| CATEGORY: SMALL CAPS ROUND-UP |
Weekly Small Caps Review |
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Thu 30 Oct 2008
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LONDON (SHARECAST) - Shares in Clean Energy Brazil fell by more than half after the investor in ethanol-producing companies reported heavy losses and said it will not pay a dividend for the year.
The company reported losses of $97.3m in the year to April 30, compared with a profit of $2.1m over the same period a year ago.
The company was hit by rising production costs arising from weakness in the US dollar and the high oil price.
“We feel that these costs have peaked and are not foreseeing any major impacts going forward,” the firm said.
“Notwithstanding the above, the prevailing realisation price and production costs for the current crop season (2008/09) are expected to result in our investee companies not performing as well as in the last crop season.”
Lloyd’s insurer Advent Capital has slipped into losses in the nine months to September as claims and related costs more than doubled.
Pre-tax loss for the period came in at £1.9m versus profits of £12.9m in the same period last year. Claims incurred in the period doubled to £66.1m from £34.4m before, while reinsurance to close claims surged to £34.2m from £6.1m before.
The group said Hurricanes Gustav and Ike losses of £18.3m was within its expectations. “In the absence of further catastrophes in the fourth quarter, the company expects the 2008 Hurricane Losses to be absorbed within the full year 2008 earned catastrophe margin,” it said.
Gross premium written, excluding the reinsurance to close premiums, increased by 32.8% to £144.5m.
“Advent is well positioned in these difficult and uncertain times. Our underwriting business has lived through many challenges over the past 33 years and our experienced management and underwriting team is well prepared to take advantage of any opportunities that arise while maintaining our focus on underwriting profitability,” added the group.
WorldSpreads Group more than doubled profit during the six months ended 30 September and remains on course to top full year targets as it benefits from extreme market volatility.
Profit before tax and IPO costs jumped to €3.1m from €1.31m in 2007 on turnover up 69% to €8.43m. Average bets per day hit 4,793, up from 2,351 a year ago. The international business accounted for 15% of revenues.
“Trading since the end of September has been very strong and the group is confident that it is positioned to exceed the challenging targets that it set for the current financial year,” said boss Conor Foley.
Financial spread betting revenues grew from €4.5m (£3.54m) last year to €8.18m (£6.44m) this time, an increase of 82%.
Last month, the group said the recent ban on short selling financial shares is not expected to have a material effect on profits.
Management systems provider Gladstone has rejected the unsolicited approach worth £13.54m from Canadian firm Constellation Software.
Constellation had announced an all cash offer of 25p per share for Gladstone on 13 October.
But Gladstone said that shareholders have not yet received the formal offer document. "The offer is not recommended by the Board of Gladstone. Shareholders should take no action at this time until the board of Gladstone issues its full response," it said.
Telecoms billing software firm Intec Telecom said it has decided to terminate all offer discussion.
The group had received a preliminary approach in May and was involved in discussions to see whether a suitable offer would be forthcoming.
“Given the current market volatility, and on the basis that no such suitable offer has been received to date, the Board has terminated all discussions,” it said.
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