Smaller Companies: Just the ticket for hardened punters

THE volume of shares traded on the London stock market has been given a shot in the arm from an unexpected source over the last few weeks. The most actively traded stock on several days during the latest account has not been a widely held privatisation issue such as BT, nor ICI or Glaxo. It has been a company most investors will not even have heard of.

On one day when the total number of shares traded in London reached 800 million (quite a lot by recent standards) a small leisure company, valued at little more than pounds 20m accounted for 130 million of the shares that changed hands. On that day trading in ICI shares reached just 2.9 million.

The Ticketing Group is a classic penny share. Or was. Currently it is a 2.5p share, having more than doubled in a little over six weeks. Hence all the excitement. As one market maker put it, 'it's a pure punt, lots of private clients are buying.'

Even in the context of a company with almost a billion shares in issue, quite large chunks are changing hands. With European investors rumoured to be picking up stakes and the added spice of a Malaysian media tycoon on the register, TTG is proving an irresistible flutter.

TTG emerged at the beginning of the year from the ashes of Expedier Leisure, a bombed-out leisure investment group, after a financial reconstruction and name change.

Expedier had given a new meaning to diversity. Interests ranged from clay pigeons to walking sticks. It sold tents, hired furniture out to film production companies and owned a warehouse in Putney, south-west London, built to house horse-drawn buses. It owned half of a joint venture with Wembley, the leisure group, in a business selling tickets for concerts and shows.

It also had lots of borrowings and no profits. Hence the rebirth, which involved buying out Wembley, issuing 600 million shares at a penny, and selling everything but the core ticket sales business.

Wembley ended up with 18 per cent of the new group but has since sold its entire stake, accounting for a large proportion of recent volumes.

Andrew Myers, finance director, says the problems are all in the past now. He says TTG is the biggest ticketing company in Europe, four times as big as its nearest rival. It sells all the tickets for the Wembley complex and has computerised ticket systems installed in the Sydney Opera House and the Athens Concert Hall.

Recently the furniture hire business, Medminster, was sold for pounds 1.3m, bringing borrowings down to a little over pounds 4m, much more manageable than the pounds 10m before the restructuring. The excess property is expected to be sold soon.

Through Clive Ng, the Malaysian cable television baron and a friend of the film director Oliver Stone, hopes are high for expansion in Asia.

That is in the future. In the year to last September Mr Myers says TTG made an operating profit of pounds 1.3m. This year pre-tax profits are expected to reach pounds 2.5m on the back of a good tourist season following sterling's devaluation.

Shared out between the holders of 850 million shares, that results in just 0.25p of earnings per share. A price-earnings ratio of about 10 is probably high enough until there is concrete evidence of recovery. In the meantime TTG will remain one for the hardened punter, propping up the exchange's volume figures.