Yesterday's trading: Growth sets a cheerful Pace
Hold the front page - a good news story for a change. Buyers chased Pace 15p higher to 75p following what analysts called 'transformational' full-year results.
Upbeat: Good news at last from the Stock Exchange
Considering the TV set-top box-maker almost went bust in 2002 - after five profit warnings and heavy losses - the figures were nothing less than inspiring.
Organic growth and last April's acquisition of the set-top box business of Dutch electricals giant Philips helped the group deliver record full-year revenues to end December 2008 of £745m, and adjusted profits of £28.5m. Net debt of £12.1m has been replaced by a cash balance of £37.7m. Long-suffering shareholders can even look forward to an inaugural dividend of 0.6p.
The significantly enlarged group - post the Philips deal - has heightened investor interest in the shares. It's gone from a basket case to a flourishing manufacturer in less than a year. Strong demand from customer Sky for its high-definition boxes has helped it along the way.
Broker Teathers expects sales in 2009 to come closer to £900m, up from £852m previously expected, with cost synergies bringing pre-tax profits up to £35m from £21m previously and earnings per share to 8p-plus from 5p. The stock is one of its key 'picks'.
Following a half-hearted attempt at a rally, the Footsie fell away abysmally yet again with doom and gloomsters predicting that the global recession is going to get even worse than pessimistic forecasts. It soon lost a 51-point gain to close a further 113.74 points, or 3.14%, down at a six-year low of 3,512.09. It has collapsed 21% already this year after falling a record 31% in 2008.
Wall Street lost a 100-point gain to trade a further 37 points lower after Federal Reserve chairman Ben Bernanke warned that policy-makers may need to expand aid to the banking system beyond the $700bn already approved, and take other aggressive measures even at the cost of soaring fiscal deficits.
Bernanke added that without a reasonable degree of financial stability, a sustained recovery will not occur.
After power station group Drax (12¾p easier at 491¾p) warned of tighter margins this year, International Power blew a fuse at 199½p, down 17¼p and Centrica lost 13p at 248¾p.
Banks remained friendless with Lloyds Banking Group falling 3.9p further to 45½p and Barclays 5.9p more to 81.8p. Growing worries about the sharp decline in the value of its investments meant private equity group 3i shed 12.6p more to 181p.
Despite cautious comments made by chief executive Manny Fontenla-Novoa in a trade magazine, travel group Thomas Cook edged up 1¼p to 209½p. He warned that strong winter trading is unlikely to offset concerns about the deteriorating economy as far as holiday companies are concerned. Thomas Cook is planning for a tough year and 2010 could be tougher.
Selling ahead of tomorrow's Investor Day left British Airways 6½p easier at 126½p. Broker Collins Stewart believes management will paint a deteriorating trading outlook. Without the Iberia and American deals, the outlook for the stock is poor. If progress on mergers and acquisitions is made in the coming months, the gap to fair value of 288p could narrow considerably.
Director buying lifted support services group Spice 6½p to 42¼p.
Shares of Britain's biggest van hire company Northgate accelerated 2¼p to 45¾p. It is currently in talks with its banks over its debt pile. That didn't deter the firm's directors yesterday. They filled their boots. Seven of them acquired a total of 254,890 shares with chairman Philip Rogerson buying 30,000 and Steve Smith, chief executive, picking up 63,930.
SHARES ADVICE & TOOLS
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Rotork, the market leader in the supply of valve actuators, soared 73p to 759p following better-than-expected preliminary results. Revenues rose 35.9% to £320.2m and the final dividend was lifted 19.6% giving a full-year payout of 26p and a yield of 3.8%. Rotork starts 2009 with a record order book of £162m, up 30.7%, and cash in the bank has risen to £41.4m. Killik says buy.
Playtech rose 4p to 339p. The developer and licenser of software to the online and land based gaming industry signed an exclusive licensing agreement with Marvel Characters BV, a wholly owned subsidiary of Marvel Entertainment Inc, to use Marvel's motion picture brands across its gaming products.
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