Smaller companies report: Thurs close

By This Is Money
Updated: 12:30 EDT, 8 June 2006

SHARES in UK smaller companies closed sharply lower today, just above the day's worst levels, depressed by hefty falls across global markets on US rate hike fears, with Genosis the worst performer after disappointing sales news, dealers said.

At the close, the FTSE Small Cap index was 55.8 points weaker at 3,338.2, just off the session low of 3,337.8. Meanwhile the FTSE 100 index was 143.4 points lower at 5,562.9.

Genosis, a consumer products company focused on reproductive health was the worst small cap performer today, shedding 20p at 42½p - a 32% drop in value - after the firm revealed that initial sales of fertility product Fertell have been disappointing.

In its AGM statement, Genosis chairman Dr Joe Blaker told shareholders that the company now believes that it will take longer than originally planned to achieve its UK sales aspirations. Genosis said it has so far delivered 11,488 Fertell packs to Boots and does not expect futher orders in the near future.

Elsewhere, shares in motor credit firm Bristol & London lost a quarter of its value, plunging 20p lower to 60p after the company warned that, in view of a delay in concluding two major contracts, its full-year results will be below current market expectations and lower than the previous year.

The group said its board has been negotiating these contracts for a number of months with a view to forming exclusive trading relationships.

The negotiations are continuing, the firm added, and while its board remains optimistic of bringing them to a successful conclusion, this may not be achieved in the current year.

Meanwhile shares in Empyrean Energy shed 12½p at 79p after the firm said its well production test at the Eagle North-1 well offshore California has been delayed due to heavy demand for equipment. Empyrean said it has been told by Victoria Petroleum NL, the operator for the Eagle North-1 well, that the securing of equipment for production testing is continuing.

Shares in March Networks Corp moved lower with the market trend today, losing 165p at 1075p, although the Canadian-based security surveillance and video monitoring business saw its annual profit soar and said its expects this success to continue.

In the year to April 30, March Net's earnings from continuing operations, excluding future income tax recovery tripled to Cad$20.6m, while sales rose 79% to Cad$76.2m.

Elsewhere shares in ITIS Holdings shed 4p at 56½p as news of a delay to the implementation of a key contract offset a swing to profit in the year to March 2006. The road traffic information and data specialist reported a pretax profit of £1.99m, up from a loss of £1.35m a year earlier. ITIS also said the current year has started well and added that it is confident it will maintain growth.

Altium Securities pointed out that while ITIS's full-year results were significantly ahead of its expectations news of a the delay in its Missouri contract has led the broker to downgrade its profit forecasts for 2007.

The broker said it has also reduced its 2008 estimates for ITIS for the sake of caution. Altium reiterated its 'buy' stance on ITIS but cut its target price to 67p.

And shares in nCipher lost 10½p to 199½p as the data protection specialist revealed quarter one losses, blaming disruption caused from an aborted takeover offer, and warned that this could hit revenues during the rest of the year.

The Cambridge-based company, which makes technology to help companies to comply with data protection regulations, said it incurred operating losses of £600,000 for the three months to March 31, compared with a profit of £200,000 a year earlier.

Away from the gloom, shares in Oasis Healthcare soared to the top of the small cap leaders board, up 7p to 24¾p - a 39% jump in value - after the firm revealed it has received preliminary takeover approaches.