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.

All aboard at Ofex

IN THE columns that went live on Christmas Eve and New Year‘s Eve, I outlined a strong case for supporting the shares of Ofex during 2004.

It may be that one or two of you were otherwise occupied at the time, but others may have been turned on by my suggestion that it could be worthwhile holding on to the coat-tails of entrepreneur Luke Johnson who had just joined the Ofex board and bought 1,354,000 shares at 25p each.

I raise the point anew, because since then Ofex shares have been as high as 40p and are still well over 30p.

What is intriguing, however, is the number of those who made the bigger, rival, Alternative Investment Market so successful in the past who are jumping aboard the Ofex bandwagon.

This week Simon Brickles, former head of AIM, has become business development director, responsible for marketing and promotion both at home and overseas - he is being joined in that section by former AIM executive Cyril Theret.

At the same time, an Ofex advisory group has been established, which will be chaired by Rachel Maguire, formerly head of AIM in the regions, as well as being responsible for regional managers within the UK for the London Stock Exchange as a whole.

To complete this week‘s announcements, Jamie Whitehorn, who was on the regulatory team at AIM, has now joined Ofex to undertake a similar role.

If these people are taking the most junior market seriously, then investors should take note.

Millbrook target

HAS Peter Stefanini, chairman of Millbrook Scientific Instruments got his ear close enough to the ground, I wonder? In contrast to the eminent people moving from AIM to Ofex (see above), Mr Stefanini announced this week that his board were 'considering a move as soon as appropriate from Ofex to AIM' in order to accelerate growth by acquisition.

He revealed this ambition at a presentation to investors in which he outlined a vision for growth and presented key financial and business goals.

Those attending probably were not blown away by the ambitions outlined, which set 'realistic' sales targets of £1.5m for the 2004/05 year rising to £3.8m in 2006/07 by which time the aim is for profits before tax and depreciation to be in excess of £1m. That compares with a loss of £138,000 reported for the six months to end September 2003.

Millbrook‘s intention is to become a £10m turnover group through an acquisition programme, but no timescale is put on that target, or any indication of how such expansion will be achieved – except, perhaps by moving to AIM.

Some you may have missed

WHEN the David Aaron Partnership of IFA firms went into administration on December 23, some 70 companies expressed interest in picking up some of the pieces. Financial Services Group Destini, also an IFA consolidator, has bought 'certain assets', although 'not the business or any of the employee'.

BIOPHARMACEUTICAL company GeneMedix, which has joint London and Singapore stock exchange listings, has taken its first step to a listing on NASDAQ with the appointment of the Bank of New York as its depositary bank.

AIM-listed marketing communications and services group Media Square has bought Hudson Advertising & Marketing, the Leeds-based retail and home shopping advertising business.

WYNDEHAM Press Group has won the printing contract to print Ideal Home for IPC Media. The contract starts next month and has an annual value of more than £1m.

PRINT management company TripleArc has signed a major deal with retailer Matalan worth more than £5m over the coming year and covering an extensive range of Matalan‘s catalogue and direct mailing print requirements for the UK market.

AT THE yearly meeting of Centurion Electronics, interim chairman Brian Hendon said: 'We believe we are well positioned to continue to build on Centurion‘s success.'

REGENT Markets (IOM), part of the Regent Markets Group, has won a bookmakers permit and betting office licence in the Isle of Man, allowing the company to accept bets from the UK and Isle of Man via the internet.

Some to watch out for

THE market has overlooked the intrinsic value of the shares in AIM-listed property developer Honeygrove Group, the former Propan Homes, says a tip from brokers Insinger de Beaufort.

PAUL Jones, analyst at Numis, brokers to Hot Group, has set a target price of 30p on the shares against the current 19.5p and says they are a 'buy'.

ANALYSTS at Arbuthnot Latham have been busy again this week. A selection of their recommendations, therefore:

Holidaybreak is a 'buy' says Alan Millar, with a 12-month target price of 640p against the current 563p.

Morgan Sindall results for 2003 are due to be published on February 19 and 'will mark the full recovery from the profits warnings of 2002', says Stephen Rawlinson. The shares are a 'buy' at 405p.

Punch Taverns are a 'strong buy' at 477p says Alan Millar, despite a 10% rise since the beginning of this year.

The current weakness in the price of SurfControl shares is a 'buying opportunity' says George O‘Connor, who sets a target price of 828p on the shares against the current 565p.