Small Companies Notebook: Fresh chairman prepares MOS for better days

FTSE All-Change - Intellexis share sale - Zari gold rush - Return to Eden
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The Independent Online

With investors betting on a sky-high oil price for several years to come, and the major oil and gas companies all looking to expand production, it is a happy time for little MOS International to be getting its house in order.

With investors betting on a sky-high oil price for several years to come, and the major oil and gas companies all looking to expand production, it is a happy time for little MOS International to be getting its house in order.

Shipley-based MOS - which makes winches, links and other equipment for use on oil rigs and gas tankers - is being transformed by a new chairman, Philip Wood, who was briefly chief executive of Sheffield United under the ill-fated chairmanship of Carlo Colombotti.

Sales at MOS collapsed almost immediately after the company's flotation in 2001 and boardroom control was wrested away from its founder, Brendan Larkin, last year.

Mr Wood made his second acquisition at MOS last week, buying Ansell Jones, a maker of lifting and marine equipment, from the receiver. Mr Wood was chairman of that business until last year and says the combination of MOS and Ansell products will help win bigger orders from the oil industry. There should also be some cost savings and property disposals to be squeezed out by a new business development director, apparently a "star accountant" whose name could be unveiled as early as this week.

With MOS promising to be trading profitably by the end of this year, and an order book that looks healthier than for a long while, fund managers are looking through the next few months of grim figures. They were happy to stump up £1.2m last week for new shares to bolster the company's cash position in the expectation of strong sales growth from next year.

FTSE All-Change

The fund managers backing MOS have taken heart from the performance of the bigger oil industry services company Sondex, which makes drilling tools and software and whose shares have jumped 50 per cent this year. As a result, Sondex is a leading contender to win a place back in the FTSE All-Share index when it is reshuffled next month. Because many tracker funds use the All-Share, and many more benchmark performance against that index, there is often a burst of buying interest in new entrants. Also on the list to make an entrance are the nuclear generator British Energy and Fortune Oil, which is making oil and gas investments in China.

Intellexis share sale

Laxey Partners, the aggressive hedge fund manager famous for forcing management change at British Land, has liquidated another of its stock market investments, we hear. The group has increased its cash holdings since becoming worried, a few months ago, that equity valuations are looking stretched. The latest to go is ILX Group, the financial training company previously called Intellexis, of which Laxey held 9.7 per cent. The stake has been shared between Brewin Dolphin and MD Barnard, the Basildon-based private client fund manager, which has taken its holding to 13.5 per cent. The trade was at 59.7p, a 13 per cent discount to the prevailing share price, but roughly the level of a small placing the company did last week to pay off some debt. Spare a thought for poor Ken Scott, the chief executive: his advisers told him it would look bad to invest in the discounted placing so he has just paid 71.5p a share to top up his stake by 14,000 shares. Intellexis said last month that trading was going well and that it is launching several new training courses in the autumn.

Zari gold rush

We mentioned a company last month which distinguished itself from the pack of mining stocks primarily by having no business whatsoever. What Zari Resources had was an option to buy a Tanzanian gold exploration company, assuming positive test results from its main gold field. Well, those results are in and the company will tell shareholders today that it has begun the planned acquisition talks. The company is also expected to say it is scouting for other East African investments.

Return to Eden

An update, too, on the Ofex-quoted natural pesticides group Eden Research, which is embroiled in a row with the former head of its US development partner, Arista Biologics. Reed Smith quit Arista in June, and wrote to the Financial Services Authority alleging that Eden had misled shareholders about the progress of a new treatment for Pierce's disease, the vine disease which menaces the California wine industry.

Mr Reed asked California's Napa Valley Agricultural Commission to investigate if Arista had acted illegally by operating without a pesticide licence. Word comes back from the Commission: "Our regulatory review determined the material in question was used in voluntary trials and no pest control products or services were sold. As a result, use of the material did not require it to be registered as a pesticide and does not warrant enforcement action."

Eden says Mr Smith is an ex-employee with a grudge, not a whistleblower. Mr Smith says he is pursuing matters with the California Department of Pesticide Regulation.