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Penny Share Review 155

Monday 21 October 2002

The Weekend's Comments

In a large article in Saturday's Independent, Derek Pain extols the virtues of Propan Homes (PPH.L) under the headline of "There are lies, damn lies, statistics and of course, that old 'negative goodwill'. Derek comments that an earnings ratio of 8 times at the share price of 12p, which is higher than larger industry peers such as Barrett Developments (6.2) and Redrow Group (6.8), is "something of an illusion". This is due to the existence of an "exotic accountancy requirement called negative goodwill" amounting to £1.1m, which arose after Propan acquired a company for less than its book value and could be considered to be a normal trading profit for a builder. Essentially the Group is penalised for its 'negative goodwill' figure. He concludes by saying, "… even if the housing market does lose some momentum, they should still be a sound long-term play". At 11.28, the stock at 14.5p was unchanged on Friday's close.

Lupus Capital (LUP) is mentioned in several newspapers, following news on Friday that Advance Value Realisation has requisitioned an EGM to significantly change the current Board. The Daily Mail on Saturday, reports that current chief executive Chris Ryder, is in talks to sell the Group's largest investment, "which could fetch £14m". The stock nudged up half a penny at 11.28 from Friday to 6.88p.

Monday's Daily Express reports on today's announcement from Cybit Holdings (CYH) about a deal with holiday firm Titan Travel to manage its car fleet. The Group confirmed the three year deal today, but did not disclose the value of the contract. This was left to the Daily Express, which speculated that the deal could be worth £200,000. At 11.28 on Monday morning, the shares had increased by 0.25p to 0.88p, from the closing price on Friday.

Ahead of today's results, the Independent from Monday comments that Rage's (RGE.L) results announcement was delayed by three working days, due to the auditors Stoy Hayward insisting on the inclusion of a £1m provision against payments due from a US distributor. The article also includes a screen shot from the Rocky game, which is forecast to sell 650,000 units in advance sells. The new game receives a review in 'The Guide' section from Saturday's Guardian. The shares increased by 0.5p to 1.63p at 11.28, from Friday's closing price.

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.

Cybit Holdings (CYH) - Three year contract win.
Hereward Ventures (HEV.L) - New investment.
Lupus (LUP) - EGM call.
Rage (RGE.L) - Final year results.

Look Out For This Week

21 Oct - Rage results.
22 Oct - No data scheduled.
23 Oct - Minutes from the last Bank Of England monetary policy committee.
24 Oct - UK retail sales figures.
25 Oct - No data scheduled.

Compiled by J.Robertson.

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