Hoodless Brennan daily smallcap newsflash including Park Plaza Hotels, Titon Holdings, Haynes Publishing Group and others

Pixel Interactive Media (PIXL, 11p, £4.25m), the Asia focussed online advertising sales company, will probably see 2010 revenues and profits to come in materially lower than PBT and EPS expectations of £0.62m and 1.13p respectively. This is driven by one of its Web site partners changing its business model from 1 March 2010. The level of the impact is not fully known at this stage. The share price today has already fallen by 12%. The strong balance sheet encourages us to reduce our Speculative Buy recommendation to a HOLD.

Park Plaza Hotels (PPH, 129.5p, £52.9m), the owner, operator and franchisor of hotels in Europe, the Middle East and Africa, reports trading for the year ended 31 December 2009, is in line with market expectations of pre-tax losses of £8.04m and EPS of -19.3p. As expected, 2009 has been tough, driven by the economic downturn. Sales fell by c.14% to €77.4m (2008: €90.3m). Weak sterling against the euro had an adverse impact on the sales.   On a constant currency basis, RevPAR for our UK hotels was £97.30 (2008:£101.80).  Whilst occupancy was flat at 84.8% (2008: 85.0%), average room rates came under pressure. On a reported basis, RevPAR for our UK hotels was €109.60 (2008: €127.50). In Netherlands, both RevPAR and occupancy were down. We do not foresee 2010 to be worse than the previous year and note the market will remain challenging. Weak sterling will continue to have adverse effects on the bottom line. We initiate with a HOLD.

Sepura (SEPU, 43.25p, £59.0m), the global leader in the design, development and supply of TETRA digital radios used predominantly by emergency services, reports an IMS from 1 October 2009 to 27 January 2010. Trading for the year ending 31 March 2010 is line with PBT expectations of £9.5m and EPS of 5.7p. The group are winning new business. They have secured further replacement business from UK customers refreshing their fleets. The stock trades on a prospective PER of 7.6x. We retain our HOLD recommendation.

Baobab Resources (BAO, 8.9p, £14.1m), the iron ore explorer announced positive results from rock chip sampling at the Singore East deposit of its Tete magnetite-ilmenite project. Vanadium concentrate values are consistently 25% higher than those reported from the Massamba Group area. Singore East has experienced no previous exploration and the company is rapidly developing its knowledge base, looking to drill scout holes as soon as practicable. The Massamba area remains focus of 2010 drilling campaign. In 2009 the company announced the Massamba target is for 47.7Mt magnetite-ilmenite Inferred Resource and 400 to 700Mt exploration. Drilling last year intersected significant widths of primary and secondary styles of mineralisation and provided valuable geological and structural information with analytical results expected in early February 2010. Progress looks sound. SPECULATIVE BUY

Titon Holdings (TON, 39p, £4.1m), the UK ventilation systems and hardware manufacturer, reports UK sales for the 3 months to 31 December 2009 fell by 2.2% on the same period last year. The improvements in UK construction experienced in Q409 have now stalled. However, growth in the overseas market notably via our South Korean 'Joint Venture' has led to total Group turnover being 9.0% higher for the 3 month period. Net cash at the end of December remained at £3.0m – a good performance. The group is well placed for the upturn in the UK construction industry. A strong balance sheet backed by property of £2.6m and net cash of £3.0m. Tangible NAV of £9.43m exceeds the current market capitalisation of £4.1m. The strong asset backing encourages us to initiate with a BUY recommendation with a target price of 80p.

Tribal Group (TRB, 83.25p, £79.9m), the provider of professional services to the public sector in the UK and worldwide, reports underlying PBT for the year ended 31 December will be slightly ahead of the previous year. A lower tax charge will lead to higher EPS. The group has a strong order book, with 42% of 2010 revenue already committed and total committed revenue of £217m (2008: £139m). This provides us with confidence for the current financial year. The group continue to win new business. Total cost savings are expected to be higher than previously thought, with savings of no less than £7.5m, of which c. £5m will be realised in 2010. Exceptional costs of £2.5m are anticipated in the current year. Net debt stood at £26m at the end of December 2009, with total banking facilities of £46m. Cuts in public spending may have a negative impact on Tribal, but management believe it will create opportunities to offer innovative and cost-effective solutions. Assuming 2010 earnings come in towards the lower end of estimates, EPS of 11.8p, the stock trades on reasonable 7x. On this basis, we retain our BUY recommendation, but concerns over reductions in public spending, encourages us to reduce our target price from 100p to 93p.

China Shoto (CHNS, 332p) the largest Chinese producer of back up batteries gives a positive profits warning, for the year ended 31 December 2009, with PBT expected to be materially ahead of expectations. This was “due to a good grasp of the linkage scheme between the fluctuating lead price and the sales price to major customers and effective management of risk”, so we are unsure as to the quality of the increased earnings. Its broker estimates 12.5m PBT, 47p EPS and 5p DPS. We would anticipate upgrades of anywhere between 10-20%. Taking the mid range would result in PBT of £14.4m and EPS of 54.6p meaning that the rating remains broadly the same at around 6x earnings. As one of our key picks back in June, the company has surpassed our earlier price target and we upgrade this to 354p which would reflect only 6.5x rating. A target price within 10% of the current mid makes this a HOLD for now. However, there is scope for further upside should the company produce a 15% or greater profits uplift.

Intandem Films (IFM, 1.38p, £1.14m), the international film group, has had a positive start to the year. The group has completed one film, The Kid, which is expected to show at the Berlin Film festival in February. Four further films are in post production and are expected to complete by May. The group are in advanced negotiations to settle the £5.7m loan. We therefore upgrade our Sell recommendation to a HOLD.

Advanced Medical Solutions Group (AMS, 32.75p, £49.4m) reports Cardinal Health, a major US healthcare services company, is marketing and distributing the group’s LiquiBand™ tropical skin adhesive range to US to hospitals, care centres, and surgeries. The agreement is in line with the group’s strategy. The stock trades on a prospective PER of 11.1x. The share price has risen 20% since our Buy recommendation on 9/12/09, almost achieving our target price of 35p. We retain our target price and move our recommendation to a HOLD. We believe further marketing and distribution deals will help sustain the share price.

Densitron Technologies (DSN, 4.75p, £3.3m) has returned to profitability in H2 2009 and the group expects to make a small profit for the year. The £1.1m of cash received following the capital reduction in Evervision and tighter working capital has led the group to end the year with a strong financial position. We retain our HOLD recommendation.

Haynes Publishing Group (HYNS, 222.5p, £16.4m), a worldwide market leader in the production and sale of automotive and motorcycle repair manuals, reports interims to 30 November 2009. Despite a marginal 2% decline in revenues to £16.0m (H109: £16.4m), improvement in gross margins and a 5% reduction in overheads has led to pre-tax profits to rise by 12% to £2.8m (H109: £2.5m) and EPS by 10% to 11.7p (H109: 10.6p).  The group ended November with net cash of £2.4m (H109: net debt of £1.4m).This represents the strong cash generation over the period.  As a consequence of lower market yields and UK gilts, the pension deficit has increased to £15.1m (2009: £10.4m).  Trading in Q2 was stronger than Q1, especially in the US. The US market continues to experience difficulties with key customers running stock levels at an all time low. However, the weak sterling against the dollar and the euro has translated into an improvement in revenues by £1.0m and PBT by £0.2m. We believe this trend will continue to benefit the group for the remainder of the year. The Australian market is performing well, with sales up 8% on H209. The outlook for the remainder of the year remains challenging. The market forecasts PBT of £7.1m, EPS of 29.2p and DPS of 15.5p in 2010 and PBT of £7.3m, EPS of 29.83p and DPS of 15.5p in 2011. The stock trades on a prospective 2010 PER of 7.6x and 7.5x in 2011 with a compelling yield of 7%. A dividend cover of 1.9x and net cash of £2.8m suggests the yield is sustainable. Despite the group achieving our target price of 222p from 10/09/09, we retain our BUY recommendation on a yield basis and increase our target price to 250p.

Nexus Management (NXS, 0.55p, 5.73m) Final Results - Turnover increased 43% to £5.5m (2008: £3.8m); Nerd Force & Resilience contributed c.80% of the increase in turnover. As we signalled in November there was a large impairment of value of shareholding and loans in PD Financial and Resilience. The group reported a £4.3m operating and £4.55m pre tax loss including a host of exceptionals though underlying EBIT loss of c.600k and pre tax of  c.£849k are the relevant figures. Despite an unqualified statement from the auditors cash resources look thin at £164k with net debt around £753k, including related party loans. However with positive sales momentum, the group projects that Resilience which lost £1m and Nerd Force which produced modest losses will return to profitability this year. For Nerd point last year’s poor performance is attributed to the focus on rapid roll out rather than the quality of franchisees which has resulted in bad debts. The focus has been shifted to identify higher quality franchisee candidates which should yield more reliable growth and Nerd Force has been rolled out to the UK where sales have started slowly but where momentum is expected to pick up. Resilience Technology is improving cash collection but trading remains tough, with disappointing sales even into this year, the focus on improving costs should aid performance but the operational outlook is not expected to improve until H2. The Nerd Force offering is intuitive and the company still offers speculative attractions, though these need to be offset against our concerns over financing. Recommendation under review.

Serabi (SRB, 1.6p, £18.4m) gave its update this morning confirming plans for its 2010 exploration programme. It is now underway with its programme aimed at increasing Palito's gold resource to above 1.5m ounces. First pass ground geophysics (electromagnetic and induced polarization) will be undertaken on the 10 targets closest to the mine site during the current wet season ending April. At the same time, it will conduct shallow (<10m depth) auger drilling to generate geochemical data below the surface for more accurate results. Results will then guide a 4,000- 5,000m diamond drill programme planned to commence in July. The exploration budget is c.US$1.7m. The summary of exploration activities gives a provides a good indication of potential newsflow; Jan to may - geophysics on anomalies 1 to 10; April to June - geophysical interpretation; July to September - diamond drilling of anomalies;  April to September - deep geochemistry - augur anomalies 1-10; October to December -prospecting anomalies. SPECULATIVE BUY

Deltex Medical (DEMG, 14.25p, £18.09m), the leader in oesophageal Doppler monitoring - measures blood flows in the central circulation, reports the publication of a new study confirms the importance of CardioQ-ODM guided fluid management for patients undergoing moderate as well as major surgery. The market has recently downgraded 2010 estimates from PBT of £0.06m and EPS of 0.05p to pre-tax losses of £0.4m and EPS of -0.32p. We retain our HOLD recommendation.

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