Small Talk: Citel plans AIM float to cash in on internet phone calls

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A US company that claims to be unique in allowing businesses to make low-cost calls over the internet without having to replace existing handsets and wiring will today signal its intention to float on the Alternative Investment Market. Citel has products that help organisations to migrate their phone systems from traditional networks to "voice over internet protocol", or VOIP. In this way the Seattle-based group hopes to cash in on one of the fastest-growing parts of the telecoms sector.

Citel's key product is its Handset Gateway to which, it claims, there is no competitor. It already has a contract to supply Handset Gateway to the US telecoms giant, Sprint, and expects to secure further such deals in the future as more and more fixed-line carriers move into the VOIP arena. Citel products are already used by a number of US blue-chip customers, including United Airlines, American Express and TD Waterhouse.

In the US, were Citel gets the bulk of its revenues, VOIP services were estimated to be worth $1.2bn (£640m). That is forecast to grow to $23bn by 2009. Citel, which registered £4m in revenues for the year to March 2006, a 265 per cent rise on the previous year, hopes to raise £10m from its float.

Wages of sin

When Interactive World came to AIM last month it described itself as a "distributor of digital media content to mobile phone and internet users". The low-key float saw the group raise £2m of new money at 73p, giving it a total value of £28m.

However, the digital media the group distributes - mainly to mobile phones - is pornographic in nature. The group gets the bulk of its content from Sports Newspapers, which publishes the Daily Sport and Sunday Sport. It shares the same majority shareholder, the porn magnate David Sullivan.

Interactive World has a technology platform that enables people to download adult images to their mobile phones irrespective of what network provider they are with. It is not the world's most noble business, but it is very profitable. The group made a pre-tax profit of £3.1m in 2005. That is forecast to rise to £4.2m in the current year and to £5.4m next year. Based on these estimates it is valued at just 7 times 2007 earnings. Whatever one may say about the ethics, one thing is for sure - it is cheap by City metrics.

CMR powers up

Small Talk urged readers to take a look at CMR Fuel Cells when it floated at the tail end of last year at 176p. Since joining AIM the group's shares have performed well and closed at 214p on Friday. The stock should get a further boost today when CMR puts out a bullish update highlighting the progress it has made towards its goal of making fuel cells a commercially viable source of renewable power.

The company's statement will show that it is six months ahead of schedule in delivering a fuel cell capable of matching current standard batteries.Existing batteries are struggling to produce the performance increasingly required by users of mobile phones and laptop computers.

Accident firm seeks to fix listing

The UK's largest provider of accident repair services is heading towards a debut on London's junior stock market. Nationwide Accident Repair Services will today unveil plans to join the Alternative Investment Market, a move that will allow its private equity backers, Guinness Peat Group and JO Hambro Capital Management, to cash in some of their chips.

The Oxfordshire-based group operates a network of 69 accident repair centres across England, Scotland and Wales. It is five times the size of its nearest competitor and provides services largely to motor insurers and fleet operators. As well as doing repair work, the company has a fleet of 3,300 courtesy cars for drivers whose vehicles are being repaired.

The float is forecast to value ARS at £50m to £55m. Its private equity owners intend to selling a 35 per cent stake, which should raise about £18m.