Enneurope - Cash Rich Cement Company.

Forget sexy tech companies, cement is where you want to be. Yes, by jove, Enneurope (ENU) are a Polish Cement company with the aim of cornering, by acquisition, 25% of the Polish market.

6 months results to end of March 2003 were described as 'truly rank' by anal-ists and the company blamed a severe Polish winter. Turnover of 167K and operating loss of 450K. Cash outflow of 900K due to capex. NTAV of 1.7M, net current assets of zip. Crap in other words.

However they have just announced fund raising that will result in a cash injection of 2.53M (net) into the company. The funds are coming from Arlington(ARL) via a placing of 8.3M shares at 15p. Arlington are also underwriting an 11.6M share issue at 15p a share for existing holders. So Arlington will own between 30% and 75% of the company depending on the take up by existing shareholders.

The share price is currently well below the 15p placement price, at 10.5p. If 27.87M shares after fundraising then current price of 10.5p gives market cap of 2.9M.

ENU recently disposed of a 3% stake in an investment trust (NOIT) raising 333 grand in cash (book value was nearly double this). Also announced an acquisition of a concrete plant at Starsgard for 240K (equivalent to Stargard's NAV).

Current trading is in line with the Board's expectations. Dont know what this means but I assume its an improvement on the interims.

The interesting thing for me is that ARL are prepared to put in up to 3M into this. ARL have been ridiculously prudent with their cash pile the last few years. The only investment of note has been a 10% stake in Ecko Tech (apart from a short-lived stake in Sentinel). So you can assume they have done a lot of due diligence. At 10.5p the current market cap is almost covered by cash and is a near 30% discount to the placing price announced last month so is IMO worth a look. dyor.