LONDON (Thomson Financial) - UK smaller companies fell to a day's low at
midday, matching the depressed mood of the blue chips, with Western Canadian
Coal heading the fallers on results woes.
At 11.41 am, the FTSE Small Cap index was 15.70 points down on 3,612.80,
while the FTSE 100 index also backtracked, 34.90 points lower at 6,324.70.
Western Canadian Coal fell 24-1/2 pence to 31 pence -- a 44 pct drop --
after announcing second-quarter net losses of 43.9 mln usd yesterday.
The news also brought down Cambrian Mining, 13-1/2 pence softer at 68 pence,
as it is a major stakeholder in Western Canadian Coal.
Meanwhile, Falkland Gold & Minerals also suffered notable losses, 0-3/4 a
penny down on 5-1/2 pence, as it too suffered disappointment over its results,
reporting a wider full-year pretax loss as it wrote-off intangible fixed assets.
It added that it was a disappointing year, as it was unable to identify the
source of coarse gold particles evident in some streams in the East Falklands.
For the year to Sept 30, the company posted a pretax loss of 3.70 mln stg
compared with a loss of 1.32 mln stg.
Elsewhere, Dawson International fell 0-1/4 pence to 2.875 pence, as it said
it sees its full-year results below its expectations. Care UK extended its
losses, 9 pence down at 352 pence, as traders continued to react to yesterday's
news that the Department of Health has asked for a voluntary termination of the
West Midlands diagnostic contract.
Following the news, Investec said it was likely to downgrade its EPS
forecasts for the group for 2007-08 and 2008-09 by 15 pct and 14 pct
respectively.
It remains a buyer of the shares, nevertheless, saying they offer value in
the longer term and that at current levels, the company is potentially
vulnerable to a bid.
However, there were plenty of risers this morning, with DiamondTech getting
the biggest boost with a 1 penny lift to 5.625 pence -- a 21 pct rise -- after
its non-executive chairman Graham Butt purchased 220,000 shares in the company
at 4.75 pence each, lifting his stake to 0.70 pct or about 1.2 mln shares.
Share-buying also lifted commodity software provider Brady 6-1/2 pence up to
46 pence, as chief executive Gavin Lavelle bought 675,000 more shares at 44
pence each, raising his stake to 685,000 shares, or 2.51 pct of its issued share
capital. Business Direct was 0-1/4 penny up at 4.375 pence, as executive
director Timothy Houstoun lifted his stake in the company to 26.3 pct or about
55 mln shares, after purchasing 300,000 shares at 4-1/4 pence each.
Nautical Petroleum stayed strong, 2-1/4 pence firmer on 14-1/4 pence,
following news it has discovered oil at its Kraken well in the North Sea, with
Evo prompted to repeat 'buy' on the stock and up its price target to 19 pence
from 17.
The results confirm Kraken to be a substantial oil accumulation reserve and
in-place resources are likely to be ahead of expectations.
Positive production news also gave support to Lithic Metals and Energy, up
0-1/2 penny to 7-3/4 pence, as the AIM-quoted African nickel and uranium
exploration and development company confirmed uranium mineralisation at the
Mvula prospect in Zambia, while Vane Minerals stayed up 0-1/2 penny on 20-1/4
pence following news its US subsidiary has found significant mineralisation at
the North Alice Extension drilling campaign in Lisbon Valley, Utah, and aims to
produce a resource estimate in the first half of 2008.
Other movers included Timestrip, 0-1/2 penny more buoyant on 5.875 pence as
it said Whirlpool Europe has adopted its smart label technology as a replacement
indicator in two of its domestic appliance filters, saying it will help
Whirlpool customers maximise the efficiency of their devices. Provexis gained
0-1/4 penny to 3-3/4 pence after the functional food company signed a 12-month
exclusive technology assessment agreement for its patented Fruitflow
anti-thrombotic technology with the Coca-Cola Company.
There was also cheer for Panmure Gordon, staying 8 pence up on 123-1/2
pence, after the Daily Mail commented on rumours doing the rounds that a
well-known Russian billionaire is wanting to build a strategic stake in the
stockbroker. Sareum Holdings, the specialist structure-based drug discovery
business, celebrated the appointment of Dr Alastair Riddell as non-executive
director with a gain of 0.05 to 1 penny.
Norcros was another feature, staying 3-1/2 pence ahead at 71 pence,
following its robust interim results, which prompted Altium to maintain its
profit and EPS forecasts on the company.
The broker pointed out Norcros is trading at around a 30 pct discount to its
peer group of consumer-facing building stocks, despite having excellent brands,
strong market positions and very limited exposure to newbuild.
Given the good opportunities for growth, extremely modest valuations of 6.7
times March 2009 PER and supported by a 6.1 pct 2008 estimated dividend yield on
a pro forma basis, Altium firmly reiterated its 'buy' recommendation.
Aircraft parts distributor Aero Inventory concluded the risers with a 31-1/2
pence gain to 725 pence, as it signed a ten-year exclusive contract with
Canadian aircraft maintenance group ACTS Aero Technical Support & Services to
supply and manage a wide range of consumable and expendable aircraft parts.
The contract would be expected to generate revenues for Aero Inventory of
some 1.2 bln usd over the initial ten-year contract period.
tf.TFN-Europe_newsdesk@thomson.com
hmb/cmr
COPYRIGHT
Copyright Thomson Financial News Limited 2007. All rights reserved.
The copying, republication or redistribution of Thomson Financial News Content,
including by framing or similar means, is expressly prohibited without the prior
written consent of Thomson Financial News.
|