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** FTSE Fledgling is made up of UK companies listed on the main market that are too small to be included in the FTSE All share index |
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Smartphones use more chips
Commercialising technology Below expectations
Positive pre-scoping study Confounds the sceptics Well funded exploration strategy NHS supplier raising cash More problems at Motive In's and Out's from the Bridge Hall CFD Desk To subscribe for your FREE CFD Morning Call via e-mail, covering our latest market long/short recommendations and to find out more about our services, click here, alternatively call our CFD desk on 0207 337 9711 or e-mail cfddesk@bridgehall.co.uk. Featured stocksARM Holdings (ARM) Directors dealingsDirectors dealings can provide a useful insight The above list of transactions represents a selection of the directors' buys and sells reported last week |
Last year was a tough time for the semiconductor industry, but chipmaker ARM Holdings put in a good performance, gaining market share. Despite a 20% industry-wide fall in dollar revenues, final results revealed that the Company ended the year with dollar revenues just 10% lower. Pre-tax profits were down by 4% at £96.8m and earnings per share suffered a similar percentage fall to 5.45p; but the board demonstrated its confidence in the future by increasing the full year dividend by 10% to 2.42p, a move which speaks volumes. The real highlight of the fourth quarter was the growth in mobile applications. Certainly the opportunity for ARM looks to be increasing with the demand for smartphones and already the first ARM technology-based mobile computers have been introduced. Rumour has it that ARM is the supplier for the Apple's new multi-functional iPad, the recently unveiled half-inch thick gadget that has been designed for a variety of media uses, including videos, games and electronic books. ARM sells around 2.4 chips per phone, as the complexity of mobile phones increases and in recent months, the Company has signed a total of six processor licences for mobile phones and computer applications.. Warren East, CEO, commented that “..The Company is well-placed for this strong performance to continue as leading semiconductor manufacturers are increasingly designing ARM technology into their products, and as ARM technology becomes ever more pervasive in markets with long-term growth such as smartphones, digital TVs and microcontrollers. Recently, Infineon and STMicroelectronics have announced the intention to use, for the first time, ARM processors in their smartcard and digital TV/set-top box product lines respectively.”
Sadly, despite major advances in medicine over the past thirty years, breast cancer still remains a killer. Speciality Scanners has developed a breast-only magnetic resonance (MR) scanner for breast cancer management. There seem to be obvious potential here, as the Company was awarded a £1.6m Technology Strategy Board Grant, and this sort of money is not handed out lightly. Today, we believe the Company is on the doorstep of the turning those technologies into commercial success. When the final results were announced in late January, the board was able to reassure investors that growing interest had been shown in the commercialisation of the Company's proprietary MR scanner technologies by major international medical equipment manufacturers. The directors are in discussions with several institutions operating in the healthcare sector about the commercialisation and roll-out of the Company's Clinical Assessment & Treatment Service (CATS). In addition, there is also increasing interest in collaborating on the Company's award winning, New Products R&D Programme, which includes a real time MRI-guided Biopsy System and Tumour Ablation System. These sorts of technologies would allow image guided diagnostic and treatment procedures to be integrated into a single outpatient session, instead of repeated hospital visits over several months. It does seem that these technologies widen the product portfolio and ought to enhance future revenue generation potential.
With the demise of the banks, something like 10% of all dividend income paid to pension funds by FTSE 100 companies comes from BP; and so the performance of the oil giant affects millions. The announcement of final results saw the share price drift lower, as the market seemed disappointed by fourth quarter figures where profits came in at 5% below the consensus forecast. That all seems to be a bit tough as in 2009, BP had put in a cracking performance and even in that last "disappointing" quarter saw underlying replacement cost profit rise by 70% to $4.38bn. After a 4% increase in production in 2009, guidance provided to analysts, is that production in 2010 will be slightly lower, which is probably about 3% less than most brokers had been forecasting; but production growth is expected to resume in 2011. The fourth quarter dividend was maintained at 14 cents, which due to changes in the exchange rate, works out at 8.679p i.e. 12% lower than the amount paid in 2008. The board see no let up in the pressure on downstream margins, as they believe that the recovery in the leading economies in US and Europe will be slow and gradual. Refining margins are a problem for the whole industry; it has been estimated that two leading US oil companies, Chevron and Exxon, are losing something like $7m a day between them turning crude oil into downstream products. It now becomes clear that BP needs an oil price of between $60 and $65 a barrel to cover capital expenditure and to keep on paying the dividend. But all in all, the stock trades on a prospective PE of 7.6 times coupled with a decent yield.
The management team at Nyota Minerals knows the value of good newsflow. The Company seems to be making rapid progress with the Tulu Kapi Gold Project in Ethiopia, which it got its hands on following the low-priced acquisition of Minerva Resources last year. The results of a pre-scoping study and metallurgical tests have just been announced, which indicated that Tulu Kapi would be economically viable. The pre-scoping study was basically a desktop study that was completed by Venmyn Rand (Pty), an internationally recognised South Africa mining consultancy, to see if the project was feasible. The study was prepared as a "Preliminary Assessment" under the NI 43-101, the Canadian mineral resource classification system. Apparently the most likely mining scenario is an open pit mine, with early indications that, what the board term a "Big Pit" mining scenario, may be feasible. During the year, additional resource drilling is planned, which has the potential to increase the reserves of the project; as Venmyn believes that the immediate exploration focus ought to be upgrading the current Mineral Resource model. One of the study’s key conclusions was that regionally there was evidence suggesting the existence of a much larger gold field within the greater Tulu Kapi/Ankore licence area. Metallurgical testwork on a 300kg sample achieved recoveries in excess of 95%; which Melissa Sturgess, CEO, suggests will mean that “...when Tulu Kapi commences production, we will be able to build a low cost processing plant to extract the gold from ore.”
Recruitment business The ReThink Group is making amends for the poor interim results that were announced in September when pre-tax profits were shown to have slumped by 85% to £12,000, even though gross revenue was 18% higher at £24.6m. At the time, a big improvement was predicted for the second half. Well, it looks like ReThink has confounded City sceptics, as the board now expects to report pre-tax profits in the region of £300,000, when the full-year figures are announced in early April. The news is that, this positive recovery in the second half, stemmed from a strong performance both in the Group’s permanent recruitment business and also at the recruitment process outsourcing division (ReThink Professional Services). Certainly, the board is optimistic about revenue growth for the rest of the year, as this period has started well with the number of contractors on assignment already ahead of management expectations, together with a continued positive demand for permanent recruitment services. 
Exploring for gold in the area surrounding an existing gold mine looks like a shortcut to success. That's what Serabi Mining is up to at its Palito Gold Project in northern Brazil. At the moment, the Company is involved in small scale mining of the free-digging surface oxide deposit, where the ore does not need to be crushed before being processed by the existing Carbon in Pulp plant. The underground part of the Palito mine has been mothballed due to past problems that led to insufficient ore being blocked out to continue mining. That said, the mine has produced 110,000 gold equivalent ounces since 2005 and has a gold equivalent JORC resource of 660,000 ounces, of which 187,000 ounces is the reserve category at a grade of 7.3g/t gold. Recently, Serabi laid out its exploration plans, which show how it will be spending the £2.25m raised in December. The board is seeking to expand the project’s hard rock resource to more than 1.5 million ounces. The plan of work over the coming months, is to carry out geophysics on the first ten anomalies plus geophysical interpretation, which is to be followed by diamond drilling of these anomalies between July and September.
Shareholders in Sutherland Healthcare Group have an opportunity to top up their holding by way of a private placing. The supplier of patient hygiene and sexual health products to the National Health Service is seeking to raise up to £250,000 at 2.5p. Small company share tipster Tom Winnifrith's Worship Street Investments will be subscribing for £100,000 worth of new shares and Sutherland's Chairman John French has agreed to invest at least £10,000. The funds raised will be used to launch new product lines and also hire a full time sales person.
Motive Television announced on 23 December 2009, its strategy of closing down or selling its television production businesses to focus on digital terrestrial television technology sector. The Company has now announced that an administrator had been appointed at its 50.6%-owned subsidiary Scarlett Television. The board is apparently negotiating the sale of its remaining television production businesses which are Motive Television Ltd and Brown Eyed Boy Ltd. Trading in the shares of Motive Television were suspended on 4th January 2010 as the Company did not have a Nomad; and it now looks likely that the shares risk becoming delisted.
Another volatile week is behind us!!! |
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