Companies: AVM    MEG   

Positive trenching results at South Sulawesi in Indonesia, which indicated ‘significant intervals with encouraging gold grades,’ has prompted Evolution analyst Keith Watson to put a buy label on Avocet Mining.

His colleague Hector Forsythe is not so bullish about progress at MICE, the ‘international experiential marketing services’ group. According to Forsythe, ‘the divisional performances by the group were positive. But then there is the central unallocated cost line at £2.5 million compared to £0.9 million last time – we didn’t see all that coming.’ While he goes on to explain that this was a mix of one-off costs, losses on disposal and the higher cost base from the expansion of the finance function, he points out that interim pre-tax profits came in at £2.7 million, largely because of a £1.3 million gain from existing hedging arrangements.

The real problem for Forsythe though is the group’s debt, which stood at £50 million at the interim stage and, due to working capital requirements, is likely to be higher still at the end of the year. ‘This is the most pressing issue for the group,’ he says, ‘the market needs to know the group will become a net generator of cash, finally, after too many promises.’