in corporate history, earning $18 billion (11.87 billion pounds) in the third quarter of its financial year. The firm sold 34,000 iPhones an hour throughout the period and performance was driven by a 70% increase in Chinese sales. The company is building up to the launch of its Apple Watch device, the first significant new product line since Tim Cook became CEO in 2011.

At the London close the Dow Jones had increased by 54.97 points to 17,442.18 and the Nasdaq rise by 32.96 points to 4,198.47.

In London the FTSE 100 closed up by 14.33 points at 6,825.94 and the FTSE 250 rose by 71.85 points to 16,425.73. The FTSE All-Share increased by 8.92 points to 3,659.72 while the FTSE AIM Index grew by 1.50 points to 690.51.

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Broker Notes

Shore Capital rated gold exploration and development business Aureus Mining (AUE) as a “buy” after the firm reported good results from recent metallurgical tests on ores from its Ndablama site in Liberia. Management are considering how to proceed with the project and whether on-site refining or a concentrate transportation option would be best suited to the area. Aureus shares climbed by 1.5p to 24p.

Westhouse Securities has given Braemar Shipping Services (BMS) a “buy” rating, with a 545p target price, after the firm exchanged contracts for the disposal of its former headquarters in Marylebone for 9.5 million pounds. This represents a gain of 5,5 million pounds over the book value of the lease. Following its planned merger with ACM Shipping, the combined entity will move to a location by Trafalgar Square next month. The shares grew by 13p to 468p.

Wireless telecommunications systems component manufacturer Filtronic (FTC) was placed “under review” by Panmure Gordon after the announcement that a late product launch and delayed and cancelled orders would have a substantial effect on the company’s Wireless division. The broadband arm of the firm also looks to report results below the comparative period. Filtronic shares fell by 5.5p to 21p.

Wireless firm missing key components?

Blue Chips

Business management software provider Sage Group (SGE) recorded organic revenue growth of 5.3% over the three months ended 31st December, in line with management expectations and driven by improvements in recurring incomes. French and North American markets continue to be difficult but the firm is taking steps to improve its performances in these regions. Shares in the company fell by 2.3p to 481.7p.

Sustainable technologies outfit Johnson Matthey (JMAT) saw group sales for the three months to 31st December rise by 5% to 745 million after strong performances in the emissions control and new business arms. The firm’s Precious Metals division was hit by the loss of 10 million pounds in commission income from Anglo American Platinum. But the company still expects underlying profit before tax for 2014/15 to be slightly ahead of the previous year. Johnson Matthey shares fell by 112p to 3,385p.

Chile based miner Antofagasta (ANTO) produced 187,500 tonnes of copper during the final quarter of 2014, a 10.8% improvement over the prior three months as all areas of the group’s operations increased throughput. However, full year copper output was 2.3% lower than the previous year due to lower grades at Los Pelambres. Total gold production also fell., by 7.8% to 270,900 ounces, due to lower grades and recoveries at the Cenrinela mine. Antofagasta shares dropped by 20p to 673.5p.

Copper firm successfully conducting business

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Mid Caps

Investment management outfit Brewin Dolphin (BRW) earned 64.4 million pounds in core income during the three months ended 31st December, a 1% increase on the same period of 2013 despite a 23% drop in commission income due to reduced trading volumes. Net growth in discretionary funds under management continued to meet Brewin Dolphin’s 5% annualised target. The shares dropped by 2.2p to 297.5p.

Irn-Bru manufacturer A.G. Barr (BAG) saw renewed sales momentum in the final quarter of 2014 after an autumn slow down, leading management to expect that full year revenues will be around 259 million pounds, equivalent to 2% year on year growth. Conditions through the year have been uneven due to intense competition between brand owners and retailers. The shares rose by 3p to 633p.

Irn Bru faced stiff competition last year

Small Caps

International public relations services Ebiquity (EBQ) saw revenues for the 6 months ended 31st October rise by 7% to 35 million pounds as analytics and data divisions continued to drive growth. Management said that there is a significant pipeline of domestic and international deals and believe that they group is well placed to continue to grow over the coming year. The shares grew by 1p to 131p.

Recruitment and human resources consultancy Staffline Group (STAF) recorded a 20.9% increase in revenues to 503.2 million pounds over the course of 2014 as the economy improved and the firm won new business. Profits before taxation also grew by 22.1% to 10.5 million pounds and the Avanta business that was acquired in June has been successfully integrated. The shares rose by 39p to 769p.

Minerals outfit Kirkland Lake Gold (KGI) will raise C$25 million (13.22 million pound) of fresh capital via the issue of 5.75 million shares at a price of C$4.35 (230p). This will be underwritten by a consortium of underwriters led by National Bank Financial and Macquarie Capital Markets Canada. The offering is scheduled to close at 18th February. The shares fell by 10p to 240p.

House building and construction firm Mar City (MAR) said that pre-tax profits for 2014 were in line with expectations and more than three times higher than in the previous year. Management said that the year was transformative as the company made substantial progress after the launch of its modular housing technologies. Mar City’s land bank currently holds around 5,000 plots. The shares rose by 3p to 100.5p.

Modular buildings stacks up profits for Mar City