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Penny Share Review 205

Monday 13 October 2003

The Weekend FT picked up on positive survey results on a potential mine in Botswana that saw the shares in African Diamonds (AFD) rise on Friday. A geophysical analysis of the Serowe field in the centre of the country suggested it contained ancient palaeo-alluvial channels that drained the diamond-rich orapa Kimberlite region 100km to the northwest. Further drilling begins today with results expected by late November. At 10.59 the shares were down 0.25p at 9.25p from Friday's close.

GX Networks (GXN.L) acquisition of Pipex appears to have increased interest not only in the Company, but also the people behind it. Peter Dubens, Chairman of GX Networks featured in Monday's Independent. A profile of his business history revealed that he, along with his partner, once held a licence for heat-sensitive T-shirts that were worn by none other than Take That. His clothing business also acquired the UK licence for Vans Shoes, which was later sold back to the US parent for a profit of £2.5m. He also is involved in the growing online gaming market with a company called ukbetting.com and counts such luminaries as jockey John Francome, Joe Lewis, Terry Semel, chief executive of Yahoo! And former Warner Bros boss, Anton Bilton, the property developer, and Mike Lynch of the IT company Autonomy, as friends. The article concludes, "The two PLCs (ukbetting.com and GX) are, however, the most visible of his efforts to the outside world and, as such, are the vehicles on which his reputation will be riding. The real test now lies in proving they are sustainable, long-term businesses although given his unconventional past, it is hard to imagine either will follow the textbook formulae." The shares at 10.59 were unchanged from Friday's close at 8.13p.

In a full-page article in the Jobs & Money section of Saturday's Guardian, on the irritation felt by customers about contacting companies, NetCall (NET) is featured. The general point is that increasing numbers of people will hang up "pretty much straight away" rather than be kept waiting. NetCall's solution allows customers to put the phone down, while retaining their place in the queue and then receive a call back is seen as proof that technology is advancing in an attempt to offset the frustrations felt by customers. The shares at 11.09 are down by 0.5p to 27p from Friday's close.

In Saturday's Independent, 'The Private Investor' column featured Oxford BioMedica (OXB) and the "conundrum" about what to do about its rights issue. There are positive and negatives. On the plus side the money will help it to make ground with its cancer and neurotherapy drugs and also strengthen its bargaining positioning when negotiating licensing agreements. In contrast, the underwriting costs come in at £1.7m, or almost 8% of the money being raised, and more worryingly for the 'Investor', is that without these new funds the Company's cash would run out early in 2005. Despite this he concludes that it's not a lot of money and he "may go along with this call". At 11.00 the shares were unchanged from Friday's close at 18.75p.

Also in Saturday's Independent is the regular feature 'No Pain, No Gain', which focuses on columnist Derek Pain's portfolio. Profile Media (PMD) is part of his portfolio and its performance he describes as a "disaster". Nevertheless he has stuck with it partly because its "experienced and talented board remains in place." Another constituent of Mr Pain's portfolio is MacLellan (MLG.L). He noted that its "trading performance continues to be encouraging" and "at 75p the shares appear undervalued." The shares in both were unchanged at 1.43p and 75p respectively from Friday's close at 11.00.

Moves to take a 2% stake in Scipher (SIP.L) by a high profile entrepreneur made the Market Report section of Saturday's Guardian. The rumours are based on the fact that 5m shares changed hands in a single transaction, which helped to push the shares forward on Friday. According to the paper interims are due next month, and news of the sale of two non-core divisions is expected. The shares were up by 0.25p to 12.25p from Friday's close at 10.59.

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.

Eckoh Technology (ECK) - Director Shareholding.
Proactive Sports (PAS.L) - Acquisition and Board Changes.

Look Out For This Week

October 13, Monday - UK Producer Prices (Sept).
October 14, Tuesday - UK Retail Price Index (Sept).
October 15, Wednesday - UK unemployment (Sept), US retail sales (Sept).
October 16, Thursday - Eurozone ECB meeting, CPI inflation (Sept), US CPI (Sept).
October 17, Friday - US consumer sentiment (Oct).

The next Penny Share Review will be posted on Monday, 20 October 2003.

Compiled by A McLintock

Penny Shares Online - penny shares research and information service.