Treasure-hunting in the Ofex

No Pain, No Gain: Derek Pain

Motion Media, the star performer of my Ofex portfolio, is due to graduate to a full listing next month. Since I drew attention to the company in September the shares have climbed from 90p to a 2,775p peak before they were suspended in the run up to the flotation at 2,275p.

The video phone group evolved from Inmos, one of those over-hyped Government initiatives such a major part of Westminster thinking a few decades ago. Ken Burgin, MM's 43-year-old founder and managing director, spent eight years with Inmos which carried Britain's hopes in the then-fledgling microchip industry.

The shares arrived on the fringe, lightly regulated Ofex market nearly four years ago at 67.5p. Until they took off last year they had, except for a few flurries, attracted little interest and at one time fell to around 50p.

Helped by a series of intriguing developments and the telecoms boom, the shares romped ahead and it soon became clear MM had made more than enough progress to justify elevation to the full market.

Capital changes ahead of the flotation acknowledge the dramatic fall from grace of high-tech shares. The sharp declines should not surprise readers of the no pain, no gain column but could not have come at a worse time for a telecom company going upmarket. There was talk of the shares being priced at 200p. The group settled for a more realistic 140p, putting a price tag of 1,400p on the shares in their old Ofex form.

The group is raising £16.9m and at the issue price is capitalised at £141m. Refreshingly, directors are not cashing in on the float by selling shares. MM is, as befits a high-tech company, loss-making and although chairman Rex Thorne looks forward to an "exciting" future there is no profits forecast and dividend payments could be a long way off. Although a small player in an industry dominated by giants, it is difficult to disagree with Mr Thorne's assessment.

MM does have an array of intriguing products, from video phones to video conferencing systems and surveillance products.

Intriguing opportunities are offered by the video communications market. Besides the video phone there are possibilities for healthcare such as links between various hospital units, and support for elderly or infirm people in their homes. Then there is the great Orange hope - video mobile phones. MM is helping develop the new Orange video mobile, due to be launched later this year.

During MM's final days on Ofex there were rumours Orange would be involved in the flotation, possibly taking up to a 10 per cent stake. But if Orange does nurse such an intention it is waiting until after the shares are trading on the stock market.

The elevation of MM means my Ofex portfolio needs strengthening. There are only two remaining constituents which have had a mixed time.

Cardington, an events and exhibitions organiser which has the Public Record Office at Kew as one of its clients, has moved from a 30.5p tip price to 57.5p; the shares have touched 122.5p this year.

MILs Technology has fared less well, falling from 41.5p to 28.5p. The group is developing an under-floor lighting system to help evacuation from confined areas, such as aircraft and ships. It recently produced an encouraging progress report and says it should soon be in a position to meet orders. I am not too worried by the share fall.

I have not decided on an Ofex replacement for MM. I hope to alight on a suitable share (or shares) in the next few weeks. Ofex can be a high-risk area, even for experienced investors. It is more a share trading facility than a share market.

It offers a vital avenue for the development of small companies and has witnessed the arrival of a few fully-listed high-tech stars which are still showing spectacular gains for those who got in during their Ofex careers.

EasyScreen, Knowledge Management Software and Robotic Technology are three which have rewarded investors who backed them when the companies took the Ofex route.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Life and Style
food + drink
Arts and Entertainment
musicBand's first new record for 20 years has some tough acts to follow
Life and Style
Shoppers in Covent Garden, London, celebrate after they were the first to buy the iPhone 6, released yesterday
Liam Payne has attacked the media for reporting his tweet of support to Willie Robertson and the subsequent backlash from fans
peopleBut One Direction star insists he is not homophobic
Life and Style
healthFor Pure-O OCD sufferers this is a reality they live in
Arts and Entertainment
A bit rich: Maggie Smith in Downton Abbey
tvSeries 5 opening episode attracts lowest ratings since drama began
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Quantitative Risk Manager

    Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

    COO / Chief Operating Officer

    £80 - 100k + Bonus: Guru Careers: A COO / Chief Operating Officer is needed to...

    Senior BA - Motor and Home Insurance

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Market Risk & Control Manager

    Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

    Day In a Page

    A roller-coaster tale from the 'voice of a generation'

    Not That Kind of Girl:

    A roller-coaster tale from 'voice of a generation' Lena Dunham
    London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

    London is not bedlam or a cradle of vice

    In fact it, as much as anywhere, deserves independence
    Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

    Vivienne Westwood 'didn’t want' relationship with McLaren

    Designer 'felt pressured' into going out with Sex Pistols manager
    Jourdan Dunn: Model mother

    Model mother

    Jordan Dunn became one of the best-paid models in the world
    Apple still coolest brand – despite U2 PR disaster

    Apple still the coolest brand

    Despite PR disaster of free U2 album
    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits
    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments