Accountants await cash shell windfall on AIM

As the deadline for inactive AIM-listed cash shells to begin trading looms,
accounting firms are preparing for a frenzy of activity over the next eight
months.

Last April, AIM implemented stricter rules requiring cash shells to complete
a deal within 12 months or face having their shares suspended.

By April 2006, the 88 cash shells listed on AIM, which have a combined market
cap in excess of £200m, will have to complete reverse takeovers of unlisted
companies.

‘Reverse takeovers require more work because there are two levels of due
diligence required for the target company and the shell,’ said Robin Stevens,
corporate finance head at MRI Moores Rowland.

A number of private companies, however, are considering reverse takeovers
independently of the deadlines facing cash shells.

Institutional appetite for new admissions has eased since the first quarter
of 2005, when 130 companies were admitted to the exchange. This has increased
the risk that new IPOs may not be able to raise the minimum £3m required to
secure an AIM listing.

This trend, combined with the urgency among cash shells, has helped to keep
AIM activity buoyant, despite the lack of interest from institutional investors.

‘The boards of many aspiring public companies would rather suffer additional
dilution on a reverse takeover than be exposed to the market risk of being
unable to raise funds on direct admission,’ Stevens said.

COMPANY REPORTS

FTSE250

Results at Lloyd’s-owned insurer Amlin are expected to be
‘materially ahead of expectations’ for the 2005 half-year because of IFRS. The
company said that, in addition to continued strong trading, low claims levels
and a good investment performance, IFRS had increased profits because of
favourable exchange rate adjustments. Amlin’s pre-tax profit for the first half
of 2005 will not be less than £120m.

Allen Roberts, the group finance director of Renishaw,
received a £77,000 increase to his 2005 pay, as the electronics company saw
turnover increase from £127.7m in 2004 to £154m in 2005. Pre-tax profit also
improved, climbing from £16.1m in 2004 to £25m in 2005. Roberts earned a salary
of £200,000, benefits of £29,000 and a £93,000 appreciation award for a total
package of £322,000. In 2004, Roberts earned £245,000.

FTSE FLEDGLING

Jeweller Abbeycrest has undertaken a cost reduction exercise
after downgrading its sales expectations. The group said it was focusing on cash
management and working capital reduction.

Construction company Balfour Beatty, which saw profits before tax and
exceptional item increase from £44m to £52m for the six months to 2 July 2005,
said adjusted earnings per share were down from 10.1p to 9.3p as a result of an
increased tax charge. The company said it had benefited from advance corporation
tax credits of £4m in the first half of 2004.

FTSE ALL-SHARE

BPP Holdings, the educational group that provides professional
qualifications for accountancy students, saw turnover for the year ended 30 June
2005 increase by 12% from £49.4m to £55.6m. Pre-tax earnings climbed 9% to
£9.2m. The company benefited from 5% turnover growth in its accountancy and tax
offerings. The company said there was continuing growth in its courses for the
various institutes, which offset a slight fall in demand for its tax and CAT
courses. BPP Holdings added that it had combined its accountancy, tax, financial
services, actuarial and HR businesses into a single division to improve customer
service and allow better managerial and financial control.