Fitbug Holdings (FITB, 3.38p, £1.28m) is a provider of online personal health and well-being services. The Board state, there has been strong growth during 2010 from an increased appetite from the corporate market. Furthermore, there is a strong pipeline of new partnership deals which are anticipated to bear fruit for Fitbug in 2011. The trading update fails to provide any guidance on numbers. We therefore initiate with a HOLD. (Amisha Chohan)
Imagelinx (ILI, 2.5p, £7.23m), the provider of pre-press and global graphic brand management services, reports disappointing interims to the end of 30 June 2010. Despite an 8% uplift in revenues to £6.1m (H109: £5.6m), a significant reduction in gross margins of 38.6 %( FY09: 50.4%) and relatively flat overheads, excluding exceptional costs of £0.27m, drove the group to break-even (H109: adjusted PBT £0.58m).Debtors increased over the period, but have now returned to normal levels. Net debt stood at £1.0m (FY09: £0.22m). Two new customers won in H1 will benefit the remainder of the year. The outlook statement expects revenues to remain flat at around the £6m level. The latter coupled with a lower cost base from the reorganisation and cost reduction, expected to be completed at the end of August 2010, should significantly improve the H2 performance. There is guidance as to the level of cost savings expected. We believe the current market forecasts of PBT of £1.1m and EPS of 0.4p is somewhat challenging. On this basis, we reduce our recommendation to a HOLD. (Amisha Chohan)
Zotefoams (ZTF, 108.0p, £41.36m), the manufacturer and seller of high-performance foams, reports interims to 30 June 2010. A broader-based recovery in demand for our polyolefin products has driven group sales up 26% to £19.6m (H109: £15.6m) and adjusted PBT up 83% to £2.9m (H109: £1.6m). Stronger cash generation has eliminated the net debt and ended the period with net cash of £0.2m. The interim DPS of 1.5p has been maintained. Sales rose 33% in Europe, 27% in North America and 74% in Asia. Demand from car makers and manufacturers of packaging were especially buoyant. The group is traditionally H1 weighted. The outlook statement is mix. Demand for High-Performance Polymers (HPP) remains strong and is underpinned by orders. However the prices for LDPE, a major raw material used in the core polyolefin business, have risen consistently over H12010 and with the prices denominated in Euros, the cost is 42% higher in sterling terms than in H1 2009. The exposure to international market bodes well for the company. We believe the group is trading in line with 2010 PBT of £4.4m and EPS of 8.5p, which puts it on 12.7x earnings this year and 12.1x next year. Zotefoams has already benefited from some recovery in demand across markets and we believe it will continue to benefit from this trend. The group has good geographical spread. We reiterate our BUY recommendation but reduce our target price from 122p to 119p. (Amisha Chohan)