Smaller companies report: Monday close

By This Is Money
Updated: 12:36 EDT, 13 February 2006

SMALL caps ended higher close to the session's peak, reflecting a brighter mood in the broader market, with the stock market minnows lifted by takeover news from Deal Group Media.

The FTSE Small Caps Index closed up 0.7 points at 3530.2, while the FTSE 100 index ended 29.4 points higher at 5,793.5.

Deal Group Media was the main small cap gainer, adding 1.87p to 5.12p, after announcing that it has received more than one approach which may or may not lead to an offer being made for the company.

A statement from the group said the approaches are all preliminary and there is no certainty that any of them will result in an offer actually being made.

Among the other winning stocks, Global Gaming Technologies was a strong play throughout the day, gaining 1.37p to 6.5p after launching a betting platform which allows consumers to transact across different exchanges in one screen. The technologies group has been granted licences to obtain live feeds from several providers, and expects to charge 50 stg per user per month.

Tristel remained well-supported, 9p better at 59p, after the infection control business turned in substantially higher interim profits and disclosed a maiden dividend of 0.275p. The group made a pretax profit of £327,481 in the six months to 31 December, against just £5,455 in the previous eight months, and expects a second half with 'good sales momentum in our existing domestic product portfolio'.

Eurasia Mining was also positive, adding ½p to 5¼p after agreeing to jointly explore a platinum prospect of the Kola Peninsula in northwest Russia together with Anglo American.

News of an agreement between Exxon Mobil and Providence Resources boosted the small cap, which added 0.9p to 4.2p after signing a farm-out agreement allowing Exxon Mobil Corp to conduct exploration work in return for 80% of the prospect in its 700 sq km Dunquin Prospect off the west coast of Ireland. Among the day's main fallers, Instore took a knock late afternoon, losing 10½p to 43¾p, after the retailer issued its second profit warning in less than a month, sending its shares 17% lower.

The group, formerly known as Brown and Jackson, and which currently trades as ... Instore and Poundstretcher, cautioned that profits for the year to February 2006 will be 'substantially below current market expectations'.

Prior to today's statement analysts were forecasting profit before tax and exceptional items of about £6.8m, having cut forecasts from about £8.3m following a n 18 January alert. In reaction, Seymour Pierce, immediately slashed its current year forecast to £4m and its estimate for next year from £9.2m to £6m.

Evolution Securities said it believes Instore will do well to make £4m this year and is unlikely to see more than £6-7m next year, adding that the retailer's business model is looking 'deeply flawed' and thinks the shares could test 35p.

Shares in Monterrico Metals also dropped 62p to 322p on news the completion of its Bankable Feasibility Study on its Rio Blanco copper-molybdenum project in Peru will be delayed until the fourth quarter of 2006 from the first quarter because of the project's expansion.

Lawrence was another casualty, dropping 31p to 261½p, following a warning by the maker of pharmaceuticals for the animal health markets that it sees both full-year revenues and pretax profits below market expectations.

It expects revenues for the current financial year will be behind market expectations principally as a result of lower than expected sales of higher margin products in Europe.

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Following the alert, Panmure Gordon downgraded to 'hold' from 'buy' and slashed its full-year pretax profits forecast to £3.1m from £6.5m. The broker still likes Lawrence, pointing out that the pigs and poultry drug is unique in its field, and has good distribution in a number of countries.

Meanwhile, Plexus Holdings fell 10p to 88½p, after the oil and gas engineering and service business warned that a shortage of exploration and appraisal well rigs and significant increases in rig hire rates will impact its current financial year.

The tightening of exploration and appraisal well rig availability in the North Sea has led to delays in the start of some rental projects.

Elsewhere, Starvest lost ¾p to 22¼p following a strong performance, after posting sharply lower interim profits.