Small Talk: Winners and losers in the pay league revealed

Dinkie Heel grows - Generics powers up - Small caps warning - Moore eyes eateries - Sectorguard deal
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The Independent Online

Spare a thought for the poor souls who run AIM companies this Christmas. According to Growth Company Investor magazine, AIM chief executives were paid£144,900 this year on average, down 1 per cent on 2003. This leaves the average chief executive on the junior exchange earning just 12 per cent of what a colleague in charge of a FTSE 100 company gets.

Spare a thought for the poor souls who run AIM companies this Christmas. According to Growth Company Investor magazine, AIM chief executives were paid£144,900 this year on average, down 1 per cent on 2003. This leaves the average chief executive on the junior exchange earning just 12 per cent of what a colleague in charge of a FTSE 100 company gets.

Of course that does not mean that AIM is devoid of fat cats. Indeed, the Growth Company Investor survey found that their number is rising. Overall, 26 AIM companies paid over £1m to their boards, nine more than in 2003. The best paid was Philip Richards, chief executive of the hedge fund RAB Capital. He received £2.5m, which amounted to 11 per cent of the company's total turnover. Some way behind is Peter Lawrence, head of the animal feed group Lawrence, with £1.1m, and Oliver Hemsley, chief executive of the stockbroker Numis Securities, who bagged £884,000.

However, pay at the bottom of the league table is far from glamorous. The worst-paid three chief executives on AIM received just £42,500 in total this year. Right at the bottom of the pile is the ex-England cricketer Phil Edmonds. As chief executive of Capricorn Resources he was paid just £13,500 by the mineral explorer. But Christmas will not be cancelled in the Edmonds household as the spin bowler is also on the board of a number of other AIM mining groups.

Dinkie Heel grows

The fund management group Chelverton has been busy transforming Dinkie Heel, the shoe parts maker, into an investment company over the past year. After taking a controlling stake, Chelverton cleaned up the group's balance sheet and sold off under performing operations. The finishing touches to this process will be a fund-raising, and word has it that this will be completed before Christmas.

Dinkie Heel will raise between £3m and £5m, with the cash to be used for acquisitions. Those hoping for racy technology sector deals will be disappointed. Chelverton is looking for steady cash generative businesses, possibly in the marketing or distribution industries. What is left of the old shoe parts business will remain as a small subsidiary. Given the new focus of the group, investors can also expect a change of name in the not too distant future.

Generics powers up

The technology development group Generics will today boast of a new round of financing for its Atraverda unit. The business has developed a new type of acid battery design which enables an increased performance of 30 per cent over standard batteries while reducing their weight by a quarter. There certainly is a lot to play for in the global battery market. It is said to be worth $16bn a year.

The latest financing at Atraverda will raise £4.4m of new money for the business, of which £150,000 will come from Generics. Others involved in the fund-raising include Scottish Equity Partners and the US venture capital firm EnerTech Capital. The deal will leave Atraverda capitalised at £7m and Generics with a 23 per cent interest. It also means that the battery developer is now in a position to start production. It intends to base its manufacturing operation in South Wales and hopes to have the first batteries rolling off its production line in the second quarter of next year.

Small caps warning

For those investors looking to pile into small caps in 2005 there is a word of warning from Roger Cursley, UK equity strategist at Investec Securities. He believes that the market is already too optimistic about the smaller companies in the year ahead. According to his calculations, both the FTSE 100 index and the FTSE Small Cap Index trade at around 12.5 times next year's earnings.

But he notes that in order for the small cap index to achieve this rating, those companies which make up the index must grow their earnings by an average 34 per cent. This, the Investec analyst believes, is far too ambitious given the state of the wider economy. In fact he predicts that the first quarter of next year is likely to see a raft of profit warnings from smaller companies as they struggle to hit forecasts.

Moore eyes eateries

Emerging UK Investments, the cash shell, was last month rumoured to have made a bid approach to Bank Restaurants, which with a market capitalisation of just £1.3m is one of the stock market's smallest companies. Since then, word has it that Emerging UK has also approached the privately owned A-Z Restaurants, which controls the Michelin-starred Zafferano's and Aubergine in London, with a view to merging the two together.

Bank, where the restaurateur Jasper Conran holds a 25 per cent stake, has just three upmarket eateries and finds its shares at an all-time low. Behind Emerging UK stands the serial entrepreneur Andrew Moore. He is also chairman of Zyzygy, which not so long ago tried to buy the Ofex stock exchange.

Sectorguard deal

Finally, Sectorguard, the security guards specialist, is today set to unveil the acquisition of Choice Security Services. The group is expected to pay £100,000 for the Stourbridge-based business, which will become its new Midlands hub. SectorGuard, founded in 1998, has grown via a series of acquisitions and now boasts clients such as MFI, Birkbeck College and Shell International.

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