Could investors in Autonomy see another spin-off from the Cambridge-based software group?
Four years ago Autonomy demerged its video search business Blinkx at 45p a share, and they now stand at 115.5p. Alongside its results, Autonomy hinted that it may do something similar with Aurasma – its new so-called augmented reality platform. In the words of Panmure Gordon analyst George O'Connor:
Aurasma technology overlays data on to smartphone screen shots, and finds a video or ad relevant to the screen shot. So, let's say that with your iPhone you snap a picture of a dress (don't worry it works with butch consumer goods as well) in a window display – on top of this you could have a video from the catwalk, or size and price guide – think even about a comparison shopper app.
This platform is currently being used by around 100 organisations, such as FT, Grazia, Debenhams, New York Times, Conde Nest, Wired, Metro, Pearson – and market segments like teaching aids, advertising, mobile operators, instruction manuals, clothing brands, film studios, museum guides.
On the conference call with analysts, Autonomy suggested it might spin out Aurasama a la Blinkx, although no timescale was mentioned.
As for the Autonomy figures, they showed a 16% rise in quarterly sales boosted by its cloud computing business, where it manages data storage and processing remotely for its customers. The news lifted its shares 64p to £17.20, making it the biggest riser in the leading index. Milan Radia at Jefferies said:
The relatively positive tone of Q&A in the analyst call confirms that suspicions with respect to accounting issues have faded. The scene is set for the premium organic growth rate to unfold into a premium rating, which we believe to be entirely warranted. We reiterate our buy rating and £22.00 price target.
Still with technology Sage, which specialises in accountancy software for small businesses, added 4.3p to 281.4p after a well received update.
Meanwhile the stalemate in the US debt crisis continued to spook investors, who shunned equities in favour of safe havens such as gold and silver - which hit new highs during the day- and the Swiss franc - which reached a record level against the dollar. With Wall Street down around 100 points by the time London closed - not helped by weak manufacturing order figures - the FTSE 100 fell 73.15 points to 5856.58. Angus Campbell, head of sales at Capital Spreads, said:
The probability of a US default increases as each day passes without an agreement as to how the debt ceiling should be raised. This means two things for financial markets, a selloff of risk assets such as equities and a rally for safe havens such as gold.
On top of this concern is mounting that the world's biggest economy might be about to dive into a similar slowdown that the UK is experiencing following some poor durable goods data. The combination of both has caused investors to take a truly defensive approach to financial markets today.
Banks led the way lower on the continuing debt fears, not just in the US of course but the Eurozone as well. Renewed worries about Europe led Goldman Sachs to downgrade its rating on the banking sector. It said:
Following last week's strong rally in banks, we recommend moving banks to neutral (from overweight). After the initial optimism (the second package for Greece included some elements that were above market expectations), doubts have started to creep back into the market. In particular, these revolve around the scope for funding the new initiatives.
So Lloyds Banking Group lost 1.935p to 43.235p while Barclays dropped 7.75p to 221p and Royal Bank of Scotland fell 1.16p to 35.01p.
The leading faller in the FTSE 100 was Scottish and Southern Energy, down 74p to £13.27 as its shares went ex-dividend.
With precious metals rising, Randgold Resources added 35p to 56.35p and Mexican miner Fresnillo climbed 8p to £17.
Lonmin, up 17p to £13.22, was lifted by Credit Suisse raising its recommendation from underperform to neutral.
Among the mid-caps engineering group Renishaw slumped 196p to £16.90 despite a tripling of full year profits, as analysts fretted that its margins were below expectations. Fairfax said:
Though the bottom line was in line with our forecasts, margins were lower than we had anticipated. However, given the rapid expansion of the group and a very successful year, this is understandable.
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Source: http://www.guardian.co.uk/business/marketforceslive/2011/jul/27/autonomy-adds-ftse-falls
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