View from City Road: Bright light on the USM

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THE UNLISTED securities market has collected a number of unkind nicknames: Unlikely to See Money is one that is unfortunately accurate in many cases. Opportunities for gain are few, but results yesterday from the emergency lighting company Menvier-Swain show that investors should not dismiss the market as a whole.

Menvier is in a small but exciting market driven by safety legislation drafted in Brussels. It makes back-up systems that replace lights knocked out by fire or power failure in commercial and industrial buildings. Far from being reliant on new construction, most of the work comes from fitting out existing sheds and offices.

Menvier's taxable profits for the year to 30 April are up 20 per cent to pounds 6m, earnings per share are up 24 per cent at 29.2p and the total dividend has been raised 23 per cent to 9p. In the past 12 months Menvier shares have performed nearly twice as well as the market average and, after a 21p jump to 440p yesterday, are now trading 93 per cent above levels of a year ago.

Future growth is promised from further expansion into the Continent. Earnings will also be boosted as Menvier explores the burglar and fire alarm markets, where insurers are always pressing for improvements. Pre-tax profit forecasts of pounds 7.2m this year imply an earnings multiple of less than 13 times. Even after their good run, Menvier shares are worth buying.

Given the USM's bad name, one might ask why a sensible and solid company like Menvier-Swain does not graduate to the full list. The short answer is that paying bankers and lawyers to prepare the necessary paperwork costs pounds 200,000.