Today's edition features:
Markets
Europe
The FTSE-100 finished Friday's session 1.08% lower at 7,309.96 whilst the FTSE AIM All-Share index was down 1.06% at 988.99. In continental Europe, the CAC-40 finished 1.06% lower at 5,060.92 whilst the DAX finished little changed at 12,014.06.
Wall Street
In New York last Friday, the Dow Jones ended the week 0.07% higher at 21,858.32, the S&P-500 closed 0.13% higher at 2,441.32 and the Nasdaq was up 0.64% at 6,256.56.
Asia
In Asian markets this morning, the Nikkei 225 was 0.82% lower at 19,568.84, while the Hang Seng was up 1.17% at 27,197.76.
Oil
In early trade today, WTI crude was down 0.08% at $48.78 per barrel and Brent crude was 0.19% lower at $52 per barrel.
Headlines
Pay growth to stay weak, says forecast
Pressure on incomes looks set to continue, with pay rises forecast at 1% over the next year, a survey predicts. Despite falling unemployment, wage growth is weak because the supply of labour has also gone up, says the Chartered Institute of Personnel and Development (CIPD). The CIPD said for every low-skilled job, there were 24 applicants. There were also 19 candidates for every medium-skilled job and eight for every high-skilled vacancy. The CIPD's quarterly Labour Market Survey of employers, carried out in association with the Adecco Group, said the workforce had been boosted by more workers from other EU countries, as well as by older workers and former welfare claimants.
Source: BBC News
Company news
Altus Strategies (LON:ALS, 10.38p) – Speculative Buy
Altus Strategies, the African focused mining project developer, listed on AIM on Thursday. Simultaneously, it raised gross proceeds of £1.1million via a new share Placing and Subscription Offer of some 11.1 million shares priced at 10p. These proceeds will be used to broaden some of its existing exploration projects, fund new projects and cover working capital requirements. The company is now well funded, and in association with its two joint-venture partners, it is well positioned to capitalise on the stronger commodity price and mining environment.
Click here to read our full research note on the company published on 10th August 2017
PHSC (LON:PHSC, 13.25p) – Speculative Buy
PHSC on Friday released its Final Results for the year ended 31 March 2017. Through its trading subsidiaries, PHSC is a leading provider of health, safety, hygiene and environmental consultancy services and security solutions to the public and private sectors. From the time of incorporation and up until the end of the 2015-16 financial year, the majority of the Group's revenue had always been generated by its health and safety businesses. In 2016-17, for the first time in the Group's history, more revenues arose from the security-related technology revenues in the form of installations, consumables and services than from health and safety services. Financial highlights for the business included Group revenue rose to £7.16m compared with £7.04m last year, from which an underlying EBITDA loss of £0.1m, down from a profit of £0.368m last year, was recorded before considering a write-down of £0.625m (compared to £0.609m last year) due to impaired goodwill. A loss after tax of £0.691m compared with a loss of £0.414m last year, leading to a loss per share of 4.92p compared with last year's loss per share of 3.23p. Period end cash reserves were £0.207m compared to £0.256m in 2015/16. No final dividend was proposed although the Board stated that an interim dividend may be considered if the improving picture emerging over recent months continues.
Our View: It is encouraging that the Group saw a material improvement in underlying EBITDA in the second half of 2016-17. The Group's legacy health and safety businesses generally continue to enjoy a large amount of repeat business from its loyal client base. Losses at its asbestos-related business have bottomed out and management are seeing stabilisation of prices after a period of heavy discounting and, although there may be further costs associated with restructuring this business large trading losses are now considered a thing of the past. The Group's proposed restructuring of its security-related companies into a single division should also ultimately result in cost savings. In addition, there continue to be good prospects for increased sales and opportunities for technological innovation of the products supplied. Based on the latest management accounts (unaudited), PHSC had total revenues of £1.82m for the first quarter of 2017-18, an increase of around 5% on the comparative period. Based on this, Q1 EBITDA appears to be around £120k, against a loss of £40k last year. Ongoing political uncertainty and Sterling weakness adversely affected last year's financial performance given that products, particularly for the security-related subsidiaries, import materials priced in euros or US dollars. The partial recovery of GBP since the start of the new fiscal period, however, will reverse some of this, while divisional loss elimination, ongoing rationalisation and a cost reduction programme should allow management to present the first stages of an improving picture by the half year stage. A resumption of dividend payments at this time would allow the shares, which now trade at a deep discount to their consolidated net assets of £5.25m and have more than halved over the past 12 months to recover some of their recent losses. Based on this, Beaufort upgrades its recommendation to Speculative Buy from Hold.
Beaufort Securities acts as a corporate broker to PHSC plc