UK small caps open higher, with Galleon up on Pepsi Mexico deal

UK small caps open higher, with Galleon up on Pepsi Mexico deal

	Published : Wed, 30 May 2007 09:37 By : Agencies Print this Story

LONDON (Thomson Financial) - UK small caps were higher in early trade, bucking the weaker trend of the wider market, with Galleon Holdings firm on the Pepsi Mexico deal and Dobbies strong on the bid approach, dealers said.

The FTSE Small Cap index was 11.5 points up at 4,160.2 by 9.15 am. The FTSE 100, however, was 49.7 adrift at 6,556.8.

Galleon Holdings ticked up 2 to 13-1/2 pence as the intellectual property rights, premiums and promotions company revealed that it has agreed to license its patented IP, EPIX, to Pepsi Mexico. This initial trial permits the manufacturing of 50 million units utilising the IP.

On the bid front, Dobbies Garden Centres rose 115 to 1,332-1/2 after the board confirmed press speculation that it has received a bid approach, while solid full-year numbers lifted HSBC Infrastructure 7-1/2 to 119.

Newcomer Itacare Capital Investments, a limited liability, closed-ended, real estate investment company, started life at 1.03 usd, compared with a placing price of 1.00 usd, while EuroTrust A/S, the wind energy and property development company and the only Danish company listed on AIM, opened at 11.00 eur.

Following the news, Seymour Pierce reiterated its 'outperform' stance on the stock. The broker believes the approach comes from Scottish entrepreneur Sir Tom Hunter, and reckons he would need to pay around 1,500 pence a share for the group.

A 98 pct increase in half-year numbers and a confident statement boosted Food & Drink 12 to 283-1/2, while Vianet Group edged up 0.25 to 4.00 as the provider of mobile data connectivity, cashless payment systems and vending solutions disclosed narrowing full-year losses and said it has sufficient cash, assuming few delays in sales growth, to develop the company to cash break even.

On the downside, Servocell Group ran back 7-1/2 to 38-1/2 after the lock manufacturer warned that its revenue in 2007 will be significantly lower than originally anticipated. It added, however, it is confident about the sales potential of its products with a very positive market reaction.

The company also said it is confident of achieving a significant increase in turnover moving into 2008 by delivering a range of products in 2007 and securing further distribution arrangements.

Also on the downside, Carter & Carter, a provider of learning solutions and outsourced support services, retreated 89 to 1,038 as traders expressed disappointment with the 1.75 mln of revenues the new 10-year College partnership agreement with North Hertfordshire College will contribute in the first year.

Shares in GCap Media dropped 14 to 244-1/2 following news of much-reduced full-year profits, a slashed dividend and a warning that total revenues for April and May 2007 are forecast to be down 2 pct and -1 pct respectively year on year on a like for like basis.

In reaction, Bridgewell Securities noted that as the UKs largest commercial radio group, GCap has had a tough year, bearing the brunt of volatility across the radio sector.

It added, however, that despite the difficult trading conditions, the company has managed to stabilise its audience, reprogramme and rebrand its key London station - having secured its pricing premium - and launch new stations.

Bridgewell believes that the company's strategy is correct and it is upgrading its recommendation to to 'overweight' from 'neutral' to reflect this.

Finally, Plethora Solutions dipped 10-1/2 to 165 as traders reacted to widening full-year pretax losses. These, the company said, reflected increased product development activity, but it added that it now has a platform for continued growth in 2007 and beyond.

The company, which develops treatments for urological disorders, incurred pretax losses of 6.13 mln stg for the year ended Dec 31, compared with a restated 5.80 mln a year earlier.

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