Last week …
… was disappointing. The FTSE 100 fell 1.3% to 5793 while the FTSE 250 dropped by 1.8% although the Aim All Share at 702 slipped just 0.5%. The week contained an IMF reminder that austerity policies will make growth a hard slog. Bright spots were UK House Prices rising relatively to -15 from -18, Retails Sales rose by 1.5%, while US Consumer Confidence jumped to 83.1 which is a five year high, as the drop in unemployment is confirmed. The prospects of lower than expected 3rd Qtr corporate earnings pulled the market lower.
This week …
… UK economic indicators are likely to continue to show relative improvements, although not perhaps Inflation which is reported on Tuesday. There are BOE Minutes and Unemployment figures on Wednesday, followed on Thursday by Retail and Internet Sales. In the Eurozone the Balance of Trade should be improving when it’s reported on Tuesday and US a Consumer Confidence survey should still be improving when reported on Thursday. Still no need for pessimism.
Eckoh (ECK) – £29m at 13p
No more waiting
Eckoh provides hosted speech recognition for the customer contact centre market. It recently announced that a key contract was renewed with Vue Entertainment for a further three years. This is a key reference site as it covers a range of Eckoh’s telephony services. It covers the established speech-enabled cinema information and ticket booking facilities while Eckoh’s live UK-based contact centre manages customer calls and emails as well as Vue’s gift card operations. Over the last year, Eckoh has developed web-based services and Vue are using these newer social media monitoring and broader customer interaction services . In September a three year contract was won with Serco the International Services provider to help callers find their nearest locations order fact sheets etc. The new business pipeline was reported to be at an all-time high while reoccurring income is running at 87%. Profits for the March 2013 year end are forecast at £1.65m for an EPS of 0.82p and a prospective P/E of 17x while yielding 1.9%. Interims are due in November.
The company is debt free and cash generated from operations at the finals increased by 65% to £1.5m with £6.4m net cash.
BrainSpark (BSP) – Suspended – £4.34m at 4.75p
Spark to Return
This week could see AIM listed Brainspark publish its Finals and then the Interims to June 2012 so it can return from suspension. The Audited finals to December 2011 were delayed and since the suspension in June the regeneration into an Italian based Theme Park, restaurant and hotel operator has continued. The failure to sell Mediapolis, a water Theme Park and surrounding site for an estimated euro 25m in April, was partly due to the inability to transfer a mortgage, recent news suggested that this sale may still go through albeit at a reduced rate. The reinforced focus is to take advantage of depressed Italian assets. Then by taking majority stakes funded partly by shares/part cash so develop a portfolio of companies primarily in the leisure, entertainment and real estate sectors. Already under way is the operation of over 30 SoSushi restaurants in mainly Rome and Malian, also a stake in ORA, a chain of hotels and a Tour operator was acquired. Once value is added Brainspark will seek an exit the investment and so crystallise the enhanced value.
The unaudited finals reported the NAV at £16.2m (18p a share ) after an £11m impairment charge. Since then debts have been converted at 35p and 15p and equity funds raised at 15p, 10p and as low as 4.67p. Further funds for working capital and to complete a purchase are likely to be sort.
Imperial Innovations (IVO) – £200.5m at 320p
Finals from this the UK’s largest Bio/ Med technology businesses developer reported an uplift in the unrealised value of its investments so pre-tax profits jumped 10 fold from £0.5m to £5.1m in the year to July 2012. Revenues were flat at £4.3m. This was the first year that Imperial was also investing in University College London, Oxford and Cambridge businesses. Novacem, the carbon negative cement company, could not raise additional funding and it is selling its technology and being wound-up. However, a number of the older investors are reaching a point where there is potential for their values to increase significantly. Circassia has initiated a phase III trial for a cat allergy treatment called ToleroMune and it could be on the market by 2015. There are discussions with potential pharma partners. The same platform can be used for other products. Grass, house dust mite and ragweed allergy treatments have also completed phase II trials. Circassia contributed a £4.42m unrealised gain in the period and it is the largest investment with a book value of £36.7m. Medical devices developer Veryan Medical contributed a £5.45m gain.