Abbeycrest (LON:ACR) (ACR, 4.75p, £3.49m), the group’s Thailand subsidiary has negotiated a £2.1m increase in their banking facilities with Siam Commercial Bank to £5.8m, for working capital purposes. The group has breached its profit covenants with its senior lenders, Burdale Financial. No announcement relating to the latter would suggest they are still working closely with them to reset these covenants. We believe consumer spending on jewellery will remain under pressure due to the fiscal squeeze and the austerity measures such as a VAT hike. Following our sell recommendation, the share price has fallen 24%. The breach of its covenants, a slow recovery with the scope for a “double dip” and high gold prices encourages us to reiterate our SELL.  

Byotrol Plc (LON:BYOT) (BYOT, 20.0p, £16.82m), the anti-microbial hygiene company, intends to raise £3.7m (net) of new money at a placing price of 15p, for working capital and to strengthen its balance sheet. We believe the placing will provide the group with sufficient funds to become profitable and cash generative. We reiterate our HOLD recommendation.

Harvey Nash Group (LON:HVN) (HVN, 43.25p, £31.77m) Interims to 31 July 2010 are expected to be line with expectations. Revenues and gross profits are expected to remain relatively flat at £200m and £31.7m respectively. We are impressed by the group’s performance in Q2, which we believe displays an element of a recovery. The cost saving benefits are reflected in the growth in adjusted operating profits by at least 10% to £2.75 (H109: £2.5m) and adjusted PBT up in excess of 40% to £3.22m (H109: £2.3m) – a strong performance. The group seek to increase the interim DPS by 10% to c.0.94p (H109: 0.85p). We believe this sends a positive signal regarding the group’s profitability going forward. The balance sheet remains sound.  Demand for contract IT professionals has been robust in the US and UK, and a recovery in permanent recruitment has also started. However, we believe the recovery may in H2 given the uncertainty surrounding the UK and US economies. Strong results were reported from the Nordic region, mitigating the delayed recovery in the Eurozone. The market forecasts 2011 PBT of £5.18m, EPS of 4.8p and DPS of 2.2p. The stock is rated on a 2011 earnings of 9x with a yield of 5.1%. On an earnings basis, we believe the stock is fairly valued. However, we believe the…

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