SHRE.L Regulatory News (SHRE)

 AIM: SHRE

Share plc

("Share" or "the Group")

Publication of latest "Profit Watch UK" report

Share, which operates The Share Centre Limited, a leading independent UK stockbroker, is pleased to announce the publication today of its latest quarterly issue of "Profit Watch UK", which analyses the revenues and profitability of the top 350 UK listed companies. This latest report examined the financial results of companies with year ends up to 30 September 2013 and which reported in the quarter to 30 December 2013. A full copy of the report can be found on The Share Centre website at https://www.share.com/experienced-investors/profit-watch-uk.

In its summary, the Profit Watch UK report notes:

· Fastest rise in revenues in over a year, up 3.0% to £109.8bn

· Growth from a broad mix of sectors

· Pre-tax profit growth up 43.7% to £6.6bn, the first increase in seven quarters and aided by lower write-downs and lower finance costs

· Profit after tax up by 52% to £4.8bn, the fastest growth rate since mid 2011

· FTSE 250 outperforms FTSE 100 profit growth as it rebounds from a very low base

Annual revenues of companies analysed in the report have started to show very encouraging signs of improvement as the UK's economic recovery gathers pace. Total sales rose 3.0% to £109.8bn. Although this is still rather sluggish on a historic comparison, it is nevertheless the fastest growth in revenues since the second quarter of 2012. Overall eleven sectors increased sales and six saw sales decline. This is the second best ratio or risers to fallers for a quarter in over a year and indicates a broad spread recovery beginning. In percentage terms the best performing sector was financial services where revenues rose 24.3% with the worst being real estate investment and services performing sector, where revenues declined by 9.1%.

Pre-tax profit soared 43.7% for the group of companies reporting by the end of December. This follows seven consecutive quarters of falling pre-tax profits. The result reflected both the reduction in borrowings by companies in recent years and lower interest charges. Also large asset write-downs seem finally to be coming to an end. This means that pre-tax profits can bounce back quite strongly in the quarters to come.

Commenting on the findings of the report, Helal Miah, investment research analyst at The Share Centre, said,

"The UK economy has a spring back in its step and this is now clearly showing up in company results. Companies have produced feeble sales growth and declining profits for eighteen months, but fortunes are now rebounding. 

"We expect sales and profits to continue to improve in the coming reporting periods. What's more we think they will do so faster than most commentators currently expect, meaning the outlook is good for the stock market and investors. Trading updates from company management teams are also more positive than they were this time last year, indicating a growing confidence across the board. With the UK expected to be one of the top performing economies in the developed world, we anticipate results from the mid-cap FTSE 250 companies to outstrip their FTSE 100 counterparts too.

"We maintain our conviction that equities are currently the preferred asset class for investors, not only because of the improving economic fundamentals, but also because the alternatives of cash and bonds offer meagre returns. Interest rates are not expected to rise for about a year, after which they are only likely to rise in gradual steps. Even when they do begin to rise investors should not be concerned as historically in this period of the economic cycle, interest rate rises coincide with rising markets. This is a powerful case for investors."

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Notes to editors

Methodology

Raw data from the financial reports of the UK's largest 350 listed firms (provided by Factset, excluding equity investment trusts) was analysed and cross referenced with additional data from the London Stock Exchange. The researchers compiled the data for the whole market and analysed by sector and index.