Small Companies Notebook: Trafficmaster broadcasts a challenge to rival

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The Independent Online

Is Trafficmaster trying to drive its old adversary, Itis Holdings, into the ground?

Is Trafficmaster trying to drive its old adversary, Itis Holdings, into the ground?

The two have rival systems for working out where there are traffic jams on the UK's roads: Trafficmaster has spent £20m building up a network of roadside sensors, while Itis has a "floating vehicle data system" which places sensors inside fleets of lorries. Indeed, they have been involved in a vicious legal spat after a Trafficmaster-commissioned report concluded that its data was far more accurate and comprehensive than that of Itis.

Now Itis is coming under pressure from a new Trafficmaster service, initially being launched in partnership with the RAC, which broadcasts the company's data to in-car navigation systems via bits of the radio spectrum belonging to but not used by Capital Radio, GWR and Chrysalis.

Itis has previously had exclusivity on this sort of technology, and the competition will be deeply unwelcome for the loss-making company.

Itis has results out tomorrow, with its broker predicting it ended the year £7m in the red. Last time out, directors were able to reassure shareholders that the company would reach profitability before its cash reserves ran out, but confidence in the City has waned.

Synergy on buy trail

After last week's £33m acquisition of Lips Textielservice, a Dutch launderer of hospital bed linen, Synergy Healthcare is already talking to a second potential bid target in Scandinavia, we hear. Richard Steeves, the ambitious chief executive, is clearly harbouring plans for a northern European empire.

Lips is Synergy's first move abroad, but is a good fit. The Dutch firm has not yet done what Synergy has managed in the UK, namely to sell additional services to its extensive hospital client base. In particular, Synergy expects to be able to start offering the surgical instrument sterilisation services, which now account for the majority of its business in the UK.

Cough up for Allergy

Allergy Therapeutics, a company developing vaccines for use against hayfever and other allergies, has decided to pursue a £15m fund raising and stock market flotation in the autumn.

Fund managers' appetite for new life sciences companies is being tested by a string of debuts in the coming weeks (from an "inhaled Viagra" company to the new vehicle for the former Shire Pharmaceuticals chief executive Rolf Stahel). The valuation put on Allergy will be dependent on how these other floats go.

Allergy's board decided last week to press ahead with the flotation, which will be run by its broker, KBC Peel Hunt. The company needs an injection of cash to kick-start major trials of its newest vaccines, which require fewer injections than treatments currently on the market. The prospects for a successful float look pretty good. Allergy was bought out of GlaxoSmithKline in 1998 and the pharmaceuticals giant still holds 26 per cent of the company. There are no venture capital backers desperate to sell shares. And, best of all, it is no blue-sky biotech dream, having £17m of sales last year and a £2m operating profit

Stadium looks East

Shares in Stadium Group, a contract manufacturer in the field of electronics, have surged in recent months to trade back at levels last seen in 2000. The recovery is down to an acquisition in that year, that of Arlec Power, which forms the kernel of Stadium's Asian operations - and its growing strength in China.

Every industrialist has run the numbers to calculate if it is cheaper to make products in low-cost countries such as China. For small companies, though, shelling out for a new factory on the other side of the world simply isn't an option. Stadium has been gaining business from those small firms that want to find a low-cost contractor to manufacture for them. The company's most recent results showed it back in the black, and there is the promise of improving dividends. Buy.

IFX thinks small

The march of new-style financial services firms on to the territory once dominated by the traditional stockbroker continues apace. Financial spread betting and, more recently, contracts for difference (CFDs) have supplanted the buying and selling of shares for a lot of sophisticated or regular share traders. CFDs allow punters to bet on falls as well as rises by an individual share, and there is no stamp duty to pay.

Now IFX Group is hoping to attract even the occasional small shareholder over to CFDs with a new product launch. Its mini-CFDs require a much smaller deposit from new account holders than existing products, and IFX is promising to train people in their use. It is the second innovative product from IFX in a fortnight, the company having just started offering CFDs on a selection of hedge funds.

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