Latest Company Announcements

Small caps suffer in silence

Investors, guided by the advice of stockbrokers and investment banks, treat most small listed stock as if they had leprosy. Virtually nothing outside the top 300 is to be touched. In fact, some big broking firms are so worried about ASIC-enforced laws known as "know your client, and know your product" that they have a blanket rule of instant dismissal should an employee give advice on a stock not researched by the firm.

12 July 2009

Investors, guided by the advice of stockbrokers and investment banks, treat most small listed stock as if they had leprosy. Virtually nothing outside the top 300 is to be touched.

In fact, some big broking firms are so worried about ASIC-enforced laws known as "know your client, and know your product" that they have a blanket rule of instant dismissal should an employee give advice on a stock not researched by the firm. For 1,900 of the 2,205 companies listed on the Australian Securities Exchange that means they disappear from the view of the big brokers and most investors, even though the cut-off market capitalisation for admission to the top 300 is $235 million.

Little wonder then that Kim Lindsay, managing director of the Queensland-based trucking and logistics company, Lindsay Australia, reckons listing his business seven years ago was a bad decision.

"It wasn't a good idea, not so much because of the cost but because you keep showing everyone your underpants," Lindsay said after a "micro equities" conference in Sydney.

"It's hard to get big investors to take an interest in us, and if you do really well your customers believe you're making too much money and think that maybe they should start looking around."

Despite his unhappiness Lindsay said he maintain his ASX listing "because we've gone too far down the track".

His views, put somewhat less earthily, were echoed by directors of two other companies which presented at the 2009 Rising Stars Micro Cap Conference which, hardly surprisingly, received micro coverage in the mainstream news media, and an attendance of less than 50 people - a true micro conference for micro caps.

Ian Brown, chief executive of food ingredients maker, Clover Corporation, said on the sidelines of the event that being heard was a major challenge.

"It's really a case of getting your story out to potential investors, and building confidence in the company," Dr Brown said.

"You have to start communicating, attending conferences like this one, and doing the hard work talking to brokers and investment banks.

"Recently, it's been a little easier because some brokers have been looking deeper into the market to find companies which are getting the basics right of making a profit, paying a dividend and growing the business."

Ross Norgard, chairman of the intellectual property investor, ipernica, said the one of the key challenges for a small-cap stock to be heard was to "have a product which is exciting to an investment banker".

"The good news is that investment bankers in today's climate, where they're looking for business, is that they will sit with you for a big future transaction. They don't need to take fees today, but if you're going to sell to an international institution further down the track, then that's when they pick up their fees.

"That's what ipernica will do in the next three months. We'll appoint a Macquarie or a UBS to take us to the next stage."

Norgard said it was easier for a small listed company to get the ear of an investment banker if it was not asking for money. "They'll come in if they like the story."

All of the companies at the conference fitted the small-cap description with market values ranging from as low as $9 million for the online lotteries and publishing business, Manaccom, to $109 million for the IT services company, DWS.

Their common challenge is being heard against the overpowering noise generated by the top 300 stocks, especially at a time in the market when investors (and banks) prefer safety over the potential of above-average return by backing a small company.

The distraction of noise at the top, plus the lack of broker research, and the lack of investment bank following, means that small listed companies struggle to raise either capital or debt - and will continue to do so until uncertainty abates further in the investment community.

While all companies were hit hard in last year's market crash, small caps were crushed and will be the last sector to recover.

Clover, for example, could reasonably expect a stronger following after posting a healthy profit in 2008 of $4.1 million from sales of $21.6 million, but is only valued on the market at $34.7 million.

Lindsay made $2 million from revenue of $196 million but is valued at a lowly $28.4 million, and ipernica made $15.2 million from revenue of $45.2 million, but is valued at just $22.9 million.

Lindsay said it was very tough for a small business to compete for media time against much bigger national companies.

"They're out in front all the time," Lindsay said of his bigger rivals. "We've just got to keep knocking on the door, until we find someone who recognises the good story that we're telling, and acknowledge that we're going somewhere."

Lindsay said one of the biggest challenges was waiting to be discovered.

"You have to wait until the good times hit your sector and your sector becomes the darling of the market."

Brown said one factor which had caused investment funds to take notice of Clover was a decision to pay a 1c a share dividend last November.

"The dividend triggered a few calls after some fund managers realised that while we're small we are making profits, we are paying a dividend, and have a growth plan," Brown said. "It helped put us on a few radar screens."

There is, however, a difference between being small and being infinitesimal. At the bottom of the 2,205-member ASX list of quoted stocks are companies where management must ask on a regular basis "why bother".

These are companies capitalised at less than $5 million, and in some cases, less than $1 million which, to not stretch the point very far, is a lesser value than some suburban newsagencies.

E-Com Multi, an e-commerce and telecommunications company, has a stock market value of $1.4 million. Anteo Diagnostics, a medical products firm, is valued at $1.6 million, and Australian Wine Holdings is capitalised at $1.8 million.

However, the prize for smallest in the pond goes to the Perth-based clothing business, Costarella Design, which is valued at $263,697 - less than the price of a luxury car.

Raising capital and attracting the higher valuations normally associated with being listed are the major reasons for joining the ASX.

But when the stockmarket is down, listing becomes an expensive drag on a small company. Annual listing fees for most small companies are between $10,000 and $20,000 a year, and that's before routine compliance costs - and the public airing of the corporation's underpants, as Kim Lindsay describes the public prying into a company's affairs.

Article by Smartcompany click here.

CEO Interviews

	Scott Power - Brisbane Capital Showcase Scott Power is a Senior Analyst with RBS Morgans
	Steve Baxter Presentation from the Brisbane Capital Sho... Steve Baxter Presentation from the Brisbane Capital Showcase
	Biosana Pty Ltd - Brisbane Capital Showcase Investor Pr... Biosana Pty Ltd - Brisbane Capital Showcase Investor Presentation
	Chip Tyre - Investor Presentation Brisbane Capital Show... Chip Tyre - Investor Presentation Brisbane Capital Showcase
	Mesynthes - Investor Presentation Brisbane Capital Show... Mesynthes Limited - Investor Presentation Brisbane Capital Showcase
	Jumbo Interactive Investor Presentation (ASX:JIN) Just as other industries have moved successfully onto the Internet (Airfares, Employment, Accommodation, Real Estate, et...
	Easylodge Infrastructure Services Investor Presentation Easylodge was founded in 2006 to provide software and infrastructure services to the non-mortgage finance industry, and ...
	Phylogica (Investor Presentation) Phylogica Limited (ASX: PYC) is a biotechnology company based in Perth, Australia and Oxford UK, with a world-class drug...
	Australian Real Estate Lottery (CEO Interview) The Australian Real Estate Lottery model is a unique mixture of gaming and property to create a financing tool to acquir...
	Easylodge Infrastructure Service (CEO Interview) Easylodge was founded in 2006 to provide software and infrastructure services to the non-mortgage finance industry, and ...
	Wholesale Investor Capital Showcase 2012 Date: Wednesday 4th April, 2012 Location: PwC Offices Brisbane, Riverside Centre Wholesale Investor and AusBiotech w...
	Investment Administration Pty Ltd (CEO Interview) Investment Administration (InvestAdmin) provides a complete, robust, scalable, technology based solution for the end-to-...
	Rubber Ducky Defence (CEO Interview) Rubber Ducky Defence is the developer of a powerful, low-cost maritime platform and weapons system which has the potenti...
	BioPower Systems (CEO Interview) BioPower Systems is focused on developing advanced technologies which convert the energy in waves and tides to grid-read...
	Qanda Technology Limited (CEO Interview) Qanda Technology owns 2 operating businesses. - Marketboomer provided online procurement services and technology to h...
	PwC Private Business Barometer Welcome to the ninth edition of the PwC Private Business Barometer.
	Exa Web Solutions (CEO Interview) Exa was founded in 2000 and has since become Australia's number one online marketing and web solutions company. Through ...
	WH Medical Pty Ltd (CEO Interview) Gold Coast Accident & Medical Clinic (A&MC) is a private emergency clinic designed to take direct pressure of the public...
	Elemental Energy Technologies Ltd (CEO Interview) Elemental Energy Technologies Ltd (â€œEETâ€) has been formed to commercialise its breakthrough third generation marine ...
	Cleantech and Renewable Energy Showcase Wholesale Investor in conjunction with our Principal Support Partners, PwC are proud to host the Cleantech and Renewable...
	Immuron Ltd (CEO Interview) Immuron Ltd is a biopharmaceutical development company with a versatile technology platform that has allowed it to devel...
	Palace Resources (CEO Interview) Palace Resources (ASX Code: PXR) is progressing due diligence on the Lumpo coal project (â€œLumpo Projectâ€) in West Su...
	BioDiem Ltd (CEO Interview) BioDiem is a vaccine company developing vaccines for both treatment and prevention of disease. The leading technology is...
	Eastern Harmony New Zealand Ltd (CEO Interview) EHNZ has commenced business as a wholesaler/distributor of NZ milk powder products in the Asia Pacific region
	Equiome Pty. Ltd (Investor Presentation) Equiome is a specialist financier of all aspects of large corporate software projects, which allows companies to realise...
	Cynergy Health (Investor Presentation) Our objective is to grow a broad based consumer health company by developing or acquiring high potential brands or produ...
	Bizpanel Limited (Investor Presentatio) The Australian Franchise Industry is a $138 billion industry featuring 1,025 franchisors and 69,900 franchise businesses...
	Exa Web Solutions (Investor Presentation) Exa is Australiaâ€™s largest Online / Apps / Web / Mobile company, with over 1000 clients. Exa generates significant ...
	Elemental Energy Technologies LTD (Investor Presentatio... Elemental Energy Technologies Ltd (â€œEETâ€) has been formed to commercialise its breakthrough third generation marine...
	Qanda Technology Limited (Investor Presentation) Qanda Technology owns 2 operating businesses. - Marketboomer provided online procurement services and technology to h...
	Mint Wireless Limited (Investor Presentation) Mint Wireless Limited (Mint) is a global payments and mobile transactions company listed on the Australian Securities Ex...
	Photonz Corporation Limited (CEO Interview) Photonz is a world-leader in the production of the omega-3 compound â€œEPAâ€ by fermentation for high purity, pharmaceu...
	Benitec Ltd (CEO Interview) Benitec Limited is a publicly listed (ASX:BLT) biotechnology company developing novel human therapies based on a transfo...
	Bizpanel Limited (CEO Interview) The Australian Franchise Industry is a $138 billion industry featuring 1,025 franchisors and 69,900 franchise businesses...
	Intellect Projects Intellect Projects is a property developing company, located within the inner suburbs of Melbourne, specialising in qual...
	Mint Wireless Ltd (CEO Interview) Mint Wireless Limited (Mint) is a global payments and mobile transactions company listed on the Australian Securities Ex...
	Folkestone (CEO Interview) Folkestone is a real estate investment, development and funds management company listed on the ASX (Code: FLK).
	Jubilent Health Aust. Ltd (CEO Interview) Based in Australia, Jubilent Health has an international focus that allows us to manufacture and retail pharmaceutical p...
	Diamond Energy (CEO Interview) Established renewable/low-carbon electricity integrated â€œgen-tailerâ€ seeking to accelerate expansion.
	Xenexus Pharmaceuticals Pty Ltd (CEO Interview) Xenexus is undertaking R & D on existing drugs in new indications to secure new use patents on these re-profiled drugs.
	Sun Connect (CEO Interview) Sun Connect Pty Ltd is a wholly privately owned Australian importer, designer and installer of solar power components. S...
	Third Link Growth Fund (CEO Interview) The portfolio manager of the Third link Growth Fund is funds management industry stalwart Chris Cuffe, who has drawn on ...
	Future Capital Development Fund (CEO Interview) Future Capital Development Fund Limited is a pooled development fund (PDF). As a PDF, the Company will actively seek to ...
	KFSU Limited (CEO Interview) Established in 2006, KFSU Limited ACN 119 778 326 is a food ingredient manufacturing company creating natural products f...
	Equiome (CEO Interview) Equiome is a specialist financier of all aspects of large corporate software projects, which allows companies to realise...
	Special Phage Holdings (Investor Presentation June 2011... Special Phage Holdings (SPH) is an innovative biopharmaceutical company focused on developing novel antibacterials in re...
	Wholesale Investor (Investor Presentation - June 2011) Wholesale Investor is Australia's largest private investment platform directly connecting high net worth and professionl...
	Sun Connect Pty Ltd (Investor Presentation - June 2011) Sun Connect Pty Ltd is a wholly privately owned Australian importer, designer and installer of solar power components. S...
	Future Capital Development Fund (Investor Presentation ... Future Capital Development Fund Limited is a pooled development fund (PDF). As a PDF, the Company will actively seek to ...
	Colmax Glass (Investor Presentation - June 2011) Colmax Glass has rapidly become Australiaâ€™s premier post-consumer glass recycler due to its ability to transform recyc...
	Medivac - CEO Interview MediVac was incorporated in 1997 to commercialise patented technology for the treatment of biological waste that would r...
	Colmax Glass Recyclers Colmax Glass has rapidly become Australiaâ€™s premier post-consumer glass recycler due to its ability to transform recyc...
	Flinders Exploration - Melbourne Investor Presentation FEX is a new mineral development company with gold resources and a copper Exploration Target ready to commence pre-feasi...
	Minotaur Exploration - Investor Presentation Minotaur specialises in application of cutting-edge geophysical techniques to locate virgin mineralisation deep below th...
	Latin Resources Limited Latin Resources Limited is a mineral exploration company focused on creating shareholder wealth through the identificati...
	Audio Pixels Limited - Investor Presentation Audio Pixels Limited was founded in July 2006 has developed a revolutionary technological platform for reproducing sound...
	Virax Holdings Limited Developing therapeutics for autoimmune diseases, AIDS, cancers, infectious diseases based on patented Co-X-Gene platform...
	Deasil Management Group Philip Weinman could be Australiaâ€™s ultimate serial entrepreneur. After starting and selling seven fast-growing busine...
	Colmax Glass - Investor Presentation Colmax Glass has rapidly become Australiaâ€™s premier post-consumer glass recycler due to its ability to transform recyc...
	Third Link - Investor Presentation The opportunity to invest in a professionally managed investment fund, with all fees received by the investment manager,...
	Commissioners Gold - Investor Presentation I have pleasure in presenting to you an offer to subscribe for shares in Commissioners Gold Limited, a new gold explora...
	Biogenerics Australia - Investor Presentation Biogenerics Australia (BGA) was established in 2005 to introduce cheaper generic forms of biological drugs into Australi...
	Virtual Gaming Worlds (Investor Presentation) Are developing a unique online casino operation, enabling players to interact via Social Network Gaming and Massively Mu...
	Equiome (Investor Presentation) Equiome is a specialist financier of all aspects of large corporate software projects, which allows companies to realise...
	Global Digital Networks (Investor Presentation) l Digital Networks is an innovative Information Services and Technology company that is leading the revolution in deleiv...
	Advanced Braking Technology (Investor Presentation) Advanced Braking Technology Ltd has commercialised an innovative and patented enclosed oil cooled braking system that is...
	Mesynthes (Investor Presentation) Mesynthes is a soft-tissue reconstruction company using its proprietary Endoform technology to develop regenerative tiss...
	Jumbo Interactive (Investor Presentation) Jumbo Interactive Ltd is an innovative and successful online lottery business that has created the hugely popular Oz Lot...
	Magma Mines Magma Mines is wholly focused on exploration of mineral resources in Fiji. For a number of years Magma has held explorat...
	Phylogica Limited - ASX Small Cap Showcase ylogica Limited (ASX: PYC) is a biotechnology company based in Perth, Australia and Oxford UK, with a world-class drug d...
	Biogenerics Australia Biogenerics Australia Pty Ltd (BGA) was established in early 2005 by Mr Peter Simpson and has as its primary commercial ...
	Progen Pharmaceutical (Small Cap Showcase 2011) Progen Pharmaceuticals Limited (Progen) is a dual listed Australian (ASX:PGL & US OTC: PGLA) clinical stage oncology dru...
	Virax Holdings Limited Virax Holdings Limited (Virax) is a biopharmaceutical company. The Company is engaged in the discovery and development o...
	Viralytics Limited (Small Cap Showcase 2011) Oncolytic virotherapy makes use of the cancer destroying capabilities of a range of benign viruses. The potential of o...
	EcoQuest (Small Cap Showcase 2011) After two years or extensive research, EcoQuest Limited is poised to commercialise its 93% biodegradable nappies and com...
	Circadian Technologies (Small Cap Showcase 2011) Circadian Technologies Limited (Circadian) is an Australia-based company. The Companyâ€™s principal activity is to devel...
	Advanced Braking Technology Advanced Braking Technology Ltd has commercialised an innovative and patented enclosed oil cooled braking system that is...
	Phosphagenics (Small Cap Showcase 2011) Phosphagenics is a completely advanced company with a platform delivery technology currently developing products for hum...
	Eastland Medical Systems Limited (Small Cap Showcase 20... Eastland Medical Systems Ltd (EMS) is an Australian based Biotechnology licensing company. Our focus is the identificati...
	Gold Road Resources Limited (Small Cap Showcase 2011) Gold Road Resources Limited is developing its 100%-owned Yamarna Gold Project, a 3,200km2 tenement covering the majority...
	Resonance Health (ASX:RHT) Resonance Health develops unique quantitative MRI image analysis technologies for the diagnosis and monitoring of human ...
	Jumbo Interactive (Small Cap Showcase 2011) Jumbo Interactive (JIN) is an Australia-based company. It has two segments: Internet Lotteries, and Software Publishing ...
	Phylogica Limited (ASX:PYC) - Reuters Insider Phylogica is a public company engaged in the discovery and development of novel peptide-based biopharmaceuticals. Phylog...
	Enerji Limited (ASX:ERJ) Enerji is a Perth-based emerging green power utility specialising in the provision of Opcon Powerbox waste heat conversi...
	Gold Mines of Peru (ASX:GMO) -Thomson Reuters Insider Gold Mines of Peru has a two-pronged strategy to secure, develop and exploit advanced gold and silver assets in central ...
	KarmelSonix (ASX:KSX) - Thomson Reuters Insider KarmelSonix (KSX) is a commercial stage, ASX listed, medical device company that manufactures and sells products that as...
	EcoQuest (ASX:ECQ) CEO Interview - Reuters Insider After two years or extensive research, EcoQuest Limited is poised to commercialise its 93% biodegradable nappies and com...
	Global Digital Networks Pty Ltd - Thomson Reuters Insid... Global Digital Networks is an innovative Information Services and Technology company
	Cloncurry Metals Limited (ASX:CCU) -Thomson Reuters Ins... Cloncurry Metals Limited has excellent exploration ground in Queensland, Australia and in the state of Michoacan, Mexico...
	Carbon Conscious Limited (ASX:CCF) - Thomson Reuters In... Carbon Conscious is Australiaâ€™s leading carbon forest sink project developer.
	Progen Pharmaceuticals (ASX:PGL) - Thomson Reuters Insi... Progen Pharmaceuticals Limited (Progen) is a dual listed Australian (ASX:PGL & US OTC: PGLA) clinical stage oncology dru...
	Viralytics (ASX:VLA) - Thomson Reuters Insider The development of targeted cancer therapies using oncolytic viruses to detect, invade and destroy cancer cells. Oncolyt...
	Patrys Limited (ASX:PAB) - Thomson Reuters Insider Patrys develops natural human antibody-based treatments for cancer.
	Rox Resources (ASX:ROX) -Thomson Reuters Insider Rox owns the Myrtle project in the NT, just south of the McArthur River mine, where a resource of 43.6 million tonnes gr...
	EcoQuest (ASX:ECQ) - Thomson Reuters Insider After two years or extensive research, EcoQuest Limited is poised to commercialise its 93% biodegradable nappies and com...
	Minemakers (MAK) - Thomson Reuters Insider Minemakers Limited (ASX Code: MAK), since its inception in 2004 and listing in October 2006, has aimed to acquire major ...
	Vocus Communication Ltd (ASX:VOC) - Thomson Reuters Ins... Vocus Communications Ltd. (ASX:VOC) is a pioneering, newly ASX- listed, wholesale voice and data provider, backed by Inv...
	Because Group International Because Group International Ltd (Because Group) is a global digital media distribution company with operations in the US...
	Anteo Diagnostics - Thomson Reuters Insider Anteo has demonstrated further applications of the technology in several other large market segments such as clinical as...