Investors Chronicle articles from April 2003

Investors Chronicle archives from April 2003

The time factor.
April 4, 2003... Certainly Keynes believed that there was no positive correlation between the time spent running a lump of capital and the returns thereon. In other words, there was no guarantee that devoting extra time to the task would bring superior returns....

Devil in the detail.
April 4, 2003... Theres so much information about investing and finance around these days that you have to learn to say no. No to the haphazard minutiae of individual companies, no to the opinions of people whose views dont count and no to surveys that only...

I hate budgets.
April 4, 2003... I hate Budgets. For one thing, for most of the past 20 years at least, they have been delivered by economic illiterates. At the dispatch box, chancellors are serenely unaware of the massive margins of error in their economic forecasts - though...

Director Dealing.
April 4, 2003... Regular readers of the Investors Chronicle and those who keep a close eye on our weekly directors dealings tables, will have noticed an interesting trend over the past month. Namely, share buying by company directors has picked up markedly. In...

Pipped to the post?
April 4, 2003... here are many restrictions on people who run their own pension funds. Self-invested personal pension plans (Sipps) like mine cannot invest in unquoted companies, buy gold bullion, antiques, paintings or other collectibles. But the most glaring...

Lost highway.
April 4, 2003... New Labours Third Way has always been puzzling to the electorate - a commitment to both free markets and a welfare state is not easy to reconcile. But the governments message is becoming increasingly inconsistent. Perhaps we should not be...

Taxing our nerves.
April 4, 2003... There are times when you have to take a chancellors words with a large pinch of salt. You should always have some extra seasoning ready when theyre talking about the pound. Jim Callaghan denied he was planning to devalue sterling in the 1960s -...

Express Dairies to merge with Arla.
April 4, 2003... The dairy industry has entered its final round of consolidation. Express Dairies, which has lost increasing amounts of business to its two largest rivals - Dairy Crest and Robert Wiseman - is merging with the fourth-largest player in the...

Volatility boost for Man and ICAP.
April 4, 2003... Market volatility might be bad news for most financial businesses, but operations like inter-dealer broker ICAP and hedge fund manger Man Group thrive in such a world. Both recently released pre-close trading statements, and both had excellent...

Emap buys Excelsior.
April 4, 2003... Emap has provisionally agreed the acquisition of a French consumer magazine publisher, Excelsior, for GBP62m. Last year, Excelsior made a GBP4.3m operating profit - equivalent to a 7 per cent return on the acquisition price. Emap says its...

Scipher warns of widening losses.
April 4, 2003... Shares in electronic product developer Scipher took a tumble this week after the company warned that delays in winning contracts would lead to a greater loss than expected in the financial year just gone. Scipher usually collects more than...

Severn Trent suffering waste woes.
April 4, 2003... A trading update from Severn Trent has underscored the tough conditions in the waste industry. The groups water business is outperforming the targets set by the regulator, but its non-regulated waste division, Biffa, continues to struggle....

SRA prompts Firstgroup wrath.
April 4, 2003... The rail refranchising process has become rather like the railways it is trying to modernise. After long delays at the start, it had its first crash this week when the Strategic Rail Authority (SRA) publicly fell out with Firstgroup. The SRA...

Wilson Bowden snaps up Boot Homes.
April 4, 2003... Consolidation in the housebuilding sector took its latest step this week as Wilson Bowden bought Henry Boot Homes for GBP47.8m, valuing the business at less than seven times earnings. The deal will provide 1,792 plots in the North, Midlands and...

SSL to sell medical unit.
April 4, 2003... SSL has confirmed plans to sell its medical division, whose main product is surgical gloves. It is thought the unit could fetch between GBP200m-GBP250m, which would be used to reduce borrowing, which stood at GBP323m at the end of September....

C&W welcomes Caio and Loosemore to top jobs.
April 4, 2003... Cable & Wireless continued its rehabilitation this week with the appointment of Francesco Caio as chief executive and Kevin Loosemore as chief operating officer. Both are considered to have decent track records."Last December, the markets view...

Six continents bid lacks froth.
April 4, 2003... It was always said that splitting Six Continents into separate hotel and pub businesses would make takeover bids much more likely. As it turns out, potential bidders havent even waited for the demerger to go ahead. Even before the pub...

Thistle faces bully-boy tactics from BIL.
April 4, 2003... Malaysian property outfit, BIL, is desperate for Thistle Hotels shareholders to accept its takeover bid. But rather than pursue the conventional approach of offering more money, the company has resorted to arm-twisting tactics. It insists...

Boots ditches wellbeing.
April 4, 2003... Boots has finally thrown in the towel on botox injections and nail bars. The company is closing down its so-called wellbeing services, which it promised would give its stores the edge over out-of-town supermarkets. Boots is also closing...

Pilkington avoids profit warning.
April 4, 2003... There was relief for Pilkington investors last week as the companys pre-close period trading update turned out not to be a (much rumoured) profit warning. The shares had been volatile as fears grew that falling prices in Europe would hit...

Cash holdings boost recovery hopes.
April 4, 2003... Hopes of a stock market recovery were boosted this week, by news that fund managers cash piles are rising. Figures from the Bank of England show that non-bank financial institutions cash holdings rose by 1.3 per cent in February. Such...

AUTOLOGIC (ALG).
April 4, 2003... Autologics markets are starting to look tough. Although it managed a creditable 7.5 per cent underlying revenue growth last year when the impact of acquisitions is stripped out, that will be hard to maintain. New car registrations are slipping...

Austin Reed saved by Slater bid.
April 4, 2003... Austin Reed has become the latest retailer to see its shares salvaged by a bid after being approached by Slater Menswear, the private firm that runs 14 stores, mostly in Scotland. Austin's shares, which had been languishing following a profit...

ALPHA AIRPORTS (AAP).
April 4, 2003... Like other aviation companies, Alpha is bracing itself for the impact of war in Iraq. Charter groups already expect tourist volumes to decrease by as much as 10 per cent, thereby damaging revenue streams. Its a shame, because Alpha has shown...

ARENA LEISURE (ARE).
April 4, 2003... Following the launch of Arenas attheraces interactive television channel, Sky Digital viewers can now back the outsider in the 3.15 at Windsor by simply pressing their handsets. And if long shots are your thing, and you dont mind the wait, you...

JKX OIL & GAS (JKX).
April 4, 2003... JKX has a valuable asset in its 66 per cent stake in the Poltava gas field, the Ukraines largest non-state producer of oil and gas. Its so valuable that JKX was forced to defend its ownership through the courts. Two Supreme Court judgements...

HISCOX (HSX).
April 4, 2003... In a booming insurance market, Hiscox managed to turn last years chunky loss - caused by 11 September - into a solid-looking profit, though management needed to raise its estimate of its net World Trade Center-related liabilities by GBP10m to...

AMLIN (AML).
April 4, 2003... From 2004 onwards, Amlin has achieved that objective which is common to most Lloyds players: 100 per cent ownership of managed capacity. So profits - and with a 95 per cent combined ratio Amlin is now making decent underwriting profits - will...

CLARKSON (CKN).
April 4, 2003... Shipping is a highly cyclical business and the good news is that this cycle has bottomed. Since the summer, Clarksons Clarksea index of earnings in the shipping industry has risen 56 per cent. The outlook for rates remains good and although...

HARDY UNDERWRITING (HDU).
April 4, 2003... Hardys combined ratio fell to 81.8 per cent, making it one of the most profitable of the Lloyds underwriters. True, airline rates are beginning to soften after dramatic post-11 September hikes. But rates did increase by roughly 10 per cent on...

WHATMAN (WHM).
April 4, 2003... Whatmans new management hasnt wasted any time in tackling the laboratory service firms numerous problems. Profits have suffered in recent years as a result of misguided acquisitions and because the company hasnt paid enough attention to its...

CODASCISYS (CSY).
April 4, 2003... Software services may be a tough sector to be operating in right now, but CODASciSys continues to impress. Conservative management and high-margin repeat business have enabled the company to turn in its sixth year in a row of growing profits...

SKYEPHARMA (SKP).
April 4, 2003... Having made its first profit, SkyePharma now hopes to underpin future earnings growth with a reliable royalties stream. Last year, just 10 per cent of group turnover came from royalties, although that did represent a fourfold improvement on...

FIRESTONE DIAMONDS (FDI).
April 4, 2003... Firestones share price halved in December when exploration on its Mopipi prospect in Botswana drew a blank. Investors were also unnerved as output and profits fell. But output is increasing again, thanks to increased capacity at the South...

DANA PETROLEUM (DNX).
April 4, 2003... Dana jumped on the North Sea bandwagon in 2002, and its acquisition of interests in three fields was the main driver of its increase in profits, reserves and production. More of the same is promised for 2003, when production is set to double to...

HUNTLEIGH TECH. (HTL).
April 4, 2003... After a bumper year in 2001, Huntleigh Technology suffered a slowdown in its key market, supplying hospitals with beds. Although the government is chucking money at the NHS, the swift introduction of Primary Care Trusts caused widespread...

TULLOW OIL (TLW).
April 4, 2003... Its now almost two years since the acquisition of Tullows southern North Sea assets was completed, but they continue to drive strong increases in turnover and profits. Additional development work should yield more production and increase the...

MUSIC CHOICE (MUS).
April 4, 2003... Music Choice is one that got away, thats to say its still here despite consistent losses and the hiatus within the digital broadcast space. With Sky as a 36 per cent shareholder, and Time Warner and Sony also featuring on the share register,...

HANOVER (HVR).
April 4, 2003... Although Hanovers regional hotels and conference centres dont rely on international corporate travellers, the company is still feeling the pinch. Businesses everywhere are increasingly seeking to save money, and conferences and training...

CA COUTTS (CAH).
April 4, 2003... Coutts is increasingly focused on higher-margin work, with 70 per cent of sales now generated from its retail communications business. Trading has started well this year, with work from clients such as HSBC and Hutchison. One black spot...

GRESHAM HOTEL (GHL).
April 4, 2003... These are stormy times for all hoteliers, but for Gresham the last year has been even more turbulent. Following a struggle with Red Sea Hotels - an Israeli group that owns a substantial chunk of its shares - the company has been forced to sack...

HAVELOCK EUROPA (HVE).
April 4, 2003... Directors buying shares ahead of the closed period was a strong signal that results from Havelock would be good. And so it proved. The acquisition of science laboratories business ESA Macintosh in 2001 has proved a smart move. Chipping in sales...

TEPNEL LIFE SCIENCES (TED).
April 4, 2003... The planned launch of the new T2000 DNA purification system will be a key factor in driving Tepnel towards profitability. The groups TLS division has signed an optimisation and development agreement for T2000 with a large UK-based global...

SIMON (SMON).
April 4, 2003... This year should mark a fresh start for Simon, hit by a stream of profit warnings and uncertainty relating to bids for the group. The profit warnings ultimately led to wholesale management changes and a complete goodwill write-off. And the...

NICHOLS (NICL).
April 4, 2003... Nichols best-known drinks brand, Vimto, is hardly the height of beverage fashion these days. Nor for that matter is its conglomerate structure, which unites soft drinks production, vending machines and packing operations under one corporate...

MANCHESTER UNITED (MNU).
April 4, 2003... Before they became listed companies, football clubs were typically owned by wealthy local businessmen. By the look of things, Manchester United could soon revert to that tradition. A handful of mega-rich individuals have been building up their...

AG BARR (BAG).
April 4, 2003... Fizzy drinks in the UK are pretty flat right now. Volume growth within the carbonated category of the soft drinks market was just 0.4 per cent last year. But AG Barrs brands - which include Irn Bru and Tizer - fizzed ahead by 10 times that...

LONDON FORFAITING (LFC).
April 4, 2003... Having hoisted the for sale sign last year, London Forfaiting is still in negotiations to sell the business and expects to make an announcement by 30 June at the latest. Its unlikely to recommend an offer at less than the 34p-a-share net asset...

MINERVA (MNR).
April 4, 2003... "In uncertain times it is an unarguable strength to focus on the fundamentals of ones core business," says Minervas chairman Sir David Gerrard in his interim statement. So its strange that Minerva should have spent so much of the past few...

PRI (PRI).
April 4, 2003... It has only taken six months of trading at PRI for the insurer to start attracting suitors. Sky-high premiums for commission-based brokers prompted PRI to the enter the professional indemnity market via an ambitious GBP130m float on Aim in June...

TELEWEST (TWT).
April 4, 2003... Telewest is taking longer than expected to finalise its refinancing deal. Chief executive Charles Burdick says it takes time to reach agreement among so many parties, and besides, there's no rush because the business is "performing well" and...

DEVELOPMENT SECURITIES (DSC).
April 4, 2003... While no property company is wholly safe from economic downturns and falling property prices, there are differences within their degree of exposure. Having noted signs of a property bubble last year, Development Securities took the chance to...

COSTAIN (COST).
April 4, 2003... Not so long ago, Costain was a basket case, but these results marked another step in the right direction. Sales growth, including joint ventures, was ahead of managements annual target of 15 per cent and pre-tax profit margins nudged up to 2.2...

CAPITAL & REGIONAL (CAL).
April 4, 2003... After selling much of its book to joint-venture funds last year, Capitals transformation - from property investor to property fund manager - is now complete. That provided sufficient funds to return GBP50m to shareholders and pay-down GBP346m...

MAIDEN (MDN).
April 4, 2003... The media industry may be in the depths of recession, but outdoor advertising continues to perform better than other national media, with the exception of television, which has seen sales bounce recently. As a result, Maidens revenues have...

EDINBURGH FUND MANAGERS (EDFD).
April 4, 2003... To the likely disappointment of many shareholders, Edinburgh Fund Managers looks like its going to sell off parts, rather than find a buyer for the whole business. Management confirmed it is in talks to sell its private-client operation, which...

INDEPENDENT NEWS & MEDIA (INWS).
April 4, 2003... These results were overshadowed by the announcement of a deeply discounted four-for-15 rights issue (see 28 Mar 2003, page 10) to raise 103m (about GBP70m). The group also announced the 88m sale of its UK regional titles and the intention to...

PERSONAL (PGH).
April 4, 2003... Employee benefits group Personal seems to have carved up a profitable little niche for itself providing workplace benefits since it floated on Aim. Its main opportunities are in attracting clients via personal hospital and death benefit plans,...

ORANGE (OGE).
April 4, 2003... How times change. Nine years ago, Orange was the brash newcomer to the UK mobile phone industry. With impressive branding and an innovative range of tariffs, Orange burst onto the scene and won market share from the established operators,...

NEXT (NXT).
April 4, 2003... Simon Wolfson, Nexts chief executive, is happy to admit that the retailer got its womenswear offer wrong last autumn. The shops were selling too many items aimed at trendy teens, which alienated its core classic customers."But its not about...

SIGNET (SIG).
April 4, 2003... Signet says it will fully update the market on how current trading is faring after Easter and Mothers' Day, but chief executive Terry Burman does admit that snowstorms in the US and the war in Iraq are not doing the company any favours. "It's...

CORPORATE SERVICES (CSV).
April 4, 2003... While Julian Treger believes there is light at the end of the tunnel for Corporate Services, the groups chairman accepts that these results were"clearly unacceptable". Even stripping out discontinued operations, sales fell 21 per cent, helping...

SELFRIDGES (SLF).
April 4, 2003... Oxford Street retailers have been under pressure for some time. Londons premier shopping street has suffered from the fall in the number of tourists visiting the UK since 11 September. And, in recent weeks, the closure of London Undergrounds...

OTTAKARS (OKR).
April 4, 2003... Self-confessed Tintin fan James Heneage, managing director at Ottakars, has achieved his long-held ambition of opening special areas within the bookshops dedicated to the Belgian cartoon sleuth. But he insists that the Tintin trial is no mere...

YULE CATTO (YULC).
April 4, 2003... Not everyone jumped for joy last October when a New York court allowed Schwarz Pharma to sell a generic version of one of the worlds best-selling drugs to the US public. AstraZeneca - owner of the drug in question, anti-ulcer treatment Losec -...

Golden wonder.
April 4, 2003... Its easy to see why investors have sought out gold funds during the Isa season. Since August 1999, the sterling price of the yellow metal has risen almost 40 per cent. Thanks to this, Merrill Lynchs Gold & General unit trust has more than...

International rescue.
April 4, 2003... Chancellor Gordon Brown will announce a big rise in public borrowing in Wednesdays Budget. Economists now believe the forecasts he made in Novembers pre-Budget report were too optimistic. Then, he forecast public sector net borrowing of...

Fuel for the fire.
April 4, 2003... "Gas - the fuel of the future," ran an advertising campaign in years gone by. In 2003, plenty of companies would have you believe the same thing. Natural gas, which is mainly methane, is ideal for power-generation because it burns more cleanly...

Uncharted waters.
April 4, 2003... The Bank of Englands monetary policy committee faces a problem at next weeks meeting - one of the most influential academic theories about interest rates says they should rise sharply. This theory is the Taylor rule, named after John Taylor...

RSAs Antipodean float fails to dispel fears.
April 4, 2003... In line with last Novembers desperate survival plan - involving raising capital through disposals and cost-cutting - insurer Royal & SunAlliance (RSA) announced the flotation of its Australian and New Zealand operations this week. With the...

Partnoys Complaint.
April 4, 2003... On page 383 of Frank Partnoys new book,"Infectious Greed - How deceit and risk corrupted the financial markets", he gets onto Synthetic Collateralised Debt Obligations, which he dubs"the ultimate in financial alchemy". This will represent...

LOGICACMG (LOG).
April 4, 2003... The jury is still out on chief executive Martin Reads bold assertion that merging the UKs two largest computer services companies would create an IT industry"powerhouse". The groups first set of results, published last month, delivered profits...

EMAP (EMAP).
April 4, 2003... The consumer magazine market is widely acknowledged as mature but, within it, some sub-categories are seeing strong growth while others stagnate. Emap insists it can find growth by focusing investment on those growth categories. Every publisher...

HURLINGHAM (HRL).
April 4, 2003... Hurlingham reported a loss of GBP135,000 (GBP189,000 pro forma) in the first half of 2001-02, but clawed half of it back in the following six months. That improvement was due to better results from the 81-room budget hotel in Perth, now free of...

HARTFORD (HAR).
April 4, 2003... Hartford changed strategy again in 2001 when it decided to develop a portfolio of"stylish drink-led operations". That decision led to last Septembers GBP4.72m share exchange acquisition of Jamies Bars, with 17 outlets in the City and West End...

EUROCOPY (EUP).
April 4, 2003... Eurocopy has had to cope with cut-throat copier competition for almost a decade. But its business model of offering more efficient machines and better service at a reasonable price seems to be working (certainly if the share price is a guide),...

TECTEON (TEO).
April 4, 2003... Tecteon may be about to offload most, or all, of its 92 per cent stake in Ofex-listed Dominion Energy. Dominion contributed all of last years turnover, and will generate even more revenue in 2002-03, thanks to higher oil & gas prices and...

WIDNEY (WDNY).
April 4, 2003... Easter quiz: which UK FIRM was first to move all the assets of its defined-benefit pension scheme into bonds? Boots gets the glory but, in fact, little Widney did that when it closed its defined-benefit scheme in December 1995. The benefits...

AVR plans shakeout at Mcleod russel.
April 4, 2003... McLeod Russel is the latest company to have its feathers ruffled by activist investor Advanced Value Realisation (AVR). It has also received an unsolicited bid approach from a third-party attracted by the potential of its European Clean Air and...

Clipper sails through fund-raising.
April 4, 2003... International yacht race organiser Clipper Ventures has secured GBP1m in new funds to help finance the development of 12 new yachts for its 2005 race. Sponsorship agent Fast Track, which is currently in discussions with a number of major cities...

Reneurons return to private ownership sparks share price rise.
April 4, 2003... Stem cell company Reneuron is going private via a GBP3.6m sale to St Jamess MGP, a company backed by private equity investor Merlin Biosciences. A bid has been on the cards for some time as product delays last year made Reneuron ripe for a...

Sportingbet hit by Cheltenham losses.
April 4, 2003... A series of bad results at the Cheltenham racing festival, and in the US basketball leagues, have hit online bookmaker Sportingbet hard. The Aim-listed company has said it will now miss analysts expectations of GBP19.5m operating profit for the...

Weeks Profits hit by rising staff costs.
April 4, 2003... Rising costs at engineering consultancy Weeks have forced the company to issue a profit warning. A hardening construction market and shortage of technical staff meant the group had to turn to more expensive subcontracted staff. Rising insurance...

Venturia approached by Armstrong Brooks.
April 4, 2003... Cash shell Venturia has received a bid approach from private investment vehicle Armstrong Brooks. An offer document has yet to be issued but the 2.9p-a-share indicative offer values Venturia at GBP2.6m - a far cry from when the group floated in...