Real bad news for RGF

Shares in Real Good Food (RGF) fell 43 per cent to 39.5p this week on a profit warning at the group’s AGM. Although sales volumes at the Napier Brown sugar division have improved since March, margins have suffered in competitive markets. Encouragingly, the other parts of the businesses –ingredients, baking and fresh fish – which contribute more than half of earnings, are expected to perform ‘in line with expectations’.

Also under pressure was communications equipment repairer CRC (CCG), down 37 per cent to 35.5p on Friday on news of disappointing trading. Even though a number of divisions are making ‘good progress’, pre-tax losses are on the cards for both the first half and full year as a result of various one-off costs.

After extreme recent volatility on the markets, by Friday afternoon the FTSE 100 was trading 75.6 points firmer at 5,753.3, adding to Thursday’s 91-point gain, with AIM advancing 15 points to 1,118.1 ahead of the Bank Holiday weekend.

US bid for DCS

Some glimmers of good news did manage to penetrate the cloudy small cap atmosphere. DCS (DCS), the car dealing software specialist, accelerated 37.5 per cent higher to 30.25p on news of a takeover by US outfit Reynolds & Reynolds. As part of the £10.9 million deal, shareholders will receive 31.5p in cash per share, valuing the business at £21.7 million.

Marketing and advertising agency Adventis (ATG) added four per cent this week to 45p after increasing annual profits by 34 per cent to £1 million. Adventis also announced the acquisitions of healthcare specialist Roundhouse Advertising and 'planning and buying' agency Coltman Media for a maximum £8.7 million in cash and shares.

A pair of TV producers posted upbeat numbers. Deal hungry RDF Media (RDF) accompanied strong maiden full year figures to January with claims it is ‘making more programmes in more genres for more broadcasters than ever before’. Profits before tax and float costs skipped 26 per cent higher to £5.3 million, driven by buoyant rights sales and acquisitions.

Sector peer Shed Productions (SHDP) delivered a sound set of results for the six months to February, with chief executive Eileen Gallagher saying the group’s development slate is ‘the healthiest it’s ever been’. Shed’s sales zoomed up 46 per cent to £17.3 million, of which £7.3 million came from November acquisition Ricochet. The shares returned to 123.5p today, for a flat performance over the week.

Red tape boosts Jelf

Jelf (JLF) lifted first-half profits to March by 60 per cent to £490,000 before tax, helped by a vigorous acquisition policy, with chief executive Alex Alway arguing the more stringent and expensive regulation of small insurance brokers is driving them into Jelf’s arms. The shares rose four per cent over the week to 162p.

Transport and regeneration counter Sutton Harbour (SUH) dipped four per cent lower to 248.5p in spite of cheering with a record 44 per cent profits spike to £3.4 million for the year to March.

And specialized chemicals play Zirax (ZRX) was in bullish mood after lifting annual pre-tax profits a modest 6.4 per cent to £945,000. Shares in the company, which produces de-icing products for the City of Moscow and other clients, remained frozen at 13.5p.

Looking forward

Next Friday Inspired Gaming, a leader in the UK field of server-based games played in pubs, bingo halls and betting shops, is scheduled to make its debut. The group has raised a momentous £108 million in an accelerated IPO at 180p with the help of Evolution Securities, the bulk of which will be used to pay third party debtors. The remainder will enable the group to complete an acquisition and ramp up the roll-out of its digital platform.