Small Talk: Intellego to close gap in product range with software buy

Where there's muck, there's more brass for TEG

Intellego is one of the AIM's smallest companies, but it is not short on ambition. Floated in December, it advises companies on using the internet for staff training, and it is close to making a breakthrough acquisition.

Intellego is one of the AIM's smallest companies, but it is not short on ambition. Floated in December, it advises companies on using the internet for staff training, and it is close to making a breakthrough acquisition.

The company acts as a reseller for off-the-shelf e-learning software, which it packages for its clients depending on what they are trying to teach their staff. Until now, there has been a big hole in Intellego's offering: it has no expertise in training for the ubiquitous business software SAP. But the company is cooking up a couple of deals to change all that.

The rumour is that Intellego plans to buy a reseller of SAP software to bring that expertise in-house, while it is also planning to tie up the rights to a SAP training product as well. The company flagged a "near-term acquisition" in its maiden results earlier this month, promising to "increase its technical services capability into higher value projects". This young company achieved sales growth of 86 per cent last year even without the aid of an acquisition.

The deals, when completed, will allow Intellego to add to and deepen its relationships with big corporate customers that already include Securicor, T-Mobile, Reuters, DHL, Amec and the Open University.

Unwarranted

Those nice people at Healthcare Enterprises - the first aid kits to antiseptic wipes company - have been receiving calls about their warrants, which are trading at a discount to their apparent fair value that is, er, unwarranted.

The warrants are exercisable once a year, on 30 June, and 25 warrants give you the right to buy one Healthcare Enterprise share for just 1.5p. At the current share price of 92p, that would suggest the warrants are worth about 3.6p each. But you can buy them for 3.2p. Bargain.

Highbury House

Small Talk wrote last week about a private equity firm stalking Highbury House, the magazine publisher on the brink of collapse. We received a mystery e-mail suggesting that shareholders ought to reject Highbury's plan to sell most of its magazines to Future, because the rump of the business might not be able to service the remaining debt.

Although a private equity firm has apparently been trying to contact major shareholders this week, it seems time is running out for a change of course.

And anyway, says the company, the rump of the business is not doomed, despite the admission that it may need to be refinanced by shareholders. Our mystery e-mailer argued that earnings of just £400,000 annually from the core hobbies and lifestyle magazines remaining would have to cover debts of £25m. But costs can be cut, Highbury says, and there are other non-core businesses making a small profit whose eventual disposal will add useful sums to the debt reduction programme.

Bottom line: Highbury goes bust on 1 July if the disposals to Future are not approved. The private equity stalker needs the support not of shareholders but of Highbury's banks.

And finally

AIM is 10 years old next weekend, and the London Stock Exchange's lightly regulated junior market can expect to be toasted heartily after swelling to more than 1,000 companies over the past year.

To kick things off, a survey of company directors concluded that respondents "consider it to be the most successful small small- to medium-cap market in the world". But the survey, conducted by the accounting firm Baker Tilly, also raises an intriguing question. It says: "Only two out of 150 companies [surveyed] regretted floating on AIM." So which two?

TEG Environmental is a step nearer being allowed to use "Category III animal by-product" in its massive composting silos. What the jargon means, in TEG's case, is abbatoir leftovers including chicken feathers, heads and feet. And what it also means is a new lucrative market.

TEG's first silo at Sherdley Farm, near Preston, currently heats up garden waste and turns it into a rich compost, sold mainly to local authorities. But veterinary approval on "Category III", to be announced today, means it should be able to move into food and animal waste by the autumn.