Numis Securities

Analyst Nick Webster is effusive in his praise of Mark Robertshaw-led Morgan Crucible, which cheered backers with interims to 4 July. Ahead of forecast, the numbers revealed 21 per cent operating profit growth to £43 million and earnings up 33 per cent to 11.3p – the dividend was raised 50 per cent to 2.25p.

Webster also lauded the acquisition of 49 per cent of NP Aerospace, a maker of vehicle and body armour products, that should immediately boost earnings. He sees sustainable strong top-line growth with margin progression supported by ongoing cost base rationalisation. ‘The strong balance sheet gives scope for further earnings-enhancing acquisitions together with potential for share buy-backs and future increases in the dividend,’ he writes, setting a 360p target and upgrading his stance to buy.

Despite the £70 million sale of HMV Japan, HMV receives a harsh hearing from the broker, which considers it ‘structurally challenged’ and ‘in terminal decline’. The 107p shares are deemed a sell with a lowly target of 80p. Meanwhile bakery-to-sandwiches business Greggs was downgraded from hold to reduce following below-forecast interim pre-tax profits of £14.8 million. Forecasts were downgraded from £47 million to £46 million (for December 2007) and from £49.8 million to £49 million (for 2008). ‘The shares are trading on 17.4 times December 2007 earnings,’ the broker writes, ‘which looks a bit racy to us.’ Fair value is 4470p, versus the current 5078p.