Small-cap Week, May 9

A scramble to buy shares to cover speculative trading positions sent New World Oil & Gas soaring this week, creating a regulatory headache on the Alternative Investment Market.

In April, the Aim-quoted energy minnow announced a four-for-one share placing to raise £1.5m. Heavy trading in the stock followed, with dealers said to be using extended settlement terms so that their orders could be satisfied with the newly issued stock.

However, a group of shareholders has now threatened to block the share issue when it goes to a vote on May 19 and New World has been taking advice on a back-up plan. A rush to cover outstanding orders with existing shares, plus a warning from the London Stock Exchange to member firms about settlement delays, drove the price of New World higher by 567 per cent.

Pure Wafer shares rose 97 per cent on news that it had completed negotiations with insurers following a fire at its Swansea wafer recycling factory. Although the details were confidential, the company said surplus cash to be returned to shareholders would be "significantly higher" than 59.59p a share but less than 125p.

Shares in Oxford Instruments rose 14 per cent, after Numis Securities issued a "buy" note in response to its $23m purchase of Medical Imaging Resources, a US mobile lab leasing business.

Communisis shares slipped 8.3 per cent, though, after the marketing group said that the euro's weakness against sterling has been affecting its Deploy supply chain management arm.

Profit warning knocks ScS below its flotation price

Shares in furniture and carpet maker ScS Group plunged below their float price on Thursday as the company issued a profit warning, blaming the weather for a sharp fall in sales, writes Kadhim Shubber.

ScS, which returned to the stock market in January almost seven years after being rescued by private equity, said that full-year profits would be between £11m and £12m, below market expectations of £14.5m. More than a third of the company's value was wiped out, as shares fell 36 per cent to 145.5p, below the float price of 175p.

Warm weather over successive bank holiday weekends pulled shoppers away from their stores, the company said, leading to a 15.9 per cent fall in like-for-like orders during the four weeks to May 2. Up until that period, like-for-like orders were up almost 8 per cent, it added.

ScS, which has launched concessions inside store chain House of Fraser, said that it was committed to paying £5.6m in dividends this year and that it expected trading to recover before the end of its financial year in July.

Tissue Regenix climbs as contract offers US growth

Tissue Regenix, a York-based maker of skin grafts, gained 7 per cent this week after announcing a distribution contract in the US, writes Conor Sullivan.

The York-based medical products company makes skin grafts and other substitute human tissue that have been stripped of their DNA so that they will not be rejected by the patient. The source material comes from humans and animals, including pigs, and the "decellularisation" technology is patented.

On Tuesday it announced that it had secured a contract worth at least $600,000 over the coming year with a distributor of surgical and wound-care products. This follows its Dermapure grafting product being approved for use by 9m elderly and poor patients that are eligible for public healthcare in 12 US states. The contract announced this week covers two of those states.

The company was formed in 2006 via a spin-off from the University of Leeds. Other applications for its DNA-stripping technique include the treatment of vascular disease, heart-valve replacement and knee repair.

Verseon and Tiziana notch up gains for UK biotech

There were more signs of stirring in the UK biotech sector this week as Verseon, a company that uses computer algorithms to discover new medicines, raised £65.8m in an initial public offering, writes Andrew Ward.

It added to a rising tide of life science fundraisings over the past year but was especially notable because Verseon is based in California.

Adityo Prakash, chief executive, said the company had chosen London's junior Aim market instead of New York's Nasdaq because of the long-term outlook of UK investors such as Neil Woodford's Patient Capital fund.

Verseon's shares closed at 214.5p on Friday, up from their 202p IPO price. Another riser was Tiziana Life Sciences, up a third in the past week, after licensing new anti-cancer stem cell technology.

Shares in Tiziana, founded by Italian entrepreneur Gabriele Cerrone, have risen from an issue price of 12p last April to 144.8p Friday.

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