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.

Big deal at BATM

TECHNOLOGY company BATM has come a long way since Dr Zvi Marom realised he could do more with his life than teach students about electronics. He built a device that, in his words, 'altered the architecture of existing telephony' the beginning of systems that allow video, voice and data all to be delivered through phones and computers.

Armed with his home-built equipment in 1992 he went to see IBM Israel, who liked it so much that they referred it to their European headquarters in Italy where it underwent two months of testing.

Realising that IBM might be embarrassed about dealing with a one-man operation, Dr Marom increased his workforce by 100% – to two people - and began demonstrating to others.

This week, BATM, now employing nearly 400 scientists and engineers around the world, with its shares quoted on the main board of the London Stock Exchange, announced a major supplier agreement with Alcatel, the giant French telecoms infrastructure supplier.

It is a deal that has Richard Winslade, analyst at Dresdner Kleinwort Wasserstein, recommending the shares as a 'buy' at 19.5p with a target price of 23p.

Stewart aiming high

IT is only three months since I revealed here that broker and smaller companies adviser Daniel Stewart was planning to leave Ofex to join Aim, but in that time the shares have risen more than 60% to 8.5p.

This week the shares have started trading on Aim and still the company continues to win new business with the news that it has been appointed nominated adviser to Jelf Group and to Music Copyright Solutions.

Peter Shea, chief executive of Daniel Stewart – a corporate name dreamt up, incidentally, over a drink in a bar overlooking the Bosphorus on a business trip to Turkey – says: 'Having taken on our first nominated adviser client in February, we are now adviser to 16 Aim-listed companies and we have completed 12 admissions to the Aim market this year.'

New issue alert

BRITISH ex-pats miss their baked beans and Cadbury‘s chocolate but Gina and Charles Hall, an American husband-and-wife team working in London for bankers J P Morgan, found it was super-premium ice cream that they missed most.

So Gina took a short course in commercial ice cream making at Reading University (and I thought they only taught media studies). She and her husband both packed in their banking jobs and began making ice cream in the family kitchen, financing the project from their savings and taking an investment from family and friends.

That was in 1996. On Monday their company, Hill Station, floats on Aim with a value of £4.7m, having raised £1.4m to lease and equip a new factory to replace their existing 2,500 sq. ft. factory in Calne, near Swindon, Wiltshire.

Hill Station now sells into more than 1,000 outlets ranging from the High street giants such as Tesco, Sainsbury, Waitrose and Somerfield to such up-market retailers as Harrods.

I am told that Hill Station uses only natural ingredients, so take care in driving after sampling the rum flavoured delicacy.

Personally, I‘m going to see if I can find a short course in commercial baked-bean making and move to Spain.

JELF Group, an established corporate intermediary based in the West Country and Wales mainly working in commercial insurance, healthcare and financial services, has raised £2.5m through a placing of shares, valuing the group at £10.8m. Dealings in the shares have started on Aim and the funds will be used to buy healthcare and insurance intermediaries and to provide additional working capital.

Some you may have missed

Angus & Ross
John East & Partners, who have been appointed nominated adviser and broker to Angus & Ross, have placed 22m shares in Angus & Ross with institutional and other investors to raise £2.2m. The new funds will be used to provide working capital generally and, in particular, to advance the company‘s existing projects in Brazil, Greenland, China and Australia.

Cambrian
Drilling has recommenced on Cambrian Mining‘s Subranum Gold Concession in Ghana. The principal aim is to drill some seven kilometres of untested Bibiani Shear Zone.

Wyndeham Press
Bryan Bedson, chairman of Wyndeham Press says in a trading update: 'Despite the market challenges we continue to face, we have been successful in gaining a considerable amount of additional work through new launches and increased market share.' The group‘s results for the six months ended September 30 will be announced on November 15.

Surface Transform
Kevin D‘Silva, chairman of Surface Transform, warned shareholders at the yearly meeting that although the current financial year‘s turnover is expected to show a small improvement over 2003/04 investment in new processes, facilities and management will increase company expenses and overheads 'as we add value to the business.'

BioProgress
BioProgress, whose American Depositary Shares, are now listed on Nasdaq, has granted exclusive distribution rights in China and Taiwan to AXM Pharma, for certain formulations of BioProgress‘ Soluleaves oral drug and flavours using dissolve-in-the-mouth films.

Hemscott
On-line financial news service Hemscott is buying Bigdough, the US-based provider of information on US and European institutional fund managers, analysts and journalists. The deal, the second this year for Hemscott, costs $38m (£21.2m).

St Helens Capital
Ofex-quoted corporate finance house St Helens Capital specialises in pre-IPO fundraisings and is a leading sponsor of Ofex companies. In the six months to end September turnover leaped 911% to £410,076 and profits were £36,319 compared with a loss of £90,000 in the first half of the last financial year.

First Derivatives
First Derivatives, who supply technical support to the investment bank market, saw profits rise £57,000 to £308,000 in the six months to end August. Revenues were £1.7m (£1.2m) and although the board has not recommended an interim dividend it says that, based on current trading, it intends to recommend a final dividend of at least a similar level to that paid for the last financial year.

Appian Technology
Ofex-listed Appian Technology, a provider of automatic number plate recognition and traffic management systems, has installed a £70,000 parking guidance information system at Edinburgh Airport‘s multi-storey and surface car parks. Edinburgh is the fourth airport to install the company‘s Navigator guidance system. The others are at Dublin, Glasgow and Birmingham airports.

Oak Holdings
Property development group Oak Holdings, which is listed on Aim, has signed Clear Channel Entertainment (Theatrical) UK, Baydrive Group and Venture Xtreme (UK) as potential anchor partners for its planned multi-million pound entertainment and leisure scheme in South Yorkshire. The scheme, known as the YES! Project is located close to junction 31 of the M1 on the site of a former coal mine, and will include 1.25m sq. ft of entertainment and leisure facilities linked to the 1,000 acre Rother Valley Country Park.

Appointments

Paul Spencer has been appointed a non-executive director of Sovereign Reversions, the finance company specialising in home reversions.

Robin Dunn has been appointed regional sales director of Associated Network Solutions and will be based in the group‘s London office.

Some to watch out for

Avanti Capital
There is no doubting the enthusiasm that SQC Research has for Avanti Capital, the company born out of the merger of e-Capital Investments and Internet Incubator. With the shares standing at 163p SQC concludes: 'Without hesitation we set a six-month target price or 200p.'

From the same stable comes a similar endorsement for Reflexion Cosmetics, which is set to make 'massive synergistic gains through acquisitions'. The target price here is 30p against the current 17.5p.

ASOS
We first drew attention to ASOS, the internet shopping group some months ago when the shares were trading around 6p. Today they are 60p and still a 'buy' says Andrew Blain at Shore Capital who initiates coverage on the company claiming that with sales up 86% in the first five months of the current year, the company could post maiden first-half profits.