LONDON (Thomson Financial) - UK small caps fell to a session low at midday, dragged down by heavy blue chip losses, with Xtract Energy tumbling as MEO Australia -- in which it holds 15.7 pct of the issued capital -- announced disappointing oil well news.
At 11.46 am, the FTSE Small Cap Index dropped 77.80 points to 3,112.20, a session low so far, while the FTSE 100 index ran back 251.00 points to 5,650.70.
Xtract Energy dropped 1.375 pence to 3.625 pence as it said MEO's Epenarra Darwin production test was unsuccessful, failing to produce hydrocarbons at the surface.
Hat Pin, which had earlier been the biggest faller, was 24-1/2 pence back on 54-1/2 pence after the human resources group warned full-year profitability will be about 25 pct below market expectations, primarily due to a poor performance from its legacy company, The Talent Business.
It named executive director and former chief executive of Akamai Financial Markets, Mike Brennan, as chairman of The Talent Business with immediate effect.
In response, Daniel Stewart cut both 2007 and 2008 profit estimates and shifted its stance on the stock to 'hold' from 'buy'.
EG Solutions fell 5 pence to 12-1/2 after the software company warned full-year revenues will be below market expectations, resulting in pretax losses. A profit warning also undermined Bioganix, 29 pence down on 82-1/2.
The waste management group said its 2007 results will be 'materially affected' by the outcome of arbitration over contracted materials supply from a major customer to its Parham facility.
Deal Group Media was the top riser, gaining 0-1/4 of a penny to 1.625 pence, as the online marketer won a contract to become the only approved digital media agency for Citibank Asia's credit card business line.
Meanwhile, the company, which is in discussions with other major brands in Asia to provide a similar offering, reiterated it expects full-year results to be in line with its earlier announcements, showing a reduced post-tax loss relative to that in 2006. This excludes the impact of the disposal of a majority stake of the UK business.
MAMA Group was up 0-3/4 of a penny to 5-1/2 as the holding company of music and marketing services businesses disclosed a swing to full-year profits and said it sees even stronger results in current year.
A substantial increase in half-year turnover and reduced pretax losses lifted shares in beauty brands company The Core Business up 0.125 a penny to 1.625 pence.
London Scottish Bank gained 3-1/4 pence to 28-3/4 pence ahead of its results on Wednesday. Beale, which recently warned on profits, staged a much-needed rally ahead of next Monday's full-year numbers, recovering 1-1/2 pence to 41-1/2 pence.
TomCo rose 0.225 of a penny to 2.175 pence as it said it has signed a letter of intent with Avenue Group Inc and its Avenue Energy Israel Ltd unit to acquire a 50 pct interest in the Heletz-Kokhav license, awarded to the subsidiary by the Israel Petroleum Commission.
In deal news, Entelos rose 1-1/2 pence to 22-1/2 on signing a research deal with UCB Pharma SA to conduct in-silico research in the field of rheumatoid arthritis using the Entelos Rheumatoid Arthritis PhysioLab platform.
Sarantel took on 0-1/2 of a penny to 8 pence, as it said it has received production orders for the SkyCaddie SG2.5 Pro Golf rangefinder device from SkyGolf.
Coffee Republic rose 0.125 of a penny to 2.30 pence as it signed a deal with Aquila Food Company to develop its deli franchise in Kuwait. Aquila, which is a subsidiary of Jassim Al-Sayegh Sons & Co, has agreed to roll out at least 14 units over the next five years.
Geong International also advanced in the wake of contract news, up 0-1/5 a penny to 66-1/2 pence, as it signed contract extensions worth 4.2 mln usd.
Proventec stayed 0-3/4 pence higher at 8.125 pence, following news its Osprey DeepClean unit has won a 14-month National Health Service tender for the sole provision of specialist steam cleaning equipment.
News that Galleon Holdings' Hong Kong based media solutions unit, Phoenix Investment Globall Ltd, has signed an agreement with Malaysian TV stations Metropolitan TV Sdn Bhd and CH-9 Media Sdn Bhd to supply its multi-platform interactive system lifted shares 1-3/4 pence to 31-1/4 pence.
A funding win saw Phytopharm gain 2 pence to 26 pence. Betbrokers took on 0.125 of a penny to 2-1/4 pence as it said its UK business is still performing strongly with the average deal size increasing 16.18 pct to 1,106 stg for the 2007 calendar year. The company also said it is confident of its future performance.
Alltracel Pharmaceuticals stayed 0-3/4 of a penny up on 10 pence in response to confirmation the company has received a very preliminary approach from a third party that may or may not lead to an offer being made.
Entertainment Rights edged up 0.35 of a penny to 8.35 pence, as The Sunday Telegraph reported that a string of private-equity firms in recent months have approached the company about a possible takeover. Parties that have expressed an interest include Saban Capital and Chorion, the newspaper reported. In reaction, Dresdner Kleinwort cut its rating on the stock to 'hold' from 'buy'.
Merchant House stayed 0.10 of a penny up to 1.875 pence as the AIM-listed financial service provider announced an association with independent law firm Merchant Legal LLP, saying this would be the first step in broadening its range of services and boosting operating margins. tf.TFN-Europe_newsdesk@thomson.com hmb/am COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
© 2008 AFX News
