Smaller companies report: Friday close

By This Is Money
Updated: 12:42 EDT, 17 February 2006

UK SMALL caps closed higher with ice cream maker Hill Station among the leading gainers on news that the consolidation of its manufacturing operations is on track.

The FTSE Small Cap index closed up 13.3 points at 3,553.2, while the FTSE 100 ended the day 17.3 points higher at 5,846.2.

Hill Station closed up 0.87 pence at 4.87 on news it will be closing its Cheadle plant in the next six months.

The move means manufacturing activities currently taking place at Cheadle will be transferred to Cwmbran, South Wales, thereby completing consolidation of the group's operations at that site.

Meridian Petroleum gained 6.25p at 23.62p after confirming a placing to raise around £1m at a price of 14p a share is in process and is expected to be completed shortly.

Print management firm TripleArc added ½p at 4¼p building on yesterday's gains after it disclosed it has continued to generate good levels of operating cash flow, enabling it to manage its debt in what it says was a difficult 2005. In reaction, Altium Securities upgraded its recommendation to 'buy'.

DVD technology and games firm Zoo Digital was another gainer, 0.63p higher at 4p after non-executive director Ian Stewart bought 500,000 shares at 3¾p a share.

Following this transaction, Stewart's total shareholding in the company has increased to 60,537,155 shares, or 19.07% of the current issued share capital.

Stewart stepped down as the company's chief executive at the start of this month following a strategic review.

Chaco Resources closed 2.27p up at 14.52p after the company said it has raised £1.5m before expenses via a placing of 13,636,364 new shares at 11p each.

The Aim-listed oil and gas explorer and developer focused in South America said the placing was made to satisfy demand from institutional investors and will provide the company with further working capital.

Empyrean Energy added 21p at 137½p following a bullish update on drilling at its Eagle North-1 well in California.

Empyrean said tests showed the presence of oil in the target Gatchell sandstone and 'provide further encouragement for the Eagle Oil Pool Development Project which is in an energy hungry environment with existing infrastructure'.

But shares in Centurion Electronics crashed dramatically, down 18½p at 1p, after returning to Aim following the stock's suspension in November.

The current share price gives the company a market valuation of just under £250,000, compared with £4.84m prior to its return to the market. The company was forced to raise 3.5 mln stg through a placing and issue of convertible loan notes.

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It is placing 510m new shares at 0.5p per share to raise £2.55m, and is issuing £1m in convertible loan notes. The proceeds will be used to pay down the group's debts after agreement with its principal creditors.

Among the other fallers, Northern Recruitment shed 50½p at 133½p after saying its first-half pre-tax profit fell 31%, while trading in the first month of the second half has been below budget and the level of last year.

Pre-tax profit for the six months to the end of December fell to £1.1m from £1.6m in the year-earlier period. The company issued a profit warning in October.

CRC fell 15½p to 72p after warning 2005 earnings will be below market expectations. The company added that the results, which were due to be published on Monday, will be delayed.

Haynes Publishing closed 47½p lower at 325p after reporting a fall in first half pre-tax profit due to continued cost increases and difficult market conditions. The company also warned that, despite some recent improvements and price increases, the second half could see a further decline in profitability.

Pre-tax profit fell to £4m from £4.2m a year earlier, with turnover down to £17.9m from £18.4m.