Pay growth to stay weak, says forecast

FTSE-100
FTSE-100 Chart (1 Year)

FTSE-100 1 Year Chart

Today’s edition features:

  • Altus Strategies (ALS.L)
  • PHSC (PHSC.L)

Visit Company News »


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 (ALS.L, 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

REQUEST A CALL FROM A BROKER REGARDING THIS RECOMMENDATION

PHSC (PHSC.L, 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

REQUEST A CALL FROM A BROKER REGARDING THIS RECOMMENDATION

To read Beaufort’s full research archive click here

Compiled by:
Barry Gibb, Kazunaga Senga, Sheldon Modeland, Charles Long & Ben Maitland
(t) +44 (0) 207 382 8384
(e) info@beaufortsecurities.com


Weekly diary


Click here to see all this week’s planned corporate and economic announcements.


Recommendations
During the three months to end-July 2017, the number of stocks on which Beaufort Securities published recommendations was 205, and the recommendations were as follows: Buy – 75; Speculative Buy – 107; Hold – 19; Sell – 1.

Full definitions of the recommendations used by Beaufort Securities in its publications and their respective meanings can be found on our website here.

Important Risk Warnings and Disclaimers
This report is published by Beaufort Securities Ltd (“Beaufort Securities”). Beaufort Securities Ltd is Authorised and Regulated by the Financial Conduct Authority and is a Member of the London Stock Exchange.

RELIANCE ON THIS NOTE FOR THE PURPOSE OF ENGAGING IN ANY INVESTMENT ACTIVITY MAY EXPOSE YOU TO A SIGNIFICANT RISK OF LOSING ALL OF THE FUNDS, PROPERTY OR OTHER ASSETS INVESTED OR OF INCURRING ADDITIONAL LIABILITY.

This document is not an offer to buy or sell any security or currency. This document does not provide you with individually tailored investment advice. It has been prepared without regard to the your financial circumstances and objectives The appropriateness of a particular investment or currency will depend on your individual circumstances and objectives. The investments and shares referred to in this document may not be suitable for you.

This research is non-independent and is classified as a Marketing Communication under FCA rules. As such it has not been prepared in accordance with legal requirements designed to promote independence of investment research and it is not subject to the prohibition on dealing ahead of the dissemination of investment research in COBS 12.2.5. However Beaufort Securities has adopted internal procedures which prohibit analysts from dealing ahead of non-independent research, except for legitimate market making and fulfilling clients’ unsolicited orders.

By receiving this document, you will not be deemed a client or provided with the protections afforded to clients of Beaufort Securities. When distributing this document, Beaufort Securities is not acting for you and will not be responsible for providing advice to you in relation to this document. Accordingly, Beaufort Securities will not be responsible to you for providing the protections afforded to its clients.

Beaufort Securities may effect transactions in shares mentioned herein and may take proprietary trading positions in those shares, and may receive remuneration for the publication of its research and for other services. Beaufort Securities may be a shareholder in any of the companies mentioned in this report. Accordingly, this document may not be considered as objective or impartial. Additionally, information may be available to Beaufort Securities or the Group, which is not reflected in this material. The remuneration of the author of this report is not tied to the recommendations on any shares mentioned nor to the any transactions undertaken by Beaufort Securities or any affiliate company. Further information on Beaufort Securities’ policy regarding potential conflicts of interest in the context of investment research and Beaufort Securities’ policy on disclosure and conflicts in general are available on request. Please refer to http://www.beaufortsecurities.com/important-info.

Past performance is not a guarantee of future performance. Investments may go down in value as well as up and you may not get back the full amount invested. The listing requirements for securities listed on AIM or NEX are less demanding and trading in them may be less liquid than main markets. This may make it more difficult to buy and sell these securities.

This document includes certain statements, estimates, and projections with respect to the anticipated future performance of securities listed on stock exchanges and as to the market for these shares. Such statements, estimates, and projections are based on information that we consider reliable and may reflect various assumptions made concerning anticipated economic developments, which have not been independently verified and may or may not prove correct. No representation or warranty is made as to the accuracy of such statements, estimates, and projections or as to its fitness for the purpose intended and it should not be relied upon as such. Opinions expressed are our current opinions as of the date appearing on this material only and may change without notice. Other third parties may have issued other reports that are inconsistent with, and reach different conclusions from, the information presented in this report. Those reports reflect the different assumptions, views, and analytical methods of the analysts who prepared them. This report has not been disclosed to any of the companies mentioned herein prior to its publication.

This document is based on information Beaufort Securities has received from publicly available reports and industry sources. Beaufort Securities may not have verified all of this information with third parties. Neither Beaufort Securities nor its advisors, directors or employees can guarantee the accuracy, reasonableness or completeness of the information received from any sources consulted for this publication, and neither Beaufort Securities nor its advisors, directors or employees accepts any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document (except in respect of wilful default and to the extent that any such liability cannot be excluded by the applicable law). You should not rely on this document and should not use it substitution for the exercise of the independent judgment of yourself or your adviser.

The information contained in this document is confidential and is solely for use of those persons to whom it is addressed and may not be reproduced, further distributed to any other person or published, in whole or in part, for any purpose. Other persons who receive this document should not rely on it. Beaufort Securities, its directors, officers and employees may have positions in the securities mentioned herein.


Beaufort Securities Limited, 63 St Mary Axe, London, EC3A 8AA.
Authorised and regulated by the Financial Conduct Authority (Register No. 155104).
Members of the London Stock Exchange, NEX and QCA.

Be Sociable, Share!

Comments are closed.