Broker Watch featuring Speedy Hire, The Clarkson Hill Group, Abbeycrest, African Aura Mining and Salamander Energy

WH Ireland upgraded Speedy Hire (LON:SDY) to “market perform” from “underperform” this morning despite Speedy reporting a 13.6% revenue decline in the first quarter – which was in line with management expectation and better than WHI’s full year forecast. Improved trading conditions were welcomed, but concerns remain over whether rising levels of private sector work will be enough to offset the effects of public sector spending cuts. The broker also pointed to an ageing hire fleet as an area of concern but said it was upgrading the company on valuation grounds. Elsewhere, WHI retained a “buy” advisory for Pace Micro Technology (LON:PIC), ahead of its interims next Monday and lowered Renishaw (LON:RSW) to “market perform” from “buy” ahead of its final results next Wednesday.

Astaire Securities cheered news this morning that Clarkson Hill Group (LON:CLKH) appeared to have resolved its regulatory capital position after two of the directors, Ron Pritchard and Mike Robinson, agreed to provide subordinated loans to the company of £0.6m. It is believed that this will meet the group’s FSA regulatory capital requirement. Astaire said the move removed the biggest short term obstacle the group faced and that it could now focus on trading and the changes in the regulatory environment. Elsewhere, Astaire noted the signing of an exclusive supply agreement between cleantech firm Acta Spa (LON:ACTA) and Girelli Bruni, a leading Italian supplier of filling station forecourt equipment, for the supply of photovoltaic installations and integrated hydrogen generators. Astaire reckons the adoption of regional laws requiring photovoltaic generation capacity and a non petroleum fuel alternative should really start to help Acta, which has a product ready to enter commercialisation.

HB Markets urged investors to “sell” Abbeycrest (LON:ACR), the international jewellery designer, which this morning said that high gold prices coupled with weak UK macros had led to weak consumer demand for jewellery for the group’s Essentials and Brands divisions. The group has also breached its profit covenants with its senior lenders, Burdale Financial, and is working closely with them to reset those covenants. HBM upgraded Deltex Medical Group (LON:DEMG) to “speculative buy” from “hold” after the global leader in oesophageal Doppler Monitoring reported a 12% rise in turnover to £2.9m in the first half of the year on the back of growth in its UK, US and Spanish markets. Elsewhere, a “speculative buy” was also urged at Independent Resources (LON:IRG), the oil and gas group, which reported that exploration well Oryx-1 (18.97% IRG) on the Ksar Hadada Permit onshore Tunisia had begun drilling yesterday. Finally, HBM upgraded air disinfection business Mid-States Plc (LON:MST) to “speculative hold” from “sell” in anticipation of distributor led sales news. RSM Tenon Group (LON:TNO) remained a “buy” on news that the accountancy’s group’s underlying profits for FY to 30 June 2010 are expected to be in line with expectations.

Evolution Securities reiterated a “buy” recommendation for African Aura Mining (LON:AAAM), which this morning reported that an airborne survey of its Nkout project in Cameroon had defined a major iron ore target there. Evo said that while it currently ascribed no value to Nkout in its target price, drilling success in the coming months would clearly point towards it revisiting the numbers. Meanwhile, Evo maintained a “buy” at Dairy Crest Group (LON:DCG), which announced that trading for the first quarter had been in line with expectations. The broker said that while cash flow and debt reduction were both on course, it was clear that more acquisitions were on the agenda at Dairy Crest, and that the company had a history of paying very full prices.

Finally, Westhouse Securities described as “sensibly priced” today’s announcement that Salamander Energy Plc (LON:SMDR) was set to buy the remaining 40% interest in the B8/38 licence in the Gulf of Thailand, which contains the Bualuang oil field, from SOCO International (LON:SIA) . The $105m deal will add around 9m barrels of 2P reserves plus undetermined exploration upside at less than $12 per barrel. In addition, the acquisition adds immediate production and associated cash flow. For Soco, the deal will result in a significant gain based on booked assets within Thailand, currently standing at $40m, as well as capital to redeploy to exploration and development activities elsewhere in its portfolio. Westhouse said it remained neutral on the transaction from Salamander’s perspective and was maintaining a “hold” recommendation on the shares.

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