Equity Insight Issue 480

REDMAYNE-BENTLEY’S FORTNIGHTLY PUBLICATION FOR ACTIVE INVESTORS ANNUAL SUBSCRIPTION: £40

EQUITY INSIGHT

WHEN AUTUMN LEAVES…? ISSUE 480
2ND SEPTEMBER 2010

September/October are months often associated with exceptional FEATURED CONTENT
stock market weakness, notably the 1929 Crash, 1987 Black Monday,
1992 Black Wednesday, 1997 Asian Crisis, the 9/11 disaster of 2001 TRADING RANGES
AGA Rangemaster and Aggreko
and most recently, the credit crunch of 2008. Unsurprisingly, with the
Dow Jones Industrial Average and FTSE 100 both flirting with historic THE CHARTS
inflection points at 10000 and 5000 respectively investors are bracing Looking For Clues
themselves for another seasonal panic attack. CITY VIEWS
With economic growth faltering in Recommendations from City Analysts
the US and insipid in the UK and EU,
SHARE SPOTLIGHT
it is no surprise that gilts, bunds and Drax
US treasuries have surged to ‘bubble’
heights recently on safe haven buying BROKER PICK
and rising risk aversion as deflationary/ De La Rue
double-dip fears have escalated.
Central banks are well prepared for that RECOMMENDATION UPDATE
eventuality, with the pumps primed Review of Past Recommendations
for further fiscal stimulus. The lessons Indonesia as key markets from which THE BACK PAGE
of Japan, hamstrung for two decades, to generate sales growth ‘in high single Top Trades and News & Events
have left western economies prepared digits. Asia Pacific sales already exceed
’
to take unprecedented steps to avoid US$1bn. Meanwhile, HSBC is shifting
deflationary depression and if it means its headquarters to Hong Kong and shoes and jewellery.’ JP Morgan Brazil
courting inflation, then so be it. It is seeking a Beijing listing. Prudential has Investment Trust manager Sebastian
a case of ‘better the devil you know,’ stressed its intentions to target Asian Luparia offers similar guidance; ‘we
especially if, over time, the mountains growth. There is a common theme. see rising public and private sector
of debt will be substantially eroded. investment as driving economic growth
Technically, the gilt market is at its most If the bond bubble bursts, rather than exports of commodities, so
overbought since the Asian currency our portfolio weightings will always
losses could be catastrophic.
crisis. Perversely, both conventional reflect this.
’
and index linked stocks are in demand, In June, China overtook Japan as the These new engines of global growth
suggesting ‘stagflation. Unwinding this
’ second largest economy after the US, may not decouple from any new malaise
anomaly may well be the catalyst for demonstrating annualised growth of in financial markets, but with autumn
the next big wobble. If the bond bubble 10.3 per cent in Q2 during a period of leaves falling on western growth, they
bursts, losses could be catastrophic. fiscal tightening. Interestingly, Anthony have an optimistic spring in their step.
But whilst economic data shifts Bolton’s new Fidelity China Special Andrew Priestley, Stockbroker
between depressing and encouraging, Situations Fund is targeting financials Redmayne-Bentley ~ Harrogate Branch
many top quality companies are still (32 per cent) and discretionary consumer
managing to report improved earnings spending beneficiaries (21 per cent)
and profitability and though cautious to capture the main thrust of growth;
on the medium-term outlook, remain ‘Previously manufacturing and exports
Contact Us
optimistic about financial strength and were the drivers
growth prospects. Take for example but that era is To speak to a broker call your
an internationally diverse player such over. It will now be usual Redmayne-Bentley branch
about the domestic or alternatively call:
as drinks giant Diageo (Johnnie 0113 200 6530
Walker, Guinness, Smirnoff), which economy and service
recently reported a modest rise in sectors. We are big Visit our website at:
net profit for 2009/10. Importantly, in retailing, sports www.redmayne.co.uk
it cited China, India, Vietnam and goods, electrical,

REDMAYNE-BENTLEY STOCKBROKERS TRADING RANGES

TRADING RANGES

AGA Rangemaster (AGA)
AGA Rangemaster is a leading international 105p
92.5p
premium consumer brands group which
manufactures and distributes some of the best known kitchen appliances and
interior furnishings in the world. Known for its longstanding heritage, technical
excellence and innovation, the group now operates production facilities in the
UK, USA, France, Canada and Ireland and has worldwide wholesale and retail
distribution.
The group followed up a profitable second-half to 2009 with an improved and
profitable first-half to the year as markets bounced back after a slow start. Overall
revenues were up by nearly five per cent. The current level of sales leads suggest
that the improving trend should continue into the second-half even though the
level of housing mortgage approvals has remained flat. Chart Copyright: ShareScope www.sharescope.com

Operating profit before amortisation of £1.6m compares with an operating loss
before amortisation in the previous half-year of £0.9m. Given the improving CURRENT PRICE (P) 90.0
performance and more stable markets the directors have decided to reintroduce 52 WEEK RANGE (P) 154.5 / 79.0
an interim dividend at 0.7p per share. Future dividend payments will reflect the
RESULTS 2009 2010(E) 2011(E)
performance and the available cash resources of the group.
Profit (£m) 0.40 5.13 10.0
The group has great brands that are attracting new consumers and an excellent
product portfolio and pipeline. This gives the directors confidence in the prospects EPS (p) 2.36 6.03 10.9
going forward. Therefore, whilst our view does not constitute a personal Dividend (p) ~ 1.35 3.50
recommendation and advice to individual clients would vary according to their
Yield (%) ~ 1.50 3.89
personal circumstances and objectives, we rate AGA Rangemaster a trading buy.
Source: Financial Times/Digital Look at www.redmayne.co.uk

Aggreko (AGK)
Aggreko, the world’s leading supplier of rented 1650p
1450p
electricity generators, has had a busy year. It
provided back-up power facilities to guarantee the World Cup’s transmission to
a global audience whilst also supplying back-up power systems to the Vancouver
Winter Olympics, Glastonbury music festival, US Superbowl and the Eurovision
Song Contest.
The solutions it provides range from generating power for entire countries in times
of severe power shortfall, to providing temperature control in an office after the
air-conditioning has broken down.
For the six months to 30th June, revenues increased 16 per cent to £583.6m
whilst pre-tax profits increased 18.9 per cent to £125.7m. The FTSE 100 company
Chart Copyright: ShareScope www.sharescope.com
provided a pleasant shock to investors by committing itself to a 50 per cent rise in
interim and final dividend payments.

CURRENT PRICE (P) 1438.0
The share price has retreated of late, spurred mainly by volatile market conditions
and the possibility that Aggreko is faced with relatively meagre prospects of
52 WEEK RANGE (P) 1637.0 / 639.5 supplying global events next year. However, with an estimated 25 per cent share of
RESULTS 2009 2010(E) 2011(E) the global market for temporary power, and a dominant position at major events,
we think that the current share price represents an attractive entry point.
Profit (£m) 234 291 303

EPS (p) 58.9 74.5 77.2
Therefore, whilst our view does not constitute a personal recommendation and
advice to individual clients would vary according to their personal circumstances
Dividend (p) 10.6 18.8 20.6
and objectives, we rate Aggreko a trading buy.
Yield (%) 0.75 1.32 1.45

REDMAYNE-BENTLEY STOCKBROKERS THE CHARTS

THE CHARTS

The last edition of The Charts page detailed a deteriorating picture and weak volumes which have subsequently pushed the
market lower. The recent bounce from 5110 was what the bulls were looking for but this level leaves technical traders staring
deeply into the past for clues.

FTSE 100
Some traders now look at a line which can be drawn from 2008
which lies precisely on 5100. Following the recent bounce at
5110 the 20-day moving average is the first hurdle which sits
at 5273. Following this, the 200-day moving average at 5340
is the next area of focus. Traders should remember that the
upper levels towards 5400 are a collection point for multiple
resistance zones. Lagging indicators give us little conviction
in the trend at present but the Commodity Channel index
shows some strength coming back from oversold territory.
Over the coming weeks it seems the trading range will
remain intact but traders should proceed with caution as
further slippage is a distinct possibility as we move forward.

Compass Group (CPG)
At the time of writing Compass Group has just managed
to break though the falling 50-day moving average intraday.
This is following the completion of the ‘W’ shaped double
bottom. This now leaves the opportunity to target the
recent price high of 566p if the positive momentum can
be sustained. The RSI trends positively with plenty of room
for development, added to this, money flows are strong at
present which adds further conviction to this chart. The buy
signal from the MACD is strengthening, meaning this chart is
relatively easy to interpret at present. On the downside, look
at the falling 20-day moving average, below that the 200-day
moving average at 500p look like a prudent stop-loss.

BG Group (BG.)
Following on from my last recommendation I would now
have expected many readers to have booked a decent profit
on BG Group at the area up around 1090p. This area has
now proved to be resistant on a number of occasions which
traders should now bear in mind. Perhaps the overbought
reading from the Commodity Channel index was a telling
signal. As I write, a precise bounce has occurred off the 50-
day moving average which signals that the 1090p area could
be challenged yet again. Momentum remains in the chart
and leading indicators all give positive readings. I would
move the stop-loss up from my last recommendation to the
20-day moving average at 1040p.

Any Comments?
Please e-mail your comments about Equity Insight to: ei@redmayne.co.uk
For enquiries e-mail: info@redmayne.co.uk or call Head Office on: 0113 243 6941
Strong Buy Buy Hold Sell Strong Sell

REDMAYNE-BENTLEY STOCKBROKERS CITY VIEWS

CITY VIEWS

A selection of recently published views from analysts in The City.

STOCK DATE PRICE (P) BROKER NAME VIEW TARGET (P)

ASOS (ASC) 26/08/10 975.5 BANK OF AMERICA MERRIll lYNCH BUY 1100
Bank of America Merrill Lynch note ASOS is growing in the fastest segment of the retail market, online clothing, and its
international potential is still untouched and should represent more than two thirds of sales growth going forward. They add
that the valuation is not demanding for anticipated top and bottom line growth of 30 per cent.

COSTAIN (COST) 25/8/10 216.0 PANMURE GORDON BUY 290
Following 1H results Panmure Gordon note that the results are solid, with a healthy dividend and sound balance sheet. They
believe that near-term challenges remain, but due to a solid order book and clear strategy, FY guidance has been maintained.

DIAGEO (DGE) 27/8/10 1097.0 NOMURA BUY 1450
Nomura see significant growth for the global spirits profit pool to 2015, noting that the stock’s valuation remains attractive. They
add that with the shares trading on a ten per cent discount to the consumer average, long-term investors should be looking to
accumulate. They reduce their price target to reflect a more phased approach to recovery in North America.

OCADO (OCDO) 31/08/10 144.75 GOlDMAN SACHS BUY 200
Goldman Sachs believe that the company is well placed to benefit from the structural shift towards online grocery due to
its differentiated business model. They expect its 3Q trading statement, due next week, to be solid and provide evidence of
continued sales momentum over the period.

REDROW (RDW) 1/9/10 118.1 CITIGROUP BUY 156
Citigroup say that the new management are repositioning the group towards a higher average selling price with more focus on
return on capital. They believe it is operationally well positioned for the recovery in the UK housing market. They note that the
rights issue has strengthened its balance sheet.

SAGE GROUP (SGE) 31/08/10 249.4 PANMURE GORDON BUY 282
Following evidence of further softness in the US small to medium enterprise economy, Panmure Gordon reduce their US
assumptions for 2010. They also reduce their price target but maintain their buy rating.

SIG (SHI) 26/8/10 99.4 CITIGROUP BUY 125
Citigroup upgrade SIG, noting that its interim results are in-line with expectations and the recent fall in the share price. They say
that while the outlook remains uncertain, the trends seen in July and August are encouraging.

VEDANTA (VED) 25/8/10 1970.0 UBS BUY 2300
UBS lower their price target and take a more cautious view on its aluminium growth outlook, after Vedanta failed to get
clearance for a bauxite project in Orissa. They also expect Vedanta’s proposed deal over Cairn India to run into hurdles. However,
they keep the stock at buy, noting Vedanta’s overall growth profile remains attractive.

WOOD GROUP (WG.) 24/08/10 377.8 EVOlUTION BUY 450
Evolution upgrade Wood Group citing scope for positive earnings surprises in 2011. They believe the company can deliver
revenue and margin growth in its engineering and production facilities and well support divisions in 2H 2010 and 2011.

WPP (WPP) 25/8/10 675.5 DEUTSCHE BANK BUY 860
Deutsche Bank notes that interim results showed revenues to be in-line, while margin and earnings per share are ahead of
expectations. They add that WPP points to a strong pipeline of revenues from new business wins. Finally the broker notes the
improving balance sheet.
The above information represents a selection of the views and target prices recently published by analysts in individual stocks at this time. It is subject to
change without notice and may not necessarily be the view held by Redmayne-Bentley. All prices quoted correct as at 1st September 2010.

REDMAYNE-BENTLEY STOCKBROKERS SHARE SPOTLIGHT

SHARE SPOTLIGHT

Drax (DRX)
Drax is the largest and most efficient only 2.7 per cent. The third reason for
UK coal-fired power station, supplying the good performance was excellent
seven per cent of the UK electricity cost control.
market. It began life as the newest
In 2009 Drax purchased Haven, a
of the UK coal-fired stations back in
player supplying the small and medium
1974, when the first three power units enterprise market. Drax is aiming to
were commissioned. Three more units take a ten per cent market share. This
followed in 1986 and post the electricity is the smallest of the three power
privatisation, was owned by National markets in the UK, with domestic and
Grid. The business was then acquired industrial and commercial accounting
by AES in 1999 for around £1.9bn for around 46 per cent each of the total
in a hugely leveraged transaction. electricity market, with the SME market
Eventually, the heavily indebted US just eight per cent. However, a decision
energy company abandoned the station, by the board to enter this market is
leaving it in the hands of its creditors, an important one because this helps Chart Copyright: ShareScope www.sharescope.com

which was enforced by the collapse reduce Drax’s overall collateral risk.
of TXU Europe, one of Drax’s largest Currently Drax has a credit rating of
customers. A standstill agreement was BBB- (Stable) at Standard & Poors. CURRENT PRICE (P) 406.2

then reached with creditors in 2003, 52 Week High 490.2
with equity transferred to lenders. One of the ongoing issues with Drax
Subsequently, the business was listed is the continued dialogue with HMRC 52 Week Low 326.3

on the London Stock Exchange. The with regards to its Euro-Bond issue, Activities
company has a market capitalisation of which was unwound in December Generation and sale of electricity.

£1.5bn and is a FTSE 250 constituent. 2008. As part of the debt restructuring
of Drax, its position was unwound
The company performed well in the first- following a proposed new tax rule
half of this financial year, underpinned and this crystallised a tax loss which
Source: Financial Times/Digital Look at www.redmayne.co.uk and Company Refs.
by its strong hedging policy. EBITDA could equate to a £220m cash benefit
was £184m, a rise of 23 per cent. The if agreed by the Revenue. The board
company locked into good margins as a hopes for a resolution to this within RESULTS 2009 2010(E) 2011(E)
result of the hedging position. Secondly, 12 months and they have ring-fenced
Profit (£m) 158 316 273
there was strong performance in £105m in cash, although the figures
the plant, as demonstrated by the themselves have not been taken to the EPS (p) 31.0 62.4 52.0

company’s low forced outage rate of profit and loss account. Dividend (p) 42.4 30.5 25.4

REDMAYNE-BENTlEY SAYS… Yield (%) 10.7 7.68 6.41

In its current state, Drax can remain operational until 2037, BUY AT
but the board are looking to convert potentially three of its
405p
existing turbines to run on biomass. Regenerating existing units COMPANY DATA
is a cheaper alternative to building from new and will provide a reliable source SECTOR Electricity
of electricity, unlike alternatives such as wind power. Biomass is not explicitly
YEAR END December
provided for under the renewables obligation and Drax have been in discussion
with the government from this year. The company has already brought forward AGM April
some dedicated biomass developments, but the regulatory uncertainty has meant INTERIM August
that work on the first dedicated plant has been put on hold until 2011, due to the
FINAL April
timing of the Renewable Obligation Certificate funding review.
MARKET MAKERS SETS
On a prospective p/e ratio of just over seven times, Drax looks good value and is
supported by a healthy yield. Clearing up some of the regulatory uncertainty will no MARKET CAP (£M) 1,448
doubt be a lift to the shares, but the management has worked hard to tackle the Source: Financial Times/Digital Look at www.redmayne.co.uk

geared balance sheet and this is an opportunity to add in a unique proposition in
the UK electricity generation market. Therefore, whilst our view does not constitute
a personal recommendation and advice to individual clients would vary according
to their personal circumstances and objectives, we rate Drax a buy.

REDMAYNE-BENTLEY STOCKBROKERS BROKER PICK

BROKER PICK

De La Rue (DLAR)
BUY BELOW
De la Rue is the world’s largest commercial security printer
and papermaker, involved in the production of over 150 710p
national currencies and a wide range of security documents such as passports,
authentication labels and fiscal stamps. The company supplies bank note paper to
central banks around the world, including the Bank of England, the Reserve Bank
of India and the Central Bank of Iraq.
The company is split into four main operations; currency, cash processing solutions
(CPS), security products and identity systems. According to the annual report year
ending 27th March 2010, currency (the core business which makes up 71 per cent
of the overall sales), increased revenue by 18 per cent to £411.2m, with operating
profit up 15 per cent to £95.3m. The CPS division which makes cash-sorting
machines and software for banks, has been hit by companies deferring their plans
to purchase machines. CPS revenue was down 13.7 per cent to £56.9m with an
operating loss of £3.5m. The security products division increased revenue 7.4 per
cent to £74.9m, operating profit margin also increased to 19.8 per cent from 15.8
per cent. The final division, identity systems, increased revenue 5.2 per cent to
£32m, with operating profit margin increasing to 8.1 per cent from 7.6 per cent.
This division has also landed a £400m passport contract with the UK running over Chart Copyright: ShareScope www.sharescope.com

the next ten years.
Recently the group has been under the spotlight regarding problems at its paper CURRENT PRICE (P) 703.0
production operations, which has led the chief executive officer to resign after
just eight months in the job. De La Rue shares have plummeted nearly 25 per 52 WEEK RANGE (P) 1005.0 / 688.0
cent since the announcement on 20th July. The company said that production RESULTS 2010 2011(E) 2012(E)
and shipment had been suspended while it conducted an investigation into the
Profit (£m) 105 92.1 97.2
circumstances surrounding the faults, adding that sales and production levels
would be ‘materially’ lower than previously expected. EPS (p) 77.6 65.6 68.6

There are so few trusted printers of currency that the customer(s) affected will not Dividend (p) 41.5 42.3 43.1
be inclined to reduce that number further and are more likely to work with De La Yield (%) 5.93 6.04 6.16
Rue to resolve the issue. Currency printing is a business which has high barriers Source: Financial Times/Digital Look at www.redmayne.co.uk
to entry and is fundamentally cash generative, therefore I think this represents a
good entry point for an oversold share.
Kevin Boland, Stockbroker ~ Exeter Branch

Worldwide Markets
Global indices ended August on the back foot as investors continued to opt for safety in the form of government bonds. With
September still to play out, traditionally a bad performing month, further pullbacks could lie ahead.
INDEX VALUE CHANGE % NOTES
The UK blue-chip index regained ground during the last few days of
FTSE 100 5366.41 63.54 1.19 August as revised Q2 figures showed that Britain’s economy grew by 1.2
per cent, better than the 1.1 per cent originally reported.
A wave of poor US economic data brought the Dow Jones back to the
Dow Jones 10269.47 –146.07 –1.4 10,000 level, with US treasury bonds seeing new inflows of money.
Cosmetics giant, l’Oreal reported a 21 per cent jump in first-half profits
CAC40 3623.84 –24.09 –0.66 as an upturn in consumer spending and cost cuts helped support the
financials.
The German economy is set to grow by three per cent for 2010 but
DAX 6083.90 –102.41 –1.65 investors remain nervy with the Dax trading back below the 6,000 level.
Attempts by the Bank of Japan to curb the Yen’s appreciation have failed.
Nikkei 8927.02 –313.52 –3.39 Traders have been unconvinced by the central banks actions interpreting
their attempts as a token gesture.
Sun Hung Kai Properties has been unwanted in recent weeks as
Hang Seng 20,623.83 –398.9 –1.89 concerns that the government will cool property prices remains.

Performance figures relate to the period from the publication of issue 479 to the close of business on 1st September 2010. Source: Financial Times

REDMAYNE-BENTLEY STOCKBROKERS RECOMMENDATION UPDATE

RECOMMENDATION UPDATE

Below we review some of the recommendations we have made over the course of the past year and give you our current
thoughts on them.
G4S (GFS)
Almost a year on from the original Share Spotlight write-up, G4S is now trading 13 per cent up from the 220p recommended
tip price. This is excellent performance considering that the group provides services to the UK government and could so easily
have been sold off as investors braced themselves for potentially fewer contract renewals and more contract cancellations.
However, G4S has been able to shield itself well from any sell-off due to its diverse operational base. The group is in a unique
position as being one of only a few companies that have a global reach with an even split between the UK, Continental
Europe and North America. The recent first-half financials justify the strong share price performance. Revenue for the period
was ahead of expectations and pre-tax profit rose 11 per cent versus last year to £142.6m. The international expansion
continues to be the most exciting arena. Chief executive, Nick Buckles commented that he expects double-digit growth from
the Middle East, India and Latin America, and sees potential in China too. If G4S continues to build on its overseas success,
this could be the determining factor to take the share price back to the 300p levels.
Recommended a Buy on 23rd September 2009 at 220p ~ current price 258.7p ~ yield 2.8%.

Morgan Sindall (MGNS)
One of the main attractions of Morgan Sindall, the construction firm, is its high dividend yield. This was one of the reasons
for the original Broker Pick from Chris Steward in our York branch plus the strong cash generation and balance sheet.
However, in light of the coalition spending cuts, which are looking more severe than originally first thought, Chris believes
the stance has now changed to a hold. Also, sector sentiment has been severely hit from the likes of Connaught, which could
take some time to rebuild. Understanding the changing circumstances, the firm is being proactive in its strategy and has
reduced its government exposure from around 60 per cent of turnover to 40 per cent. Also, the business is being streamlined
by merging the construction and infrastructure divisions which should save £6m a year. MGNS remains a good company in a
tough environment and investors should sit tight for now.
Recommended a Buy on 4th February 2010 at 550p ~ current price 600.0p ~ yield 7%.

WPP (WPP)
A surprising upturn in US advertising helped support first-half financials, leading the chief executive, Sir Martin Sorrell, to
forecast organic revenue to grow around four per cent this year versus the previous forecast of just two per cent. Net profit
for the six months to 30th June was £150.8m, up 39 per cent from £108.4m last year. By no means does this suggest that
a smooth run lies ahead and it is for this reason that the shares remain a hold. The company is definitely moving in the right
direction with forecast earnings per share for 2011 in the region of 60.3p. Businesses cut down their advertising spend at the
height of the economic downturn and there are now signs that firms are increasing funds available to their advertising and
marketing departments. One of WPP’s biggest clients, Unilever, upped their marketing spend by 1.4 per cent for the three
months to 30th June. Investors should look towards improving economic data to help support the share price, but any price
weakness could be a good opportunity to invest in a recovery play.
Recommended a Buy on 7th January 2010 at 615p ~ current price 675.5p ~ yield 2.4%.

Primary Health Properties (PHP)
Primary Health Properties is yet another company that will feel the effects of the new coalition government. Proposals
to enhance the role of the family doctor or GP look set to be introduced, which should increase the demand for modern
healthcare premises. Since last autumn PHP has spent over £100m on acquiring new assets. The portfolio of properties is
steadily growing with the latest acquisition of primary care and pharmacy property company, Health Investments, for a
consideration of £11.7m which will increase the total portfolio by ten per cent and should help prop up the 5.8 per cent yield.
It will be no surprise if further properties are added over the next year. The shares recently broke the 300p level and so it may
be worth monitoring the situation before making any moves. Continue to hold for income.
Recommended a Buy on 27th January 2010 at 293p ~ current price 307.0p ~ yield 5.7%.

Strong Buy Buy Hold Sell Strong Sell

REDMAYNE-BENTLEY STOCKBROKERS THE BACK PAGE

THE BACK PAGE

TOP TRADES
Below we take a look at the most frequently traded shares through Redmayne-Bentley over the last couple of weeks and
consider why they have been so popular.
Computacenter (CCC) Tullow Oil (TLW) Drax (DRX)
IT hardware and services provider, Having started to test its all-time Drax remains very much a yield story
Computacenter has been one of highs, some investors have reduced in the near-term, and with the shares
the preferred stocks as investors pre- their positions in Ghana focused oil retracing below the 400p level, the
empted a good set of results. Indeed, explorer, Tullow Oil, securing a good opportunity to purchase the shares
first-half pre-tax profit rose by 17 per gain. However, the potential for further has presented itself. The pull-back can
cent to £21.3m from £18.2m, from growth remains in abundance. Having be attributed to a number of reasons
increased revenues of £1.29bn. With made several positive discoveries including the likelihood that earnings
a net cash position of £57.1m the throughout this year and Heritage are set to decline by about 12 per cent
board was confident enough to raise Oil assets still to come on board, the in 2011, regulatory uncertainty which
their interim dividend to 3.5p, pleasing future does remain bright. Half-year has left a dark cloud over any sustained
income seekers. The stock currently results were excellent with pre-tax share price rally, and the fact that the
yields just short of four per cent. The profits tripling to US$89m versus last management realise a tough financial
performance was driven by a strong year and the company now reckons year lies ahead. However, diversifying
rebound in infrastructure spending by full-year production will increase to into biomass will help prolong the life
companies and the company remains 57,000-58,000 barrels of oil equivalent. of the business and hopefully translate
on track to meet full-year expectations. Analyst views on the stock continue to to increased profitability.
July and August has started well with be positive with target prices of 1400p
CCC performing better in every country and beyond.
that it operates in. Strong Buy Buy Hold Sell Strong Sell

NEWS & EVENTS
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Info Point: Wealth Warning:
Opening Hours: The price of investments and the income paid on them can fall as well as rise. All investments
Monday to Friday 0800 – 1700 involve risk and you may not get back the full amount of your investment and it may fail
altogether. Past performance is not necessarily a guide to future performance. There is an extra
To give feedback on Equity Insight risk of losing money when shares are bought in some smaller companies, including penny shares,
e-mail: ei@redmayne.co.uk as there can be a big difference between the buying and selling price. Partners, employees
and clients may have a position or engage in transactions in any of the securities mentioned.
Head Office Tel: 0113 200 6530 Redmayne-Bentley has taken every step to ensure the accuracy of the information and statistics in
E-mail: info@redmayne.co.uk this literature but cannot accept any liability for errors or any direct or consequential loss arising
For more details visit our website from the use of this document or its contents. Before taking any action you should consult your
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Equity Insight Issue 480

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