Cagney's decision to remove its shares from the stock market - announced this morning - is the second such decision to be made by a marketing services company within weeks, reflecting the burdens imposed on underperforming smaller businesses in maintaining a reasonable market in their shares at a manageable cost. Market research group Optimisa delisted its shares last month (see Optimisa shareholders approve cancellation of stock market listing).
Cagney was launched on AIM in 2006 under the leadership of Paul Simons but its performance soon stuttered as most of its initial business units proved to be too insubstantial to fuel the rate of growth and market clout necessary for a public company. Its post-tax profit in the first year was a mere £189,000.
Cagney says that 44% of its shares are now held by company managers and, for this reason among others, there was very little market activity in its shares. Furthermore in the present climate Cagney does not believe it can readily raise funds on the stock market. It would probably be difficult to do so in any climate on the back of its recent financial performance.
The company's profit record has been very disappointing - it reported a loss of £2.9 million in 2007 and a further £3.7 million in 2008. This morning the shares were priced at 0.35p, down from a flotation price of 7p.
© Fintellect Ltd
BOB WILLOTT
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