STOCKS NEWS UK SMALL-Regus extends falls after update

12:00GMT 20May2009-Regus extends falls after update

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Shares in serviced office provider Regus (RGU.L) fall 4.7 percent, extending Tuesday's losses made in the wake of the company's trading update, with KBC Peel Hunt repeating its "sell" rating on the stock.

KBC cuts its pretax profit forecast for 2009 to 60 million pounds from 110 million pounds, and for 2010, to 40 million pounds, noting that this integrates 75 million pounds of annualised cost savings targeted by management two months ago.

The broker has a 60 pence target price on Regus, based on a 12.5 times 2009 PE ratio and a 2009-2010 average EV/EBITDA of 3.0 times.

"We do not currently believe the stock to be worth more, given the lack of visibility, the late-cycle nature of the earnings decline and the challenging nature of the UK business...," says KBC Peel Hunt in a note.

Reuters Messaging rm://ben.deighton.thomsonreuters.com@reuters.net

11:50GMT 20May2009-FTSE small caps up 0.6 pct at midday

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The FTSE Small Cap index .FTSC gains 0.6 percent in midday trade, outperforming the blue chips .FTSE, which fall 0.5 percent, and the midcaps .FTMC, which add 0.1 percent.

Cannabis drug specialist GW Pharma (GWP.L) rises 7.6 percent after the company says that it has filed its Sativex drug for regulatory approval in Europe. [ID:nLK408731]

African Eagle (AFE.L) climbs 5.3 percent as Seymour Pierce says a higher valuation of the Dutwa nickel project and inclusion of the new gold resource at Igurubi leads it to repeat its "buy" rating and up its target price 31 percent to 21 pence. [ID:nLK27059]

Reuters Messaging rm://tricia.wright1.reuters.com@reuters.net

11:46GMT 20May2009-Cape up on trading

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