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Penny Share Review 236

Monday 24 May 2004

The Financial Mail on Sunday picked up on recent institutional buying in Bede (BED). It's lean and mean approach has meant that the Company has been able to weather the downturn in the semiconductor sector and at the same time allow it to attract several top investors, including AAA-rated fund managers Patrick Evershed, Giles Hargreave and Mark Slater. All three took part in last July's placing, but Slater bought heavily again at the end of last month and his fund now controls nearly 1.7m shares or 2.99%. The coverage appears to have had some effect as the shares were up 3.50p from Friday's close to stand at 23.00p.

Director buying in Envesta (EVS) was picked up by Saturday's Daily Express among others, saw the shares move forward in trading on Friday. Chairman Lyndon Chapman bought 100,000 shares at 2.2p taking his holding to 635,000 or 0.28%, while non-executive director Mark Heraghty bought 2m shares at 2.2p for a maiden 0.87% stake. The shares were unchanged from Friday's close of 2.50p.

House broker Teather & Greenwood's 'Buy' recommendation on Intellexis (ILX) is featured in today's (Monday) Independent. The situation has been transformed, apparently, by the acquisition of Key Skills, which trains people for the Prince2 project management qualification that is increasingly being used by the private sector. On relative earnings for the current financial year, T&G reckon the stock looks cheap, but the broker has so far failed to put out forecasts for next year's earnings. According to the Independent ,"clued-up investors believe (next years numbers) will show a significant jump." The shares were up 3.50p from Friday's close at 89p.

Impatience on the bulletin boards about how long it is taking Motion Media (MMD.L) to tie up its deal with Scotty is matched by a curiosity among the investment community about why Scotty is contemplating the deal, according to today's (Monday) Independent. A prospectus is not expected until mid-June and a fundraising at 12p is being mooted against a suspension price of 12.75p. Motion Media's chief executive has borne the brunt of criticism from the bulletin boarders after overestimating the take-up of the video conferencing technology, while the Scotty team are being questioned about why they want to do the deal at all. It appears that the post-acquisition Company will be almost wholly focused on Scotty's products and will be renamed Scotty to reflect this, but the logic for the deal comes from gaining access to Motion Media's non-PC based technologies to complement its own suite of products. The shares remain suspended.

There never seems to be a quiet week at Planestation (PTG) and Edmond Jackson of the Sunday Telegraph reviewed the recent events, with an eye on their implications for corporate governance. He noted, "A new chief executive in a recovery situation is among the most potent of factors than can drive change." Mr Jackson reckoned that the new boss takes about six weeks to settle in and then the news starts to flow. Last week we found out that the Company had taken a 30% stake in start-up airline EUjet, which is due to begin flights from Manston airport in Kent and should according to Mr Jackson help Manston market itself and in turn enhance surrounding land values, if the business model is proved up. The chief executive also extended his commitment to run the Company from nine months to two years and recognised the potential upside by negotiating a total 25m share option deal. However, it is the agreement of the exercise price ahead of anticipated news that rankles with Mr Jackson, as it appears that the chief executive is geared to the upside and not the downside risk of the business. Moreover, he is concerned about the emerging autocratic nature of the business following the recent departure of directors and managers. A non-executive director was sacked last Tuesday "after a loss of confidence by the executive board" and Mr Jackson is of the opinion that the "initiative to hire and fire non-execs must not come from executive directors". Nevertheless, "a raw truth about autocratic chief executives" he summarised, "is that they can make a lot of money, especially in turnaround situations". He continues to hold the shares, but his approach is to be vigilant. The shares were off 0.03p from Friday's close to stand at 4.95p.

Proactive Sports (PAS.L) has agreed a three-year merchandising deal with bigbluetube to market limited edition signed photographs and framed T-shirts of Wayne Rooney and Ruud van Nistelrooy, wrote Saturday's Times. Mr Rooney could earn anything up to £1m per season as a result, while Proactive are set to take an even firmer stance on those websites that sell fake memorabilia. The Company are gearing up to undertake legal action to close such websites down, but some football supporters are said to be dismayed by this as it means that top footballers will become brand names, a situation that is commonplace in the USA, commanding eight-figure sums for the exclusive rights to their autographs. The shares were unchanged from Friday's close of 7.38p.

Tepnel Life Sciences (TED) rebounded, according to Saturday's Daily Express, on brisk trading on Friday. This followed last Wednesday's (19 May) update that outlined that the overall trading performance was ahead of management's forecast, with operating losses considerably less than expected and that this was to continue for the remainder of the year. The shares were up 0.25p from Friday's close to stand at 9.50p.

NB: The prices quoted above were taken around 10.50 am today.

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.

FFastFill (FFA) - Selected as a Futures Trading Partner.
Hidefield (HIF) - Placing.
London Asia Capital (LDC) - Issue of Equity.
Mercury Recycling (MRG) - Preliminary Results.
NWD Group (NWD.L) - New Business.
Raft International plc (RFT.L) - Contract win.
Virtue Broadcasting (VTB.L) - Final Results.

Look out for this week

Monday, 24 May - Mercury Recycling (F), Virtue Broadcasting (F).
Tuesday, 25 May - SWP Group EGM, UK Business Investment (Q1), US Consumer confidence (May).
Wednesday, 26 May - Bristol & West Investments (F), UK GDP (Q1).
Thursday, 27 May - Water Hall AGM, UK GFK Consumer confidence (May), CBI industrial trends survey, US GDP (Q1).
Friday, 28 May - UK BBA mortgage lending (Apr), Eurozone CPI inflation.

The next Penny Share Review will be posted on Tuesday, 1 June 2004.

Compiled by Andrew McLintock

Penny Shares Online - penny shares research and information service.