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Penny Share Review 146

Monday 19 August 2002

Galahad Capital (GLA) is taking advantage of falling share prices, which has left 700 listed companies trading at a discount to their net cash and net asset value, according to Saturday's Independent. In the six months to end-June a pre-tax profit of £208,000 was reported largely due to the profit made (£268,000) from the buying and selling of a stake in TEAMtalk Media. In its Oultook column from the same day The Independent commends Galahad on its ability to do better than average but neither the newspaper nor Mark Slater (Galahad Chairman and son of investment guru Jim Slater) believe that the bear market is over. The newspaper opines, "just because some investors are making money" does not mean that the market has turned. At 13.14 the shares were unchanged from Friday's close.

The acquisition by Newmark (NWT) of Grosvenor Technology appears in Saturday's Daily Express. Grosvenor makes security management systems to stop employees wandering off with valuable equipment, such as laptop computers, or to stop them being violently robbed. Newmark is to pay up to £6.8m for Grosvenor in a move that chairman Maurice Dwek considers to provide a "quantum leap forward." An initial payment of £3.3m will be followed by £3.5m after five years. The Daily Express reports that the purchase of Grosvenor is to be funded by the sale of its subsidiary Vema but in fact it is the opposite. Vema was demerged from Newmark but it was unable to make a go of it as a stand-alone concern and sold all of its operating businesses to become a cash shell. Newmark is buying back the 49% stake in Vema for shares and is using the resultant cash to purchase Grosvenor. A name change to Newmark Security is proposed that will confirm the new focus. The Independent from the same day reported that non-executive director Alexander Reid bought 400,000 shares at 2.2p. The shares at 13.14 were unchanged from Friday's close.

In a small piece in the Financial Mail on Sunday the completion of the fund-raising by Oxus Mining (OXS), which was announced this morning (see announcements below) is previewed. The £15m secured through a loan deal with Societe Generale adds to the £20m agreed last month. This will allow Oxus to begin work at its Amantaytau site. At 13.15 the shares were up 0.25p to 11p from Friday's close.

Momentum appears to be growing at Symphony Plastic Technologies (SYM) at least if the press coverage is anything to go by. The recent deals with Somerfield, Kwik Save and Co-op have certainly fired the media interest and this weekend is no exception. The Business from Sunday/Monday reviews the recent deals that will more than double Symphony's sales this year, with the Company set to produce more than 1bn degradable retail carrier bags a year in the UK. Cannaccord Capital, the Company's broker, believes that Symphony is two years ahead of the competition and that break even should happen in the second half of this year with a pre-tax profit of £1.4m in 2004. On this basis the newspaper rates it as a 'speculative buy'. Interestingly, coverage has also spread to the lifestyle columns. Saturday's Guardian Weekend magazine includes the degradable bags in its 'What's new' page. It notes that refuse sacks and bin liners can be purchased directly from Symphony but suggests that you buy from an intermediary organic retailer who are donating money to charity. The shares at 13.11 were up 5.5p to 42p from Friday's close.

Today's Announcements

The following companies, in which City Equities customers may have an interest, released announcements to the market this morning. These can be found by entering the relevant company name or ticker code in the search box on this site.

Oxus Mining (OXS) - Amantaytau Loan Agreed
Protagona (PTG) - Proposed Acquisition
Software for Sport (SWS.L) - Final Results

Look Out For This Week

19 August - Software for Sport (final results), Eurozone Inflation (July)
20 August - UK mortgage lending (July), US international trade
21 August - No data scheduled
22 August - UK retail sales (July), CBI quarterly economic forecasts.
23 August - UK GDP (first revision) Q2.

Compiled by Andrew McLintock



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