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Penny Share Review 250

Tuesday 31 August 2004

1st Dental Laboratories (FDT) was The Times' 'smaller stock to watch' on Tuesday ahead of the interim results (see announcement link below for more details). The shares were up by 1p at 30.50p.

Shares in Bits Corporation (BIT.L) jumped 70% on Friday, the weekend FT noted. News of an agreement with SCi Entertainment, to publish and distribute Constantine, a new game adapted from the upcoming supernatural thriller, starring Keanu Reaves and Rachel Weisz was behind the leap. The shares were down 0.25p to stand at 3.38p.

Speculation of a positive outcome from legal wrangling over contracts was enough to move Earthport's (EPO) shares forward in trading on Friday, according to Saturday's Express. The shares were unchanged at 1.50p.

Formjet (FMJ), a developer of anti-virus software that came to AIM on Friday and had a good first day with the shares trading at a premium to the Placing price of 7.25p, which was good news for Envesta (EVS.L) as it has a stake of just over 12% in Formjet. Shares in Envesta were down 0.05p at 2.05p, while Formjet's shares were trading higher by 0.13p at 9.00p.

Events surrounding the collapse of stockbroker SP Bell may lead to the bankruptcy of some of its private clients, according to Mail on Sunday. The paper noted that some of the 75 clients caught up in the affair might face bills of up to £500,000 to pay for shares in Fundamental-E Investments (FEI) they claim they never agreed to buy. Clients' accounts were allegedly used without their knowledge to buy the shares, but Simon Eagle, former Chairman of FEI commented, "there was a mis-allocation of stock into individual accounts. The largest component of that was shares in FEI". The clients are being asked to pay for these shares by Pershing Securities and meet their liabilities, but SP Bell is now in administration, with liquidation most likely. The shares were down 0.25p to stand at 1.75p.

News about the bid for Honeygrove (HYG) was picked up by Saturday's Independent, which noted that investors are awaiting further details of the approach. The shares were up 0.50p at 11.50p.

I-documentsystems (IDOX) was featured in The Business (29/31 August). The article goes over recent events, but noted that it is unlikely to achieve the pre-tax profit of £500,000 being touted for the current year, as "an unpredictable new contract pipeline and more competition has slowed growth". It has signed new contracts since the end of April and also acquired TFPL, but the paper reckon it is too early too see how this will enhance growth. The shares have traded between 9p and 13p over the year "reflecting the delay in profitability". However, "expected revenues of £5m in 2003 were only £500,000 short and the Company continues to make progress. It seems earned profits will not be visible until 2005." It concludes, "the shares are a hold until finals give a clearer picture of how the acquisition is working". The shares were unchanged at 11.00p.

The weekend FT provided a potted history of Mean Fiddler (MEF.L) and the man behind it Vince Power, which was timely given the bank holiday weekend's Reading and Leeds festivals, both organised by the Company. The shares were unchanged at 54.00p.

"Take a look at Oxford BioMedica (OXB)" wrote The Sunday Telegraph. The Company is working in an area of science that is as yet unproven, but "if it works it is sitting on a possible goldmine". There is potential for strong newsflow over the coming months, which "should also help drive the share price". "The shares", the paper reckoned, "are well off the 39.79p high in 2002, are for investors willing to take a risky punt." The shares were up 1.25p to stand at 17.50p.

Pentagon Protection (PPR) featured in Saturday's Daily Mail Investment Extra column. In an upbeat review the paper highlighted that having SupaGlass fitted to your car costs about £900 plus VAT, which may be beyond the ordinary motorist, but the big prize is to persuade car makers to offer it as an option when you buy. Mercedes has already done so, BMW may follow. However, the next big opportunity is protecting buildings, as it bought Filmtek, which provides protective coating for windows and glass roofing. The film's job is to reduce the damage caused by flying glass after an explosion or terror attack and it has completed work at Changri airport in Singapore as well as other projects in China and is also replacing and protecting the roof glass at the Eurostar Terminal in Waterloo. At home there are opportunities in the health and safety authorities such as the fire brigade and police. The company does not expect to have to come back to the market for fresh funds. The article concludes, "This is a small company and things could go wrong. But the team is enthusiastic and confident. Chairman David Thomas says: 'A great deal of sweat has gone into this. Now we feel we are at the tipping point.' That goes for the shares too." The article appears to have stimulated interest, as the shares were ahead by 0.75p to stand at 7.13p.

Confirmation by Planestation (PTG) of the loss of a cargo contract with MK Airlines "comes at a crucial time for the company" writes Monday's Times. MK withdrew from Manston in protest at the doubling of landing charges from £3 per tonne to £6 per tonne, which means that the airport is now an uneconomic base from which to operate. The news comes ahead of the first scheduled passenger flights by EUjet, which are due to take-off on Wednesday. This news also stimulated Edmond Jackson of The Sunday Telegraph to undertake some research, as the news was "perturbing" for shareholders, of which he is one. He concludes that MK had a favourable five-year deal, which has come to an end and that with other operators poised to take advantage of Manston's new facilities "it is uneconomic for Planestation to continue with old terms". He also added that PTG could receive as much as £30m from a half-share of development profits from land in Liverpool. His conclusion is that at about 6p the shares "remain high risk/reward yet the strategy looks on track". The shares were unchanged at 5.75p.

Saturday's Telegraph revealed that there was speculation among traders that Merrill Lynch was behind a block trade of 20m shares in Scipher (SIP.L), worth 7.7% of the Company, at 0.68p. The shares were unchanged at 1.00p.

There was speculation, picked up by Saturday's Express that Scotty Group (SCO), formerly known as Motion Media, was close to announcing two sizeable defence technology deals with European armies. The shares were down by 0.25p to stand at 3.63p.

The weekend FT reported on the interim results of Sopheon (SPE), which saw a reduction in losses and an increase in turnover from continuing business after the completion of its restructuring programme. The shares were unchanged at 23.75p.

Tuesday's prices, quoted above, were taken between 10.45am and 11.00am on 31 August 2004.

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.

1st Dental Laboratories (FDT) - Interim results.
Northern Petroleum (NOP) - Acquisition of interest in Offshore Guyane.
Real Estate Investors (RLE) - Shareplacing.
Sopheon (SPE) - Product development system.
Southern African Resources (SFU.L) - Director change.
Virotec International (VTI) - Preliminary result.

Look out for this week

Tuesday, 31 August - 1st Dental Laboratories (I), Mears (I).
Wednesday, 1 September - Oxford BioMedica (I), UK Nationwide house price survey (Aug).
Thursday, 2 September - nothing of note.
Friday, 3 September - Artisan AGM, UK service sector CIPS (Aug), US unemployment rate (Aug).

The next Penny Share Review will be posted on Monday, 6 September 2004.

Compiled by Andrew McLintock

Penny Shares Online - penny shares research and information service.




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