Asian Digital Holdings (ADH, 0.415p, £2.94m)has secured core operations from its former subsidiary Deal Group Media followings its recent administration. ADH sold a controlling stake in DGM UK in 2007 and since then it had provided technology services to the group. We still see the group as on target for breakeven on £30m or so of revenues and this secures the future for its performance advertising business. We maintain our BUY recommendation. (Julian Tolley)
Ceramic Fuel Cells (CFU, 11.75p, £121m) has announced the first sale of its BlueGen CHP fuel cell to a major US energy company. Although the highest valued of the UK fuel cell plays we remain positive regarding the outlook for the share price as we foresee an increasing trend or orders against a background of increasingly encouraging Government policies. SPECULATIVE BUY (Julian Tolley)
DQ Entertainment (DQE, 122p, £43.88m) has announced a co finance and product agreement with Nick India, part of Viacom 18 Media Pvt Ltd, to produce a local animated series for children. Nickelodeon has provided content for the series while DQE is executing the production for global distribution and licensing. Encouragingly, while Nick India will hold the distribution rights for south Asia including India, DQE has the rest of the world. We remain buyers of the stock as the company is building an impressive range of own IP and back catalogue to exploit in the future. BUY (Julian Tolley)
Enfis Group (ENF, 10.5p, £1.59m) has secured the contract to supply LED arrays and drivers for the NBA Stadium under construction in Guangzhou, China for this November's Asian games. Deliveries of the products will be completed by August 2010, with the revenue booked in H2 2010. The value of the contract has not been disclosed, which suggests that it will be small. However, the contract highlights the groups’ high quality products and will act a lighting flagship for Enfis. Interims should be announced shortly. HOLD (Amisha Chohan)
Matchtec (MTEC, 207.5p, £48.41m) Trading update for the year ending July 2010 has confirmed the improving trends in both contract and permanent recruiting. Contract saw H2 revenues of £10.3m V.S. £9.6m in H1 - though still down 10% year on year as a total. Similarly permanent recruitment H2 revenues were £3.2m V.S. £2.9m - down 27% year on year. Contractor numbers reached a record of over 5,100 by the period end and the group saw an easing of margin pressures in H2 as well. The group increased headcount and launched 2 new brands in the professional services segment during the period. Net debt ended the period at £4.5m (net debt £1.2m). With some 50% of the net fee income arising from directly or indirectly Public Sector spending there may be uncertainty over the following months. We maintain the BUY recommendation due to the significant yield support (at the interim it held the 5p payout, having last year paid 15.6p DPS for the year) and forecasts would have to fall 40% before the yield was covered once. A held full year DPS at 15.6p would imply a 7.5% yield. (Julian Tolley)
Medicsight (MDST, 6.5p, £10.11m), the developer of Computer-Aided Detection (CAD) and image analysis software, reports interims to 30 June 2010. Revenues increased by 2.2x to £0.22m (H109: £0.07m) predominantly driven by the newly launched MedicCO2LON Insufflator (66% of sales). We are impressed by the level of sales of MedicCO2LON. The benefits of the cost reduction programme reduced operating costs by £2.3m, a 46% reduction, in the period. Pre-tax losses almost halved to £2.5m (H109: £4.8m). Net cash stood at £8.3m (Q109: £9.1m, FY09: £10.7m). There are no forecasts out in the market. The company is still very far off from breaking even. Medicsight is still waiting for approval from the FDA and Japanese Ministry of Health, Labour and Welfare. We are slightly concerned that the approvals are taking longer than usual. We believe FDA approval will be the next catalyst to increase the share price. We therefore retain our very SPECULATIVE BUY recommendation. (Amisha Chohan)