Smaller companies spotlight

EACH week, former Fleet Street City Editor

Cleaning up
FOR someone who started his working life with a bucket and mop, David Evans has cleaned up financially over the years. The former professional footballer and cricketer, who famously recruited Tony Berry (of Blue Arrow fame) as they crossed while taking a run when both opened the batting for Edmonton Cricket Club, has made two fortunes and been a Tory MP somewhere to the far right of Lady Thatcher.

This week he sold his Broadreach Group, which cleans the floors of several High Street giants such as Sainsbury's, Homebase and Comet, to MacLellan. The initial price is £16.88m - of which Evans picks up around £5m in cash and shares. Evans stands to pocket a further £2.5m if he can develop Broadreach from its current £42m turnover to £50m in the next two years.

Evans started his office cleaning business in North London, helped by his wife Janice, with a bucket and a mop and a battered Hoover, which they loaded into an old van every morning at five o'clock. Eventually he founded Exclusive Cleaning, which came to market as Brengreen Holdings, where Berry was his finance director until there was a major falling out and Berry left to start Blue Arrow. Soon after, Brengreen was sold to BET for £32m and it later passed to Rentokil. Broadreach, started eight years ago, now employs more than 5,000.

John Foley, chief executive of MacLellan, believes the deal will extend the reach of his operation nationwide, and provide opportunities for integrating management and cutting overheads. It will also boost profit margins from the current 3% to 4% next year, on annualised turnover of £170m.

The deal, which took a year to finalise from the initial discussions, is not MacLellan's last. Foley admits there are talks going on with several parties. Broker Peel Hunt say the shares have 'an upside potential of 25%'.

Fairground attraction
THERE has been some excitement this week in the shares of Lo-Q, the group that produces the Q-bot, a pager rented by theme park visitors to cut queuing times for popular rides.

Following its admission from Ofex to the Alternative Investment Market reported here a fortnight ago, Lo-Q's managing director Leonard Sim issued a trading statement saying the Q-bot was proving so popular at the Six Flags Over Georgia park that despite a doubling of the rental price to $10 a day per person, there were no signs of resistance in the first five weeks.

Revenue approached $20,000 a day on two days and another four US parks are expected to offer the service from mid-June. The news boosted Lo-Q's share price by 16p to 116p, before profit-taking reduced the gain by 3p.

Some you may have missed
ALBA was one of the original names in the production of radios, and it is still in the forefront of audio electronics. It has announced a licensing agreement with Ministry of Sound, under which the two will develop and market lifestyle audio products including mini portable and personal CD and DVD players. They are also developing the world's first personal digital audio broadcasting radios.

Broker Peel Hunt says 'buy'. Results for the year to 31 March will be announced on 19 June.

TRIPLEARC, which provides web-based print procurement, has reported turnover of £1.44m and gross profits of £250,000 for its first year. The company, which came to AIM in December through a placing has 'got off to a good start in 2002, and the board is confident of reporting further progress,' says chief executive Conor O'Brien.

KENJI KITATANI, group executive officer of Sony Corporation, and Philippe-Olivier Rousseau, an executive director and senior adviser at BNP Paribas Structured Finance, have been appointed non-executive directors of Music Choice Europe.

ANDREW GANNON has been appointed group managing director of AIM-listed NetB2B2, the internet-based digital services group. Gannon was previously on the UK board of US computer giant Hewlett-Packard.

Some to look out for
WEBSITE watshot.com says the new management at pubs group SFI Group - including Tim Andrews, the finance director poached from rival Po Na Na - could be entertaining analysts later this month to a Midlands visit. As watshot suggests, analysts would expect to hear a positive story - having been dragged away from their normal City watering holes.

RESEARCHER Mark Watson-Mitchell likes the look of Envesta, whose main operating company is Seven Telecom, a supplier of telephone minutes to the wholesale telecoms market. He predicts Envesta shares, currently 4 1/2p, could easily top 6 3/4p (their previous peak) and will be trading at 10p within two years.

PETER JOSEPH, analyst at broker Peel Hunt, reiterates his February 'buy' recommendation for Fitness First. Although the shares have risen 10% (to 462p) 'they are still a long way below our target of 631p,' he says.