UK small caps remain firm midday; Litcomp leaps 50 pct on positive update

UK small caps remain firm midday; Litcomp leaps 50 pct on positive update

	Published : Tue, 29 May 2007 12:27 By : Agencies Print this Story

LONDON (Thomson Financial) - UK smallcaps remained firm midday, mirroring the trend of the wider market, with Litcomp rising over 50 pct after saying its results to year ended March 31 will show 'significant improvement' over the previous year, dealers said.

At midday, the FTSE Small cap index was up 5.1 points at 4,143.1, while the Footsie was 22.9 ahead at 6,593.4.

Soaring to the top of the small cap leader board, LitComp added 25 pence at 74-1/2, after the company said its results for the year ended March 31 will show a 'significant improvement' over the previous year and over the six months to Sept 30 2006.

The provider of after-the-event insurance and medico-legal reports expects pretax profit of at least 800,000 stg against a loss of 342,000 stg last year.

LitComp said its after the event insurer Elite Insurance Company Ltd has finished its first full year of trading ahead of expectations, while the outlook for its medico-legal subsidiaries is positive due to the elimination of uncertainty in the market and a number of marketing initiatives.

Mineral exploration and development company Red Rock Resources added 0.75 at 3.62, after saying that Jupiter Mines Ltd has exercised its option to acquire Red Rock's Mt Ida and Mt Hope iron ore licenses in the Yilgarn region of Western Australia for 250,000 aud in cash and 1 mln aud in shares.

Red Rock will be entitled to a 1.5 pct royalty on production.

It said it will retain its nearby Mt Alfred license, but said Jupiter will have the right to match the sale price for 30 months from the grant of the original options, should the company decide to sell its stake.

Also making gains in the commodities sector were Pantheon Resources, up 3 at 36-1/2, after the company said the Kindee ST 949 number 1 well at the Wilson gas prospect in Texas has shown indications of at least two potential natural gas zones.

The mining company reiterated that it assesses gross best estimate potential reserves of 9 billion cubic feet for Wilson.

Pantheon has a 31.77 pct working interest in Wilson.

Progress was also made by, Formation Group, 4-1/4 ahead at 31-3/4 as the company said it has agreed to a reverse takeover of property development company Columbia Design & Build Ltd for about 19.4 mln stg in shares, as part of its plans to establish a property division.

The sports marketing company also said it has agreed to issue about 8.8 mln new shares at 17 pence each to property developer David Kennedy or his nominee.

Formation plans to use the funds raised to assist in its subscription in Columbia Formation Group (Ireland) Ltd, the holding company for two major developments in the Republic of Ireland.

Also fairing well, First Property Group added 1-1/4 pence at 21-1/4, after news the Universities Superannuation Scheme has doubled its investment mandate with the company to a 100 mln stg commitment in the USS Fprop Managed Property Portfolio.

The property asset manager also said it has entered into a forward commitment to buy a retail centre, which is to be built in Bytom, Poland, for about 47 mln stg.

Full year results pushed Parallel Media Group (PMG) higher, up 0.12 at 1.37, as the company reported pretax profits of 359,000 stg compared to a 1.09 mln stg loss in 2005.

PMG also announced turnover of 4.56 mln stg up from 2.58 in 2005 and diluted earnings per share of 0.30 pence from a loss of 4.86 in 2005.

Commenting on the results, chairman David Ciclitira said: '2006 was a year of redevelopment and rebuilding for PMG and I am delighted with the strong progress the Company has made since last year.

Adding, that the company's progress has resulted in a maiden profit and has laid the foundations for PMG to continue to attract business from global brands in the executive sports market.

Results also helped Liontrust Asset Management, up 8-1/2 at 393, after the company said full-year pretax profit rose to 11.8 mln stg against last year's 10.5 mln stg and added that it is confident of making good progress in the current year.

In response, Bridgewell Securities reiterated its 'overweight' recommendation and Altium Securities repeated its 'buy' stance on the company.

Altium said it is raising its full-year 2008 estimated adjusted EPS forecast by 2 pct to 30.1 pence and its full-year 2009 estimates by 8 pct to 34.5 pence.

The broker is also raising its price target to 470 pence from 450, in line with market appreciation.

Contract news helped Zoo Digital to make gains, up 8-1/2 to 40, after the software provider said it has signed a contract with Mattel to develop DVD games.

Interactive titles made with Zoo's software include 'Who Wants to be a Millionaire?', 'Question of Sport' and 'Madagascar - Animal Trivia Game'.

Buyers also came for Nighthawk Energy, up 3-3/4 at 39-3/4, after news that Major Drilling, a Salt Lake City-based company, has started a ten-well drilling programme at Nighthawk's Cisco Springs project in Utah and that the drilling is likely to take about six weeks to complete.

The US-focused hydrocarbon production company said it is awaiting approval for the drilling of an additional ten wells, which is expected to be in place before the end of the present drilling programme.

A further ten permits have been submitted for approval, it said.

Nighthawk, which holds a 37.5 pct stake in Cisco Springs, and Running Foxes Petroleum Inc, operator and majority holder, will buy a further 1,211.19 acres of land at Cisco Springs bringing their total area held to over 18,000 acres.

Positive comment in the Midas column of the Mail on Sunday lifted Neutra Health up 1-1/2 at 12-1/4.

Meanwhile, Xansa were firmer, up 1 at 87-1/2, after the company announced the successful sale and leaseback of the its Indian real estate assets with Alpha Tiger Property Trust Ltd for 35 mln stg, with Seymour Pierce reiterating its 'outperform' stance.

In a note this morning, Seymour Pierce said it highlighted Xansa as a stock worth revisiting in its most recent edition of Tech Notes, published last Friday.

It added that, with an April year, and having made solid progress on new and extended contracts, Xansa appears to be headed towards reporting a robust set of results, having bucked the trend pf project cost overruns from the likes of LogicaCMG and Scisys.

An announcement today, confirming that Gareth Bale will join the football club has given Tottenham Hotspur shares a boost, up 7 pence at 133.

Earlier today, Southampton Leisure Holdings said it has agreed terms for the transfer of Gareth Bale to Tottenham for a fee of up to 10 mln stg, comprising of an immediate payment of 5 mln stg and further conditional payments up to a total additional consideration of 5 mln stg.

Moving onto the downside, Stanelco fell over 42 pct, down 0.49 pence at 0.67, after the company said trading expectations for the full year will be 'adversely affected' by patent challenges lodged against its joint venture company Biotec.

The company added that trials of its Greenseal product showed the application is unlikely to lead to commercial sales.

The company put its plans to manufacture Biotec products in the US on hold and its sales and product pipeline from the 50-50 joint venture with SPhere SA is currently nascent and is expected to be developed over the next 18 months.

Underlying trading at its radio frequency application division remains steady, the company said.

In a trading update, the company said it is reviewing its cost base and has 11 mln stg in cash balance as at end-April.

Meanwhile, Biofuels Corporation lost 6-1/4 to 10, after news it is currently in discussions with Barclays over a planned restructuring of the group's 100 mln stg debt.

In March, Biofuels, which is constructing a 250,000-metric-tonne biodiesel plant at Sea Sands, Middlesbrough in the UK, said it is considering a 'range of options' -- including a debt-for-equity swap -- to restructure its debt in order to secure its future.

Biofuels, which has been struggling to cope with the weak market and increased costs, has secured additional funding from Barclays, it main creditor, early this year.

Also falling away, Isoft was down 9-3/4 at 41, after IBA Health Ltd said a key partner in iSoft has withheld its consent for IBA's 333 mln aud takeover offer aimed at creating one of the world's largest healthcare software providers.

IBA said Computer Sciences Corp (CSC) has indicated it will oppose the takeover, which has been recommended by the iSoft board.

IBA said CSC has not given reasons for its stance and that both iSOFT and IBA are now seeking clarification on the matter.

In a statement to the London stock exchange, iSoft said that it 'has received a notification from Computer Sciences Corporation that it does not intend to give the consent to the change of control in iSoft that is a condition of IBA's offer.'

Finally, the employee-owned retailer, John Lewis of Hungerford were down 0.30 at 2.65, after interim results showed an improving sales performance but still showed a first half loss, albeit, reduced.

John Lewis said revenues have increased 32 pct to 1.90 mln stg from 1.43 in 2006 and normalised pretax loss has been reduced to 51,000 stg from 289,000 in 2006.

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