Non-Footsie players are 1997's biggest winners - and losers
Friday 02 January 1998
With their much smaller capital bases, the non-Footsie players invariably experience the biggest percentage price movements. So it is not surprising that two up-and-coming groups which started the year as tiddlers and ended with capitalisations of around pounds 130m achieved star status.
Shield Diagnostic soared on exalted expectations that it had found a system for the early detection of heart disease. Robert Walters has scored by specialising in computer and financial recruitment. Sandwiched between them is Abacus Recruitment. It is still one of the third division players, capitalised at pounds 21m.
The health group closed at 717.5p on New Year's Eve, a runaway winner. It has been as high as 805p. Robert Walters ended at its peak, 521.5p.
Shield has had an extremely volatile year. In March it looked more a candidate for the losers' table than the winners. Its shares were hit by sudden doubts about its AFT blood test. But it survived the panic which halved the price from 805p in a few weeks.
Later in the year Shield had to contend with the surprising and unsettling departure of its managing director, Gordon Hall.
More positive information about AFT and thoughts that Shield will strengthen its links with Abbott Laboratories, the US group helped the shares shrug off their anxiety. There is even a school of thought that Abbott could be tempted to mount a takeover bid. In 1995 the shares bumped along at 32p.
Third placed Robert Walters, floated in July last year at 105p, has enjoyed the double bonus of rapid expansion and operating in a growing and lucrative market. Profits in 1996 were pounds 3.9m; something around pounds 8m is likely for this year.
Runner-up Abacus has had a remarkable couple of years. It featured in last year's top 10. In 1996 it was possible to buy the shares at 16p. Its booming performance is due to rapid profits growth. It has already "warned" that its interim profits will exceed pounds 800,000, matching the figure for the last full year.
Although it was a difficult year for many of the blue-sky medical shares, Drew Scientific also gets in the top 10, more on hope than achievement.
Coffee Republic is probably the most intriguing winner. As Arion Properties it had, despite a strong Slater family involvement, a rather pedestrian existence. At the helm was Chris Slater, son of share tipster Jim. Bahamas- based mega-rich trader Joseph Lewis (Christie's International, Glasgow Rangers FC, etc) had 23.4 per cent.
Yet it was the arrival of Bobby Hashemi and his sister Sahar that enlivened the shares. Arion paid pounds 3m in shares for their six London coffee bars. As news of the deal leaked out Arion was full of beans and when its shares were suspended ahead of the takeover announcement they had risen from 4.5p to 33.5p. They are now 25p.
It is an exceedingly rich price, capitalising the company at pounds 14.2m. Not bad for a business, now consisting of seven coffee bars, which says it will not make money for two years and will need a rights issue to achieve its target of 20 New York style coffee bars by December. The price values each of the coffee bars at more than pounds 2m.
Property is well represented among the best performers, although only Gresham House makes it into the top 10. It had the dubious distinction of being the first investment trust to have negative net asset value and at one time seemed a certain candidate for the corporate graveyard. Slowly it has returned to health and is even back on the dividend list. Still, it is unlikely to recapture its glory days; in 1987, ahead of Black Monday, the shares were 650p.
Proudfoot, a management consultant, is also a survivor. It has suffered heavy losses but is now seen as recapturing some of its old sparkle. In 1993 its shares were 122.5p.
Jarvis, the construction group now deeply involved in the lucrative world of rail maintenance, is another to make the top 10 for two consecutive years. In 1995 its shares were 4.75p.
What about the losers? Although AIM supplied three of the top 10, no fewer than seven of the worst performing shares are in the junior market. Of course, by its very nature, AIM has a high risk element and its shares carry a wealth warning. Still, such a strong losers' representation is worrying. AIM has had its successes but its crop of poor performers should be sounding alarm bells in the Stock Exchange Tower.
The four top (or bottom) of the losers list are AIM constituents. BKG Resources, it could be argued, suffered most of its indignity as fully listed Bakyrchik Gold. After a series of mishaps the Russian gold explorer was relegated to the junior market. Its shares, now 10.5p, once nudged 600p.
Multimedia, a CD Rom group, has issued a series of profit warnings; shareholders in OmniMedia, another CD Rom casualty, seem advised to rest their hopes on some sort of reverse takeover. Crown Products, a giftware group, is attempting a refinancing. The fully listed casualties include retailer Storedale and pipe-layer AH Ball.
Closing price % gain
Shield Diagnostic 717.5p 409
Abacus Recruit. 330p 290
Robert Walters 521.5p 283
Gresham House 23.75p 280
Drew Scientific 84p 273
Coffee Republic 25p 233
Polydoc 152.5p 221
Gaskell 420p 197
Proudfoot 43p 185
Jarvis 397.5p 180
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