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Penny Share Review 255

04 October 2004

Slightly ahead of today’s announcement, the Financial Times from Monday reported on the impending acquisition by 1st Dental Laboratories (FDT) of Southampton based Quality Smiles, a maker of crowns and bridges. Following confirmation of the acquisition today, the shares nudged up 1p to 28.5p.

Croma Group (CMG) and the CEO John French are profiled in the Daily Mail on Saturday, which makes a range of products that would not look out of place in a James Bond movie. The results to the end of June 2004 are due to be revealed soon, in which a loss is expected to be reported. According to the broker Seymour Pierce, in this financial year, a profit of £0.8m on sales of £4m are forecasted. The article concludes by saying that Croma has more promise than track record, but of the obvious demand for surveillance and hence the “shares are worth a flutter.” The stock remained unchanged this morning at 6.38p.

The announcement today that Media Square (MSQ) has gained shareholder approval for the acquisition of Coutts Holdings got a mention in the Monday’s Financial Times. Media Square’s shares stood firm at 18.75p. In the Mail on Sunday, we learnt that Ofex Holding’s (OFX.L) broker has been approached by 535x, which proposes that the two bodies merge and operate a bulletin board trading system. Simon Kiero-Watson believes Ofex needs to “change or die”. According to unnamed ‘City Sources’, 535x’s approach is not the only one that has been presented to the broker. The news had no directional impact upon the shares on Monday morning, with the shares trading unchanged at 5.5p.

Mean Fiddler (MEF.L) received a mention in several of the weekend newspapers, including the Sunday Times which questioned whether the company had ‘run out of Power’, after the Chairman cashed in his 35% stake for £12.6m and stepped down to the role of non-executive. The good news for investors is the fact that the Placing was 50% oversubscribed. Furthermore, if savings are achieved, the Group is forecast to make a profit touching £8m in the year to December 2005, putting the shares on a low forward multiple. The paper concludes by cautioning that the rock promoting business is a volatile game. The stock was unmoved this morning at 54p.

Several of the weekend newspapers commented on the sharp rise in the share price of Petrel Resources (PET) last Friday. The Business poses the question about who will be the next Cairn?, in an article about ten oil exploration minnows. A company like Petrel with no cashflow and the focus on one single high risk prospect is not for the faint hearted the paper comments. Shares in Petrel flowed higher yet again by 24.5% (29.5p) on Monday morning to trade at 150p.

The Sunday Express featured Zi-Medical (ZIM.L) in its ‘Rising Stars’ columns and talked about the prospects for its award winning Red-Eye drip monitoring system, which is expected to generate £1m in sales by 2005. The Chairman Michael Fort believes the success of the Company and this key product lie on changing age-old medical practices. The article helped move the stock up by 1.25p on Monday morning to 7.5p.

Monday’s prices, quoted above, were taken just after 11.00am on 4 October 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) – Acquisition.

Claims Group (CLM.L) – Client gains.

Media Square (MSQ) – EGM statement.

Ormonde Mining (ORM) – Drilling report.

Planestation (PTG) – Shareholding.

Tanfield (TAN) - Acquisition

Virtue Broadcasting (VTI) – Broadcasting deal.

Look out for this week

Monday, 4 Oct – CBI financial services survey.

Tuesday, 5 Oct – CIPS service sector survey.

Wednesday, 6 Oct – Industrial production.

Thursday, 7 Oct – BoE interest rate decision at 12 noon.

Friday, 8 Oct – US non farm payrolls.

The next Penny Share Review will be posted on Monday, 11 October 2004.

Compiled by Jason Robertson

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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