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Small Caps round-up: Lonrho, Payzone, Lipoxen..........

Date: Friday 05 Feb 2010

African-focused conglomerate Lonrho posted a loss of £3.3m, up from £2.7m, in the three months to December.

The increased loss for the quarter reflects the additional interest and depreciation on the capital expenditure programme required to expand the Agribusiness and Infrastructure divisions and a 20% strengthening of the Rand against the Pound.

"The 21.7% increase in revenue delivered this quarter on a comparable currency basis to the prior year demonstrates that Lonrho is on track and is meeting its ambitious targets for the year,” executive chairman David Lenigas added.

Shares in electronic payments and cash machines operator Payzone have been suspended ahead of its potential acquisition by a private equity firm. The company’s lenders will have to write-off a significant portion of outstanding debt for the deal to go ahead. The deal involves the acquisition of the business and assets of Payzone.

Management says that there will be no value left for existing shareholders.

Shares in vaccines and biopharmaceuticals developer Lipoxen slumped 2.25p to 8.25p after it said that delays to clinical trials meant its 2009 revenues were lower than expected. There was net cash of £1.02m at the end of the year.

The delayed trials are Phase-II trials for longer-acting versions of insulin (diabetes) and EPO (renal failure). These treatments are based on improved formulations of existing products. Lipoxen would have generated licence revenues if the trials had begun. The Indian EPO trial, which will be carried out on a FDA compliant basis, should start in the next couple of months, while the Russian diabetes trial should commence in the second half of 2010.

Organic composting and waste-to-energy plants operator TEG Group says that its 2009 figures will be in line with expectations. TEG’s supply of waste was hit by poor weather at the end of 2009 but trading was strong in the rest of the period. TEG will be loss-making in 2009 but it is expected to be profitable in 2010.

The 2009 figures will be reported on 15 March.

Turbotec Products says that lower gross margins mean that profits will decline from $2.2m to $760,000 in the nine month period. That is lower than the six month figure. Profits should recover in the fourth quarter but the full year profit will be lower than forecast.

The heat exchangers and heat transfer tubing manufacturer will report turnover of $14.7m in its figures for the nine months to December 2009. The third quarter contribution is $4.9m. Turbotec reported turnover of $20.9m in the nine months to December 2008.