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Germany stutters The picture is not so bright in Germany. Revenue in the third quarter declined 6% to £274m from £292m a year earlier, which represents flat revenue performance on a constant currency basis. This brings the year-to-date position to a decline of 2% (CC: growth of 5%). Services revenue was flat in the third quarter (CC: growth of 7%), bringing the year-to date position to growth of 6% (CC: 13%). Supply Chain revenue in the quarter declined by 9% (CC: decline of 3%), bringing the year-to-date position to a decline of 5% (CC: growth of 1%). "While the third quarter showed decline in the Supply Chain business, for the year-to-date position, this represents a stabilisation from the performance in the second quarter. We have stated before that the comparison was challenging, given the strong growth achieved in the second and third quarters in the German Supply Chain business in 2011 by 46% and 22%, respectively, in constant currency," the firm said. The group may have bitten off more than it can chew in terms of new contractual services arrangements in Germany. The group has seen a material deterioration in the more recent contracts it has taken on, as the transition stage is requiring more time and cost than anticipated.

UK sparkles Performance in the UK has been good, with revenues growing 12% in the third quarter to £265m, bringing the year-to-date growth to 8%. Services revenues rose 18% while the Supply Chain top line improved 9% year-on-year, although the group pointed out that the third quarter of last year was a particularly poor one for the Supply Chain business. The pipeline of orders on the Services side remains strong, the group revealed, while management is satisfied with the performance of new contracts, particularly given the growth rate of the Services business.

Information technology services provider Computacenter is having to spend time and money getting service levels up to the required standard on some new German contracts, but things are going well in the home market. Revenue in the third quarter of 2012 was up 1% to £656m from £648m in the third quarter of 2011, but was 6% higher on a constant currency basis. In the first nine months of the year revenue was up 3% (7% on a constant currency basis) to £2.07bn from £2.01bn the year before. Group Services revenue grew by 9% in the third quarter, 13% in constant currency (CC), bringing the year-to-date position to 11% and 15% respectively. Group Supply Chain revenue declined by 2% in the third quarter and grew by 2% in constant currency, bringing the year-to-date position to a decline of 1% and growth of 4%, respectively.

Wood Group, the international energy services company, has completed the acquisition of Mitchells Oil Field Services. As previously announced, the $135m acquisition significantly increases the company's presence in the US Bakken shale region and is expected to be earnings-enhancing from completion. Further earn out payments are due in the period to 2015, depending on the future performance of Mitchell.

Positive Points: Given differing dividend policies, BAE and EADS previously highlighted plans to bring the two into line. Such a move would effectively have seen BAE shareholders suffering a cut to the dividend payment. The current dividend remains attractive in a low interest rate environment (over 5% as of 10Oct2012). A progressive dividend policy has to date been pursued - the interim dividend was increased by 4%. The generation of cost savings was likely to have proved difficult. The governments of the respective countries in which the combined group would have operated in are likely to have faced stiff opposition from trade unions regarding possible job cuts. Management guidance for full year BAE profits remained unchanged as of its early August half year results. As for accompanying management comments, the board noted that “the outlook for defence spending in the UK had stabilised". BAE previously underlined good progress in securing business opportunities in international markets. Order intake in the first half of 2012 in markets outside the US and UK increased to £4.3billion (2011 £1.6bn), including a £1.6 billion training aircraft contract in the Kingdom of Saudi Arabia and a £0.5 billion contract for CV90 vehicles in Norway. BAE's management has previously highlighted a focus on faster growing activities such as cyber-security................

Negative Points: A combined BAE Systems and EADS would have established a company able to rival Boeing. Both BAE and EADS would have diversified their respective product profiles. Sales relationships for each may have been used to benefit the other. Cost savings may eventually have been made. Procurement and sourcing efficiencies available to the enlarged were expected to provide the early focus. BAE management outlook comments prior to the merger announcement proved cautious in tone. Modest growth in underlying earnings per share was forecast, with a greater bias being given to second half trading. In addition, the merger talks may have distracted management, whilst costs to advisors are likely to have been incurred. Despite a previously highlighted stabilisation in the outlook for UK defence spending, government debt in the U.K., U.S. and other countries in which the group operates remains high. Historically, and in political terms, defence spending is easier to cut than Health or Education spending. Given reduced US government defence spending, major US competitors are also likely to be seeking sales elsewhere in the world. Negotiations with regards to BAE's important Salam (Eurofighter Typhoon) contract have generally proved challenging. Saudi Arabian defence spending may slow if oil prices significantly decline.........................

Termination of merger talks: In a joint statement, the companies noted that "Notwithstanding a great deal of constructive and professional engagement with the respective governments over recent weeks, it has become clear that the interests of the parties' government stakeholders cannot be adequately reconciled with each other or with the objectives that BAE Systems and EADS established for the merger. BAE Systems and EADS have therefore decided it is in the best interests of their companies and shareholders to terminate the discussions and to continue to focus on delivering their respective strategies." BAE's chief executive noted that “We are obviously disappointed that we were unable to reach an acceptable agreement with our various government stakeholders. However, our business remains strong and financially robust. We continue to see opportunities across our platforms and services offerings and in the various international markets in which we operate. We remain committed to delivering total shareholder value and look to the future with confidence." BAE was generally seen as the bigger beneficiary near term of any completed merger. Government defence spending for its key U.K. and U.S. markets remains pressured, whilst moves to make airline fleets more fuel efficient has proved supportive for civil aircraft manufacturers. As such, and following the announcement, BAE's shares moved lower, whilst the share price for EADS moved higher. For now, uncertainty regarding defence spending, particularly in the US, continues to loom. Nonetheless, the failed talks do appear to at least signal a willingness at BAE to consider consolidation. Furthermore, a strategy to expand the group's geographical markets still remains in place, whilst the ending of merger talks removes the previously announced cut of the dividend payment for BAE shareholders

Company overview The Group's core activities are the development, delivery and support of advanced aerospace systems and defence products for all 3 branches of the military. BAE Systems designs, manufactures and supports military aircraft, surface ships, submarines, fighting vehicles, radar, avionics, communications, electronics and guided weapon systems. The Group has customers in some 130 countries with major operations conducted in the UK, the US, Australia and Germany.

Positive Points: Assets under management have increased by 6.8% to $68.0 billion. The drivers of the increase were positive investment performance of $3.7 billion and net inflows of $600 million. Management highlighted that the group was continuing to perform in line with its expectations. The London based fund manager is a recognised leader in the management of emerging market debt. Group focus remains on long-term growth, in line with the company's strategy. A progressive dividend policy continues to be pursued. The total dividend over the course of its last financial year was increased by 3.4% compared to the prior year.

Negative Points: In the financial year just gone, assets under management fell by $2.1 billion to $63.7 billion. Total net revenue proved virtually flat at £333.3 million, whilst profit before tax declined by 1% to £243.2 million. The share price valuation has been assessed as potentially being expensive. As of its full year results, Ashmore encountered significant market volatility within its core emerging markets categories. The group remains susceptible to short-term volatility due to global macroeconomic weakness.

Financial Highlights: The quarter saw assets under management increase 6.8% to US$68.0 billion. The group is continuing to perform in line with management's expectations.

First quarter trading update: Ashmore reassures investors. In a relatively short statement, Ashmore management broadly reassured investors. Assets under management increased by 6.8% to US$68.0 billion, against a fall of 3.3% during the previous quarter. The drivers of this increase were positive investment performance of $3.7 billion and net inflows of $600 million. The principal net inflows of funds were within the blended debt and local currency themes, with the largest inflows coming from further Asian and Middle East government related sources. In all, management highlighted that the group was continuing to perform in line with its expectations. On balance, with concerns for slowing growth and the share price valuation pitted against hopes for long term growth in the Emerging Markets

Company overview Established in 1992 and headquartered in London, Ashmore Group PLC is a leading investment manager dedicated to emerging markets. The group focuses on a number of investment themes including external debt, local currency, special situations (incorporating distressed debt and private equity) corporate debt, real estate and equity. It manages US$63.7 billion (June2012) in pooled funds, segregated accounts and structured products. The company joined the FTSE 100 index in September 2011.

Positive Points: Operationally, investment into flagship markets continues. In the period, 13 main stores were opened in flagship destinations that included Regent Street, London, Hong Kong, Milan & Rome. Selling space in the second half of the year is expected to increase by 14%. The group already enjoys geographical diversity, an attribute which many retail rivals such as Marks & Spencer are currently attempting to emulate. Burberry announced it will directly operate fragrance and beauty categories from 1 April 2013. Ongoing self-help initiatives maintain focus on tightly controlling discretionary spending. A progressive dividend policy continues to be pursued.

Negative Points: With over 60 stores in China, the health of the Chinese economy is a significant factor. Last month, management took steps to protect the group's long term luxury brand status, axing cheaper fashion lines in order to buoy prices. Cheaper handbags, made in Asia were reduced. Coats made from fabrics woven at Burberry's own mills in Yorkshire were increased. The lowest price for a trenchcoat has risen to about £1,000. Burberry's results are exposed to changes in demand for luxury goods, which in turn is reliant on the overall health of the economic environment, and consumer confidence. A large proportion of Burberry's sales is related to tourism (in particular Japanese tourists) and is therefore exposed to changes in international tourist flows. Burberry has a much higher exposure to fashion apparel over other luxury goods companies. The Burberry brand's appeal could fade.

Financial Highlights: Burberry reported total revenue of £883 million in the half-year to the end of September, up 8%. Retail revenue growth at constant exchange rates was £577 million, up 10%. Wholesale revenue totalled £253 million, up 5% and in line with guidance. Following last month's profit warning, sales at stores open over a year rose 1% in the three months to 30 September, the group's fiscal second quarter. Full year capital expenditure plans remain unchanged at a range between £180 million-£200 million.

Trading statement: Burberry's underlying growth remains intact. The 6% spike in the price in early trade has restored some of the company's investment reputation. As trailed in the September update, sales have been under pressure due to the double whammy of a difficult external environment and tough comparatives. The latter, at least, should ease as the year progresses. The underlying strengths of the company, which for the moment seem to have been dismissed by investors, remain intact and today's statement shows some strong underlying growth. Burberry's exposure to China in the recent past has been something of a double edged sword given that country's slowing economic growth, whilst the equally important American and European regions provide further economic hurdles. The unexpected news from the company last month severely damaged the share price performance, which now stands 22% down in the last three months as compared to a 2% rise for the wider FTSE100. Over the last year, the contrast is more marked, Burberry having lost 20% with the FTSE adding 7%. After today's update,

Company overview Burberry Group PLC is a British luxury fashion house, manufacturing clothing and fashion accessories. Its distinctive tartan pattern has become one of its most widely copied trademarks. The company has branded stores and franchises around the world and also sells through concessions in third-party stores. It runs a catalogue business and has a fragrance line. HM Queen Elizabeth II and HRH, the Prince of Wales have granted the company Royal Warrants. Burberry's trademark products are its fashionable handbags and exclusive fragrances. Burberry is quoted on the London Stock Exchange and is a constituent of the FTSE 100 Index.

Mondi is ideally placed to capitalise on growing demand in emerging economies and Nordenia increases its exposure to resilient fast-moving consumer goods. What's more, its shares are rated at less than 11 times forecast earnings for 2013, which is lower than its rivals. On that rating, they hardly reflect the benefit of recent acquisitions.........as always dyor and gl.

What's more, if demand improves in Europe, the upside for the share price could be substantial. According to broker Jefferies, if Mondi can grow organic revenue by 2 per cent a year to 2014, and deliver EPS of 82¢ and cash profits of €1.1bn in 2013, the shares could be worth 820p. That doesn't seem far-fetched, especially now that Mondi has sold half of its share of the Aylesford newsprint business. True, it had to take a €71m hit, but supplying paper to national newspapers is a dying trade.