Smaller companies spotlight

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

Diamond life
THE country may still be reflecting on the Golden Jubilee celebrations, but Tom Elder, president and chief executive of AIM-listed Mano River Resources is already looking forward ten years to the Diamond Jubilee. He reckons that by then the 23 diamond exploration areas he has claimed in North West Quebec will be paying off.

The company's Vancouver-based partner International Taurus Resources has identified more than 150 targets for exploration this year and additional land acquisitions will continue, even though the existing exploration areas already cover 9,000 hectares of fairly remote country.

'The geology in Canada's Superior Province is remarkably similar to that in western Liberia and Sierra Leone where we already have discovered several kimberlite pipes, the primary source of gem diamonds,' Elder says. A major difference, however, is that drilling in Canada takes place at temperatures roughly 70 degrees centigrade lower than on the African Continent - at minus 35º C rather than plus 35º C.

'We use the summer to do basic exploration work with lightweight equipment that can be moved by helicopter or in 'planes able to land on the many lakes,' says Elder. 'It is much easier to move the heavy equipment needed for drilling when the lakes are frozen and we can drill through the ice to the soft rocks at the bottom of the lakes, which is where diamonds tend to be found.'

It has taken Mano only six months to find the first traces of diamonds in Canada, against the norm of six years, but there is still three years of hard work to define economic quantities and then a few more before finds start paying their way.

Elder plans to do his marketing through De Beers when the time comes, and what better time to enter the market than when it is sparkling in celebration of a Diamond Jubilee?

Bargain basement
SELL in May and go away, days off for Golden Jubilee celebrations and the World Cup - no wonder people are not interested in shares at present.

But take heart: Bob Semple, equity strategist at Deutsche Bank, still believes the FTSE Index will be at 5,600 by the end of this year. That's around 600 points above its present level.

Providing the Indians and Pakistanis do not start hurling nuclear materials at each other, that there are no more 11 Septembers in the offing and President Bush does not take a swipe at Saddam Hussein, Semple is probably right.

But while the market is nervous share prices will remain volatile. Treat it as an opportunity to look for bargains.

Some you may have missed
TRAVEL promotions group Landround has survived 11 September and moved ahead, reporting pre-tax profits of £272,000 for the six months ended March. That compares with £159,000 for the whole of the previous year, which started with a loss of £390,000 in the first six months. Shareholders collect an interim dividend of 1p a share.

IAN Scott-Gall, chief executive of Vislink, which makes microwave transmission equipment for broadcast quality television, was in buoyant mood at the yearly meeting. He told shareholders that orders were 20% higher in the first four months of this year - at £28.77m - compared with the same period a year ago. The story was similar in the US, the company's major market.

COINMASTER Gaming appears to have hit the jackpot. The company, which came to Ofex in January, has reported pre-tax profits of £905,000 (before Ofex costs of £180,000) on a 10% rise in sales to £7.68m.

During the year the company sold 24 automatic roulette machines to UK casinos and 46 similar machines overseas, mostly to Russia. A new multi-player concept, Automatic Prize Bingo, aimed at the UK amusement arcade market and world gaming markets, has also been developed and it sold 14 of these in the final quarter of the year.

The company is also receiving orders for Winning Post, a virtual horse racing game developed for world gaming markets as well as the UK betting shop market. Seven orders have come in from Europe, South America, South East Asia and the US, including one for a 20-player model retailing at $359,000 (£256,000). An automatic dice game and a double roulette game are scheduled to come to the market before the end of this year.

INTELLIGENT Environments has won a contract with the Bank of New York to help create the bank's 'Next Generation' European Fund Service Technology.

GARDEN centre operator Blooms of Bressingham has reported a pre-tax loss of £3.96m for the full year. The figures include one-off losses of £2.77m, the result of property write-downs and closure of a small site. Chief executive Jon Kitching sowed the seeds of doubt in City minds in January, but he also predicted a return to profits in the current year.

Some to look out for
CATHERINE Bond, analyst at broker Seymour Pierce, believes the appointment of Trevor Birch as chief executive of Chelsea Village following the resignation of Michael Russell may reverse the decline in its share price.

THE sale of its forged products division for £1.8m is a good deal for GET Group, says John Beddoe, analyst at Seymour Pierce. He wonders what else may be up the electricals distributor's sleeve.