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.

Keeping up appearances

THE problem with people-businesses acquiring other people-businessers, such as in advertising, public relations and fund management, is that the twain don‘t always meet. Usually, it is not long before the old stagers try to dominate the new, or vice versa.

That does not seem to have happened at Savoy Asset Management, which recruited a team of 10 fund managers and brokers to its London offices in the six months to end September. It also bought a firm of independent financial advisers based in Bournemouth.

According to its chief executive Christopher Saunders, the teams have been ?successfully assimilated‘, and one can imagine that it will be mutual Christmas and New Year wishes from all to each.

Savoy has benefited from the shake-up in the Tory Party. While Ian Duncan Smith was still in charge, many in the City believed the company was in danger of losing its chairman, former Chancellor Kenneth Clarke. The moment he decided not to stand in that rat race, it was clear he would remain at Savoy where he builds on the group image.

Clarke takes his role very seriously. He drives down from Nottingham, and through the rugby scrum of fans on Monday to meet financial journalists spreading the word that funds under management have doubled to £1.1bn since last July - mainly because of its latest recruitment. He also explains that with the move towards larger groups in the private fund management sector, there will be further opportunities for growth.

Although Savoy Asset Management shares have risen from 72p to 130p in the past six months, house broker Charles Stanley says they are still a ?buy‘, both for the next 12 months, and for the longer-term.

Management buy-in

BOB Holt, head of support services group Mears, has confirmed that a major US fund management team is buying into the company. It is likely to have built a declarable stake, which will no doubt be announced in the next few days.

Meanwhile, Mears goes from strength to strength, and as Mr Holt is always looking for the next acquisition, we can probably expect more news on this early next year. The company is expected to issue a trading update at the end of January that promises not to disappoint.

English lessons

EUROPASIA Education teaches English, mainly to Chinese and Pakistanis who want to live in the UK and work in the medical profession. It also teaches English to small and medium-sized companies throughout Europe - an area that is likely to boom as more East European countries sign up for EU membership.

The company joined AIM in the summer by reversing into internet incubator Starit, and has since been moving comfortably ahead.

The Management International division has signed many contracts in Europe with a total value of £250,000 covering the next 30 months. It has set up a 50-50 joint venture with 32-year old Ms Umku Iman in Pakistan to form the St James Academy in Lahore. The Academy will teach English language, foundation, professional and degree courses.

Nurses at Schenyang Normal University in China who plan to live in the UK and work for the NHS are also being taught.

How long will it be before the Government signs up Europasia to teach the English language skills which are still lacking in many parts of Britain?

A load of rubbish

UK businesses are handing bin loads of personal and company information to criminals who are using the data to fuel a boom in identity fraud.

Consumer credit group Experian in association with the London Borough of Camden analysed waste from 327 domestic households and 71 organisations in Camden. It found that companies are simply throwing important documents in the bin and not discarding them properly. Documents found could be used to commit company ID fraud, such as headed paper (45%), a director‘s signature (24%), whole invoices (44%) and bank account details (20%).

Be warned, bin raiders are being paid £5 a document by organised crime.

Some you may have missed

THE Ofex provider of medical and legal reports, Litcomp, boosted turnover 25% to slightly more than £1m in the six months to end September. Profits were 48% higher at £62,434. Chairman Jason Smart says sales growth is being maintained in the second half.

IFA market consolidator, Destini Financial Services, has made its 12th acquisition this year, using shares and cash to buy Fiona Price & Partners, the all-female advisory team.

PALADIN Resources has successfully tested for oil in its Hawa-1 exploration well in the Borj el Khadra production concession in southern Tunisia.

JAMES Steel, former managing director of European Investment Banking at Citigroup, has been appointed head of corporate finance at Arbuthnot Securities. Insurance analyst Dilip Shah has been recruited from Altium Capital by Arbuthnot where he will also ?selectively pick up sub-sectors within specialty financials.‘

CAPCON Holdings, the only UK listed firm of private detectives, increased sales 43% to £7.1m in the year to end September. Profits were 89% higher at £510,000.

IN-CAR audio-visual entertainment group Centurionsaw profits increase 171% to £1.18m in the year to end September.

FINANCIAL news provider, thewrongprice.com, has been bought by Vitesse Media, the AIM-listed print and online publisher.

ARMOUR Group remains ?financially strong. The new financial year has started well, and a good potential new business pipeline further underlines the board‘s confidence with regard to prospects‘, chairman Bob Morton told the yearly meeting.

WHAT a difference a week makes - just one week after Adonis Pouroulis, chairman of Petra Diamonds issued an upbeat end of year report, he announced that the South African Government had ended the bidding process for the disposal of 51% of Alexkor, a Government controlled diamond mine due to be privatised. Petra had hoped to win the Alexkor deal and had made it a key component of its future.

PILAT Media Global, which supplies business management software to broadcasters worldwide, has signed a £10m deal with CTV, a Canadian broadcasting communications company.

ASFARE Group, maufactuers of ladders for rescue services, starts life on AIM tomorrow having raised £2.4m through an institutional placing.

BEMA Gold and Kinross Gold are to recommence gold operations at the Refugio heap leach mine near Copiapo, Chile.

Some to watch out for

THE board of Aim-listed babycare products and fabric dyes group, Mayborn, said the group‘s results for the year ending 31 December will be ?materially ahead of market expectations‘, which had already been upgraded following an upbeat interim announcement in September.

ALAN Millar, analyst at Arbuthnot Securities, is raising a glass to brewers Hardys & Hansons. He said the shares are a ?buy‘ and set a target price of 475p against the current 443p. He also recommended Wolverhampton & Dudley Breweries a ?buy‘ at 754p.

NOTHING could be clearer – ?at the current price, and with embedded value calculations suggesting a value more than 1000p, we are buyers‘, said Arbuthnot Securities analyst Stephen Rawlinson at builders Berkeley Group. The shares are currently 848p.