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.

Ring in the money

VIANET, the smart vending management company, has come up with another way to cash in on this cashless society.

Chief executive officer Ian Orrock, who invested £250,000 of his own money into the company, has joined forces with internet service provider, Alcatel, to tie in Europe‘s 6.5m automatic vending machines through the mobile phone network – more than 1m of these machines are in the UK.

By dialing a number on the vending machine the doors open to deliver the purchase and add the cost to the phone bill. It also records the sale and alerts the machine owners when stock is low. The system can also check temperatures in the vending machine and report back on maintenance needs.

The company plans to launch the operations in the second half of this year, rolling it out in railway stations, schools and Government offices, but on small price products initially.

Vianet, however, hopes to move into higher-priced goods, such as DVDs, mobile phones, books and other items currently bought on credit card.

Orrock says the system will break-even when it has 15,000 units in situ, a target he expects to reach in the second quarter of 2005.

Having raised £3.5m through a placing, the company is financially sound, with Alcatel providing a marketing partner, and the $25bn (£15bn) European vending market growing at an average of 5% a year.

Orrock‘s £250,000 investment could soon provide a very jolly ring tone for his own mobile.

No more trolley trouble

A SHOPPERS‘ dream, a trolley without wheel-wobble could be coming to a store near you, and you even have the chance of buying into the company making it.

Supercart, the market leader in South Africa, where the company has been operating for nine years, produces all-plastic trolleys for the South African and US markets, and now intends to launch an entirely new model in Europe.

Not only does it boast no wheel-wobble, but it also claims improved maneuverability and control. It offers supermarkets a product that is rust proof and that will outlast conventional wire baskets.

To fund development and on-going research, Supercart is coming to AIM through a placing that is expected to raise £4.5m. Dealings are expected to start early next month.

Failing to make waves

DAVID Hutchins, chief executive of Ocean Resources, tells me: ?We have a portfolio (of shares) that can make a lot of money over the next few years‘. He adds: 'We have an asset base which you couldn‘t buy at current prices.‘

However, before you rush to buy into Ocean, I should point out that the investment company failed to raise funds when it came to market last February because the market was at rock bottom and concerns about what was happen happening in Iraq.

The companies making up the portfolio all sold their assets for Ocean shares on the basis of each share being worth 50p. The shares were launched on AIM in February at 55p, but before the holders were allowed to sell they had crumpled to 20p.

At this stage, brokers Collins Stewart bought out each of the original investors at 20p (effectively giving them 40p in the pound) and placed these out with 17 value-driven hedge funds.

Since then about 100 private investors have climbed aboard, and the share price has recovered to about 30p.

There is no doubting Hutchins‘s sincerity, but for the moment Ocean seems all at sea, trusting that the wave of enthusiasm for gold and other exploration shares continues.

Some you may have missed

WATERMARK Group, which provides support services to the international travel industry, is raising about £18.7m, net of expenses, through a placing and open offer of shares.

It has also made an offer to buy Air Fayre for an initial £17.3m in cash and shares. A further earnout-based, deferred consideration of up to £8.5m may become due dependent on future performance.

THE marketing support services and promotional products group 4imprint Group says it expects profits for 2003 to be slightly above market expectations.

Its outlook is optimistic and is confident of significant progress in 2004. 4imprint has appointed Numis Securities as joint corporate broker along with Panmure Gordon.

TERRACE Hill Group has made an offer of 2.5 new shares priced at 30p each for the 69.44% of the shares in Serah Properties that it does not already own. Holders of 27.27% have accepted already.

DRUG discovery company Henderson Morley has received ethics committee approval to start an Ionic Contra-viral therapy Phase 11 study in the US.

CARDPOINT, which owns and operates 1,900 cash machines and about 3,500 mobile phone top-up terminals, has been awarded a five-year exclusive contract to continue to supply Welcome Break with roadside location cash machines.

Cardpoint currently has 85 cash machines installed in Welcome Break sites and the contract provides for a minimum of 30 additional installations.

DIGITAL photography software group Pixology has signed a two-year agreement with Canon Inc‘s digital camera group to supply Pixology IRISS, the company‘s red-eye removal technology.

IT has been a good week for Daniel Stewart & Co which has been appointed corporate adviser to Ofex-listed New York Holdings and nominated adviser and broker to AIM-listed Offshore Telecom and also to Ofex listed Music Copyright Solutions.

Some to watch out for

NORTHGATE wins the approval of Alastair Gunn at Arbuthnot Securities who says ?buy‘ and sets a target price of 675p on the shares.

HIS colleague Michael Blogg, is similarly enthused by Umeco, the aerospace support group, claiming the outlook ?is good and is not fully discounted‘. He says the shares are a ?buy‘ at 390p.