LAST WEEK/ THIS WEEK

The FTSE 100 fell -1.4% to 5453.7 last week while the Aim All Share Index at 692.3 marginally improved. The 2009 relief rally has meet the cold blow of the immediate prospects for 2010. No need for a great sell -off but maybe less reason to buy other than special situations. Non-economist’s may shudder at Thursday’ Public sector net borrowing requirement while Unemployment on Wednesday and Retail Sales on Friday are unlikely to surprise.
 
Company Reports

Avesco (AVS) – £5.2m@20.5p
The 12 months to the 20th September 09 are described as the worse trading conditions in Aveso’s history. On turnover of £90.2m (£94.8m last-year) the company made a trading lost £9.8m (profit £1.6m) and a full loss of £13.2m which nearly includes the kitchen sink. Avesco provide services to three markets: corporate events including conferences, exhibitions and presentations, sports and entertainment events and finally broadcast services which include the provision of equipment and studio facilities. As a ray of sun in a cloudy sky some stability was reported to have returned to these markets. 2010 will include a number of major global events that will bring additional revenue. Forward visibility is limited, but the level of customer enquiry was reported to have improved. The current year includes the Vancouver Winter Olympics, FIFA World Cup and the World Expo in Shanghai and there are early signs of confidence returning in the corporate sector. Perhaps it is premature to suggest the verge of an upturn but stability may be enough to get to break-even as they are well positioned to benefit as and when markets do recover.
Financials
The net assets were £38.5m (2008: £53.0m), equivalent to £1.48 per share. At the year-end, the Group had net debt of £21.1m with a further £5.1m available in undrawn facilities, leaving gearing at a manageable 55%. During the year the Group renegotiated its banking covenants, giving more covenant headroom going forward.

Verona Pharma (VRP) – £38m@16p
The respiratory and inflammatory diseases drug discovery and development Company released an end of financial year trading update which confirms that it is on track to deliver the stated business plan. The company successfully raised £2.8 million (net of expenses) during December and this further strengthened an already strong balance sheet. We estimate the company closed the year with a net cash balance of £3.7 million, which is more than sufficient to secure the first licensing agreement (for RPL554) and actively fund the development of VRP700. On 8 January 2010, Verona received the final quality assured study report for RPL554 from the Centre for Human Drug research at Leiden University for the phase I/IIa trial of RPL554; the company’s novel asthma and allergic rhinitis (hay fever) treatment. This report further strengthens the company’s hand in ongoing licensing discussions with major pharmaceutical companies with expertise in the respiratory area, particularly those with good inhalation device and formulation skills. We continue to anticipate a licensing agreement during 2010.
Financials
GECR value this company on the basis of a conservative Discounted Cash Flow model, which assumes positive Stage 1-3 data and commercialisation of only one product by 2016, RPL554. Medium term revenues from the lead product, we anticipate a £10 million upfront payment and milestone payments totalling £50 million over 5 years (but these could be up to £100 million and possibly over 4 years not 5). The estimate of Verona’s Net Present Value at 38.2p.

Cinpart (CINP) – £15m@16.5p
A placing at 12.5p a share raised £1,050,000 before expenses and will fund the establishment of subsidiaries in various international markets including; Australia, Thailand and Southern Europe. These new subsidiaries will, market, sell and install the VoltageMaster products which are to be produced in the group’s Thailand manufacturing facility. Christopher Foster, executive director acquired 2 million shares and now holds 7,525,071 which is 8.65 %. There was also an intriguing statement that there are discussions with a UK focused blue chip energy supplier regarding a strategic partnership relating to the development of new markets for the energy saving VoltageMaster product.

Henderson Morley (HML) – £4m@3.5p
On 6 January, the company released interim results for the six months ended 31 October 2009 that showed a pre-tax loss of £579,502 that was slightly ahead of the comparable period’s £547,984 while the loss per share was 0.06p compared with 0.09p.The group continues to pursue its strategic objective of becoming a ‘pure play’ vaccine company by 2011 and last November’s capital raise of £273,751 assists in the process while the company concludes its discussions with a potential buyer for some of the ICVT Human technologies. The company anticipates making an announcement within the next 60 days.

Media Corp (MDC) – £6.9m@2.6p
Since the start of the current financial year, Media Corporation, the AIM listed advertising network and internet publishing group, has transformed significantly following the Purple Lounge acquisition. Additionally, there are growing signs that the advertising market’s recession is at least over the worst and no longer deteriorating and may even be improving. While on 1 December, following hot on the heels of Google removing its listing penalties on www.creditcardexpert.co.uk and www.gambling.com, the group announced the relaunch of http://www.gambling.com/. Which is all this positive news flow.

Minoan (MIN) – £11m@16p
Minoan placed 3,340,671 shares at 15p to raise £501,100 which included a significant financial contribution from directors. The proceeds will mainly be used to make further progress with the 6,500 acre (10sq miles) Cavo Sidero leisure village project and to help progress the Company’s recently announced intention to develop a meaningful presence in the Greek renewable energy market. Minoan has acquired two licences to develop a solar energy business and further progress is expected. The solar energy development may help unblock the planning delays at the massive Cavo Sidero site as the renewable energy represents compelling business and environmental logic. The site fully built-out could be worth in excess of £150m and the shares at 16p give a market cap of £11m.

Southern Bear (STBR) – £15.7m@1.9p
There was a blitz of announcements made in December. The interims to 30th September 2009 were announced, the acquisition of Intumescent Protective Coatings Limited (IPCL) with a £3.45m related fund raising and last and by no means least the appointment of 16% shareholder Nigel Wray as Non-Executive Chairman. The interim results showed a strong improvement due the organic and acquisitive growth with a 19% increase in operating profits before amortisation to £1.5m. IPCL has had a successful track record of more than 10 years and provides a range of contracting services with a focus on the application of fire protective coatings to steel structures and related procedures. IPCL has a wide range of blue chip clients which include multi-national organisations. As at 31 July 2009, IPCL had profits before tax of £1.04 million and net assets of £0.82 million. It was acquired for a total consideration of £4.83m of which £3.45m was paid in cash.

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