Small Talk: Pan-Pacific raises £535,000 before digging for granite

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The Independent Online

Could there be signs of life at what has looked for some time like another AIM casualty? The bombed-out Pan-Pacific Aggregates raised £535,000 on Friday at 0.225p. Despite this, the shares barely blinked, finishing unchanged at 0.35p.

Are investors mad? This is a company that, after all, was floated four years ago at 80p.

But interesting things are happening. The Canadian group is thought to be close to one, possibly two, deals to buy quarries but the crucial date in its calendar is 25 August. That is when a public meeting will be held in British Columbia, to decide whether its ambitions to dig for granite at its Pumptown Quarry can be realised. The share collapse was caused by a series of disasters and the quarry has been the cause of many problems. First, it was closed because its access bridge was condemned and then the company was sued for millions. On 27 October 2008, PPA announced that HSBC had served a claim for C$13.26m (£7.35m), although it was heavily beaten down and settled for C$150,000. New management was drafted in after the deal and appears to have addressed the problems. The access has been sorted and, subject to the public meeting, work should start next month.

It helps that the planning officers and committee have said "yes". PPA lost £3.3m last year but a restructuring of the operating company was completed on 24 July and the new funding should see it through to the start of work, if all goes well.

The key point about the stock is that the economic outlook for aggregates within British Columbia is buoyant. Stimulus packages by the Canadian federal government are focused on infrastructure, so there are a number of supply contracts which Pumptown Quarry would be in a good position to win following receipt of the operational and by-pass road permits.

Some C$400,000 already sits the quarry floor ready to ship. Crazy investors? Like a fox.

Will weather knock online fashion too?

Last week, the Met Office delivered news no fashion retailer wanted to hear: the soggy July will be followed by a washout for the rest of the summer.

Rain will dampen sales of summer clothes on the high street but the impact on Asos, the AIM-listed online fashion retailer, is less clear cut. While poor weather could hit the purchasing of fashion brands on its site, Asos may actually benefit from customers having more time at home to buy items for their holidays.

Beyond any meteorological changes, rising unemployment among its core customers, aged 16 to 34, and a slowdown in online sales is starting to have a bigger impact on the sales at Asos. For the year to March, it delivered pre-tax profits up by 93 per cent to £14.1m, after sales jumped by 104 per cent to £165.4m. But sales growth halved in the 13 weeks to 26 June. In fact, City analysts expect Asos's sales growth to fall to between 35 per cent and 40 per cent this year and some have trimmed full-year pre-tax profit forecasts to about £19m.

Nevertheless, Asos is still expanding at a swift pace. It is introducing about 1,000 new product lines each week and has added discount designer, maternity and childrenswear. Its international sales shot up by 303 per cent last year and Asos now delivers to just shy of 60 countries.

Airline caterer in talks over £70m partnership

Journey Group, which supplies catering and in-flight products to airlines, suffered a testing 2008 and was hit by the turbulence in the industry.

The company, formerly Watermark Group, made a loss of £10.5m in the year to December. Its auditors issued a "going concern" warning in its annual report in June, although the directors expect its banking facility to be renewed at the end of this month. But Journey's prospects look much rosier after last week's announcement that its Air Fayre business, which caters for carriers including Air Canada and Qantas, had entered exclusive discussions with the Italian group Autogrill's Alpha Flight UK unit to create a joint venture of their in-flight catering at London's Heathrow Airport. The deal would be huge for Journey, which delivered revenues of £91.3m last year, because turnover for the potential combined business is estimated to be £70m a year. At a time when the airline industry is in a fragile state, Journey Group will be hoping the deal takes off.