Smaller companies spotlight

EACH week, former Fleet Street City Editor

Jumping the queue

HENRIETTA Sim was ready to use all the skills she has acquired as a fifth dan black belt in karate on anybody who crossed her on the day she had stood in a queue for one and half hours at the Little Mermaid ride at Florida's Universal Theme Park - only to be told that the ride was cancelled.

Her arm was aching from holding a baby in one arm. She was holding the hand of her, increasingly fractious other child.

As so often happens it was her husband, Leonard (a sixth dan black belt ) who took most of the flak. And he took on board Henrietta's suggestion that somebody should do something about it. An electronics engineer with a string of high profile jobs in the chip industry, he put his mind to work and had one of those 'eureka' moments a few months later. And that is when the virtual queuing system, Lo-Q, was born.

The company's product is a pocket-sized pager called a Q-bot, which can be rented daily by theme park visitors. The Q-bot is placed near an electronic booking point close to the entrance of each ride and an infra-red transmitter books a time for the holder to return, rather than having to stay in line. A separate entrance for Q-bot holders prevents riots and it means the holder and family can go off and book in on other rides and enjoy other facilities.

The system is proving so popular, despite costing up to $50 a day, that US theme park giant, Six Flags, having tested it on its Georgia park, has signed contracts for it to be introduced into a further ten of its parks by next year.

There is a danger of it becoming so popular that it may not be too long before there are long queues forming at the Q-bot booking office. Lo-Q is also talking to theme park operators worldwide. Leonard Sim says his initial target is the largest 340, which each attract an average 500,000 visitors a year. Six Flags alone has a further 19 parks in the US and ten internationally.

Lo-Q this week moved from Ofex to the Alternative Investment Market, having raised £3.6m through a placing, and bringing the market cap to more than £14m. But it might never have got off the ground if the Sims' family and friends had not rallied round to provide the seed corn capital when banks and venture capitalists didn't want to know. Those original backers included a dustman from the karate class who invested £5,000 - a holding now worth close to £60,000.

And he may see even better returns yet. Leonard says the system can be expanded to include internet-based ride booking and planning; parallel ride booking, and an electronic purse to be used as pre-paid cash.

Three aim high

THE Alternative Investment Market is enjoying a burst of activity. As well as the Lo-Q move from Ofex, three new listings have been announced this week.

Music Entertainment Group, formed in 1995 to produce unreleased and rare music from the 60s, 70s and 80s, is raising £2m to fund acquisitions.

The company searches for unreleased or 'forgotten' music by stars of the past who still have a following among the 40-60 year-olds who swooned at their feet decades ago. Record companies that would, in those heady times, record maybe 50 songs for a 15-track album, still have the originals in their archives. Sometimes the artists themselves have copies.

MEG buys the master recordings and puts them on CDs, which are made in Germany then sold here to the 'true fans' at Continental prices - some £4 cheaper than a typical UK price.

The business also includes Soundhouse, a music and home entertainment mail order distribution company. Sales in the past year were £3m, with profits of £170,000 - projected to top £400,000 this year.

Also heading for AIM is Cheerful Scout, a multimedia and animations specialist that is raising £850,000 through a placing and offer for subscription of 34m shares at 2 1/2p each. Dealings start on 12 May, and the issue is underwritten by adviser Seymour Pierce. The company will use the cash to expand and develop operations.

And Peter Hambro Mining, holding company for Russia's Pokrovskoye and Pioneer gold deposits, has published its prospectus for a placing of 8.4m shares at 130p, to fund further exploration and development. Dealings will start on 29 April.

Some you may have missed

THE board of Izodia has appointed Lehman Brothers to advise on maximising shareholder value. This may result in the e-commerce software company being taken over, or merging or forming a joint venture with a third party.

NIGEL Wray does not mess around when he decides to invest. He has bought 2,990,000 shares in AIM-listed Propan Homes. He now holds 4.85% of the residential property building and development company.

PRIVATE & Commercial Finance Group, which bankrolls those citizens who find it difficult to raise finance elsewhere, expects to announce next month new securitisation arrangements. These will 'increase its levels of new motor finance business and reduce borrowing spreads and increase leverage,' says chairman Julius Levinkind. He said the company, listed as one of the fastest-growing middle-market companies in the UK last year, is in line for another award this year.

SYSTEMS Union Group, a provider of financial and business management software solutions, reveals that insurance brokers Willis Group has signed a £6m contract for its SunSystems5 software. The deal includes the sale of licences and global support for five years.

KS BIOMEDIX is to start phase one and two clinical trials on pancreatic cancer for its in-house developed antibody. That follows significant progress in studies on colo-rectal cancer patients.

Some to look out for

'THIS is going to be a very important year for Stilo International,' says SQC Research. Shares in the AIM-quoted software and computer services firm are 'clearly oversold and significantly undervalued...No wonder its directors have been big buyers in the last couple of weeks. It may well be right to follow their example.'

STEPHEN Thomas at broker Teather & Greenwood likes the way Longmead Group is picking up. He continues to recommend the bathroom accessories firm as a 'buy' ahead of further recovery in the share price (currently 24 1/2p).

TWO 'buy' recommendations for retirement home builder McCarthy & Stone following buoyant interim results. 'The company is a very attractive investment proposition', says James Follows at web research group MoneyGuru, who puts a target price of 370p on the shares - currently 310p. Leslie Kent at broker Seymour Pierce is equally enthusiastic, although his target price is a more modest 360p.

LIKE-for-like sales at Domino's Pizza rose 29% for the first 15 weeks of this year, which encourages Paul Hickman at house broker KBC Peel Hunt to recommend the shares as a 'buy'. He is raising his 2002 pre-tax profit forecast by 14% to £3.75m.