The Cambridge Index sank 10.0% or 379.8 points to 3,415.8, as all but 2 of the top 10 index heavyweights closed in the red, reflecting general weakness across the broader market. Investor worries resurfaced during the week as consumer spending continued to slow and the Bank of England inflation report predicted a sharp contraction in the U.K. economy next year. Aveva Group, Autonomy Corp., Johnson Matthey and Greene King fell 16.7%, 11.9%, 12.2% and 3.5% respectively. For the six months ended 30 September 2008, Aveva announced that its revenue increased 32% to £74.8 million and profit before tax climbed 73.0% to £29.2 million over the same period a year ago. Chip maker stocks CSR and ARM Holdings fell 15.2% and 14.1%, respectively, after mobile phone maker Nokia released a poor sales outlook for 2009.
Phytopharm was the biggest loser on the index, plunging 54.5% to 5.0p, after announcing that its development partner, Unilever, has abandoned plans to develop the company’s product, ‘Hoodia’. Other prominent losers included, Pursuit Dynamics, Sepura, ITM Power and Alizyme, down by 16.7%, 10.4%, 9.6% and 6.8% respectively.
Among the top gainers, Bango and Minster Pharmaceuticals climbed 31.4% each. Minster Pharmaceuticals registered gains, as its cash reserves of £9.01 million as on 30 September 2008 surprised investors positively and the company remained hopeful of tasting success in a key clinical result. Kier Group climbed 10.6% to 780.0p, after announcing that its financial performance to date is in line with its expectations and that the company remains on track to meet its full-year expectations, provided there is no major fallout in its key operating markets. Other prominent gainers included Medical Marketing Int., NXT and Cyan Holdings, up 21.7%, 12.5% and 11.1% respectively.
The FTSE 100 Index closed lower by 3.0% to 4,233.0, as falling metal and energy prices pulled energy and mining stocks lower, while the Bank of England’s warning of a sharp contraction in U.K. economy and further weakening of the pound had a knock on effect on banking and consumer-facing stocks. Stocks extended losses after the unemployment rate rose to 5.8% in the three months to September and retail sales declined at an annual rate of 2.2% in October. During the week, the FTSE techMARK 100 Index was down 1.8% to 1,166.6, while the FTSE AIM 100 Index finished lower by 6.1% at 1,975.5.
In the US, the Nasdaq Composite Index declined 7.9% to 1,516.9, and the Dow Jones dipped 5.0% to 8,497.3, as more signs of weakness in the job market and concerns over weakening consumer spending continued to weigh on the markets. A 2.8% monthly decline in retail sales in October added to the fears that consumers’ reluctance to spend could drag the U.S. economy into a deeper recession. Investor sentiments were further dampened after the U.S. refrained from using its $700 billion bailout to buy toxic mortgage assets.
Index Movers
ARM Holdings PLC
Shares of ARM Holdings PLC, a designer of microchips, slipped 14.1% to 90.0p, as chip markers across the board lost ground after mobile phone maker Nokia released a poor sales outlook.
The company announced the industry’s original Silicon-on-Insulator (SOI) physical IP library, including standard cell, memory and I/O libraries, for IBM’s fully enabled 45nm SOI foundry. It claims that ARM SOI library of physical IP is the only design platform of its kind in the industry and could significantly ease implementation process of SOI technology.
Aveva Group PLC
Engineering technology company, Aveva Group, plunged 16.7% to 600.0p. The company, in its unaudited results for the six months ended 30 September 2008, announced that its revenue increased 32% to £74.8 million from £56.8 million and profit before tax climbed 73.0% to £29.2 million from £16.9 million, recorded in the same period a year ago.
Chairman, Nick Prest said “We acknowledge that recent and rapid developments within the world economy have created less certainty about future demand and whilst there has been little impact on our current trading, we continue to monitor the situation closely.”
Aveva also announced further expansion in Latin America with the opening of AVEVA do Brasil in Rio de Janeiro.
The company received mixed reviews from brokers during the week, with two of them upgrading Aveva to ‘Buy’ with respective target prices of 1000.0p and 918p, while another assigned a ‘Sell’ rating with a price target of 620p.
Bango PLC
Bango PLC, a developer and provider of technology for mobile phone users, was among the top gainers of the week, rising 31.4% to 69.0p.
CSR PLC
CSR PLC, a company engaged in designing microchips used in Nokia Oyj mobile, eased 15.2% to 163.0p, tracking losses across chip maker stocks after Nokia warned that mobile-device sales will fall next year.
CSR announced the launch of ‘BlueCore TouchLITE’, a Bluetooth remote control development kit for automotive use, based on its successful BlueCore technology.
Cyan Holdings PLC
Cyan Holdings PLC, a fables semiconductor company providing configurable application software, featured among the week’s leading performers, rising 11.1% to 1.3p.
Medical Marketing International Group PLC
Registering gains for the third consecutive week, the shares of Medical Marketing International Group PLC, a specialist pharma company focusing on the development of drugs for cancer, surged by 21.7% to 7.0p (or a total value of £4.5 million).
Minster Pharmaceuticals PLC
Minster Pharmaceuticals PLC, a pharmaceutical company specialising in developing drugs for the treatment of neurological and psychiatric conditions, soared 31.4% to 11.5p, as the company’s cash reserves of £9.01 million came as a pleasant surprise to the investors, and the company remained hopeful of success in a key clinical result. Pretax loss for the six months ended 30 September was £3.6 million, up from £2.3 million recorded a year earlier.
NXT PLC
Shares of technology and licensing company, NXT PLC, gained 12.5% to settle at 6.8p. The company, in its interim management statement for the period from 1 July 2008 to 14 November 2008, noted that the current global economic turmoil is affecting some areas of its business. Overall, NXT’s revenues to date are currently below management’s expectations; however, the company expects that the combination of new business and currency translation will reverse this position by the end of December.
Phytopharm PLC
Phytopharm PLC, a pharmaceutical development and functional food company, was the weakest performer during the week, plunging 54.5% to 5.0p following announcement that its development partner, Unilever has abandoned plans to develop its product, ‘Hoodia’, a hunger-curbing herbal extract.
Separately, Phytopahrm notified that the company has received a notice of termination of employment contract from CEO, Daryl Rees and CFO, Piers Morgan.
Pursuit Dynamics PLC
Shares of Pursuit Dynamics PLC, a provider of steam propulsion and pumping technology, slumped 16.7% to 83.8p.
Other Movers in the Index
Amino Technologies PLC, a broadband network software and systems company, advanced 1.0% to 52.3p. The company announced that Lumexis, a provider of Fiber-To-The-Seat airline entertainment systems, has licensed its ‘AmiNET130M’ technology to deliver digital HD IPTV to airline passengers.
ANT PLC, a provider of embedded application software and support services, jumped 10.9% to 30.5p. VP of Sales and Marketing, Richard Baker, stated that personalisation was the key to broadcasting and advertising industries for competing effectively against alternative consumer devices.
House builder and commercial business park developer, Artisan (United Kingdom) PLC, shed 5.0% to 28.5p. The company announced that it has put up a decent performance in the year to 30 June 2008, amid difficult market conditions, helped by the strong performance of its commercial division. However, since June to date, the company has witnessed a considerable deterioration in the market for both its residential and commercial development operations, with activity levels falling below the level witnessed in the corresponding period last year.
Chairman, Michael Stevens said “…Whilst short term prospects are undoubtedly challenging, I believe that the fundamentals for the development industry are strong in the medium term and that Artisan has excellent prospects once market conditions have improved.”
Autonomy Corp. PLC, an infrastructure software company, plummeted 11.9% to 863.0p. The company announced the release of a new version of its Investigator & Early Case Assessment (ECA) software to enable banks and insurance companies to quickly assess litigation risk and exposure in the wake of the global financial crisis.
Brady PLC, a provider of transaction and risk management solutions for metals and commodities, remained unchanged at 45.5p. The company announced that it has been included in a world-wide risk technology ranking named ‘Chartis Risk Tech 100’, which basically evaluates and ranks the world’s top 100 risk management vendors. Brady’s overall rankings have increased compared to last year and it has been highly ranked in terms of customer satisfaction.
Celsis International PLC, a global leader in innovative life science products and laboratory services, gained 2.3% to 157.0p. The company, in its interim results for the six months to 30 September 2008, announced that its revenue increased 3.5% to $27.2 million from $26.3 million and profit before tax rose 17.8% to $5.0 million from $4.2 million recorded in the same period a year ago. Earnings per share stood at 16.0 cents, up 14.1% from 14.0 cents. The company remains on track to meet its expectations for the year.
Dialight PLC, a provider of electronic lighting and electromagnetic products based on applied LED technology, fell slightly by 0.4% to 114.5p. The company, in its interim management statement for the period from 1 July 2008 to 13 November 2008, announced that its overall trading was in line with the board’s expectations, despite unfavourable global economic conditions. Dialight maintained its current outlook on trading for 2008, given that its orders in the Signals/Illumination segment continued to grow at double digit rates.
Brewery and pub operator, Greene King PLC, eased 3.5% to 362.8p, in line with other pub stocks, after the Bank of England noted that the U.K. economy has slipped into a recession, which may last longer than previously estimated. The company will release its interim results for the 24 weeks to 19 October 2008 on 2 December 2008.
Building, civil engineering, and mining and property development group, Kier Group PLC, climbed 10.6% to 780.0p after announcing that its financial performance to date is in line with its expectations and it remains on track to meet expectations for the full year, provided there is no major fallout in its markets. The company received mixed reviews from brokers during the week, with one recommending a ‘Sell’ rating on the stock with a price target of 610p, and another recommending a ‘Buy’.
LPA Group PLC, a provider of electronic and electro mechanical systems, increased 1.6% to 31.0p. The company announced that its wholly-owned subsidiary, LPA Industries Ltd. (trading as “LPA Niphan Systems”), has been awarded a contract worth £1.55 million to supply stand-by power systems and inter-car electrical interfaces, to be used by Bombardier Transportation U.K. Limited for the manufacture of a total of 93 Turbostar Diesel Multiple Units. Delivery will commence during the first quarter of 2009 and will extend into 2010.
Netcall PLC, a provider of call-back, auto-messaging and contact solutions, was unchanged at 12.5p. The company notified that it has purchased, from the market, 280,000 ordinary shares of 5p each at 11.6p per share, on 6 November 2008.
Biotech firm, Vernalis PLC, rose 2.8% to 2.9p, after announcing the appointment of Ian Garland as CEO and David Mackney to the position of CFO. Both hold the same positions in Acambis Plc.
Separately, the company, in its interim management statement for the period 1 July to 14 November 2008, announced that its trading performance and financial position are in line with the Board’s expectations. Vernalis maintained its current estimates and expects to have sufficient funds until mid 2010, based on its plans for investment in its R&D programmes and the successful out-licensing of certain programmes. The company is currently initiating a Phase IIb study with V3381 for the treatment of neuropathic pain due to diabetes, with the first patients due to be recruited in December this year.
