February 25, 2008: 07:10 AM EST | /money.cnn.com/news/newsfeeds

LONDON, Feb. 25, 2008 (Thomson Financial delivered by Newstex) -- UK small caps hit a session high at midday, lifted by strength among blue chip stocks, with Infoserve more than doubling as it resumed AIM trading and announced a major contract with Google.

At 11.47 am, the FTSE Small Cap index was 24.5 points higher on 3,232.8, a session high, as the FTSE 100 index rose 96.9 to 5,985.4
Infoserve soared 64 pct, up 13-1/2 pence to 34-1/2, as it resumed AIM trading and said it has won a major new contract with Google Inc (NASDAQ:GOOG) , which will see it become an 'Authorised Google AdWords Reseller'.

The shares were suspended on January 24 pending the announcement of the contract.

Reacting, WH Ireland raised its sales estimates for the group to 9.8 mln stg from 7.8 mln for 2009 and, for 2010, to 20 mln from 11.7.

However the broker said Infoserve will need to add technical staff to support the new product, so increased its estimate for the 2009 pre-tax loss to 1.2 mln stg from 0.7 mln.

Cape Lambert Iron Ore rose 10-1/4 to 32-3/4 -- a 45 pct gain -- on signing a memorandum of understanding with Chinese conglomerate China Metallurgical Group Corp for the sale of its Cape Lambert iron ore project, located in the Pilbara region of Western Australia, while Spiritel hardened 0.125 a penny to 0.775 a penny as it agreed terms of a proposed balance sheet restructuring with its funding partner, Penta Capital Partners.

The business communications service provider said Penta Capital will convert up to 11 mln stg of loan facilities and preference shares into new shares at a substantial premium to the current share price and also waive 800,000 stg annual interest charges.

Elsewhere, deal news lifted Tanfield Group 6-1/4 to 98, as Enova Systems (AMEX:ENA) confirmed it has received a 2008-2009 production order for drive components for Tanfield, thus extending its supply agreement with the electric vehicles manufacturer, while MDY Healthcare rose 5 to 54-1/2 as it acquired Stanmore Implants Worldwide Ltd, an orthopaedic devices company, for 12.5 mln stg in a joint deal with Abingworth Management.

Northacre climbed 8 to 64-1/2 as the property developer said it has generated sales revenues of over 100 mln stg from the first phase of passive marketing of The Lancasters, which represents almost one-third of the total number of apartments, while Cash Converters moved 1-1/2 higher to 17 as it posted a record net profit of more than 7 mln usd for the half-year ending December 31 2007, saying it is well placed to deliver the full year profit forecast, previously advised, of 14-1/2 to 15 mln usd.

Still in results news, Robert Walters strengthened 9-3/4 to 146-1/4 as its pretax profit for 2007 rose 26 pct on higher revenues, prompting Seymour Pierce to upgrade the financial and legal recruiter to 'buy' from 'outperform', as Waterman Group rose 9 pence to 164-1/2 pence as it posted a 43 pct jump in first-half pretax profit as revenues rose 33 pct from a year earlier.

This prompted Numis to upgrade its EPS estimates for the group while keeping 'buy'.

Raymarine also climbed on bumper numbers, up 13 to 268, as the marine electronic products maker posted full-year pretax profit up 66.1 pct, prompting Citigroup (NYSE:C) to keep its 'buy' rating on the stock.

Meanwhile, Goals Soccer Centres rose 13 to 336 after posting a 42 pct higher full-year pretax profit and 26 pct higher sales, prompting Numis to keep 'buy' on the stock.

Still in football, Tottenham Hotspur gained 4-1/2 pence to 157-1/2 pence after the team's emphatic victory against Chelsea in yesterday's Carling Cup Final.

It is the North London club's first piece of silverware since 1999.

Firestone Diamonds extended earlier gains to rise 20-3/4 to 150-1/4,on receiving encouraging results from the MK1 kimberlite at its Tsabong project in Botswana after initial grade estimates 20 carats per hundred tonnes.

Similarly, Henderson Morley gained 0.125 of a penny to 1.375 after receiving positive results from its study on its PREPS and L-particles vaccine platform, as Oilex climbed 6 to 70 on confirming presence of moveable oil in the Sarha-1 well, Oman, after drilling.

Bid rumours lifted Sportingbet 5 to 48, as BWIN Interactive Entertainment said it does not want to comment on 'market rumours' it is mulling a new bid for its British peer Sportingbet, a company spokesman told Thomson Financial News.

However Zenith Hygiene Group continued to lead the fallers, dropping 2 to 16 as it posted a wider full-year pretax loss in 'a very difficult year' and said Ringo Francis will step down as its chairman and chief executive.

The manufacturer and supplier of cleaning and hygiene products said interim COO Gavin Gracie will become CEO and Simon Barrell becomes acting chairman.

Finally, Gulf Keystone Petroleum pulled back from earlier losses but was still 1 lower on 32, as it updated investors on its activities, saying the HBHN-1 exploration well on the Hassi Ba Hamou gas field in Algeria was spudded on Feb 21, and drilling at a second HBH Algeria well has started.

Copyright Thomson Financial News Limited 2007. All rights reserved.

The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News