Secondary Recommendation

Sovereign Oilfield Group - Interesting new issue in oil services

November 2005

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

With the oil & gas sector still providing fertile ground for investors, new issue Sovereign Oilfield, a diversified oilfield services business, has clearly picked a good time to float. The company was introduced to AIM by broker Charles Stanley at 140p a share in a placing which raised £4.1m net new money and have since shot up to a 27% premium. Market cap. at today’s price is £26m. The most impressive thing about Sovereign is that although only formed two years ago, it has hit the ground running very hard. In that time, management have made four acquisitions, which are forecast to make sales of £29m and a pretax profit of £1.3m in the current year ending 31 March, before rising to nea ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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