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.

Be a Supporta supporter

KEEP an eye on Supporta, the company that has grown out of Staffing Ventures and now includes the profitable Parys Snowdon Payroll Services operation.

Parys Snowdon already is responsible for handling wage payments to 1 in 10 of workers in the National Health Service. With savings of 25% or higher being achieved for NHS Trusts using this outsourcing, that ratio looks set to rise. Expect news too, in a month or so, of a modest acquisition.

This is a company chaired by Bob Holt, the outstandingly successful head of support services company Mears, and he believes the opportunities for this operation reflect those of Mears. Brokers Arbuthnot are looking at sales of up to £18m in the 2004-05 financial year, and forecasting profits of around £1m.

Supporta could be worth supporting.

Multi Group attracts the pros

READERS will know that I am a great believer in holding on to the coattails of successful investors, so I draw your attention to a little known (as yet) tool-hire group called Multi Group.

I learn that Bob Morton, who is never afraid to put his money where his judgment is, has become a major investor in the company, although he has so far declined a seat on the board.

Multi Group has also hired a new financial public relations guru, always a sign that there is a story to tell. This week the firm started its reconstruction by announcing the sale of two loss-making software subsidiaries to AIM-listed IT services group Touchstone, and its event hire subsidiary to Place Settings, a privately owned company.

Together the sales raised £980,000, cash that will come in handy to fund chairman Oliver Cooke‘s future plans.

Manston could be launchpad for PlaneStation

EUJET, the Irish airline that started operating last May, providing aircraft to airlines and tour companies, is looking to follow Ryanair and develop a network of smaller airports throughout Ireland, the UK and Europe.

It has already signed a conditional agreement with PlaneStation Group to use their Manston airport in Kent as a hub for the new service. It is expected the route selection process will be completed by 14 April and the first flight will take place by 14 June. A company statement says 'it is anticipated that by the end of this year 29 routes will be served from Manston'.

Eujet believes some 300,000 passengers will be using Manston during its first year of operation, growing to some two million by the end of the third year. The airline is headed by PJ (why do the Irish only have initials?) McGoldrick who was chief executive of Ryanair when it made its first profit.

Providing Brussels is happy with the deals, this should all be good news for PlaneStation.

From kitchens to stitchings

WE HAVE become used to the sight of patients on trolleys in hospital corridors, but investors will soon be able to buy shares in a company that provides portable cabins fitted out for instant hospital operations.

PKL Group, which last year sold nearly £13m worth of portable kitchens to contract caterers, expects sales almost to double this year along with the growth of its healthcare division. It seems that operating theatres have much in common with kitchens, in that both have a high mechanical and electrical content and both sectors are obsessive about hygiene (or should be).

PKL is planning to come to AIM in May, raising around £10m that will value the whole company at around £40m.

MFI could shed Howden

TALKING of new issues, Gillian Hilditch, an analyst at Arbuthnot Securities, believes that flat-pack specialist MFI may be preparing to float off Howden, its building supplies offshoot, which accounts for 64% of profits.

She says: 'Given the company‘s strong performance, management must be considering a possible flotation or demerger of Howden, and this should provide further interest for investors.' Ms Hilditch thinks MFI shares are attractive in any case and says they are a 'buy' at 160p.

Some you may have missed

DATAMONITOR, the business information company, has been able to report some good news: sales last year rose 27% to £40.2m and pre-tax profits were £2.5m against a loss of £6.6m in 2002. There is even a first-ever dividend, of 1p a share, to bring a smile to shareholders‘ faces.

HEMSCOTT, another in the business information business, is also coming good, with revenues up 24% to £6.4m last year and pre-tax losses reduced 53% to £1.1m, which is better than the market had anticipated. Chairman Michael Grade says: 'Market confidence is now returning. This can only accelerate the company‘s organic and strategic growth and bring forward the achievement of sustained profitability and capital growth.'

IN HIS first trading update since joining AIM in December, Stuart Wright, chief executive of City Lofts, said: 'Good progress is being made in maximising returns by enhancing existing planning approvals and negotiating acquisition of new sites for city centre apartment developments. Potential site opportunities remain good.'

MILLBROOK Scientific Instruments has sold a MiniSIMS desktop mass spectrometer to a US company based in the Bay Area of California, heartland of electronics in the US. The order is worth $179,000 (just under £100,000).

GORDON Cameron, chief financial officer of Acambis has been promoted to chief executive, coming out top in a worldwide search by an international recruitment consultancy.

SURFACE Transforms, makers of carbon fibre reinforced ceramic materials, saw a 66% rise in sales to £175,481 in the six months to end November and operating losses reduced to £161,742 from nearly £800,000 in the corresponding period a year ago.

FUTURA Medical, the AIM-quoted pharmaceutical and medical device group that develops innovative products for the sexual healthcare market, has reported a pre-tax loss of £1.46m for the 11 months to end December. That compares with a loss of £1.23m in the previous 12 months.

Chief executive James Barder says: 'The progress the company has made developing and licensing innovative products encourages us to believe the group can deliver profitable growth for the future.'

PHYTOPHARM, currently developing nine programmes based on four drug discovery platforms, has raised £6.3m before expenses through a share placing, the proceeds of which will be used to strengthen the balance sheet and continue development of products.

BAR and nightclub owner, Urbium, a regular in our ?Some to watch out for‘ section, has come up trumps with turnover up 13% to £67.6m last year and pre-tax profits 2% better at £9.3m. There is a maiden dividend of 10p a share.

DR URSULA Ney, previously CEO of Charterhouse Therapeutics, has been appointed chief operating officer at Antisoma, the biopharmaceutical company.

ALIBI Communications, the AIM-listed media company, has acquired Coolebah, a business exploiting a portfolio of brand and entertainment properties. Part of the package is that William Harris, co-founder of Coolebah, becomes non-executive chairman of Alibi.

MARK Sidlin has been appointed group finance director of Wigmore Group, replacing Peter Grisman who has resigned.

PHARMAGENE has reduced net losses by £3m to £5.5m following a 49% rise in sales to £4.7m in 2003. Sales orders during the year increased 70% to £7.3m.

SPROTT Asset Management, a Toronto-based institutional investor, has bought 2,950,000 shares in Cambrian Mining, an 11.38% stake. Meanwhile, Cambrian itself has converted a $500,000 loan note from exploration group Ivernia West into 7,692,307 new Ivernia shares, raising its stake to 37.9m shares, representing 19.29% of the company.

IT HAS also been announced that Vancouver-based Western Canadian Coal, in which Cambrian Mining has a 52% interest, is seeking a quote on AIM, aided by Williams de Broe. The company is already quoted on the Toronto Stock Exchange.

HISCOX insurance group is to offer all of its household insurance clients access to the Red 24 service offering advice on security issues both at home and abroad.

SPECIALIST healthcare company Maelor has signed a contract for the distribution of its plasma substitute product, Volpex, in China.

PETRA Diamonds has entered into a strategic alliance with BHP Billiton World Exploration over Petra‘s Alto Cuilo diamond project in north-eastern Angola. The two sides are looking into a possible formal joint venture agreement.

Some to watch out for

EDISON Investment Research analyst, Fraser Thorne, takes a realistic look at Aminex, the exploration company that issued a bullish statement on prospects at its Nyuni-1 exploration well on 17 February. He asks, 'How much is there and can it be found?' but then makes the point that 'with the oil price forecast to remain at around $30 a barrel for the short term, and the majors struggling to replenish their reserves, Aminex could be transformed if it finds recoverable, commercial reserves.' At 23p the shares are a punt.

ANYBODY who has been on the Atkins diet will know the pounds that come off can easily be replaced. It is much the same story with the shares of engineering group Atkins, whose shares dropped to 110p last year and have since recovered to 565p. Following an upbeat trading statement on 19 February (the second upgrade in three months), Michael Morris, analyst at Arbuthnot Securities, says the shares are still a 'buy'.

ALASTAIR Gunn, analyst at Arbuthnot Securities, is a fan of Transport Development Group, which he says is a 'buy' at 212p, and on a low rating when compared with its peer group.