21st Century Technology (LON:C21, 6.375p, £5.88m), the vehicle installation service provider supplying public transport CCTV and other monitoring systems, will report in the AGM statement today, the group is trading in line with management expectations. The pipeline of orders is strong in the UK and mainland Europe. The group is debt free, with cash flow remaining strong. The group are making good progress. We continue to believe the group is fairly valued trading on a 2010 PER of 10.6x and 7.1x in 2011. We repeat our HOLD recommendation.

Endace (LON:EDA) (EDA, 185.0p, £27.72m), the leader in network monitoring solutions, reports prelims to 31 March 2010. The results come as no surprise, following the recent profit warning with revenues of $31m, adjusted PBT of $1.4m and cash balances of $1.7m. We believe customers may continue to delay their capex, which would have a negative impact on the business. Despite challenging market conditions, the Board claim they are experiencing increasing interest and demand for their products and solutions to protect critical infrastructure – the pipeline is strong. The market forecasts 2011 PBT of £1.67m ? £3.27m and EPS of 5.71p – 10.52p. The stock trades on an average PER of 22.9x, an unwarranted premium to the software and computer services sector, which trades on 9.8x. The share price has fallen 25% since our sell recommendation. We retain our SELL recommendation with our target price of 168p.

Lees Foods Plc (LON:LEE) (LEE, 161.5p, £3.8m), the operator of Lees of Scotland and the Waverley Bakery, reports prelims to 31 December 2009 are ahead of market expectations. A 13% increase in revenues to £18.2m (2008: £16.1m) drove normalised PBT up 1.2x to £0.84m (2008: £0.38m) – an excellent performance. A proposed 7% increase in DPS to 7.2p (2008: 6.7p) demonstrates good cash generation. Net cash improved to £0.38m (2008: £0.04m). The introduction of new products combined with selling the Lees brand to new export customers in Kuwait, France, USA and Australia, has helped increase revenues and increase geographical spread. The outlook statement highlights the strong performance in 2009 has continued into 2010 – Q1 2010 is ahead of management expectation. The marketplace remains extremely competitive; however the competition from European manufacturers has eased due to the current strength of the Euro against the sterling. Some commodity prices have stabilised, but there are still areas where cost remains under…

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