LONDON (Thomson Financial) - UK small caps closed at their lows for the session, dragged down
by the wider market, with International Greetings falling more than 20 pct after a profit warning late this afternoon.
At the close, the FTSE Small Cap index was 54.3 points off at 3,372.9, the low for the session. The FTSE 100 fell 71.4 points to close at 6,315.2.
International Greetings fell 32 pence, or 21.3 pct, to 118, after it warned that full-year results to March 31, 2008, will 'fall materially short of market expectations' as it faces continuing problems with revenues and margins at its UK greetings division.
However, the company, which designs and manufactures gift wrapping paper, greeting cards, Christmas crackers, stationery, photo frames, albums and other decorative accessories, said it expects overseas operations to perform in line with expectations.
International Greetings will announce interim results on Dec 13.
Elsewhere, Tersus Energy closed 1.875 pence, or 45.5 pct, lower at 2.25, after the company revealed all discussions regarding a potential offer have ceased, and it continues to explore 'a number of avenues' to raise more capital.
Tersus said in November it was in talks with a 'third party', which might or might not lead to a whole or partial acquisition offer.
Negative broker comment hurt sweets and entertainment goods retailer Woolworths.
Citigroup slashed its target on the company to 12 pence from 23 and reiterated its 'sell' rating, citing concern about the consumer slowdown. The shares fell 1 penny to 15, at one point having been as low as 14-1/2, the lowest since the company was spun out of Kingfisher in 2001.
SCS Upholstery suffered further after its cautious trading update yesterday. The shares fell another 12 pence, to 86.
Speculators also retreated from Fountains, 6-1/2 lower at 124-1/2, as the environmental support services concern confirmed it has terminated talks with an interested party and is no longer engaged in any discussions regarding a potential offer for the company.
Corporate Services Group, which owns the BlueArrow recruitment chain, fell 0.14 to close at 1.9. The company is set to lose its place in the FTSE Small Cap Index, dropping into the Fledgling index, at the quarterly reshuffle, which is based on market caps at the close of business on Dec 11.
Corporate Services made a profit warning in August, having suffered accounting problems at its Comensura unit, and its market cap is now around 20 mln stg.
The negative mood spread to to other recruiters. Robert Walters ended the day 16-3/4, or 10 pct, lower, at 150-1/4, although its market cap of more than 100 mln stg means it has no chance of eviction from the small caps. The shares have lost more than 65 pct since peaking in June, though it has not made a profit warning.
Also on the downside, Knowledge Technology Solutions slid 0.075, or 10.7 pct, to 0.625, in the wake of widening full-year pretax losses. The financial market information services provider's immediate goal is to stem recurring losses at its KTS business, while supporting organic development for its acquisition Arcontech.
Another casualty was Access Intelligence, off 0.625 at 2.375 pence after the company warned its full-year results will be below market forecasts.
It blamed a slower-than-expected initial take up of MS2M's recently launched on-line compliance product and disappointing first-half storage sales at Willow Starcom.
Datong fell 12 pence, to 100, after reporting a considerably lower first-half pretax profit after a loss from operations, compared with a profit last year.
The intelligence gathering equipment manufacturer posted a pretax profit of 24,000 stg for the six months ended Sept 30, down from 261,000 stg a year ago, despite a 5 pct jump in revenues to 3.52 mln stg.
On a brighter note, Symphony Environmental Technologies continued to make progress, climbing 0.875 more to 4.875 following yesterday's news the degradable plastics and waste-to-energy group will place up to 14 mln new shares with Hunter Hall's unit trusts and will raise gross proceeds of up to 700,000 stg.
Hunter Hall, an Australia-based leading international ethical fund manager, will hold a 19.13 pct stake in Symphony, or about 19.04 mln shares, if the placing is completed in full.
Highland Gold Mining attracted support, rising 11-3/4 to 175, as the company signed a 400 mln usd equity subscription pact with Millhouse LLC under which the Moscow-based asset management firm will hold a 40 pct stake in Highland Gold.
Under the terms of the deal, Millhouse will purchase a total 130.1 mln shares in the company via two equal-sized transactions, at 151 pence per share. These proceeds will form an 'essential component' of the company's funding and will allow it to proceed with its development programme as well as reduce its reliance on debt financing.
DermaSalve Sciences ticked up 0.375 to 4.875 following news of the first significant purchase order arising from a distribution agreement with New Horizons to supply SafeCleanse gel into southern Africa.
Elsewhere, Surface Transforms edged up 0-1/2 to 16-1/2 after the maker of carbon fibre-reinforced ceramic materials revealed trading in the six months to end-November is in line with its expectations.
Turnover for the period was higher than in the corresponding period last year, and cash balances at the period end were 1.6 mln stg. The company has a strong forward order book.
Vividas Group rose 4 pence, or 13.1 pct, to 34-1/2 after the company said it has terminated the conditional placing agreement with HB Corporate by mutual consent, as it has now received an offer from Ignition Capital UK Ltd, for the subscription of up to 7.14 mln Vividas shares at 35 pence each.
Vividas also said it plans to adjourn its extraordinary general meeting, which was scheduled on Dec 5, indefinitely since the proposed resolutions have no further relevance.
Meantime, e-pay Asia Ltd recovered some lost ground, rising 1.375 pence, or 61.1 pct, to 3.625 pence, after it said strong operating cash flows for the quarter to end-September reflects robust trading in its core Malaysian business.
The electronic payment solutions provider said net operating cash flow for the period was 1.4 mln aud.
The company added it is making good progress towards move into China, which has the potential to deliver significant opportunities, and is confident of steady progress. Despite today's surge, the shares have still lost more than 95 pct of their value since early 2005.
Buyers came for Carluccio's, 3 higher at 157-1/2, as the Italian restaurant group disclosed a 66 pct rise in full-year pretax profits. This was on the back of higher turnover, helped by a strong focus on supplier terms resulting in increased margins.
For the year to Sept 23, pretax profits rose to 5.3 mln stg from 3.2 mln.
In response to the numbers, Altium again advised clients to 'buy'. With an average spend per head of around 12 stg, and a brand that has broad mass market appeal, the broker sees substantial development potential and significant medium term share price upside.
Music Copyright Solutions moved ahead 1-1/2 pence at 31, after the company signed an exclusive worldwide music publishing administration agreement with Bellhaus Entertainment.
And Mobile Doctors Group advanced 5-1/2 to 59 as the medico-legal services provider signed an exclusive UK-wide contract with Nuffield Proactive Health and Nuffield Diagnostics under which they will provide all of Mobile Doctor's rehabilitation, treatments and diagnostic services.
Finally, Vyke Communications advanced 3-1/2 to 110-1/2 after the voice over Internet protocol service provider said it knows no reason for the recent movement in its share price.
The company continues to be encouraged with current trading and, with the rollout of its new marketing initiatives, is confident about the future. It expects its IP-based customer accounts to reach more than 1.25 mln by the end of the year.
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