Amazon’s sales per-employee is twice that of nearest bricks and mortar rivals …

Amazon’s sales per-employee is twice that of nearest bricks and mortar rivals so the net results is that US retail jobs are in relative decline. 

FT

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Last week …

… the FTSE 100 fell 2.5% to 6249, while the FTSE 250 was 3.2% lower and the AIM All Share at 711 declined by 2.6%. Despite lower UK, PMIs on Manufacturing & Construction and lower Mortgages approvals, the BOE left Interest Rates and QE unchanged.  Reductions in the growth rate of US Manufacturing and a smaller increase in jobs than had been expected combined to rattle the foundations undermining growth assumptions.

This week …

… there are UK Manufacturing and Production numbers on Tuesday which are expected to be depressed. German Industrial Production figures are reported on Monday followed by RPI numbers on Tuesday. Back to the Euro crisis, Portuguese political resistance to austerity policies is likely to become destabilising. On Friday in the US, the Producer Price Index is reported as well as the forward looking Consumer Confidence survey. North Korean attention seeking can almost safely be ignored.  Markets seem unlikely to stage much of a recovery.

 

Company Reports

Universe (UNG) – £9.4m at 5p

Growth Plans

These finals to December 2012 are from the new management team who reported a PBT of £0.82m compared to a loss of £1.0m. Revenue from the continuing business of developing and supplying online payment and loyalty systems for primarily petrol retailers had increased by 13% to £11.9m. This follows the sale of the loss- making manufacturing business in December 2012 that completed the strategic repositioning while helping eliminate debt along with a £1.53m placing at 2.3p.  The existing product range has been revitalised and the UNG are moving into the transformational phase involving the acquisition and development of new products for its existing markets and hopefully moving into new ones. The focus is on the creation of a complementary set of leading-edge products to support the planned expansion in new related sectors.  Investment is being made in development and marketing teams  which should show increasing returns in 2014 and beyond. Profits for 2013 are forecast to remain relatively flat at £0.9m which would give an EPS of 0.5p and a prospective P/E of 10x.

Financials

 

Cash from operations increased to £2m from £0.8m and borrowings of £1.6m was repaid leaving net debt of just £19k.

 

Instem (INS) – £13m at 111p

Globally over-reaching

Healthcare development IT supplier Instem reported lower revenues and profits for the year to December 2012. Revenues reduced from £10.8m to £10.7m due to a decline in licence fee income which was only partly offset by higher margin SaaS (Software-as-a-Service) revenues. PBT fell from £1.5m to £1.3m. Instem provides technology that helps pharma companies with R&D, particularly analysing data which can narrow down the compounds most likely to be clinically effective. The technology has been endorsed by the US government, who purchased the Provantis 9 preclinical software suite via SaaS to support National Toxicology Program studies. The initial value of the contract is $870,000 in the first year. The contract can be extended to up to 10 years and that would mean it will be valued at between $6.2m-$7.6m.  The customer retention rate is 95% and a number of other contracts have been won including one with a leading Japanese pharmaceutical company and one of the world’s largest Biopharmaceutical organisations and 87% of the group’s revenues comes outside of the UK.  The shares have improved from a low of 90p despite profits for 2013 being forecast to dip to £1.2m which gives and EPS of 6.9p and a prospective P/E of 16x, with moderate growth expected for 2014.

Finance

Net cash was £2.2m at the end of 2012 and with the new contract wins it should be improving.

 

Bond International Software (BDI) – £20.5m at 56p

Building Value

Recruitment software and services supplier Bond International reported reasonable finals for the year to December 2012.  Despite revenues falling from 3.5% to £35.5m the recurring revenue increased 5% to 67% and increased SaaS revenues are part of the reason for the decline in the lower ‘value’ software licence sales. Administration expenses were reduced by 4% and the profit before acquired goodwill amortisation and impairment charges rose from £1.5m to £2.2m. There was a contribution from the first contract in Japan where further expansion is expected and an updated product is being launched in the US.  In the UK the launch of real time information requirements by HMRC will help to boost demand in 2013. Outsourcing revenues of HR and payroll continue to grow and a significant new retail client has been won. The shares are on an historic P/E of 9x while yielding 3.4%  and further growth is anticipated.

Finance

Net debt was £1.79m at the end of 2012 and a £6m bank facility with Barclays has been renewed for three years.

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