Small Companies Notebook: Pipex wired up to make the most of broadband

Niche makes its mark - KBC could reward - Comprop dilemma
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The Independent Online

The risk with a business that has grown through a string of acquisitions is that, when management gets down to the business of integrating them, it will find some nasty surprises lurking in the acquired companies. But there is also the chance that it will find a very pleasant surprise - and that seems to be what has happened at Pipex Communications.

The risk with a business that has grown through a string of acquisitions is that, when management gets down to the business of integrating them, it will find some nasty surprises lurking in the acquired companies. But there is also the chance that it will find a very pleasant surprise - and that seems to be what has happened at Pipex Communications.

The broadband internet and web-hosting company is being built up by Peter Dubens, whose previous ventures include ukbetting, the sports websites group. Pipex is now one of the five biggest broadband internet service providers in the UK after buying eight companies since 2002.

One of its earliest acquisitions, incidentally, came with the UK licence to a part of the broadcasting spectrum. So far, so unexciting. Except that it now seems Pipex owns part of the spectrum which is being used for a nascent wireless broadband technology called WiMax, heralded as the Next Big Thing in the telecoms industry.

WiMax, like its less powerful cousin WiFi, allows computers to make a wireless connection to the local phone network. WiMax is being heavily promoted by the technology giants Intel and Nokia, and, at big industry shows this year, has been talked of as a way for the fixed-line phone companies to fight back against the mobile phone groups. It is too early to say if WiMax will take off, but it is certainly attracting attention in the City and at least one big investment bank is ready to publish a tome in the next few weeks. It could turn out that Pipex is sitting on something rather valuable.

Niche makes its mark

Niche Group, the little investment company we featured here on flotation last month, has written its first cheques. There is £120,000 for MadWaves, whose software allows budding musicians to mix samples and recorded instruments to make digital music. There is £25,000 for a Russian tote betting company. And £50,000 for a company we have featured here before, INB Holdings, which owns Holiday FM, broadcasting 12 radio stations to Brits abroad in Spain, the Balearics and the Canary Islands. All the companies are planning flotations in the next year.

KBC could reward

When the "C" in KBC Advanced Technology - Peter Close - was persuaded back from his French vineyard to become chief executive last year, he didn't believe it would be quite so tough to turn around the fortunes of the oil industry consultancy he founded in 1979.

KBC helps major oil companies improve the efficiency of their refineries, where oil is converted into useable products, but orders have dwindled since the company floated in 1997. There was a little more pain last week - a profit warning and dividend cut - but it sounds like a good moment to take a punt on the bombed-out shares. Oil refining capacity is tight at the moment and, with oil prices at a very high level, companies have cash available to spend on improving efficiency.

KBC has also just launched its new software for working out the best blend of products possible from a refinery, after a ghastly legal wrangle kept the product off the market for two years. There will be development and marketing costs associated with the product launch this year, but the rewards could be large if it takes off.

Comprop dilemma

It is the first closing date this afternoon for acceptances of the £51m cash-and-shares offer for Comprop, the Channel Islands property company, by CI Traders, the islands' dominant retail and pubs group. The companies have three directors in common.

It is difficult to imagine Comprop shareholders turning the deal down, since it represents a 16 per cent premium to the share price last month. But there are ructions on the other side, with the former chairmen of the two companies which merged to form CI Traders saying the cosy little deal should not be done.

Because CI Traders is an AIM company there will be no shareholder vote, but Ian Steven and Christopher Lloyd are threatening to call an extraordinary meeting to protest. The pair say CI Traders should be investing in trading operations, not turning itself into a property company. Comprop shareholders could end up with shares in a company in turmoil.

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