Lower rated SME stocks represent great value, says DC Advisory Partners

28 JULY 2010, London – Current market conditions have resulted in small to mid-cap[1] stocks in the FTSE All-Share having significantly lower ratings than their large cap counterparts, presenting a compelling opportunity for corporate or financial buyers to acquire attractive companies at reasonable valuations, according to research by DC Advisory Partners (formerly Close Brothers Corporate Finance).

The analysis by DC Advisory Partners reveals that small to mid-cap stocks in the FTSE All share index currently trade at a 26% discount to large cap stocks.

The findings show that the UK market is attaching a lower rating to small and mid-cap stocks despite the fact that good quality smaller companies often have better growth prospects than their larger peers.

Market cap between
Average Multiple

£0m
£100m
5.0x

£100m
£500m
6.1x

£500m
£1,000m
7.7x

Above £1,000m
7.3x

Large caps do not always trade at a premium to small caps and the current situation is likely to be driven by investor risk aversion due to the economic downturn. Conducting the same analysis as at 1 July 2005, showed significantly different results; at that time, average multiples were 8.2x for small and mid caps and 8.0x for large caps.

Market cap between Average multiple
£0m
£100m
9.1x

£100m
£500m
8.1x

£500m
£1,000m
8.1x

Above £1,000m
8.0x

According to DC Advisory Partners, the market is currently attaching a premium to larger cap stocks due to: their perceived ability to better control their pricing and margins; their often more diversified and therefore stable revenue streams; and the benefits that many gain from international operations which include access to higher growth emerging economies.

However, DC Advisory Partners notes that good quality smaller companies frequently have better growth prospects than their larger peers and are able to grow revenues and profits at much faster rates.

The ratings ascribed to small and mid cap stocks are further influenced by stock market mechanics. The lower trading volumes and lack of liquidity associated with many small companies tends to deter investors, particularly in a downturn, thereby suppressing value.

Commenting on these findings, Guy Ballantine, a Director at DC Advisory Partners, said:

“During buoyant economic times investors are more likely to seek out high growth, and often higher risk, small and mid cap companies. The discount presently being applied to many of these stocks reflects the current economic environment and investor risk aversion. Many good quality small and mid cap stocks are being over-looked by investors. This represents an excellent opportunity for trade or financial buyers to make strategically compelling acquisitions at attractive prices.”

DC Advisory Partners notes that whilst in such instances the shareholders of unloved small and mid cap stocks may demand a significant takeover premium from potential suitors, the absolute multiple may still provide a good value opportunity.

Ballantine concludes, “Our analysis indicates that institutional risk aversion due to the economic downturn continues to adversely impact valuations for small and mid-cap stocks. Consequently, we believe that the current market provides a rare opportunity for corporate and financial buyers.”

Now entering its fourth year, the 2010 International Trade Awards, sponsored by Santander Corporate Banking, is the only UK wide business awards to exclusively recognise the excellence achieved by the UK’s leading exporters and importers.

Despite the challenges posed by recent global economic conditions, UK companies are still competing on the international stage. As the tenth largest exporter in the world, British companies exported goods and services worth more than £231 billion from 2009 to 2010, and the International Trade Awards celebrate these ventures and successes.

Businesses from England, Northern Ireland, Scotland and Wales are invited to enter one of 12 regional heats to compete for a regional title. Regional finalists will be invited to attend the UK final, held at the House of Lords in Spring 2011.

The International Trade Awards recognises companies of all sizes regardless of sector that turnover £1m or more. Winning an award not only raises an organisation’s profile it also puts a smile on the faces of employees as last year’s winners of the Excellence In Innovation Award, specialist software developers ITRS Group discovered.

With offices in London, New York and Hong Kong, ITRS Group has seen rapid and sustained growth to become the leading global provider of real-time systems to the world’s financial community. They beat off strong regional competition to take the title of London winner of the International Trade Awards 2009 and then beat 11 other regional finalists to be announced Winner of the Excellence in Innovation Category.

Commenting on the win, Stephen Bates, CEO of ITRS Group, said: “It’s quite humbling to be chosen from amongst a peer group that represents the great things that this country is achieving – winning the award is taking time to sink in. Clearly, we are delighted that the International Trade Awards chose ITRS as winners of the ‘Excellence in Innovation’ award; it is very prestigious and will feature prominently in our offices. The award has become part of ITRS’s history and our challenge is to ensure that this success is replicated in the future. In order to achieve this we will need to continue to focus on clients, products and staff.”

Ian Campbell OBE, Chairman of the Judges and Former Director of the Institute of Export added: “Excellent companies, such as those honoured by the International Trade Awards, continue to show the country, the media and our political masters that UK business and industry are still world-beaters in many fields. International Trade is delighted to have the opportunity, annually, to reward and show off these great British companies.”

Follow this link for information and to enter the International Trade Awards sponsored by Santander Corporate Banking :- http://www.internationaltrade.co.uk/awards.php?SID=45

IT-Freedom’s claims management software rated as a serious contender for insurer’s shortlists

LONDON, 27th July, 2010 – IT-Freedom (www.it-freedom.com), the leading provider of specialist software solutions for the general insurance industry, today announced that ICE Claims has been profiled in a new analyst report from Celent – ‘European Claims Vendors in 2010’, which analysed the market for insurance claims systems. A key finding was that ICE Claims was a strong contender to be on the shortlist for insurers looking to evaluate new claims management systems. Strong customer feedback cited in the report praised IT-Freedom’s understanding of the insurance market and the system’s use of business rules and workflows allowing users to define their own business processes.

Catherine Stagg-Macey, Senior Analyst, Celent commented, “With its heritage in the world of third party administrators, ICE Claims has a rich functional offering which belies its relative youth. Business users consistently praise the product’s intuitive rules and workflow engine allowing users to make changes to the system. The modern code base and architecture will ensure strong rating in any evaluation process. Insurer concerns over company size should be mitigated in part by the partnership with Logica. Celent mirrors the customer feedback and notes that this is a contender for the insurer’s short-list.”

The report reinforced IT-Freedom’s product development capabilities which enables the company to deliver functionally robust insurance and claims management software. With a highly experienced team of insurance professionals, IT-Freedom also has an in-depth understanding of the issues faced by insurers and how these trends affect business processes.

IT-Freedom notes that the key features of the ICE Claims system include:

Rapid Return on Investment (ROI) can be achieved within weeks of contract signature.
Business user configurability reduces dependency on IT resources.
Extensive out of the box functionality for General Insurance Claims processing.
New lines of business can be delivered in a matter of weeks, new schemes in hours.
Supplier management capabilities drive leakage out of the claims process.
IT-Freedom has established a reputation for claims management software that can be quickly and easily implemented. Mick Sargeant, Managing Director of IT-Freedom said, “We designed ICE Claims to meet the requirements of today’s insurance companies for a modern claims management system. I am pleased that our strengths in solution design, ROI payback period and insurance industry expertise have been recognised in the Celent report. We have invested significant resources to ensure that we can deliver products that help insurers maintain operational efficiency, enhance business agility and minimise claims leakage.”

The Celent report profiles 21 claims management system vendors in Europe, with 11 full profiles and 10 limited profiles. Only systems that have been deployed in Europe and have had at least one reference were eligible for a full profile. A copy of the report can be obtained by visiting www.celent.com.

European energy consultancy leader, EnergyQuote incorporating John Hall Associates Limited, is to rebrand as EnergyQuote JHA. This move enables the new company to optimise its service offerings by delivering increased capability and expertise to its client base of 800 major energy users located across Europe. EnergyQuote JHA will deliver ‘a unique perspective’ on energy markets and create leading-edge, bespoke, solutions for its clients’ energy buying needs.

The name change is the final step in an extensive process of integration following EnergyQuote’s acquisition of John Hall Associates in August 2009. EnergyQuote JHA combines the best of both businesses, in terms of values, culture, products, expertise, resources, people, depth of knowledge, technology and geographical expansion in Eastern European and North American markets.

Gary Worby, Managing Director at EnergyQuote JHA said, “The re-brand is an exciting development and through our combined resources, unique energy market insight and expertise it will accelerate our product innovation to customers in the energy market. We want to help them gain a greater insight and understanding of the growing complexity and volatility in today’s energy markets.”

- Russian domestic market is key to growth -

London, 20 July 2010 – Baring Asset Management (Barings) says Russia has enjoyed a strong recovery and is now back to pre global financial crisis levels. It says that a number of key market indicators are showing positive signs, and that the Russian stock market offers some of the best value of any globally.

Matthias Siller, manager of the Baring Russia Fund, which has annualised returns of 24.3% for the past 10 years against 20.7% for its index(1), comments: “Russia was hit hard by the global financial crisis, but it has bounced back well and much more quickly than many investors thought. Moving forward, key indicators suggest solid growth for Russia and attractive opportunities for investors.”

Transportation and industrial production figures – good barometers for the Russian economy – are very positive at the moment. Freight turnover at Russia’s far eastern ports, for example, increased to 57.36 million tonnes in the first half of 2010, 1.7 times more than the same period last year(2). Industrial production also increased by 12.6% in May this year.(3)

Barings believes that there are many other positive developments in Russia that investors should be noting. Matthias Siller comments: “First, the exercise of de-leveraging amongst Russian corporates and households is over, which is good news for economic growth. In addition to this, Russia is still a relatively cheap country where the price of a Big Mac for example, is less than in Hungary, Poland, Turkey or the Czech Republic(4). With increasing income levels, there is plenty of room for domestic growth. This, coupled with the fact that Russia has a low export dependency makes it an attractive proposition for investors.”

The Baring Russia Fund is underweight in the commodities sector and overweight in consumer related industries such as retail, healthcare and mobile telephony. Within the commodity sector, basic material stocks are preferred over oil and gas companies as the current budget policies indicate tax increases in the energy sector that will put cash flows under pressure.

The Baring Russia Fund was launched in January 1997. It has $138.2 million in AUM and over the past year, posted a return of 40.7%1.

The deVere Group is pleased to announce that the deVere Group 1.0 App was today approved by Apple, and is available on the Apple iTunes App Store. The App will enable clients to manage their investments through the use of their iPad™. This step forward now makes it easier than ever to put the client in complete control of their own investments along with the iPhone® App which will be launched in the near future.

In today’s challenging financial environment, access to real-time and customisable data is paramount. Meanwhile, as more people rely on their mobile devices to carry out daily tasks, the iPad is increasingly becoming one of the dominant mobile web platforms in the world. In a bid to appeal to the digital generation, the deVere Group took its online Fund Platform to the next level by introducing an App for its investors.

Nigel Green, CEO of the deVere Group said, “We are proud to be at the forefront of technology and address our clients’ needs. This user-friendly application provides access to your investments on the go, at the touch of a screen and suits the busy lifestyle of our international client base”.

The deVere Platform App offers instant access to over 5,000 funds from some of the world’s leading fund houses. It allows users to keep up to date with their investments, current market trends, and latest news while giving them the ability to contact their financial adviser just by tapping the screen, anywhere in the world.

About the deVere Platform App
deVere Group 1.0 for iPad™ enables an enhanced user experience. Associated functions are grouped together on one screen, making more information and related features easily available and improving the overall flow. The “pop-out” screens give clients access to all the information they want, easily.

Download the App on the Apple App store at http://itunes.apple.com/gb/app/devere-group/id380891188?mt=8

For further information please visit www.deverefundplatform.com

Deutsche Bank has hired Dixit Joshi as Head of Equities for EMEA. His appointment reinforces the bank’s commitment to clients in the region and will strengthen its leading position in cash equities, equity derivatives and prime brokerage.

Mr Joshi will join the bank from Barclays Capital where he was Head of Equities for EMEA, establishing and building that business after his appointment to the role in 2008. He joined Barclays Capital in 2003 from Credit Suisse First Boston. Starting in October, he will report to Garth Ritchie, Global Head of Equities, and will be based in London.

Commenting on the appointment, Mr Ritchie said: “Following the financial crisis we created a diversified business focused on liquid client flow trading. We are the market leader across European cash equity, derivatives trading and prime brokerage and Dixit’s experience will be invaluable in building further on our momentum in this business”

About Deutsche Bank

Deutsche Bank is a leading global investment bank with a strong and profitable private clients franchise. A leader in Germany and Europe, the bank is continuously growing in North America, Asia and key emerging markets. With 80,849 employees in 72 countries, Deutsche Bank offers unparalleled financial services throughout the world. The bank competes to be the leading global provider of financial solutions for demanding clients creating exceptional value for its shareholders and people.

www.db.com

Susanne Tide-Frater, ex-Selfridges & Harrods Creative Director, joins the farfetch.com team

9 July, 2010 – London: farfetch.com, the fast-growing online fashion marketplace for independent fashion boutiques from across Europe and North America, today announces a $4.5 million growth equity investment from Advent Venture Partners. Frederic Court, General Partner at Advent, is joining the farfetch.com board.

farfetch.com is also announcing a key strengthening of its team with two key appointments:

- Susanne Tide-Frater joins as Brand and Strategy Director. Susanne is the former Creative Director at Harrods and Selfridges, and is currently Fashion Director at 19 Entertainment, where she helps develop its fashion collections including Victoria Beckham and Roland Mouret.

- Andrew Robb joins as Chief Operating Officer. Previously, Andrew was Managing Director of membership-only online retailer Cocosa. He brings with him a wealth of ecommerce experience.

London based farfetch.com was founded by serial entrepreneur José Neves in October 2008. Initially open to European boutiques, it expanded to North American boutiques in 2009. The site has experienced rapid growth and now represents 44 boutiques that sell over 1,000 brands and 11,000 individual lines through its marketplace. Visitors have increased by more than 70% every six months since launch, and this growth is also reflected in sales, which in the last six months have seen an uplift of 105% on the previous six month period.

The site’s customers have access to a hand-picked collection of clothing, accessories and lifestyle pieces by designer brands, ranging from established names such as Comme des Garçons and Balenciaga to emerging designers such as Current Elliot and Bless. L’Eclaireur, the original Paris concept store, is the latest to offer online customers access to its array of global brands and fashion vanguards (from Christopher Kane to Junya Watanabe, Balmain to Tim Hamilton) via farfetch.com, joining the site for the AW10 season.

Advent’s new investment will be used by the company to continue expanding its operations in Europe and North America as well as to expand into Brazil. In Brazil farfetch.com is building a network of independent boutiques and designers who will sell through its Brazil-only marketplace. farfetch.com has already built a global following, with customers in over 100 countries. Approximately 40% of orders come from the UK and Europe, 30% from North America, 15% from Asia and the Middle East, 5% from Australia and 5% from Brazil and the rest of South America.

New appointment Susanne Tide-Frater, Brand and Strategy Director, said: “I am delighted to join farfetch.com and be part of the team led by José. farfetch.com is one of the most innovative and fast-emerging fashion websites and has the opportunity to become the experiential online destination for forward-thinking fashion shoppers. This is a natural evolution for me and I am very keen to be part of it.”

“The online fashion market is a vast and fast-growing market which we targeted as part of our strategy to invest in capital-efficient ecommerce businesses. Following an extensive review of the market, we decided to back farfetch.com which hit all our investment criteria: proven entrepreneurial team, fast-growing revenue, highly differentiated positioning and a strong ability to scale with limited capital requirements. We are thrilled to be involved with a company which has already made significant impact within its market based on its unique business model”, said Frederic Court, General Partner at Advent.

Commenting on these two key milestones for farfetch.com, José Neves, CEO and Founder, said: “Our customers tell us they love farfetch.com for our unique range of labels and for our informed fashion viewpoint and vision. With Advent, Susanne and Andrew on board we are now in a very strong position to accelerate our growth, benefitting from their deep understanding of our market and proven expertise at building businesses. They will also help us provide our partners with the best tools and platform to help them better leverage this fast-growing channel.”

Finamex, the leading financial services broker dealer for the Mexican Exchange marketplace, historically focused in providing premium professional trading products for high performance and low-latency market access, announced today its new proximity DMA offering.

Currently, Finamex enabled trading systems allow firms to access Mexican Exchange venues at the lowest latencies in the market place. Finamex being an authorized broker dealer also offers all risk requirements, validations and processes fully in-line with existent official regulations and certified on a yearly basis. Local as well as international trading firms have utilized Finamex connectivity to Bolsa Mexicana de Valores and the Mexican Derivatives Exchange Finamex FIX gateways.

Today’s announcement of the technology roll-out within the Exchanges’ data center incorporates a new low-latency approach by Finamex for DMA. FIX gateways are now within LAN proximity to the Mexican Exchange trading engines allowing for high frequency trading strategies to perform optimally on this new Finamex DMA Gateway. Straight-Through-Processing systems have also been deployed in this environment with integration of Finamex Order Management, Risk Controls, Execution Routing, Algorithmic Trading, as well as
networking connectivity for clients and partners.

The new Finamex DMA Gateway includes full support of:

* Ultra-thin and transparent FIX engines configurable for special requirements
* Pre-trade order validation optimized for high throughput execution
* Low-latency verifications modules for trading limits and other important checks
* Optimized order routing directly onto the Exchange matching engine LAN
* Neutral access and protected order flow as Finamex do not operate a proprietary trading desk
* Zero-cost execution algorithms including VWAP, TWAP, POV, and others as well as several synthetic order types

Finamex’s new infrastructure services support general co-location needs for customers and other market participants to implement their own servers and other network components further minimizing overall latency.

For more than 20 years Finamex has been a leader in the Mexican financial services industry consistently ranking as one of the best independent broker dealers in the country. Finamex’s commitment to technology excellence is one of the reasons why it is in the top ten most liquid in the equities market, top five in the fixed-income business, and the prime choice for HFT players and ALGO shops requiring execution services.

About Casa de Bolsa Finamex

Finamex (Casa de Bolsa Finamex SAB de CV) is the leading provider of high-quality market access products for the Mexican stock markets. Finamex services diverse participants globally such as institutional, corporate and professional investors, as well as financial supports services firms worldwide.

Finamex is amember of the Bolsa Mexicana de Valores (BMV) and the Mexican Derivatives Exchange (MexDer), and through Valores Finamex International, a USA Broker Dealer, registered in the NASD since 1990. Finamex is listed on the Mexican Exchange as FINAMEX.O and has clients in over 10 countries.

Accuity’s IBAN Validation and Conversion Capabilities Help Improve Payment STP Rates and Reduce Costs of Payment Failures and Repairs for BofA Merrill Customers

LONDON – Bank of America Merrill Lynch (BofA Merrill) today announced that it has selected Accuity’s international bank account number (IBAN) conversion and validation solutions to help corporate clients successfully meet the compliance challenges of the Single Euro Payment Area (SEPA) initiative. These solutions can help reduce the cost to clients of processing eurozone payments by automatically converting legacy account details into valid IBANs and correct routing Bank Identifier Codes (BICs).

“The unparalleled solutions offered by Accuity provide the essential tools our clients need in order to reduce costs, optimise payment efficiencies and manage previously manual, time-consuming processes,” comments Carole Berndt, head of Global Treasury Services, Europe, the Middle East and Africa (EMEA). “The referral arrangement we now have in place with Accuity demonstrates yet another way in which Bank of America Merrill Lynch is focused on providing clients with products and services that allow them to move money faster, more safely, and with greater ease anywhere in the world.

“We believe Accuity’s end-to-end IBAN conversion, validation and maintenance solutions help us provide our clients with a comprehensive solution to convert legacy account payments data into SEPA payment format.”

By submitting payment transactions that contain the correct IBAN and routing BICs, BofA Merrill’s clients should benefit from higher rates of payment straight through processing (STP) and experience a reduction in the inefficiencies associated with payment errors and repairs.

“Accuity has a relationship with Bank of America Merrill Lynch that dates back over 70 years,” said Malcolm Taylor, Accuity’s managing director for EMEA and Asia Pacific. “We are excited to offer our enhanced IBAN services to the bank’s valued customers so that they can benefit from the lower cost of SEPA-compliant payments.

“Accuity’s IBAN solutions are underpinned by a unique, comprehensive and multi-layered verification process. They help users convert legacy account information quickly and efficiently into accurate and validated IBANs that are required for certain SWIFT payment messages.”

The referral agreement with Accuity is part of BofA Merrill’s multi-year investment in new technology and supports the company’s continued focus on treasury management, corporate banking and other businesses in key global markets.