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Penny Share Review 214

Monday 15 December 2003

The forthcoming flotation of Ireland's EiRx Therapeutics was highlighted in Monday's Daily Express and shareholders in Billam (BLLM.L) will be eagerly awaiting its debut on 5 January next year. Billam has a 36% stake in EiRx, for which it paid approximately £2.2 million and the Company hopes to raise itself £1m to fund further pre-clinical testing work. EiRx is focused on research into 'apoptosis', the mechanism of cell death, and the main targets are cancer and inflammatory disease. Billam did very well (and continues to do so) out of its investment in CybIT Holdings (CYH.L) and investors will doubtless be looking for another healthy return. Billam shares have just been consolidated on a 100-for-1 basis and at 09:17 today they were 21.2p-mid, albeit with a large bid-offer spread of 18p-25p, which will hopefully narrow in time.

The Financial Mail On Sunday ran an article claiming that Shami Ahmed, Chief Executive of Legendary Investments (LEG), was using complicated litigation to avoid a large tax bill in the UK. Apparently, he is effectively suing himself as litigation has been brought against him by a company of which he is ultimately the beneficiary. The article further suggested that Mr Ahmed's well-publicised Contracts For Difference (CFDs) are held through Legendary, but we do not believe this to be the case given the collateral required to take such positions. Legendary shares were steady at 0.75p by 09:17 this morning.

Vince Power is at last winning friends in the City and The Observer yesterday produced a potted biography of the man. Long has he bemoaned the lukewarm response to his endeavours at Mean Fiddler Music Group (MEF.L), but now a number of people are taking notice. Last week, he sold 10m shares to Irish entertainment entrepreneur Denis Desmond at 46.25p, which was at a significant premium to the prevailing market price. If you believe Mr Power, his new partner still achieved very good value, as he considers the Group to have a 75p-a-share break-up value. Despite this and last week's transaction, the market still seems cautious and the shares were unchanged at 36p at 09:16.

Andrew Griffiths 'AIM Investor' column in The Business (Sunday) focused on Netcall (NET), pitting the risks against potential reward. Netcall shares have had a very good run this year and with broker estimates for 1.4p earnings in 2005, investors are warned that the stock is already on a prospective multiple of 20. However, the sales pipeline is improving and a number of blue chip names are customers, so the "forecasts may prove somewhat conservative." Mr Griffiths further suggests that the Company may come under the bid spotlight and by 09:17 this morning, the shares had risen 0.5p to 28.5p-mid.

Today's Financial Times pre-empted the announcement by Oxford BioMedica (OXB) of progress for its Innurex nerve regeneration product, details of which are being presented by Prof Malcolm Maden of King's College London at the 10th International Symposium on Neural Regeneration, held in California. Pre-clinical data has shown that tests on mice have resulted in some nerve cell re-growth at the site of damaged cells, after localised delivery of the RAR B2 gene through OXB's LentiVector system. The FT reckons that the annual potential market for a suitable treatment for nerve, in particular spinal cord, damage could be US$500m-2bn. The shares were up 1.25p at 22.38p by 10:16.

The Equity View column of The Sunday Telegraph advised readers to "Take a look at/Have a punt on" Zi Medical (ZIM.L), the medical devices company chaired by Michael Fort. ZIM's main product is the Red Eye intravenous drip monitor, which has gained the giant Baxter Healthcare organisation as a distributor. On trial in a number of hospitals, the device could yield sales of £1m a year by 2005, rising at 20% per annum, and the Company now has a motorised syringe driver ready to augment the product range. Tipped at 6.75p, the shares were described as "risky", but "worth a punt" on growth prospects and this morning the stock was up 0.875p at 7.5p in the middle at 09:17.

Elsewhere, Saturday's editions of The Times, Daily Mail and Daily Express featured the market debut of Flightstore (FLG), down 0.25p by 10:15 today at 11.75p-mid, and the acquisition of Attlaw Security & Protection by Maclellan (MLG), up 0.5p to 73.5p at 10:16 from Friday's close. The Times also picked up on Friday's announcement of the sale by Chris Hanson, finance director of Cardpoint (CASH), of 120,000 shares to satisfy market demand. On the day the shares went higher on the news and were steady at 96.5p so far today. The Daily Express mentioned the small rise in Motion Media's (MMD.L) price "on talk of an education-related deal", but they are currently unchanged at 12p-mid.

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.

Advanced Medical Solutions (AMS) - CE approval for LiquiBand wound closure glue.
African Diamonds (AFD) - Drilling Report.
Cytomyx Holdings (CYX) - Final Results, Acquisition and Placing.
Eckoh Technologies (ECK) - Interim Results and Contract signing.
Oxford BioMedica (OXB) - Product Update.
Proactive Sports (PAS.L) - Grant of Options.
Raft International (RFT) - Exercise of Options.
Totally (TLY) - Directorate change.
Virotec International (VTI) - Appointment of Director.

Look Out For This Week

Dec 15 Monday - Eckoh Technologies (I), Cytomyx Holdings (F). No UK data.
Dec 16, Tuesday - UK RICS House Prices (Nov); RPI (Nov); USA CPI (Nov); Housing starts (Nov); Current Account (Q3); Industrial Production (Nov).
Dec 17, Wednesday - UK Bank Of England MPC December minutes; Labour Market Report.
Dec 18, Thursday - UK Mortgage Lending (Nov); Retail Sales (Nov); PSNCR (Nov).
Dec 19, Friday - UK Motor vehicle production (Nov); Gilt Issuance Calendar Jan-Mar 04.

The next Penny Share Review will be posted on Monday, 22 December 2003.

Compiled by Andrew Thacker.

Penny Shares Online - penny shares research and information service.




Risk Warning

There is an extra risk of losing money when shares are bought in some smaller companies including 'Penny Shares'. There is a big difference between the buying price and the selling price of these shares. If they have to be sold immediately, you may get back much less than you paid for them or you may have difficulty in selling them. Past performance is not a reliable indicator of future results. The price may change quickly and it may go down as well as up. You could lose every penny put into a particular share.

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