Smaller companies spotlight

EACH week, former Fleet Street editor Patrick Lay keeps This is Money readers up-to-date with a neglected, but exciting sector of the stock market – smaller companies.

Aim polish for Armour

BOB Morton has had many winners in his life, mostly greyhounds - he has owned more than 100 including three classic winners - and the occasional horse, but I doubt if any has given him more pleasure than the Aim Company of the Year award made to Armour Group this week.

The man who casts himself 'more of a surgeon than company doctor' because he cuts out the bad bits and gets rid of them, was called in to rescue the audio electronics Armour Trust just after the millennium. Less than two years ago he admitted 'not much is happening at present', but the man he had installed as chief executive, George Dexter, would soon begin to make things happen.

As I reported at the beginning of this month, Armour reported sales had doubled to £13.8m in the six months to end-February and pre-tax profits had leapt to £1.335m from £368,000 at this stage last year.

Forecasters say sales, even on modest estimates, will double to £30m in the full year and rise to £35m next year with profits rising from £1.5m last year to £3.1m this and £3.7m next.

The award was made at the 2004 Growth Company Awards, sponsored by Growth Company Investor, ceremony where Cape was the runner up.

In other categories, KBC Peel Hunt was voted Aim Adviser of the year; Evolution Beeson Gregory, Aim Broker of the Year; Baker Tilly, Growth Company Accountant of the Year; Memery Crystal, Aim Lawyer of the Year and Artemis Fund Managers, Institutional Investor of the Year.

Other prizes went to Oakdene Homes, Ofex Company of the Year and JM Finn, Ofex Adviser of the Year.

Hansard records revenue surge

ONE of the classic rules of public relations is that the PR should never become the story, which is probably why Hansard Group initially 'forgot' to send me details of their performance in the year ended 29 February.

However, a quick phone call and there they were, telling a story that did not deserve to be hidden.

As chairman Tony Caplin said: 'In the last financial year, Hansard had established a foundation from which to grow. In this period the company has done precisely that. It has grown in revenue, in profit, in ability and in reputation and, since the period end, indications suggest that it will continue to do so in the future.'

Wow ... Turnover was up 113% to £1.3m and there was a pre-tax profit of £140,000 against a loss of £106,000 in the previous 12 months.

Chief executive Adam Reynolds reveals that the company had 27 retained clients at the year-end and has won accounts for four companies soon to be listed on Aim and a further five clients already trading on Aim.

The shares which were available at 5p a year ago are currently trading around 25p, having touched 30p early this week – but don't try to find them in the Financial Times, the company has chosen not to have them quoted there – but they can't hide, click on the Aim share prices link on this page and there you will be able to find Hansard and all the other Aim companies we cover.

Angus finds jam in the jar

MINING folk live most of their lives on a jam tomorrow basis, but occasionally they glimpse the jar that holds the jam. That is the case with Angus & Ross, still one of the smallest of the many mining companies now listed on Aim, but I sense that chairman Robin Andrews has the spoon by his side ready to sup.

This week he announced the company has found gold in one of its Australian prospects in an area where there are other big mines already in production. 'The next stage is to see if it is there in commercial quantities,' he says, something he will know by the autumn.

Meanwhile, the company has interests in seven other prospects and results from drilling on three of these are expected in the next few months.

Might be time to start thinking of jam butties.

More mining

I THINK I have found out why it takes so long for mining companies to actually produce anything: it's because the people who run the companies are seldom at the coal face, so to speak.

It has been my pleasure over the past few years to meet dozens of mining hopefuls charging around London to raise funds, telling the stories of how demand from China is fuelling the market. Now they are appearing in droves.

In one mailing this week I have been invited to meet representatives from no fewer than 13 separate companies in two days of seminars. Each delegate I know will have a good story to tell.

But in my book, 13 is still an unlucky number: note that the Chinese central bank has warned of slowing economic growth and that the Chinese Government will make steel and aluminium companies use more of their own capital for new investment. Not good news.

Baltimore Technologies

THE extraordinary meeting to decide the future of Baltimore Technologies takes place next Thursday (May 6), and it is building up to be a nasty occasion.

Already Baltimore has had to withdraw an accusation of wrong-doing by Acquisitor in the share buying department and, despite the apology, Acquisitor 'is seeking legal advice on defamation proceedings'.

Now Acquisitor has drawn attention to a purchase of a company called Loy Yang – a power station and coal mine in Australia - made by CMS Energy when Baltimore's current chief David Weaver was vice president of that organisation.

It seems, and I have only Acquisitor's word for this, that Mr Weaver said at the time: 'it is an excellent asset and the purchase price reflects fair value for the asset'.

That asset has recently been sold by CMS for a net loss of $582m.

Acquisitor directors have been holding meetings with Baltimore investors in Dublin and London and believe they have gained a good level of support for their move to oust the existing board.

One certainty is that David Buchler, chairman elect of the new board should feel at home if things turn nasty next week. He is deputy chairman of Tottenham Hotspur, and we all know how unpleasant the atmosphere at football grounds can sometimes get.

New issue alert

ALTHOUGH Oliver Hemsley, chief executive of Numis said this week 'there was no feeding frenzy so far as initial public offerings are concerned', there is growing evidence that the market has more life in it than a year ago.

This week ITM Power, a developer of fuel cells for the hydrogen economy, raised £15m through a placing and a listing on Aim, and BBI Holdings, a rapid test diagnostics company, has raised £5m through a placing and is also coming to Aim.

Aquilo does not qualify as an IPO, but this company which supplies management and advisory services to the insurance and financial services sector, has raised around £2.25m through a placing as it moves from Ofex to Aim.

Some you may have missed

Alexandra
Continuing evidence that there is nothing like a uniform to get us going comes from Alexandra, the UK's leading supplier of corporate uniforms and workwear. Although sales fell 4% to £70.4m due to lower prices, pre-tax profits soared 14.4% in the year to 31 January. Chief executive Julian Budd says: 'Alexandra has built a strong platform for profitable future growth.'

Forbidden Technologies
Increased product and sales development costs resulted in losses at Forbidden Technologies rising £46,000 to £477,000 last year. Chairman Vic Steel says the company, which markets a range of products for video distribution over the Internet, says our belief is that over the next decade, video will replace text and sound as the mainstay of communications.

Galen
Dr Allen McClay, founder and former chairman of Galen, has bought back that company‘s UK-based pharmaceutical product sales and marketing business in a deal worth £40m in cash. The products include Kapake, an analgesic, Regurin for incontinence and Loestrin, an oral contraceptive. The company now intends to focus on the US market.

C A Coutts
Robert Essex, chairman of C A Coutts, told shareholders at the yearly meeting that the positive momentum of 2003 has continued into the first quarter of this year 'with current trading producing like-for-like profits ahead of the same period last year'.

Sinclair Pharma
Sinclair Pharma announces that Decapinol, an oral rinse for the treatment of gingivitis and periodontitis, has been designated as a medical device by the US Food and Drug Administration. The next step is to file for registration of the device so that it can be marketed in the USA.

Ennstone
Ennstone has agreed to buy GRS (South Witham), operators of a limestone quarry in South Witham, Lincolnshire, for a total of £1.55m in cash and shares. The quarry will provide additional sales of 250,000 tonnes of material a year. The deal is conditional on consent being obtained for a new access road to the site to be built.

York Pharma
Daniel Stewart has been appointed nominated adviser to York Pharma the developer and marketer of pharmaceutical products.

CamecCentral African Mining & Exploration Company has been granted exploration permits at Lodja in the diamond rich Kasai Oriental Province in the Congo.

Centurion Electronics
Centurion Electronics, the in-car audio-visual entertainment group, has been selected by Kia Motors UK to design and supply 'rear seat entertainment systems' for Kia's range of vehicles.

Wyndeham Press Group
THE board of Wyndeham Press Group says results for the year to end March, to be issued in June, 'will be in line with the top end of market expectations'. Chairman Bryan Bedson, said: 'We have made great progress in the second half of our financial year.'

Terrace Hill
Robert Adair, chairman of Terrace Hill, the property development and investment group, says, in a trading update: 'We are very happy with the way the whole company is progressing ... our growing development programme (£200m in hand and a further £200m projected) should make a significant contribution to our profits over the next few years and provide the potential for very rapid growth in our net asset value per share.'

Vitesse Media
On-line publisher, Vitesse Media, is getting stronger and stronger. In the year to end January turnover rose more than 12% to £1.7m and pre-tax losses at £135,000 were a third of their level in the previous 12 months. Chairman Sara Williams says: 'We are now well placed to grow both organically and by acquisition in the months ahead and build upon the strengths of our management team.'

Supporta
Supporta has bought SDMS & Co, a small consultancy and systems support business, with specific expertise in consulting, supporting and maintaining payroll and human resource systems within the NHS. The maximum consideration is £350,000.

Croda International
Antony Beevor, chairman of Croda International, told shareholders at the yearly meeting: 'In our annual report I said that trading had started well in 2004. I am therefore pleased to report that our unaudited management accounts for the first quarter show sales from continuing operations up by 6%.' Interim results are due on 28 July.

Celsis International
Milk Link has installed the CellScan Innovate T system produced by Celsis International at three of its UK sites to test its long-life milk, cream, custard and soya products.

Henderson Morley
Henderson Morley has filed a further patent application in respect of its in-house platform technology, Ionic Contra Viral Therapy. This has the potential to increase the patent protection of the product and offers the prospect of increased clinical efficacy of products based on this new formulation.

Some to watch out for

Chelford
Following the very positive agm statement from Chelford, the software and computer services group, George O'Connor, analyst at Arbuthnot Securitiers, says 'buy' at 2.6p, notwithstanding the fact that the shares have outperformed the FTSE All-Share Index by 331% over the past year.

Mersey Docks
Mersey Docks is still on the 'buy' list of Alastair Gunn, at Arbuthnot Securites, who says the shares – currently 661p – are worth 763p.

Albidon
'Buy' Albidon, the nickel-platinum exploration group at 23.25p, says John Meyer at Numis. He expects the company to significantly increase its nickel resource at Munali, 60km south of Lusaka, where drilling is expected to start shortly.

Enterprise
The ink was hardly dry on the press release from Enterprise, the Aim-listed support services group announcing new contracts worth £650m from the water industry, than Stephen Rawlinson at Arbuthnot Securities issued a 'buy' recommendation. He promises a further update following the yearly meeting tomorrow (30 April).