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HB Markets Daily Smallcap Newsflash including: Globo, Hightex , Superglass, Arena Leisure and others

HB Markets Daily Smallcap Newsflash including: Globo, Hightex , Superglass, Arena Leisure and others

Arena Leisure (ARE, 27.75p, £101.07) Trading update from the horseracing fixtures operator for the year ending December 2010 confirms 352 fixtures in the period with an average attendance up 4.4% to 18,03 (1,727) though total attendances fell to 633,000 (639,000). The group continued to see 15% growth in hospitality attendances. The weather towards the end of the year resulted in 18 98) meetings being cancelled. Despite arranging 6 additional fixtures on its 3 all weather sites the impact of the reduced attendances, cancelled meetings and additional will result in profits being some £0.3m to £0.4m lower than the current expectations (some 10%). With income from the racing levy expected to fall next year we continue to struggle to understand the high valuation, despite NAV of £79m or so. We maintain the SELL rating.  (Julian Tolley)

Brainjuicer (BJU, 219p, £27.27m) Trading update for the year ending December 2010 from the international online market research agency saw revenue growth of 35% for the year to over £16m, resulting in profits ahead of market expectations. The group generated cash with a net cash position at the period end of £2.5m (up from £1.6m at the half year in June).  Forecasts could move form £1.9m to £2m for the December 2010 year, giving EPS of 10.7p – putting the group on 20x PER going historic.  With a high rating there is a lot to prove, and the group has been purchasing its own shares at 200p+ levels, which would help the group make EPS accretive acquisitions. With profits forecasts for some 20%+ growth (potentially increasing organically before any further acquisitions) we maintain the Buy recommendation with an increased 240p price target. BUY (Julian Tolley)

Globo (GBO, 10.5p, £18.37m) Despite being based in Greece the trading update from Globo for the year ending December 2010 and the outlook is very encouraging. The year to December 2010 has seen strong growth in the international markets aiding revenues to end ahead of expectations at €30.9m (€23.5m) with PBT in-line with market expectations (£5.86m PBT with 3.5p EPS). International revenues rose from €0.1m to €6.8m, reflecting the investment of the past 2 years – driven primarily by CitronGo!, the push-email software for mobile phones. The shift towards the repeat revenue model continued apace with revenues increasing to €6.96m (€2.92m). The group did consume cash during the year, primarily due to the international expansion and support required for the marketing roll-out of CitronGo! Net debt ended the period at €10.7m (€9.9m) post 2 cash raises and other equity issues totalling some €3.6m.  Included in the numbers are the amount owed by the Greek Government which fell to €1.98m (€5.5m) - in part highlighting a reduced level of activity with that customer.  With 20 customers so far 2011 promises to see CitronGo! a key driver in the year, especially with the addition of a Server version aimed at the medium to large organisations. The group will expand the number of locations around the world to support the CitronGo! opportunity. We still see significant upside in the outlook with CitronGo! undervalued (compare this with Synchronica with a value of £28m). BUY to a price target of 5x PER historic – or 17.5p. (Julian Tolley)

Hightex (HTIG, 6.75p, £12.68m) Trading update from the designer and installer of large membrane projects has highlighted €30m revenues, driven by its involvement in 3 key projects – the retractable roof on the Olympic stadium in Kiev, the National Stadium roof in Warsaw and the roof/façade for the BC Place Stadium in Vancouver.  However additional manufacturing equipment together with higher marketing costs will reduce expectations of PBT to some €2m (£1.7) down from £2m.  We see the price as a fair reflection of the future opportunity offset by the dangers that H1 PBT may be muted by higher continued marketing costs. HOLD (Julian Tolley)

Plant Health Care (PHC, 77.25p, £40.88m) has completed the previously announced disposal of its US landscaping business for a cash consideration of $4.65m, V.S. an operating profits contribution of $0.38m in the year to December 2010. The group hints that there may be other disposal announcements of its direct sales organisations which are located in Europe and Mexico. Trading update fir the year ending December 2010 has reported sales are some $3m below earlier expectations – so the group is ceasing its early order programme to enhance margins on the lower sales levels. Up front licensing income is lower as well. The group ended the period with a net cash position of some $13m which will rise to $16.5m post the disposal income. Despite the disappointing year we maintain the Hold recommendation, noting the group is well funded with a quarter of its market capitalisation represented by cash. HOLD (Julian Tolley)

Superglass (SPGH, 34.5p, £19.99m) As we had previously highlighted the group has decided to repair the second furnace – resulting in a 6 week period when the other unit is worked harder resulting in additional costs. The trading period over the since the report of the finals in November has seen a slow start to the newly extended CERT programme – so results will be weighted towards the H2 – or a profits warning for H1 instead!  We still see downside in the numbers and maintain the Sell recommendation with a 30p or 6x PER price target. SELL (Julian Tolley)

T. Clarke (CTO, 114.5p, £47.40m) A cautious trading update for the year ending December 2010 has highlighted the impact of the downturn in the UK construction market, yet reports an order book of £190m (£160m). The 4th quarter saw extreme margin pressure combined with the impact of the bad weather. The result will be results below expectations and the outlook is for results in 2011 to be below those to 2010, despite making 2 acquisitions during the past year. The group maintains financial flexibility with some £7m of net cash at the period end. As we flagged in August 2010 the lower outlook will lead to a final DPS at the same level of the interim (4.25p) taking the full year outlook to 9p or 6.3% - and a total annual cost of £3.8m – so there is scope for a further dividend rebasing. Forecasts of £5.5m with 9.6p EPS would suggest a first stop for the price below 96p. SELL (Julian Tolley)

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