Companies: DETS    HRN    REX   

Having reassured that trading for the year to July met expectations, Seymour Pierce notes Debts.co.uk is ‘the only significant player in the IVA market that has not had a profit warning this year, despite the turmoil in the sector’. Accordingly, the AIM-quoted debt solutions counter receives a buy recommendation from the broker and a target price 50 per cent higher than the current 156p. While conceding that ‘considerable uncertainty’ still looms over the industry, Seymour Pierce points out that processes in this arena are expected to be simplified and standardised, meaning a likely ‘increase [in] the number of IVAs that can be registered and supervised by each insolvency practitioner’, Debts.co.uk included.

Prospects at small-cap toymaker Hornby, which is trading on a p/e ratio of less than 13 for next year, have excited the retail team, which has upgraded the shares from outperform to buy. A recent trading update ‘confirmed that Hornby is already beginning to deliver our hopes for the business’ with licences secured for Formula 1 star Lewis Hamilton’s McLaren team as well as worldwide for Transformers toys on the back of the release of the Hollywood blockbuster. Further progress in the US is expected, with Hornby having sold its first products into the Toys-R-Us chain.

At the large-cap end of the market, analyst Kevin Lapwood urges clients to hold onto cans and consumer packaging giant Rexam, despite half-year results being ‘significantly worse’ than expected and net debt of £2 billion ‘set to go higher’. Hold on, he says, while cautioning that ‘it is too early to say for certain’ whether recent problems are over.