Small-cap week: Thorntons turns sweet

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Thorntons was the sweetest of small-caps this week, surging 59.7 per cent despite revealing plans to slash its dividend and close at least 120 high street stores over the next three years.

Analysts suggested the severely depressed stock was now seen as “option money” by less risk-averse investors.

West Africa-focused oil and gas company Bowleven was the week’s other big winner as it rose 55.3 per cent on the back of takeover speculation.

Dragon Oil, which has extensive assets in Turkmenistan, said it was in the preliminary stages of making an offer.

Video search engine Blinkx jumped 26.5 per cent after confirming it would power video search for AOL, the US internet company.

Yell, which publishes the Yellow Pages in the UK, fell 22 per cent after revealing that its revenues declined 15 per cent in the fourth quarter.

Citibank said that “Yellow Pages companies are near uninvestable for as long as revenue continues to decline, and Yell is no exception. The company’s balance sheet looks stretched, and although free-cash flow generation for now continues to be robust, we worry that cost savings/working capital opportunity will be exhausted before revenue trends ameliorate.”

CPP Group, which sells assistance policies for problems such as identity theft, fell 13.5 per cent after Barclaycard said it would not be renewing its contract with the company.

CPP is facing a Financial Services Authority investigation which Peel Hunt said could see more of its business partners abandoning the company.

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