Tweet

 

Email

Email to a friend:

To:

Separate multiple addresses with commas.

From:

Name: Please send me a copy Message:

Verification code

Enter the code from aboveRequired

Send

Alkane Energy (ALK, 15.5p, £14.43m) has extended the tolling arrangement with GDF Suez that sees its electricity generation capacity use piped in gas rather than coal mine methane. ALK has extended the contract by 18 months to march 2012 which uses excess capacity as its Markham and Shirebrook operations - so generating an estimated income of some £0.3m in the first full year. The contract doubles capacity to 10MW, thereby potentially doubling the revenues to be earned. With the outlook based on increasing electricity prices we maintain our BUY recommendation. (Julian Tolley)

Digital Marketing Group (DIGI, 27.75p, £20.58m) is the UK’s largest digital marketing specialists.  The AGM statement reports trading is currently in line with management expectations. As expected market conditions have improved slowly and the recovery is modest. The collaboration agreement with UM, the global media planning and buying agency, will increase the number of clients the group work with internationally. The launch of 20:20 Connect, the new business developed to provide a comprehensive range of mobile communications and mobile commerce services, will help enhance organic growth. All in all, we are encouraged by the statement.  We believe a shift in spending in favour of online and mobile channels and away from traditional media will benefit the group in the long term. The market forecasts 2010 PBT of £6.0m and EPS of 5.1p and in 2011 PBT of £7.2m and EPS of 6.1p. The stock is rated on a mere 5.4x 2010 earnings and 4.5x 2011 earnings. We continue to believe the large discount to the sector is unwarranted. We maintain our BUY recommendation but reduce our target price to 33.55p, equivalent to 5.5x 2011 earnings. (Amisha Chohan)

Regenersis (RGS, 36.75p, £16.47m) has secured a four year, multi-million pound contract with DHL Supply Chain. The group will provide repair and refurbishment of mobile devices, as well as the systems to drive down total service costs.  The latter coupled with DHL's supply chain leadership in reverse logistics, will mean that telecom customers can now move to a market leading service combined with reduced inventory levels.  Management expect the new end-to-end technical service will raise the industry benchmark. We are encouraged by the contract win, which highlights the group’s ability to develop new service models for existing customer. Trading on a 2010 and 2011 PER of 3.8x and 3.3x respectively, a discount to the sector, we continue to believe the group is undervalued. In our view, new contract wins will act as a catalyst for the share price to accelerate. We retain our BUY recommendation with our target price of 63p. (Amisha Chohan)

ServicePower Technologies (SVR, 4p, £7.58m) Interims to June saw revenues increase to £10m (£9.4m) with a gross profit down to £2.3m (£3.6m) with an adjusted loss before tax of £0.3m (loss £0.6m) and net cash of £2.11m (£2.31m)  - treating the convertible loan note as debt. The fall in gross margins reflected the change in product mix with Service Operations (Hosting/SaaS +UK and US ops) accounting for £7m (£4.4m) while Service Scheduling (Licences/Implementation/Support& Mobility) accounting for £3m (£5m). Recommendation dropped to a HOLD due the price/sales and the adverse movement in gross margins. (Julian Tolley)

Tandem Group (TND, 117p, £6.5m) Interim trading update for the period ending July 2010 reveals turnover flat at £18.9m (£19m) despite the absence of a £1.4m boost from a national retailer promotional contract. Profits are expected to be ahead of the comparable period despite increases in raw materials and transport costs. The group highlights a good reception to the Autumn catalogue with optimism for the 2011 Spring Summer outlook. Results are expected to be well ahead of expectations and the group has confirmed an interim DPS will be paid. The group is updating the market on its strategy on the 7th September. HOLD till the strategy is outlined. (Julian Tolley)