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blinkx can build on market position, says Numis

Video search engine firm blinkx (LON:BLNX) is well placed to develop its market position, according to Numis Securities.

The broker is bullish on the prospects of the company, whose market capitalisation has now passed £700mln after a spike in the share price yesterday.

It follows a solid set of first half numbers from the company, whose revenues jumped 36% in the six months to the end of September to US$117mln with a 76% increase in underlying earnings to US$18.2mln.

“We believe that Blinkx is executing well in an industry which is enjoying structural tailwinds,” Numis’s Paul Richards said.

“We have raised our FY14 revenue forecast from US$216mln to US$240mln, which represents growth of 21% on a reported basis and adjusting for last year’s Olympics and Presidential Election, the underlying increase is 33%.”

He considers this and the 20% growth estimate for 2015 to be conservative.

Richards has raised its target price to £2.21, leaving around 23p of headroom for the shares at their current levels.