Smaller companies report: Tuesday close
UK SMALL caps closed lower, mirroring falls by the broader market as investors cashed in recent gains, while a mixed bag of corporate news also weighed, traders noted.
The FTSE Small Cap index ended 7.3 points lower at 3,374.4, while the FTSE 100 closed down 42.7 at 5,688.8.
Business Systems remained under pressure, closing 3¼p lower at 13¾p, following news of Mapeley Estates' decision not to renew its current outsourcing contract with BSG when it expires at the end of March 2006.
This contract termination will have no impact on the group's revenue and profit expectations for the year to March 2006, but will inevitably have a material impact on profitability for the succeeding financial year, the group noted.
In the year to March 2006, the annual revenues from Mapeley Estates are expected to be in the region of £2m.
Granby Oil and Gas was also sharply lower, plunging 16p to 89½p, after the group said it is to plug and abandon another exploration well in the North Sea after finding little oil there.
Funding fears took their toll on beleagured Sanctuary , 0.18p off at 1.78p.
The company has increased its bank facilities by some £134.125m to continue to meet some of the exceptional costs associated with its restructuring and for working capital purposes.
African Copper shares were also under pressure, down 1½p at 57½p, after the company disclosed estimated capital costs of $37m for a combined underground mine and flotation concentrator in Botswana.
In addition, the group said it expects operational costs of $15 per tonne for processing, including general and administrative costs.
On a brighter note, buyers pursued ITM Power, 59½p better at 209½p after the company, which aims to provide enabling technology for the hydrogen economy, revealed the fulfilment of three remaining technical milestones.
After the news, Evolution Group upgraded its rating to 'buy' from 'add' and stepped up its price target to 200p from 150p, although cautioned clients that a 'serious' fundraising will be on the cards this year.
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Solid gains were also scored in Victory Corp, 22½p higher at 147½p as the company disclosed that a rise in direct selling offset a sales dip at its shops in the Christmas period for its principal activity, The Virgin Cosmetics Co.
Elsewhere, a better-than-expected trading update lifted Game Group 3½p to 82p. The computer games retailer expects full-year profits to fall by up to more than two-thirds, blaming a shortage of the latest Sony PSP and Microsoft XBox360 consoles over the year and lower profit margins on older consoles.
However, an improved supply of PSP consoles in December helped lift group like-for-like sales in the six weeks to Jan 7 by 26.6%.
The group, which gave a profit warning in November, said it saw full-year pretax profit between £8m-£10m, down from £31.9m a year earlier.
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