BioProgress in recovery

In the week before Christmas investors played safe and marked down small cap shares ahead of the festive break. In quiet trading the AIM Index conceded four points to 1024.2 but the FTSE 100 rallied nearly 50 points to 5590.4.

For the year as a whole the blue chip index has easily outperformed AIM, showing an 18 per cent gain versus a four per cent rise for the thriving junior market.

Although few shares changed hands, a number of deals were completed in time for Christmas.

Drug delivery systems developer BioProgress splashed out £8.5 million to acquire Dexo, a producer of branded drugs for the French market. This should provide some stability for BioProgress, which lost £6.2 million in the first half. This poor trading resulted in the departure of chief executive Graham Hind.

The new management has chopped costs severely. Dexo is profitable and produces annual revenues of £4.4 million. Finance director Dan Farrow plans to try BioProgress’ novel technologies on Dexo’s established products – France is open to new treatment methods.

If all goes to plan he believes the entire group should break even next year. Investors welcomed the deal, accompanied by a £6 million fundraising at 47p. The shares rose five per cent to 57p.

Newmarket in the stalls
Newmarket Investments, another company that has disappointed investors during its tenure on AIM, also revealed a promising new path. The group will sell its loss-making Goalstriker theme park penalty shoot-out game and re-focus on racing.

Newmarket, which made a £400,000 loss in the six months to September, has persuaded Tony Gadsby Peat, formerly with the sports management colossus IMG, to become chief executive.

He aims to find a suitable reverse takeover deal but will concentrate on the group’s remaining operations: British Bloodstock Agency and BBA Insurance Services. The shares improved 1.5p to 19.5p over the week.

A deal was also mooted at business broker Dipford after the group lifted pre-tax profits 20 per cent to £104,500 in the six months to October. Dipford wants to increase its borrowing to fund an acquisition, now under 'advanced negotiations'.

The group has carried out a number of acquisitions during its history, including, most recently, Kings Business Transfer, bought this July for £2.1 million in cash and paper plus an earn-out. This 'has added significantly to the profitability of the group'. The shares were unchanged at 63.5p during the week.

Malins fined
It was a poor week for Jo Malins, finance director of Cambrian Mining, after the FSA fined him £25,000 for market abuse. Cambrian fell 9.5p to 108.5p. Malins has resigned as a director of Asia Energy, down 16 per cent to 359p.

D1 Oils kept falling as the market continued to digest the disappointing news that the group would no longer tie up with fellow AIM-listed green fuel maker Biofuels. D1 dropped 22 per cent to 173p.

Profit-taking ahead of next month’s interims affected recreational drug tests developer Cozart, off 22 per cent at 23.5p. This means the shares are now below last year’s 30p admission price.

An even worse performance came from wireless antennae maker Sarantel, which plunged 47 per cent to 25.5p after warning that first half profits would be ‘materially below’ market expectations. The shares joined AIM in March at 82p.

More positively, Symphony Plastic Technologies jumped 122 per cent to 13.88p after an appeal by rival Environmental Products about the use of confidential information amongst other things was dismissed in the courts.

Watch out for Vigilant
Tel Aviv-based Vigilant, a technological leader in the fast-growing high-end CCTV arena, debuted on AIM on Tuesday, showing a small gain of 1.5p to 44.5p on the 43p price at which £10 million was raised.

The group designs sophisticated ‘intelligent’ security and surveillance solutions. The systems are already in place at Israel’s Ben Gurion airport, Bluewater Shopping Centre in Kent and via contracts with three London boroughs.

House broker Shore Capital forecasts a move into profits this year on sales of $8.5 million. The technology allows customers to record, compress, store, review and analyse digital video footage collected from their security cameras.

Fellow CCTV developer Quadnetics also enjoyed a good week, rising 21 per cent to 235p. The group, which bought rival Protec last month, has used surplus cash to buy back shares.

This morning CMR Fuel Cells leapt 9.4 per cent to 192.5p as shares in the group, spun out from Generics, started trading for the first time after broker Investec raised £10.3 million