Scrutineer

Claims Direct

THERE'S nothing like a chief executive buying a significant chunkof new shares to help revive optimism in a bombed-out stock.

And that is what happened at Claims Direct yesterday, after thepersonal injury claims specialist's chief executive, David Poole,ploughed-in to buy another million shares in the company.

This was no empty gesture, accounting for about half of all theshares traded in Claims Direct yesterday, and taking Poole'spersonal stake in the company to 5.8 per cent.

The chief executive bought the shares at 10p, and the immediateresult was for the shares to jump by one-third in value from 9.75pto 13p.

Better sentiment towards the stock was also helped by CD'sfinance director, David Gravell, buying 20,000 shares. CD has neededan injection of momentum following disappointing results lastNovember and two subsequent profit warnings in January and March.

The stock is still an aeon away from the 360p it touched shortlyafter its flotation last July, but Poole may at least have drawnsome sort of line under the decline.

Chrome Technology

CHROME Technology is a so-called "vulture fund". Its purpose isto acquire floundering internet and tech companies. It floated onthe Alternative Investment Market in October last year at 10p ashare, raising GBP 1.5 million. A month later shares rose to 55.5pand were tipped, by some, to be bought all the way up to 75p.

Yesterday, the shares were languishing at 11p, unmoved by thenews that Chrome is to acquire Xworks, a private internet incubator,in what is in effect a reverse takeover. The company announced backin January that it was in talks with Xworks, but it then wanted acontrolling interest in an internet car retailer, Wundercars,minority-owned by Xworks. Yesterday Chrome said it had abandonedthis intention.

What this reverse deal means is that the Xworks directors move onto the board of Chrome and have honestly announced their salaries,which are in the GBP 55,000-GBP 60,000 range.

The stories of the sufferings of dotcom investors have been wellaired. Now it is a question of having faith in those that are ableto revive moribund internet companies. A rush back into Chrome'sshares looks some way off yet.

Autonomy

THE evidence is now mounting that the US economic slowdown ishaving a bigger than expected knock-on effect on the UK and Europe,judging by yesterday's profits warning from Autonomy.

Autonomy, which produces software that can understand andorganise text, such as emails, has been widely seen as one of themore robust of Britain's technology companies.

But if its customers are reining in spending then there is littleit can do but batten down the hatches.

It is quite worrying that large numbers of multi-nationalcustomers should suddenly have deferred signing contracts worth morethan $10 million at the end of the first-quarter to March.

But, it is the fact that these deferrals were largely fromContinental Europe that really stunned investors yesterday.

Hence the massive fall in the group's shares, down more than 50per cent at one stage and down 38 per cent, or 218p, to 352p lateron.

The stock has now fallen from about 4,000p in November 2000 and1,400p last month.

It is increasingly looking as though the venture capital groupApax, a founding shareholder in Autonomy, made a good decision tosell its entire seven per cent holding for 1,495p per share inFebruary.

Autonomy's cash position is strong, holding $137 million at theend of last December. It also has a pretty flexible and leanbusiness model, employing less than 200 people worldwide, althoughit will have to continue investing in both people and acquisitionsto maintain momentum. The obvious challenge is to keep growingrevenues more quickly than its costs.

With a blue-chip customer base, including the likes of the BBC,News Corporation, Merrill lynch and Reuters, and a series ofsoftware manufacturing partners, Autonomy should eventually ride outthe storm, even if in the short-term things prove to be rocky to saythe least.

RMC's key-word is consolidation

RMC, the building materials group, has not had the best of timeswith its international operations over the last year, with pricewars in its German and Austrian markets and the politicalinstability in Israel. The company's shares have underperformed thebuilding materials sector by eight per cent in the last six months.

However, RMC has turned its focus to Scotland for growth, withthe GBP 59.7 million acquisition of Alexander Russell. This willcatapult RMC into the Scottish number two position in aggregates andwill allow it to take advantage of the proposed large increase ininfrastructure spending, which will benefit demand for heavybuilding materials. The deal will be earnings enhancing in year-one.

Alexander Russell has been doing quite nicely on its own, having,in contrast to RMC, outperformed its sector by some seven per cent.In fact, RMC made a play for the company two years ago, but wasspurned on the grounds that the offer was too low. Currently, RMCtrades on a prospective price/earnings multiple of 10.52, comparedwith Alexander Russell at 8.46 and against a sector average of 8.89.

However, the combining of Alexander Russell with RMC's existingScottish businesses makes a lot of strategic sense, giving themerged operation the critical mass it needs to take advantage of newopportunities. The aim is to grow the business organically, althoughfurther acquisitions in Scotland are not being ruled out.

No less than in other industries, consolidation is the watchword,and there is continued speculation that RMC itself might be thesubject of a takeover bid. The company is selling non-core assets tocut its debts . This latest deal should at least help keep the groupon a steady path in its UK operations, though there remains much tobe addressed in the overseas businesses.