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

Fuel for thought

SORRY for the delay in presenting this week's column, the result of a long-delayed holiday break.

The most significant economic event that has happened in my absence was the Treasury's announcement that Chancellor Gordon Brown is to raise duty on petrol by 1.25p a litre.

I heard this while watching a BBC World programme in an area of Spain where the price of unleaded is e77.9 a litre. A few days later, while driving through France, prices for the same product ranged from e94 a litre in a supermarket station, to e107 on the motorway.

At a rough estimate, the new duty will raise prices in the UK to at least 80p (e120) a litre. I'm not convinced that joining the single currency will be a good thing for the Government if it reveals to everybody the true cost of rip-off Britain in everything, not only petrol.

Some you may have missed

AIM-LISTED digital television and wireless entertainment group Yoomedia produced its first significant half-time earnings from interactive TV operations. The company is still being re-rated by City analysts after signing a deal with BSkyB that will allow nearly seven million viewers to access Dateline, the lonely hearts agency.

IN THE nine months to end June Red Squared, the IBM hosting and managed services partner, made gross profits of £1,518,502, some 27% higher than in the corresponding nine months of the previous financial year.

HIGHLAND Gold Mining has benefited from the rising gold price, as well as falling costs, and saw pre-tax profits rise $4.5m to $11.7m in the first half of this year. The company aims to produce 194,000 ounces of gold this year, some 16,000 ounces more than in 2002.

CENTRAL African Mining and Exploration Company has raised £1.15m through the placing of 38m shares at 3p a share. The proceeds will be used, primarily, for developing operations in the Democratic Republic of the Congo.

TERRACE Hill Group is selling its completed development, known as The Cube, in Newcastle-upon-Tyne for £4.65m. Joint managing director Ross Macdonald says the deal will add in the region of £1m to profits this year.

THREE new analysts have been added to the Teather & Greenwood research team. Gareth Davies moves from Deutsche Bank to join the support services team, Kate Moy joins from ING Charterhouse to concentrate on house building firms and Ian Macdougall moves from Williams de Broe to follow the food and general retail sectors.

SALES of Corin rose 42% to £11.8m in the first half of the year and pre-tax profits were 65% higher at £2.3m. The interim dividend is raised to 0.4p a share from 0.3p.

Wiggins Group expects to post a circular to shareholders together with the 2003 accounts in October, at which time the suspension of trading in its ordinary shares will be lifted.

Some to look out for

HOWARD Miller at brokers Teather & Greenwood does not believe that at 122 1/2p the current share price of pharmaceuticals group BioFocus 'adequately factors in the upside potential from collaborations and in-house programmes' and says the shares are a 'strong buy'.

VSA RESOURCES is of the opinion that as the global economy continues to recover, Consolidated Minerals' share price 'retains further upside potential against a backdrop of rising commodity prices, increased production at Coobina and progress at the iron ore exploration joint venture.'

FIRST-HALF results from Premier Oil were strong and have inspired comments from Al Stanton at Deutsche Bank and Duncan Goodwin at Merrill Lynch. While Goodwin holds a neutral view on the shares until the exploration programme shows some initial success, Stanton suggests they are a 'buy'.

MEDIA and entertainment group Stream rates a 'buy' forecast at 18 3/4p from Jonathan Barrett at Teather & Greenwood. He says: 'Given the potential for upgrades, continued growth in revenues and profitability, the low absolute valuation and the possibility of a dividend payment', the shares are still a 'buy', despite the recent sharp outperformance.

THE fall in Urbium's share price to 463p following the recent interims (which were in line with expectations) 'does no justice to the group‘s strengths and the expectation of steady and sustainable growth in earnings from 2004 onwards,' says Nigel Popham at Teather & Greenwood of this established player in the late-night bar and nightclub scene. He says they are a 'strong buy.'