Friday January 11, 12:18 PM
UK small caps fall to session low at midday; SCi slumps as offer talks end
LONDON (Thomson Financial) - UK small caps fell to a session low at midday, weighed down by wider market weakness, with SCi Entertainment (Munich: 908725 - news) shedding half its value as offer talks ended.
At 11.57 am, the FTSE Small Cap index fell 30.80 points to 3,249.80 -- a session low -- as the FTSE 100 (news) index ran back 71.90 points to 6,150.80.
SCi Entertainment lost 67 pence to 67-1/2 pence as it terminated offer talks it has been holding since last September, as it has concluded it is unlikely that a sale of the company at its full value will be achieved.
Reacting, KBC Peel Hunt predicted an EBIT loss for SCi (Frankfurt: 605101 - news) of around 19 mln stg this year, with share volatility until confidence is restored.
A broker downgrade took 2-3/4 pence off Intec, on 41-1/4 pence, as Panmure Gordon cut its rating on the stock to 'sell' from 'hold'.
The broker cited tighter customer spending, a tough budgetary environment and a more competitive business environment, as it kept its 40 pence price target.
Polymer implants manufacturer Inion stayed 1-1/4 pence off the pace at 21 pence after investors failed to get excited by the company's trading update, in which it anticipates revenues of 2.5 mln stg for 2007, in line with current market expectations.
AIM-listed venue management technology provider Venue Solutions (LSE: VSH.L - news) slid 0-1/4 of a penny to 6-3/4 pence after warning full-year losses will be greater than anticipated due to further consolidation of YourDay Inc and a delay in two significant contracts.
The firm did say that, during the current financial year, it expects to realise increased revenues and contributions from the investments it made in 2007.
However, there was cheer for IT services group Ultima Networks (LSE: UTN.L - news) , staying top with a 0.30 a penny rise to 0.85 a penny, after reporting it has been making excellent progress at the operating profit level during the second half of the year.
In a trading update, Ultima also said it will not benefit from the one-off profit on disposal of property, as it did in 2006.
Chasing behind it was Imaginatik (LSE: IMTK.L - news) , 0-1/2 a penny stronger on 3.875 pence, as it won two 'important' contracts.
The first, from a global consumer goods company, is worth more than 0.6 mln stg over the next three years, including 0.2 mln in the current financial year.
The second is a pilot contract, which could lead to 'significant' future revenues, Imaginatik said.
Contract news also boosted Puricore (LSE: PURI.L - news) by 3-3/4 pence to 33-1/2 pence, as it won a contract with a large US food retailer worth 11 mln usd for its Sterilox food safety system, while software publisher NetDimensions (LSE: NETD.L - news) ticked a penny higher to 24 pence as it said Louis Vuitton has chosen its Enterprise Knowledge Platform (EKP) as the platform for its e-Learning system.
Oil and gas company Empyrean Energy (LSE: EME.L - news) rose 3-1/2 pence to 34 pence as it encountered 'significant' further gas shows and flares whilst drilling at the TCEI JV Block A 3 well at Sugarloaf Block A in Texas.
The company said testing is expected to commence shortly and a further announcement will be made when the workover rig arrives on site prior to commencing testing.
Red Rock Resources (LSE: RRR.L - news) rose 0-1/4 of a penny to 3 pence as it upped its stake in Retail Star Ltd, which has secured a uranium licence in Malawi, while Archipelago Resources (LSE: AR.L - news) took on 2 pence to 27 pence after announcing it plans to sell off all its interests in its subsidiary Archipelago Metals Ltd to its shareholders at 1 penny a share, with options also being offered on a one-for-two basis.
Numbers news boosted online gaming services provider NeTeller (LSE: NLR.L - news) 1 penny to 57 pence, as it said it is confident full-year results will meet market expectations with Q4 operating businesses trading in line with expectations.
The firm also said it will make the final payment of 38.25 mln usd on Jan 16 to the US authorities as part of a settlement related to Internet gambling prosecutions.
Elsewhere, cosmetic group Swallowfield (LSE: SWL.L - news) gained further, up 4-1/2 pence to 90 pence at midday, after opening its new filling and packaging plant in the Czech Republic, which it sees as increasing revenue and cutting costs.
Swallowfield said benefits of this new plant will be seen in the results for the year starting July 2008.
Finally, gold producer Goldplat (LSE: GDP.L - news) was lifted 0-3/4 a penny to 15 pence after announcing its gold recovery plant in Ghana, operated by its wholly owned subsidiary, Gold Recovery Ghana Ltd, is now in full production.
Goldplat also said further surface stockpiles in Ghana have been purchased and the company's client base has been strengthened.
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