Brokers' Views: Arbuthnot Securities

With the results season getting into gear, analysts Rob Saunders and Oliver Cummings pass comment on a number of the broker’s corporate clients, including two ‘strong buy’ recommendations.

Lo-Q, maker of gadgets to reduce queuing times in theme parks, is strongly backed, with the company having delivered ‘highly commendable’ results for the ten months to October. Profits of £2.4 million were ahead of forecasts, though higher R&D spending means flat profits are envisaged for the new year.

A 100p target price offers good potential for improvement in the 85p shares.

Clarity’s wizard deal
Also on AIM, Clarity Commerce Solutions received a ringing endorsement after the transaction software provider won a multimillion-pound contract with theme parks owner Merlin Entertainments.

Clarity will provide its suite of point-of-sale solutions and services over a phased four-year roll-out programme. ‘This reiterates Clarity’s continued trading momentum and we remain hopeful that our forecasts will have upside potential,’ says Cummings, setting a 55p target price for the shares, currently 43p.

Arbuthnot also notes that aerospace equipment provider Hampson Industries was lately forced into a £60 million fundraising. ‘Several factors have combined to erode Hampson’s financial headroom and its ability to support the growth that seems set to resume in aerospace tooling,’ explains colleague Michael Blogg. ‘We expect shipments to rise during the next year, underpinning recovery and Hampson's rehabilitation with investors. As the new shares are assimilated and the news improves, we expect outperformance from this very depressed level.’ A buy at 52p.