Small Talk: Akers could begin to pump with a radical new deal

Click to follow

Small Talk last updated readers on Akers Biosciences back in July. Since then, the shares have climbed more than 50 per cent, albeit from an all-time low starting point. But there is more to come from one of the first American stocks to list on AIM.

Since hitting rock bottom at below 10p a share, Akers has enjoyed a much more positive newsflow. Last time we wrote, much depended on the signing of contracts with the US military to provide disposable breathalyser kits. Well, that $4.5m (£2.2m) deal was duly done and, barring disaster, the company should more than break even this year, and next year could be a real breakout one.

The word is that another deal is in the pipeline – this time to supply home-testing kits to calculate the amount of free radicals in the bloodstream. Free radicals attack cells and are thought to be a major contributor to cancer, and are increased through the high intake of, well, everything that is bad for you such as tobacco and alcohol.

Many people have been tempted into buying vast quantities of vitamin supplements in the hope of reducing free radicals, but until now there has been no way for most consumers to find out if these vitamin supplements are actually working. Rumours are that Akers is already making shipments of its kits and confirmation is thought to be imminent.

The potential market for this type of kit (which has no current competition) is vast. This may seem like an unrelated fact, but according to numbers released last week by the Federal Trade Commission, an astonishing 30.2 million US adults were victims of fraud last year. The vast majority were victims of healthcare scams. Anything that allows consumers to test the efficacy of their vitamin regimes should have customers lining up around the block.

This remains a high-risk story, as all biotech stories are. But Akers has finally begun to deliver on its promises, and investors with a hearty appetite for risk could do a lot worse than tuck a few away for a rainy day.

Priorities at Erinaceous

Several times in recent months, Small Talk has covered the tale of woe that is the property developer and manager Erinaceous Group.

Investors can't say they weren't warned – the shares have lost more than 80 per cent since we first raised our concerns, and anyone buying the stock a year ago has lost something like 95 per cent of their money, in spite of several aborted takeover approaches.

The news went from bad to worse last week, as another round of takeover talks ended, the company issued yet another gloomy trading statement and Fursa Alternative Strategies, a hedge fund that owns 19 per cent of Erinaceous stock through various derivative contracts, called for an EGM. It hopes to oust the former chief executive, Neil Bellis, and chief operating officer, Lucy Cummings, and if remaining shareholders have an ounce of sense they will back Fursa to the hilt.

Mr Bellis and Ms Cummings are inexorably linked with failure at Erinaceous. Property, perhaps more than any other business, is about people, and Erinaceous has been haemorrhaging senior staff for too long to make anyone believe that its problems do not start at board level. Unbelievably, both have retained their seats on the board.

Where its problems end is another matter, and even if the light at the end of the tunnel remains very distant last week's appointment of Tim Redburn as chief executive is a step in the right direction. He is a turnaround specialist, previously in charge at Esporta, the sports group formerly owned by Duke Street Capital. Although he certainly has his work cut out, he would not have taken the job if he thought it a lost cause.

His first task will be to rebuild internal relationships and keep the wolves from the door. His relationships with the banks that Erinaceous owes money to ought to be good – they asked him to take the job, after all. He must also to try to piece together the businesses that make up Erinaceous, deliver some synergies and get them all pulling in the same direction. But let's make this clear – this is an Augean stables of a mess.

Mr Redburn deserves some time to deliver – but doing that will be much easier without the baggage that Mr Bellis and Ms Cummings bring to the table.

Adilli looking to raise £1.5m to cash in on ethical consumer boom

Although it is hard to describe retail as a boom sector, ethical retailing is finding an enthusiastic customer base. Last year, spending on ethical retail products topped £1.3bn so look out for the online ethical clothing retailer Adilli, which is set to announce plans that it will seek a listing on AIM.

The company, which sells clothing and accessories via its website, is looking to raise £1.5m of new capital in order to fund an expansion of its range and increase its marketing opportunities.

The broker John East & Partners will be managing the issue of stock, which should give the company a value of approximately £5m when it lists.

The company, whose names translates from the Swahili words for "ethical" and "just", has been established since last year and sources its wares from producers who must adhere to strict environmental and ethical criteria. Its chief executive, Adam Smith, has 15 years of retail experience and is a former director of Dixons' e-commerce division.