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Penny Share Review 218

Monday 19 January 2004

The most prominent feature for us in the weekend's papers was the appointment of Greg Hutchings, the former chief executive of Tomkins, as Chairman of Lupus Capital (LUP) after a three-year absence from the market. Lupus investors will hope that he emulates the success at Tomkins, which from humble beginnings grew into a multinational conglomerate before Mr Hutchings was, as the Financial Times (17 January 2004) put it, "ousted by shareholders after allegations of corporate excess." He will oversee the development of the Lupus portfolio, where Gall Thompson Environmental currently has pride of place, in particular identifying under-performing engineering businesses to turn-around. Mr Hutchings has invested over £2m of his own money in the Company at 9p a share and the market reacted favourably to the news last Friday, with the shares finishing the day up 3.38p at 12.75p. After the weekend press comment, the stock has risen again and at 10:48 it was up another 1.63p to 14.38p.

Cardpoint (CASH) featured in Saturday's Daily Telegraph, Financial Times and Daily Express after announcing an £8m, 5-year contract to place ATMs in Welcome Break service stations. The shares, already having a good run, advanced another 11p today to 127.5p at 10:48.

Saturday's Daily Telegraph also mentioned the small rise in the price of PlaneStation (PTG.L, formerly Wiggins) shares, on rumours of a contract win for Manston airport. A Daily Mail article earlier in the week had suggested that Cosmos was considering Manston as a departure point for certain charter flights. The shares were up 0.13p from Friday's close to 4.63p-mid at 10.48 today.

Brian O'Connor's 'Investment Extra' section of the Daily Mail (17 January 2004) included a column on Virotec International (VTI), but it was a cautionary tale. The Company's technology is attracting a great deal of attention, but to date it has not attracted any large orders or US Environmental Protection Agency approval, which remains "hovering just outside its grasp." With a market cap above £40m, Mr O'Connor clearly wants to see the rating justified by earnings, which could be huge if things go right. At 10:49 today, buyers were undeterred and the shares were 0.5p dearer at 23.63p.

SectorGuard (SGD) is beginning to win a few friends in the media. Derek Pain's 'No Pain, No Gain' section of Saturday's The Independent featured the Company whose shares, he considers, "could be worth accumulating." The Company has performed well in its time on AIM under the stewardship of David Marks, completing a number of acquisitions as well as organically driving turnover and profit. Mr Pain further argues that the performance of SectorGuard may make it a target for takeover, despite further opportunities for acquisition coming the Company's way. Having already had a good week on the market, the shares were unchanged at 5p-mid at the time of writing this morning.

Further to musing about SectorGuard, Derek Pain covered John Foley's Maclellan (MLG), the support services group. Maclellan has recently acquired a manned security business to add to its cleaners, porters, etc. and this diversification may prompt further industry consolidation with, apparently, US and South African companies looking to buy into the UK scene. The Group's shares were 1p better at 74.5p by 10:50.

Shares of Dickinson Legg (DKL.L, the result of the restructuring of Brunel Holdings), have tempered recently and the Market Movers column in The Independent (17 January 2004) noted a further fall after last week's trading statement warned that profits for the year will not meet market expectations. At 10:49 this morning, the stock was off another 0.25p to 29.75p. Meanwhile, Saeed Shah's 'The Week in Review' section in the same paper included a piece on Paramount (PMN.L), the former cash shell that has acquired the Chez Gerard restaurant chain. With the stock having doubled in the past year, Mr Shah believes they are "best avoided" in the absence of fresh broker forecasts. The shares were unchanged today at 29.5p.

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.

African Eagle Resources (AFE) Drilling Results from Miyabi.
Eckoh Technology (ECK) Issue of Equity.
Gaming Corporation (GMC.L) Marketing Agreement and Issue of Equity.
Mean Fiddler Music Group (MEF.L) Holding in Company - Denis Desmond/MCD Production.
NetB2B2 (NEB) Issue of Equity.
Offshore Telecom (OST.L) Final Results.
Patsystems (PTS) Contract Win.

Look Out For This Week

Jan 19 Monday - Offshore Telecom (F), Eurozone - meeting of finance Ministers. US - public holiday.
Jan 20 Tuesday - UK - Inflation (Dec); OECD report on UK economy.
Jan 21 Wednesday - UK - MPC minutes (Jan); public finances (Dec); mortgage lending (Dec).
Jan 22 Thursday - Mears Group Trading Statement. UK - Chambers of Commerce Q4 survey.
Jan 23 Friday - UK - GDP (first estimate) Q4; retail sales (Dec); motor vehicle production (Dec).

The next Penny Share Review will be posted on Monday, 26 January 2004.

Compiled by Andrew Thacker.

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