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Penny Share Review 253

20 September 2004

Chelford (CHR) was featured in Saturday’s Daily Mail ‘Broker Buys’ column. Arbuthnot is the broker in question, who recommends to buy at 2p, as the balance sheet restructuring will allow dividend payments. The shares were up 0.35p from Friday’s close at 2.15p.

Monday’s Independent in its Small Companies Notebook picked up the game that small cap fund managers are currently playing with regards to Greg Hutchings at Lupus Capital (LUP). The game is called ‘Second guess Greg’, as investors are trying to work out the first likely acquisition by Mr Hutchings in his attempt to recreate Tomkins, the engineering conglomerate that he used to run. He is not limiting his search to any particular sector, but the first deal could be worth up to £100m. Initial guesses have focused on Carclo, the plastic moulding and specialist wire products, which is currently labouring under debts of £28m, with a market cap of £23m. The shares were unchanged at 19p.

Millwall Holdings (MWH) received some attention from the weekend’s papers following the disclosure that a Californian hedge fund had taken a 10.9% holding. Saturday’s Guardian quoted an executive from San Francisco based Lonestar Partners as saying, “We have been supportive of Millwall for some time and believe that the company is significantly undervalued in the financial market place”. Lonestar reckons that the club’s exploits on the field will deliver rewards off the pitch. The shares were unchanged at 0.15p.

The opening of Oxus Gold’s (OXS) mine in Uzbekistan was featured in Monday’s Independent. This is the first new mine the country has seen with foreign investment and director Richard Wilkins noted, “We are only at phase 1. Phase 2 will turn to the high-grade deposits underground. The potential is huge.” Today is the official opening, but the mine has been producing since January and is already profitable, the paper added. The shares were unchanged at 49p.

Edmond Jackson, in his Taking Stock column in the Sunday Telegraph, reported on his trip last week to the Planestation (PTG) AGM next to a “gravel pit in Essex”. The meeting lacked structure and clarity, but Martin May, chief executive, still managed to put across the management’s agenda. Mr Jackson highlighted that once the formal business was over, he got a “sense for good news at the end of the month, but timing can always drift.” The one-for-15 consolidation “should narrow the spread and appeal to institutions”. Nevertheless, he concluded, “The investment rationale does involve belief in May’s ability, and in this respect the AGM encouraged me to retain my shares.” The shares were up 0.10p from Friday’s close and stood at 5.17p.

Scotty Group (SCO) came under the spotlight of Derek Pain of the Independent. In Saturday’s column Derek suggested, “with a little luck” this fallen star may “now be dialling the right numbers”. The reverse takeover by Scotty has breathed new life into the group and there is an expectation of profits in the region of £1.5m this year, while a year out Tom Winnifrith is reckoning on £2.5m. Colin Blackbourn is also a supporter and has a holding of 4.2%, with hopes that the health products are set to collect some orders, while Charlie Goodfellow at Durlacher is also making encouraging noises. “With the Austrians now powers in the combined boardroom, it is likely that more of the British side’s inventive skills will be translated into hard cash. But the shares are a gamble…So don’t, please, get carried away”, Mr Pain cautions, “Settle for a modest punt with 25p a dream target.” The shares were up 0.38p at 4.13p from Friday’s close.

Monday’s Times previewed Zi Medical’s (ZIM.L) interim results, which were unveiled this morning revealing a loss before tax of £608,000 (see link below for more details). The shares were off 1.75p from Friday’s close and stood at 7.75p.

Monday’s prices, quoted above, were taken just after 9.35am on 20 September 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.

Hereward Ventures (HEV.L) – Final results.

Hot Group (HOT.L) – Acquisition.

Tandem Group (TND) – Interim results.

Virtue Broadcasting (VTB.L) – Interim results.

WILink (WLK) – Interim results.

Zi Medical (ZIM.L) – Interim results.

Look out for this week

Monday, 20 Sept – Hereward Ventures (F), Tandem Group (I), Virtue Broadcasting (I), WiLink (I), Zi Medical (I).

Tuesday, 21 Sept – Invox (F).

Wednesday, 22 Sept- Bede (I), UK MPC meeting minutes.

Thursday, 23 Sept – UK CBI monthly industrial trends survey (Aug).

Friday, 24 Sept – Netcall (F).

The next Penny Share Review will be posted on Monday, 27 September 2004.

Compiled by Andrew McLintock

Penny Shares Online - penny shares research and information service.