Yesterday's trading: Bonuses bite Bridgewell

By Geoff Foster for MailOnline
Updated:

 

Independent investment bank Bridgewell came clean in January when it warned profits will miss targets because of hefty bonus payments to its staff.

It said it had to shell out at least 50% of operating profits to ensure that employees do not leg it to rival firms. Rumours have since been rife that the group is in desperate need to climb into bed with a bigger rival to survive. Yesterday's confirmation that it has received a number of takeover approaches came as no real surprise, but it lifted the share price 51/2p to 126p.

It has appointed Rothschild to sift through a 'number of unsolicited approaches'. Wouldbe suitors could include Collins Stewart, Canaccord Adams and Man Group.

For the year to the end of December, Bridgewell reported underlying pre-tax profits of £4.5m, down from £4.8m, as revenues rose 23% to £30.8m. Although chairman Paul Manduca said the group has made an encouraging start to 2007, bears roar that the group must be struggling because the number of companies arriving on the AIM market has slowed significantly.

Indeed, Grant Thornton yesterday revealed that the first three months of 2007 rank as the worst in three years as far as admissions to the junior market are concerned.

So far, it has had only 51 new entrants - that's a drop of over 50% compared with this time last year. However, GT says the pipeline remains healthy and the next weeks and months should deliver a performance more in line with AIM's usual standards.

Man Group jumped 22p to 565p amid continuing speculation that today's trading statement will be accompanied by details of the flotation in New York of its brokerage business. Today Peter Clarke takes over as chief executive from Stanley Fink who steps down after seven years to become non-executive deputy chairman.

The Footsie bounced back with a 57-point gain to 6.324.2. Pleasing trading statements from constituents Tate & Lyle (29p higher at 5731/2p) and Compass Group (153/4p better at 3353/4p) got proceedings off to a bullish start and then bid speculation took over.

Scottish & Newcastle was the day's top tipple. It frothed up to 613p before closing 64p dearer at 595p on growing speculation of a £7-a-share break-up bid from Carlsberg.

BAE Systems rose 111/4p to 4611/4p as it emerged that talks with defence and services contractor VT Group (21p up at 492p) about forming a joint shipbuilding venture are making good progress.

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ITV advanced 13/4p to 1091/4p but a report that Virgin Media is lining up a fresh bid for the broadcaster as been rubbished. VM has enough on its plate at the moment deciding whether or not to bid for Pipex Communications, 1/4p off at 16p.

Property group Liberty International climbed 23p to 1243p on confirmation of subsidiary Capital & Counties' £460m joint venture with Great Portland Estates, 161/2p up at 772p. It involves the management of a string of properties in Central London.

It was back to reality for fashion retailer Next as its shares plummeted 112p to 2241p. Rumours of a £25-a-share private equity takeover bid were forgotten as dealers heard that chief executive Simon Wolfson had taken advantage of the strong rise in the share price since last week's better-than-expected results and sold 160,000 shares at 2309p. News of a half-price or less sale at all branches from today also damaged sentiment.

Housebuilder Taylor Woodrow erected a speculative gain of 21p at 486p on hefty turnover of 10.7m. Punters responded to continuing-gossip that Persimmon (19p up at 1421p) will soon bid for TW and so scupper its plans to merge with George Wimpey.

Rumours of a pending lucrative order from UPL for 60 of its zero emission road delivery vehicles helped Tanfield Group rise 8p more to 1091/4p.

Software minnow Pixology jumped 51/2p to 231/2p after saying takeover talks are continuing and the group has a strong balance sheet with more than £5m cash in the bank.

Dog of the day was SMC Group which crashed 37p to 661/2p following a warning of a 'further significant reduction' in full-year profits. Final results are being delayed until April 11 to complete a contract-by-contract review of the business.

Chromogenex, the medical laser device company, added 13/4p at 81/4p following strong annual results. It recently announced a manufacturing agreement with US aesthetics company Smoothshapes for the production of an advanced new laser treatment for cellulite and body shaping.

Colourful property entrepreneur Desmond Bloom's Equable Properties starts trading on AIM today at 1.4p and should attract plenty of penny share punters. The flotation coincides with news of the acquisition of ten pubs in northern England and Wales for £4.6m in cash and shares. The placing values the company at £2.5m. Bloom intends to expand and is looking at retail, hotels and more pubs.

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