Oil adventurer on to Siberian winner

SHARES CITY TALK
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DANA PETROLEUM is one of that rare breed, an adventurer for Siberian oil and gas fields. Good news for the company this week after an independent review of its reserves in the Sortymskoye oil field in western Siberia. Dana has a 30 per cent stake, acquired in July. The review shows 57.3 million barrels, with a further 20 million barrels of probable reserves. That doubles Dana's interest in the field to 34 million barrels of probable and proven reserves. The shares, at 9p, are a racy buy.

KILLIK AND CO, the private client stockbroker, likes developments at Capita Group. The public-sector management support group announced two contracts for pounds 29m, last week.

The first, for pounds 14m, is with the London Borough of Bexley, to provide revenue services. The other, for pounds 15m, is to supply information technology services to the Society of Motor Manufacturers and Traders over the next four and a half years. The shares headed up to an all-time high of 280p, but on this evidence there is plenty more to come. Buy.

PRINTED circuit boards are at the heart of modern-day electronics products - from computers to washing machines. Britain actually has a good track record, despite the general impression of an undeveloped electronics sector. A company doing well is Forward Group, which supplies custom-designed, advanced-printed circuits to telecoms, medical, military and automotive companies.

One reason the shares have jumped is Forward's growing links with the likes of Nokia, Motorola and Ericsson, the heavyweights of the mobile telephone revolution. Last week, interim results to the end of July showed turnover doubled at pounds 20.52m, with pre-tax profits up from pounds 940,000 to pounds 2.01m. Earnings per share doubled to 14.2p.

While some of the growth came from acquisitions, continuing activities were also buoyant, and operating profits were up 65 per cent to pounds 1.53m. There is the added advantage of the UK firmly establishing itself as a low-cost centre. However, a three-fold increase in the shares over the previous year, to 635p, suggests it is time to take profits. Sell.

WHILE the likes of Wimpey and Tarmac have been under the spotlight this week, there seems little relief for smaller companies reliant on the fortunes of the construction sector. High- Point, a civil engineering consultancy, is a case in point. A pounds 2m provision wiped out operating profit of pounds 1.43m, while sales fell 3 per cent to pounds 41.76m. The exceptionals should have accounted for debtor write offs for the engineering and project management consultancy, but business in the UK will continue to be tough, as the Government cuts back on road spending.

Two bright spots are the US and Pacific Rim, where growth continues at a healthy rate. But with house broker Beeson Gregory only predicting a return to profit next year at pounds 600,000, the shares are a sell.

THERE should be an announcement from Peptide Therapeutics sometime towards the end of this week, giving more details on when it will price the shares for its coming flotation. PT is engaged in immunotherapy, specialising in allergy treatments. Expect it to raise some pounds 15m, to give a market capitalisation of pounds 50m. Its most promising product is an allergy vaccine for hay fever and insect stings.

Management has hit on a strategy of licensing out products at an early stage for other, better-resourced businesses to manufacture, sell and distribute. While this reduces the risks to the investor, it also reduces their rewards. For that reason, this cautious strategy may prove an ideal way into the sector for investors interested in biotech who do not want to face the uncertainties and cash calls of companies that seek to go it alone.

The logic of Peptide's approach, as analysts point out, is that the company itself will not sell a single drug. But it also hopes to buy in new drugs at an early stage of development. A small company could well have the freedom to manoeuvre that larger companies lack, so there is every chance this tactic could pay off.

AWAIT with interest results from Abacus Group, due out on 27 November. The electronics distributor has seen its shares race ahead since it was floated in November 1993. Although Abacus is on a current p/e of 25, the City expects results to hit pounds 6.2m for the year to September, reflecting steady progress from pounds 3m in 1993, and pounds 4.2m in 1994.

If the company meets this target, the p/e falls to a modest 16, against a more usual level for the sector in the low 20s.

Fuelling the growth is increasing demand for semi-conductors, for which its Dubilier business is expanding into new premises. Its market cap, in the region of pounds 80m, could well be on the move again. At 264p, the shares remain a decent buy.

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