Derek Pain: There may be fringe benefits now Plus Markets is on sale
No Pain, No Gain
Saturday 18 February 2012
Is Plus, the City's rather sleepy fringe share market, set for a new, more active lease of life? I ask this question following the surprise announcement that its parent company has, in effect, put itself up for sale. There is, of course, a danger that the process could lead to the little stock market suffering acute damage. But I don't think that will happen. There is no doubt the Plus share-trading facility deserves to continue and could grow much stronger under new ownership.
The Plus market, where about 160 shares and bonds are traded, is owned by an AIM-traded company, Plus Markets. To many investors outside the City it is by far the most important segment of the group. But the company also offers a derivatives market and the ability to deal in a vast range of shares including many foreign stocks as well as fully listed and AIM shares.
It has spent huge sums developing what it hoped would be a full-blown stock exchange, a miniature version of the London Stock Exchange. However, its ambitious expansion has produced losses with profits not even in sight.
Certainly Plus has strayed a long way from its original structure. It was set up by a veteran City stockjobber, John Jenkins, when the LSE, in its infinite wisdom, decided to end its off-market, matched-bargains operation. Mr Jenkins, whose father launched a jobbing firm just after World War Two, created a market for the displaced constituents that did not want a quote but, as public companies, felt the need for a share-trading facility. His fledgling platform was also aimed at young, ambitious companies with cash calls in mind. He called his venture Ofex (Off Exchange).
As a fringe market, under the Jenkins guidance, Ofex attracted many groups, including such heavyweights as National Car Parks and Weetabix. Both have disappeared from the market. The fringe player had its problems but arrived on AIM and the shares topped 40p. However, the Jenkins AIM reign was short lived and new investors (with pots of money) and managers moved in. In 2007, its shares were above 30p. And, to emphasise that the company's new role would be much more than running a fringe share market, the name Plus was adopted.
But the group's ambitions, which overshadowed the original Ofex market, failed to generate commercial success. Losses piled up. The last recorded year's deficit, not bad by Plus standards, was £5.7m. In the first six months of last year, the last figures available, the loss was reduced from £2.5m to £1.4m.
Discontent grew among the group's backers. In October Amara Dhari Investments called a shareholders' meeting aimed at removing chairman Giles Vardy and electing Simon Brickles, who developed AIM and had already enjoyed a stint at Plus, to the board. City veteran Mr Vardy departed and the meeting was called off.
Now the sale process is under way. Certainly the fringe element should attract considerable interest with, I suspect, a number of City firms knocking on the Plus door. But whether there will be much interest in acquiring the rest of the group remains to be seen. Last year there was a conditional approach for the derivatives business but the mini-stock exchange, which has been described as a platform for City professionals to play around at minimum cost, could have little attraction.
Amara Dhari, a Kuwaiti group with 17.2 per cent, will have a major say in the fate of Plus. Interestingly it says the sale decision is "regrettable". The City's main representative on the shareholders' register is merchant bank Close Brothers with a near-20 per cent stake. serial investor, Bruce Rowan, who has built a 15.6 per cent interest largely as Plus shares have collapsed into the penny-dreadful category, is another important player. Mr Rowan, noted for his involvement with small caps, was quoted as describing the shares as a "gambling stock" during his early days on the Plus scene. As I write the shares are around 1p, providing a £3.2m capitalisation.
The Plus operation has in recent years become an authorised stock exchange. But official recognition has not served it well. Perhaps it should have stayed on the fringe.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Day In a Page
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens