FTSE in-depth: Dealers pursue dynamic result
Jam tomorrow technology business Pursuit Dynamics ran into heavy selling and slumped 70p, or 12.5%, to 490p.
Geoff Foster: Edging closer towards the magic 6,000 level, the Footsie climbed 30.46 points further to 5,891.21
The loss-making group, which builds fluid processing systems aimed at reducing costs for industries such as brewing, has attracted some of the City's shrewdest investors.
Indeed, John Morley sits on 15.1%, Hugo Tudor at Blackrock owns 14.9% and Nicholas Barham 4.43%, and it's their support that helped the stock soar from 150p in January to a year's peak of 732.5p, much to many dealers' amazement.
At that heady level, Pursuit's market value stood at an expensive £500m-plus, not bad for a company that increased losses to £7.2m on revenues of £128,000 for the year to September 2010.
The appointment of Dutch internet guru and entrepreneur Roel Pieper as chief executive in September 2009 must have persuaded many of the big boys to get involved. But his CV is not that gilt-edged. Disbelievers point out he helped set up investment company European Technology and Research Centre, which ultimately went bankrupt.
Nevertheless, since arriving at PD, Pieper has gone about commercialising the group's technology and a steady series of announcements on its applications have persistently fed the bulls.
Pursuit Dynamics says its technology improves the fermentation of starch, giving a better yield while consuming less energy. It has recently announced development agreements with Procter & Gamble, the National Nuclear Laboratory and German brewer Oettinger Brauerei.
It expects to become cashflow positive within the next 12 months, boosted by its biofuels and brewing business. But as one fund manager said: 'The message here has always been full of things to come, nothing has ever actually been achieved.'
Edging closer towards the magic 6,000 level, the Footsie climbed 30.46 points further to 5,891.21. It was underpinned by a hefty 14.75p, or 3.2%, rise to 473.1p in oil giant BP as rumours of a possible bid from Royal Dutch Shell (23p better at 2089.5p) did the rounds yet again.
Wall Street rose 66 points in early trading after US retail sales rose a better-than-expected 0.8% in November. Many investors held off though ahead of the Federal Reserve's policy and inflation outlook announcement.
Broker Killik believes Bob Diamond is a chief executive to watch in 2011. He takes over as boss of Barclays Bank (1.3p off at 272p) on April Fools' Day next year and his Diamond Family Foundation on Monday splashed out £995,000 on buying 363,179 shares at an average price of 273.97p.
Diamond currently runs the successful investment banking arm Barclays Capital, which is in the process of shedding hundreds of jobs. But Bank of America/Merrill Lynch is bullish and expects the bank to be a strong performer in 2011 as profits recover and equity raising fears recede.
Part-nationalised Lloyds Banking Group firmed 0.52p to 69.34p on a Deutsche Bank recommendation and target price of £1. It is the broker's top pick for the New Year, given its attractive UK retail banking position, plans to deliver significant surplus capital, and with high expectations of new management.
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RWS, the intellectual property support services provider, jumped 31.5p to 300p after Numis upgraded to buy following impressive full-year results, including a 16% dividend increase to 10.25p a share.
Chairman Andrew Bode said the company has fully hedged its anticipated euro and dollar trading exposure at attractive rates. The company is in a strong financial position and is well placed to grow its share of the patent translations market.
Slightly better than expected annual figures helped Domino Printing Sciences put on 10.5p to 574p. Pre-tax profits soared 53% to £54.7m and the amount of cash in the banks jumped to £49.5m from £20m. The dividend is lifted by 20%. Broker Altium Securities says that with its strong balance sheet acquisitions are likely.
Capita edged up a penny to 680p following the acquisition of the financial accounting and procurement management software business of iSoft, now a part of McKeown. The operations are focused on the UK public sector, in particular supplying 60% of NHS Trusts.
Shore Capital is a seller and says the transaction takes Capita's annual acquisition spend to £180m, accounting for 75% of 2010's free cashflow.
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