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.

No stopping Mr Holt

BE still my beating heart! I am assured by Bob Holt that although Mears is soon to appoint a chief operating officer who will eventually replace Mr Holt as chief executive, Mr Holt himself will not be taking his eye off the ball.

Indeed, he intends to continue planning the strategy for this highly successful company for some time yet.

Mears has grown year by year under the smooth direction of the dynamic duo of Mr Holt and the canny financial controls of finance director David Robertson, so much so that pre-tax profits this year are expected to rise to £7m from £4.8m last year.

Whoever the newcomer is, and we shall know in a few weeks, he has a huge act to follow, and the City will need to assess whether, in this case, the phrase 'two‘s company, three‘s a crowd' will apply or will we have a 'triumphant trio?'

Meanwhile, in the first half of this year Mear‘s turnover soared £30m to £81m and the order book is now £750m stretching into 2019.

Such is the nature of this provider of services to local authorities that it is already possible to predict turnover will rise to £215m next year and £250m in 2006, with at least 50% of the 2006 prediction already in the bag.

Analysts are whispering that 2005 pre tax profits will top £9.5m, but my guess is that the company could be hitting double figures on those turnover figures.

Mears shares have risen from below £1 to 195.5p in the past year and several pundits believe they have further to go yet.

Out of focus

VISLINK is not having the best of luck; the company supplies microwave radio and satellite transmission products that help TV companies beam pictures from around the world into our living rooms, but somehow the picture always becomes a little blurred when the company focuses on its own figures.

While the US operations are growing at 20% a year, the group is being hit in the foreign exchange markets and by poor trading in the UK where, despite a halving of the numbers employed here to just 98, chief executive Ian Scott-Gall is still talking of 'restructuring'.

Following half-time results showing sales down £4m to £30m and pre tax losses of £260,000 (down from a profit of £323,000 in the first half of last year), brokers Investec have lowered their forecast for the current year by £1m to £2.6m and by £800,000 for 2005 to £3.7m.

Despite this Investec still says the shares are a 'buy' at 23p, which means they probably are an even better buy at 18.5p, the price they fell to on the half time results.

Invisible ink

INNOVATA Biomed, a division of ML Laboratories, has signed 'an exclusive agreement' for the marketing rights to its Budesonide Clickhaler, which is used by asthma sufferers.

The trouble is the deal is with a Japanese pharmaceutical company, who nobody is prepared to identify, and the announcement says Innovata Biomed 'is to receive an undisclosed access fee, payable immediately, and subsequent milestone payments.'

So we don‘t know who is involved or how much the deal may produce, bit of a waste of time really.

New issue alert

Cubus
FOR those who cannot, or do not, wish to travel to the Las Vegas Casino in the Histria Hotel in Pula (it‘s in Croatia) the management of its operators, Cubus Lux, headed by chief executive, Yaron Yenni, has made it easy for punters to still enjoy a gamble.

Cubus Lux has raised £1.38m through an offer for subscription and has come to London‘s AIM market.

With one in three of the companies coming to AIM last year 'bombing,' according to a recent newspaper survey, the odds of this being a winner probably are slightly better than are available at the group‘s roulette tables.

Sheba
SUBSCRIPTION lists have opened for Sheba Exploration which is raising £300,000 through Gateway Securities and applying for an Ofex quote; the cash will be used to pay for 'intensive verification and assaying of a number of interesting (gold and mineral) targets in Ethiopia'. Lists close on 20 September.

Some you may have missed

Vane
MINERAL exploration company Vane Holdings has entered into a option agreement with Minera PAFEX, SA, to acquire the Mina Charay gold and silver prospect in the State of Sinaloa in western Mexico. Vane has planned a drilling and sampling programme on the prospect to take place throughout October and November and expects to announce the results of this programme early next year.

Daniel Stewart
DANIEL Stewart & Co has been appointed nominated adviser to Business Direct Group, which has listed on the Alternative Investment Market.

Avanti
RETAIL television services provider Avanti Screenmedia has won two contracts for the supply of its music video network channel to two pub chains. Eldridge Pope will install MVN channels in 27 of its 'Toad' pubs and Modern British Taverns is to have them in its four bars in Birmingham and Chester.

Xenova
DRUGS company Xenova Group has sold its manufacturing facility in Edmonton , Canada, to QSV Biologics for £2.9m of which £2m is payable in cash on completion and the remainder in two equal promissory notes maturing 12 and 18 months following completion.

Loyalward
OFEX-listed leisure group has appointed Premier Resorts to handle the international marketing of luxury second homes on its proposed new multi-million pound development on the island of Crete.

Smithies
JOHN Smithies, former chief executive of Impala Platinum, has been appointed a non-executive director of Southern Africa Resources.

Minmet
NATURAL resource company Minmet has had applications confirmed by the Swedish state mining authority for a number of areas of oil shales and mineral targets in central Sweden totalling 7,075 hectares.

Billam
CALDWELL Associates has bought 1,890,000 shares in Billam, the AIM-listed group, on behalf of discretionary private clients. The shares, bought in the July placing, are registered in the name of Forest Nominees and represent 9.9% of the issued share capital.

Axis-Shield
IN-VITRO diagnostics company Axis-Shield reports that an increase in gross profit margins and a cut in external research and development spending helped the group to reduce losses in the first half of this year to £900,000 from £4.3m at this stage last year.

Shire
BIOTEC company Shire Pharmaceuticals has appointed Barbara Deptula to the new position of executive vice president of business development.

Community Broking
BOOSTED by organic and acquisitional growth, Community Broking Group saw turnover rise 33% to £946,000 in the first half of this year and profits were 35% higher at £104,000.

Centurion
IN-CAR entertainment systems developer Centurion Electronics has signed a new retail supply agreement with Home Entertainment Corporation‘s retail division, Choices Video.

Some to watch out for

Ark
UNDETERRED by the halving of the Ark Therapeutic share price since its launch on the market last March and the widening of pre-tax losses to £6.41m in the first six months of this year, Samir Devani at Code Securities, says the shares are a 'buy' at 70.5p, and he sets a 'fair price' on the shares of 115p-119p.

Polaron
FOLLOWING the announcement by Polaron, the AIM-listed, broad-based technology group, that it has bought the Ilight group for £1.7m in cash and shares, Robert Sanders at Arbuthnot Securities, says Polaron shares are a 'buy' at 181p. He is looking forward to the group‘s final results due on 27 September.

Baggeridge
THE price of Baggeridge Brick‘s shares has slipped recently and is too low at 145p, says Stephen Rawlinson at Arbuthnot Securities. He says the shares are 'a 'buy'.