LONDON (Thomson Financial) - UK small caps were sharply lower in early trade, mirroring the wider market where an initial mark-up failed to hold. Clinton Cards stood out among the losers as dealers reacted to a disappointing sales update.
The FTSE Small Cap index was 15.3 points shy at 3,499.1 by 9.15 am, while the FTSE 100 was 30.2 off at 6,090.6.
Among fallers, a disappointing sales update undermined Clinton Cards, 4 pence adrift at 58.
Group like-for-like sales for the 16-weeks to Nov 18 rose 2.0 pct -- Clinton brand sales by 1.6 pct, and Birthdays brand grew 3.1 pct.
In reaction, Seymour Pierce reiterated its 'underperform' stance, continuing to see downside risk to forecasts.
Freeplay Energy was another casualty, sliding 2-1/2 to 6-1/2 as the energy products maker revealed its hunger for cash. It will raise about 1.47 mln stg through a placement of 34.71 mln shares, but is still exploring other means of funding to reach the 3 mln usd mark, which is required to finance the company until April 2008.
The company also said it requires about 6 mln usd to fund its working capital needs for the next 12 months.
Meanwhile, its revenues for the 10 months to October rose 16 pct to 5.7 mln usd, and it continues to trade in line with its expectations.
On a brighter note, progress was seen in Maghreb Minerals, 1.1250 up at 6.25, after the AIM-quoted exploration company said that new analysis had showed significantly higher zinc grades at Bou Jabeur.
Licence extension news was good for a gain of 0.0150 to 0.2100 of a penny in Angel Biotechnology.
The biopharmaceutical contract manufacturer revealed its manufacturer's authorisation for investigational medicinal products has been extended for a further two years following the regular two-yearly audit of the Pentlands site by the Medicines and Healthcare products Regulatory Agency.
Elsewhere, a robust set of half-yearly results from ILX, the AIM-quoted business education and training specialist, boosted the shares 6 to 69.
Charles Stanley repeated its 'buy', stance on the stock in response to the numbers. With the reorganisation of the Best Practice division starting to show benefits, the broker believes the Mount Lane troubles of FY07 should be of less importance.
Its 80 pence price target is only 11.5 times the current year's earnings, falling to 8.8 times to March 2009. These multiples are not demanding, given the growth of ILX's core business, the broker concluded.
Accsys Technologies attracted support and rose 0.10 eur to 3.85 following news the company's Titan Wood unit has signed a full licence agreement with Diamond Wood China, in respect of rights to manufacture Accoya wood in China for an annual nameplate capacity of 500,000 cubic metres.
And Kryso Resources ticked up 3/4 to 14-3/4 as the resource estimate at the Pakrut gold project in Tajikistan was been raised to 1.06 mln ounces at a cut-off grade of 0.5 grammes a tonne.
The new estimate is about 77 pct higher on the original resource statement given in March this year.
Rambler Metals and Mining hardened 2 to 63 following news that the company's underground drill delineation program to test the Footwall Zone is underway.
Shares in troubled workwear and laundry group Johnson Service continued yesterday's rally, advancing 4-1/4 more to 90 amid talk of an approach from Nordic private equity group Industri Kapital.
Finally, and again on the upside, Care UK climbed 21 to 386 as Citigroup upgraded its rating to 'buy' from 'hold' on valuation grounds, while cutting its target price to 460 pence from 575.
The house cut its 2008 and 2009 EPS estimates by 7 pct and 15 pct respectively, reflecting the loss of the West Midlands Diagnostics contract, and also no further Wave 2 contract awards -- the bear case.
This implies -2 pct growth in 2008, but about 21 pct in 2009.
It said the bear case implies a 11.2 times 2009 calendarised PE, which is conservative for over 20 pct growth, in the broker's view.
If all Wave 2 contracts are won -- the bull case -- the broker estimates the 2009 multiple falls to 10.3 times. tf.TFN-Europe_newsdesk@thomson.com fjb/slm 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.
The FTSE Small Cap index was 15.3 points shy at 3,499.1 by 9.15 am, while the FTSE 100 was 30.2 off at 6,090.6.
Among fallers, a disappointing sales update undermined Clinton Cards, 4 pence adrift at 58.
Group like-for-like sales for the 16-weeks to Nov 18 rose 2.0 pct -- Clinton brand sales by 1.6 pct, and Birthdays brand grew 3.1 pct.
In reaction, Seymour Pierce reiterated its 'underperform' stance, continuing to see downside risk to forecasts.
Freeplay Energy was another casualty, sliding 2-1/2 to 6-1/2 as the energy products maker revealed its hunger for cash. It will raise about 1.47 mln stg through a placement of 34.71 mln shares, but is still exploring other means of funding to reach the 3 mln usd mark, which is required to finance the company until April 2008.
The company also said it requires about 6 mln usd to fund its working capital needs for the next 12 months.
Meanwhile, its revenues for the 10 months to October rose 16 pct to 5.7 mln usd, and it continues to trade in line with its expectations.
On a brighter note, progress was seen in Maghreb Minerals, 1.1250 up at 6.25, after the AIM-quoted exploration company said that new analysis had showed significantly higher zinc grades at Bou Jabeur.
Licence extension news was good for a gain of 0.0150 to 0.2100 of a penny in Angel Biotechnology.
The biopharmaceutical contract manufacturer revealed its manufacturer's authorisation for investigational medicinal products has been extended for a further two years following the regular two-yearly audit of the Pentlands site by the Medicines and Healthcare products Regulatory Agency.
Elsewhere, a robust set of half-yearly results from ILX, the AIM-quoted business education and training specialist, boosted the shares 6 to 69.
Charles Stanley repeated its 'buy', stance on the stock in response to the numbers. With the reorganisation of the Best Practice division starting to show benefits, the broker believes the Mount Lane troubles of FY07 should be of less importance.
Its 80 pence price target is only 11.5 times the current year's earnings, falling to 8.8 times to March 2009. These multiples are not demanding, given the growth of ILX's core business, the broker concluded.
Accsys Technologies attracted support and rose 0.10 eur to 3.85 following news the company's Titan Wood unit has signed a full licence agreement with Diamond Wood China, in respect of rights to manufacture Accoya wood in China for an annual nameplate capacity of 500,000 cubic metres.
And Kryso Resources ticked up 3/4 to 14-3/4 as the resource estimate at the Pakrut gold project in Tajikistan was been raised to 1.06 mln ounces at a cut-off grade of 0.5 grammes a tonne.
The new estimate is about 77 pct higher on the original resource statement given in March this year.
Rambler Metals and Mining hardened 2 to 63 following news that the company's underground drill delineation program to test the Footwall Zone is underway.
Shares in troubled workwear and laundry group Johnson Service continued yesterday's rally, advancing 4-1/4 more to 90 amid talk of an approach from Nordic private equity group Industri Kapital.
Finally, and again on the upside, Care UK climbed 21 to 386 as Citigroup upgraded its rating to 'buy' from 'hold' on valuation grounds, while cutting its target price to 460 pence from 575.
The house cut its 2008 and 2009 EPS estimates by 7 pct and 15 pct respectively, reflecting the loss of the West Midlands Diagnostics contract, and also no further Wave 2 contract awards -- the bear case.
This implies -2 pct growth in 2008, but about 21 pct in 2009.
It said the bear case implies a 11.2 times 2009 calendarised PE, which is conservative for over 20 pct growth, in the broker's view.
If all Wave 2 contracts are won -- the bull case -- the broker estimates the 2009 multiple falls to 10.3 times. tf.TFN-Europe_newsdesk@thomson.com fjb/slm 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.
© 2007 AFX News
