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.

Going into orbit

ANYBODY replanning a kitchen or bathroom knows the benefits of being able to see where everything fits before buying. It's the basis of what has made Planit Holdings one of the rare market success stories these days. If there was similar software to help investors decide which companies might fit into a portfolio, the chances are this firm would be found to fit as snug as a corner cabinet.

A growing number of institutional investors are building stakes and now own 60% of the company; one that is adding to its holding whenever shares become available is Artemis, which now has more than 4%.

More encouraging is the claim by chairman Michael Jackson that at current levels he too is a buyer and that he believes the shares look cheap taking a 12-18 month view. And David Johnson, analyst at Beeson Gregory, has taken time before his summer holiday to pen a 'buy' recommendation.

Planit supplies computer software which enables retailers to offer customers in-store design systems to help them choose kitchens, bedrooms and bathrooms. Now it has developed software which helps those who make the furniture design it better, and even to order. Its Cabinet Vision and Cabnetware brands now have a leading position in the US custom-cabinet making market, and that already accounts for 30,000 licences of the software.

Chief executive Trevor Semadeni says customer surveys conducted early this year indicate that a significant number of people intend to use the system in the next three years.

Last year it bought Licom Systems, which has proved a stunning success. Semadeni says the company's products were 'renowned for their reliability and of being capable of accurately carrying out the most intricate machining operations. However, the look and feel of the software was seen as being tired and dated, putting the sales force at a disadvantage when selling to new users in competitive situations'.

Altering the look and feel of the product and extending some functions has given the sales force an edge. It has also taken Planit from a £60m-a-year market place into a field where the market is valued near to £1bn a year and which has no dominant player.

Despite losing some £2m of turnover in the US in the months following 11 September, Planit still managed this week to report a 17% rise in turnover to more than £22m and a 24% lift in operating profits to £5.6m for the year ended April.

Semadeni is confident about the current year, having streamlined the US operations. Although expecting organic growth, he is still on the lookout for acquisitions which will dovetail into the organisation.

Mano the moment

FORMER financial journalist Malcolm Burn is making headlines himself at the moment. As head of Golden Prospect Mining, he has a seat on the board of Jubilee Platinum (reviewed here last week) and now he turns up on the board of Mano River Resources, the AIM-listed exploration company.

Mano has just raised £120,000 through a private placement which will be used to continue funding its exploration of promising hard rock gold and diamond targets in the Mano River Union countries and in Canada.

Some you may have missed

FIRST-quarter results from investment group Viatrade do not make encouraging reading. Several of Westbrook International's potential customers appear reluctant to commit to business in the current climate, says chairman Richard Henstock, and he does not believe it will be possible to salvage any value from the group's investment in Trainersite.

However, it was not all gloom; he is 'very pleased' the performance of Dawmed Systems, the medical devices company, where the order book is the highest ever. The latest investment, Centacom, has been actively promoting its new products which allow users in different locations to communicate by voice and vision, and has brought forward several sales leads.

AIM-listed security group SectorGuard has reported a 64% leap in turnover to £2.98m in the six months to end March, with operating profits rising 417% to £111,035.

THAT enterprising Graham Whitworth, chairman and chief executive of plug-in fire alarm group Sprue Aegis, will have to get more shelf space. He's just picked up another award, this time from the Shell LiveWIRE Business Award for Innovation.

PERTHSHIRE Leisure is buying ARC Risk Management for £491,468, payable in shares. Perthshire will change its name to ARC Risk Management after raising between £375,000 and £645,000 before expenses, by an offer for subscription to existing and potential investors.

STOCKBROKER Teather & Greenwood reported losses of £3.8m in the year ended April, compared with profits of £6.3m the previous year. Staff numbers have been reduced from 300 to 245.

A FALL in new car prices, low interest rates and a rise in disposable income helped to boost pre-tax profits of motor retailer Reg Vardy by more than a third to £32.6m for the year ended April. Chairman Sir Peter Vardy said he saw plenty of reasons to be optimistic for the current year.

AFTER a two-year break, supermarket group Somerfield has again reported profits, £22.2m against £13.1m loss, and resumed dividend payments. But it's not all good news. Subsidiary Kwik Save is showing particularly weak trading.

COMPUTACENTER, the UK's largest reseller of computer hardware, has reported a 'marked improvement over the second half of 2001' and forecast 'a similar profit performance as last year' - unless market conditions improve.

Some to look out for

DESPITE the gloomy news of losses from Teather & Greenwood this week, its analysts still seem in bullish mood. Peter Ashworth is a fan of support services group IFTE, which has just reported a turnaround from £1.1m loss to £1.79m profit. He says the shares are still a 'buy' despite outperforming the FTSE AIM index by 36% over the past year.

Parkman is another in the support services area, and it too receives a 'buy' recommendation from Ben Archer 'on a 12-month view'. To complete the trio, Stephen Thomas likes Auto Indemnity (also in support services) where profits are likely to be heavily weighted towards the second half. It's another 'buy'.