Small Talk: Former cricketer on sticky wicket over biofuel
Monday 01 September 2008
Phil Edmonds, right, the former England spin bowler turned miner, is said to be annoyed about the press his businesses get for operating in countries such as the Democratic Republic of Congo and Zimbabwe, because other, bigger, companies operate in the same region and don't get so much stick.
He should probably get used to it as his latest venture is no less controversial. Today MrEdmonds is set to list Bioenergy Africa on the Alternative Investment Market (Aim), which will operate biofuel projects in Mozambique and has raised £8.6m from the IPO. The topic of biofuels can get people's hackles up, as they argue that the land used to generate ethanol could be better used to grow crops for food, keeping the cost of feeding people lower.
Bioenergy Africa counters by saying that the land in Mozambique had already been set aside for such a project and that by 2013, it plans to employ 7,000 local people. What is more, the groupundertakes feedingprogrammes that cater for as many as 1.5million in southern Africa.
All that is genuinely very commendable, and at the same time,because there is great demand for biofuel, Bioenergy Africa islikely to be a commercial success. MrEdmonds, however, probably cannot complain too much that he gets a few googlies from critics when he mines for platinum in Zimbabwe, and uses land that could grow food in Mozambique for the production of fuel.
Coal group fires up investors
All is well if you are a coal group in South Africa. Readers of last week's column will remember that there are huge shortages of the stuff in the country and an increasing number of mines are being reopened after being hitherto uneconomic.
That is fine so long as the miner is aiming to sell the coal to domestic energy producers. For those wanting to export it, to say China, where they can't burn the stuff fast enough to keep up with demand, they need a port to get it out of.
Coal of Africa used to be called GVM Metals but changed its name to avoid confusion when it switched its concentration to coking coal, used in steel production, from hunting nickel.
Thankfully for the group, which has increased its value from £3m at initial offering in 2005 to some £600m today, it has signed long-term agreements with ports in Mozambique and South Africa. Port allocations, particularly in South Africa, are tight, and this should help reach Landsbanki's 232p price target for the shares. Not bad for a company that has not actually produced anything yet.
Leather firm in fashion
Last Thursday must have come as a relief for management at Pittards, the maker of leather gloves and boots. In its interim results, the firm said that it has cut costs and managed to offset some of the problems caused by a weak dollar, probably the solution being that the greenback has strengthened versus sterling. The market was impressed, with the stock soaring by 62.5 per cent, to 1.625p. A reason to get leathered indeed.
Radio specialist on right wavelength
Tomorrow brings the AGM of Software Radio Technologies (SRT), a group that makes tetra communications devices – the radios used by police, to you and me – and what it calls marine AIS systems, used to alert ships of the presence of others nearby.
SRT is on the move. The managing director, Simon Tucker, who ended up buying the group after overhearing a conversation on a train, is soon expected to announce contract wins that will help the group to move into profitability in the second half of the year.
As with almost every group under the sun, SRT sees Asia as one of its key markets, and recently sold $1m worth of AIS products to a Chinese client. The AIS system in particular is useful: a couple of weeks ago marked the second anniversary of the death of three yachtsmen whose boat is thought to have collided with a ferry in the English Channel. It is a rather macabre marketing technique, but an AIS system would have prevented the accident, SRT says.
Tricky digital questions loom for Saatchi chief
These are interesting times in the advertising industry. As media big boys such as Johnston Press and ITV struggle to bring in the advertising revenues, imagine what it must be like for those that really are at the coal face.
One of the most famous advertising agencies is Aim-listed M&C Saatchi. Its chief executive, David Kershaw, above, reckons that the industry is not only facing a tricky time economically, but as consumers move to more digital forms of media, so the advertising industry must do the same.
To make sure that everyone at the firm is up to speed, one wag has insisted that all employees, including Mr Kershaw, take a digital proficiency test. Let's hope it does not include questions about airlines. M&C Saatchi famously lost the British Airways account a few years after coining the tagline of "the world's favourite airline". It was also the agency that counted the business travel specialist Silverjet among its clients. That'll be the same Silverjet that went bust two months ago, then.
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