Small-cap Week, October 18

Connect Group , the magazine distributor formerly known as Smiths News, was among the week’s best-performing small-caps after launching a same-day delivery service for Amazon.

A well-received investor roadshow also boosted demand for Connect shares, which climbed 17.8 per cent over the week. Liberum estimated that its Amazon partnership could provide an 11 per cent boost to group earnings. “The strategic logic is strong: it utilises Connect’s existing retail relationships, distribution network and time critical logistics expertise,” the broker said. “The marginal cost is low and there is minimal invested capital.”

Trap Oil dropped 42.7 per cent after it warned decommissioning costs at the Athena field in the North Sea would be more than previously expected. Site operator Ithaca Energy estimated the total would be £60m – nearly twice an earlier forecast – of which £9m net will be owed by Trap.

Network software maker Wandisco , one of Aim’s fallen stars, bounced 28 per cent this week after a quarterly update showed growth. Allocate Software , a specialist in corporate governance software, also posted a 33.2 per cent rise after agreeing to a £110m buyout from private equity group HgCapital .

Imagination Technologies , the chip designer, rose 16 per cent after larger peer, CSR , agreed to be bought by Qualcomm . Imagination also hosted an investor day that set out a plan to turn MIPS, the processor maker it bought in 2012, into a competitor to Arm Holdings .

Hope for cancer treatment trials in 2016 lifts Scancell

Shares in Scancell, the Aim-quoted biotech business, rose nearly 15 per cent this week after positive news about one of its cancer treatments, writes Kate Burgess

On Tuesday, the company – which was spun out of Nottingham University in 1997 – unveiled what it described as “encouraging survival and safety data” for treatment of malignant melanoma using its technology.

Scancell is developing ways of combating aggressive cancers using the body's own immune system and it said this week that one of its treatments would be ready for clinical trials in 2016.

But the development process is long and costs are high – which has led to some volatility in the share price.

Until 2012, Scancell – which moved from what was Plus Markets to Aim in 2010 – was a 10p (or less) stock. It was then re-rated following news of a breakthrough technology, Moditope, for treating tumours, and its share price hit 53p. Since then it has gone on to develop cancer vaccine technology. Its shares closed this week at 32.4p.

Range rises more than 25% amid loan refinancing deal

Shares in Range Resources, the Trinidad-focused oil explorer, rose by more than a quarter on Friday, to 0.9p, on completion of a $15m loan financing agreement, writes Michael Kavanagh

However, at that level, they remain well below the 1.6p they traded at in late September, before plans for the refinancing were first announced. That announcement was overshadowed by the revelation of production problems at some of Range’s fields and write-offs on investments in Colombia, which hit the shares.

Range’s new loan facility with specialist lender Lind Asset Management is intended to allow increased production in Trinidad until longer-term debt can be secured. But it comes with harsher conditions following the recent share price declines.

Falling oil prices have not helped sentiment towards the shares, either, and may not help Range’s aim of pumping faster to pay back the loan. Some commentators have argued that investors should give the Aim-quoted company’s new management team more time to turn its fortunes around.

Vertu Motors sales power record half-year profits

Two and half years of rising UK car sales – and some strong trading at newly acquired car dealerships – have powered Vertu Motors to record breaking half-year profits, writes Chris Tighe.

A “buy and build” strategy has helped the Gateshead-based group to become Britain’s sixth largest car retailer, in just eight years since its formation.

In the six months to August 31, Vertu reported a 48 per cent rise in pre-tax profit to £12.8m, on sales that were up 29 per cent to £1.1bn. It said it would increase its interim dividend by 16.7 per cent to 0.35p a share.

New retail sales in September – the month number plates change, and the key to profitability – were also up on a like-for-like basis. New vehicle margins are coming under pressure, as manufacturers direct higher vehicle volumes to the UK, but Vertu has the bulwark of strong used car sales and service revenues. Its shares closed the week up 6.4 per cent.