Smaller companies spotlight

EACH week, former Fleet Street City Editor Patrick Lay keeps This Is Money readers up-to-date with a neglected, but exciting sector of the stock market - smaller companies.

Diamond geezer

I CONFESS that in my late teens and early twenties I was not as other men; my game was baseball, not cricket, and my heroes were Babe Ruth, Joe DiMaggio, Yogi Bera and Lou Gehrig.

A couple went on to become famous for other things – Joe DiMaggio became Mr Marilyn Monroe (though you wouldn‘t have called him that to his face) and Lou Gehrig‘s name will live on having had the disease that killed him, named after him.

Lou Gehrig‘s disease is the most common manifestation of Motor Neurone Disease, one of the most devastating human disorders affecting the function of nerves and muscles.

His name came across my desk this week with the announcement from Oxford Biomedica which is assessing, in collaboration with Dr Nicholas Boulis of the Cleveland Clinic Foundation in Ohio, a series of five genes as components of a product to address this problem.

It has just received a grant of $120,000 from a US charity that will virtually pay for the cost of initial research into using Oxford Biomedica‘s LentiVector technology. With an average of 15 new cases being diagnosed every day in the US alone, it must be hoped that the research is successful; it will do Oxford Biomedica no harm, but best of all it will mean Lou Gehrig can be remembered for his baseball achievements and not for a crippling disease.

Safe pair of hands

THERE is a distinctly sporting flavour to the column this week; I eventually traded in my baseball glove for those of the wicket keeping variety, and my heroes changed too.

One of the new breed was Phil Edmonds of Middlesex and England whose spinning techniques would have made Alistair Campbell green with envy.

Mr Edmond turned to business when he retired from the great game and is now non-executive chairman of Property Internet, which has been drastically restructured following the 29.9% stake bought by Grosvenor Land Holdings.

He revealed this week that Property Internet is setting its sights abroad and aims to invest in high-yielding international and UK property ventures and is starting with a close look at the market in Moscow where foreign ownership of property has been permitted, and encouraged, since January 2002.

My memory tells me that Mr Edmonds was not as orthodox as others with the bat, although often successful; he clearly adopts a similar approach to business.

There is a tenuous sporting link in this next story, particularly at the start of Wimbledon fortnight. Not a lot of people know that geologists searching for platinum throw their hats in the air and shout 'eureka' when they spot 'tennis ball markers'. These are indentations which give the impression that a tennis ball has been hit into the surface and, sure enough, some 300m - 500m below, there is almost always platinum.

I am indebted to Colin Bird, chief executive of Jubilee Platinum, for this snippet that will enhance my reputation at many a dinner party. But there is a more serious side.

Mr Bird is about to spend a week or more meeting fund managers in London, Paris, Geneva and perhaps Dublin, extolling the virtues of his company which is planning an AIM listing in mid July.

He is looking to raise £2.5m-£3m net to help Jubilee find these 'tennis ball markers' on more than 4,500 hectares of land on which the company has five year options in the southern end of the eastern Bushveld – less than 10 kilometres from where the giant Anglo American Platinum is also beavering away.

As with all mining companies the public has to trust the experts rather than the story that is being told, but Mr Bird is well known in London‘s mining community, not least because he helped list Canadian company Franconia Minerals on Ofex early this year.

He is a 58-year-old engineer who worked in South Africa for 14 years, produced coal and copper in Zambia, copper and nickel in Botswana and had a gun pointed at his head in Venezuela.

Chairman of Jubilee Platinum is Steve Kearney, who used to be chief executive of Implats, the second biggest platinum producer in South Africa and there is an impressive list of names on both the main board and the technical board.

Although South Africa is important, Mr Bird also says: 'If you are going to look for elephants you look where elephants have been seen before.' The company also has land in Canada, Madagascar and Sierra Leone – all good 'elephant countries in Mr Bird‘s terms.

As anybody with a credit card knows, platinum is worth more than gold, but there is still something that sets the heart thumping when the yellow metal is up for grabs.

So as the price of gold soars away in the markets (still around $320 an ounce) yet another Canadian-based company is seeking an AIM quotation. Thistle Mining is looking to raise US$5m-$10m through a placing to institutions.

It claims it has 'measured and indicated resources of more than 14.3m ounces which include 2.5m ounces in proven and probable reserves.' The strategy is to become a substantial gold mining group and to increase annual production to 500,000 ounces, although no date is given for the strategy to be achieved.

Investors should be aware that president and chief executive, Willie McLucas, is something of a character. A couple of years ago he was pronounced clinically dead after a heart attack in Fiji, but he clearly isn't and demonstrates his obvious fitness by doing cartwheels – often while wearing a kilt.

Some you might have missed

AIM-LISTED Interactive Digital Solutions is to receive in the region of £1m a year for 15 years through its strategic partner, Wandsworth Group, which has already received orders to install 12,500 NHS Trust hospital beds with its Tele-Call Digital System. The number is expected to double by the end of 2002.

A MAJESTIC performance from Majestic Wine, whose sales rose 20% to nearly £105m and pre-tax profits climbed 34% to top £6m in the year to 1 April. Like-for-like sales in the first 11 weeks of the current financial year were up 12.2%, and internet orders now represent three% of sales with an average order size of £123.

IN THE three months to end March, financial media group Insensia saw a 124% rise in revenues over the previous quarter and a 41% drop in losses. The trend is set to continue says managing director, Alan Hutchison.

A £480,492 LOSS after tax in the first six months of the year for Lo-Q was not a true reflection of how well the business might be doing. The six months to end March coincided with the virtual close down of the majority of American theme parks. Lo-Q says a number of operators have made visits to use the existing system in Atlanta and, says chairman Jeff McManus: 'Without exception, all the feedback we have received has been very positive, both for the system and our operation.'

SOME tech companies are making progress in these difficult markets. Red Squared, the Manchester-based IBM hosting and managed services partner, reports a 1200% increase in sales to £2,159,000 in the six months to end March, a 383% leap in gross profits to £755,740 and a £260,000 cut in losses after tax to just £109,272. Chairman Graham Cooper says: 'We are continuing to negotiate a number of new contracts in conjunction with IBM'.

NUMERICA, the AIM-listed accountancy group, has reported underlying profits of £1.2m on a turnover of £15.2m for the period between 2 August, 2001 and 31 March, 2002.

WOMENSWEAR retailer Jacques Vert has followed a disappointing first half with a strong second half performance and reported pre-tax profits of £879,000 for the year to 27 April against a £95,000 loss in the previous year. Chairman Bill Reid says the current year has started well.

Some to watch out for

THE UK‘s leading independent provider of travel-based promotions, Landround, gets strong support from SQC Research. It is 'well on the way for strong profits recovery' following a downturn after 11 September, is the claim. The company, which has been around for ten years, has been profitable since its eighth week of trading. And its more than 1,000 customers include some of the biggest names in the High street, including McDonalds, Sainsbury and Tesco. The shares have been as high as 378p and as low as 57p and are currently trading around 120p.

REFOCUSING of the Park Group following the change of management is now starting to bear fruit says Stephen Thomas of brokers Teather & Greenwood. He says the shares are a 'buy' with a 30p price target against the current 22.5p.

RICHARD Ratner, retail analyst at brokers Seymour Pierce, says use any weakness in the price of Body Shop shares as a buying opportunity and he feels that 'now the price is coming back on the Merchant Retail Group we may get a decent opportunity to buy' there also.