Investors Chronicle articles from August 2004

Investors Chronicle archives from August 2004

Buyer beware.
August 6, 2004... Abbey National's one-time boss, Ian Harley, told me he wanted the one-time building society to be a financial supermarket rather than a bank. This was back in the 1990s, when Abbey still wasn't comfortable calling itself a bank (even though it...

Bricks and sectors.
August 6, 2004... If I'm subjected to much more house price speculation, I'll need an ice pack on my head. The din is deafening and yet it isn't obvious just how accurate this speculation is. We heard threats of an imminent house price collapse from economists...

Out of the spotlight.
August 6, 2004... Luke Johnson - the stock market impresario and Channel 4 chairman - writes a column in The Sunday Telegraph's business pages (under the name "The Maverick"). It doesn't appear every week but, when it does, it's an excellent read. Recently...

Oil: the UK explorers.
August 6, 2004... The price of gas varies from region to region but for oil, barring slight differences in the quality of local benchmarks - West Texas Intermediate, Brent Crude - there's pretty much one price the world over. And right now, according to broker...

On a roll.
August 6, 2004... Forget about oil prices for a moment. Steel is on a roll. For the first time in years, producers are consistently profitable. US Steel reported net profit of $211m in its second quarter. Arcelor, the world's biggest producer, saw first-half net...

BSkyB announces new assault on subscriber growth.
August 6, 2004... Six months ago, BSkyB's shareholders were close to harvesting the fruits of their investment. Revenues were rising, costs were falling, and the business was becoming hugely profitable. Now that harvest has been postponed. Chief executive...

Intec calls in general atlantic for placing.
August 6, 2004... Intec Telecom has issued shares to fund its $75m (GBP41m) takeover of Singl.eView. The takeover was announced in June, and Singl.eView wanted cash, so Intec has placed shares with General Atlantic Partners (GA), a venture capitalist. The...

British Energy has hedge funds on edge.
August 6, 2004... Hedge funds have this week been lobbying small shareholders to reject the restructuring plans for British Energy, which would see investors left with just 2.5 per cent of the equity. But shareholders will probably be wiped out if they don't...

singer shares warm to icelandic investment.
August 6, 2004... Shares in private bank and asset manager Singer & Friedlander gained 10 per cent this week as the company revealed that an Icelandic investment firm, Burdaras, has bought 3.4 per cent of its shares. The move increased speculation that Singer...

Ennstone digs up a row.
August 6, 2004... A piece of takeover theatre every bit as interesting as the Marks and Spencer duel is taking shape in the unglamorous world of aggregates. Last week, Ennstone announced an unsolicited cash-and-shares bid for mini-conglomerate Johnston...

Wichford to benefit from civil service move.
August 6, 2004... Aside from sacking civil servants, Gordon Brown's other big idea for the nation's bureaucrats is to move more and more of them out of London. Property company Wichford, which plans to list on Aim on 13 August, will take advantage of this...

Proteome's credibility hit at first hurdle.
August 6, 2004... To add to its recent difficulties, Proteome Sciences could be running short of cash. The biotech company that produces diagnostic protein markers saw its market value halve to GBP79m this week, after US partner Biosite decided not to include...

WH Smith sells publishing arm.
August 6, 2004... WH Smith has sold its publishing business, Hodder Headline, to French publishing house, Hachette Livre, for GBP210m. The speed of the sale took most analysts by surprise, but they said that the price was in line with expectations. WH Smith...

Next unveils novel incentive scheme.
August 6, 2004... Next's directors have invested in an innovative incentive scheme that has raised eyebrows in the City. If the price of Next's shares hits 2,450p in four years' time, a group of senior directors will share more than GBP13m. The share price...

Matrix continues to grow impressively.
August 6, 2004... Matrix Communications is further bolstering its offerings by splashing out up to GBP4.9m on three new businesses. This is the latest in a long line of positive announcements from the integrated network solutions provider since it changed its...

Brightview for Invox.
August 6, 2004... Marketing promotions company Invox has completed its first acquisition: the GBP25m purchase of leading internet service provider Brightview. The deal is expected to be immediately earnings-enhancing and brings 10 brands, including Global...

Metal Bulletin buys up Florida broker.
August 6, 2004... Metal Bulletin, the specialist publisher, has bought an equity research and execution-only broking company for GBP11.4m. Avalon, based in Florida, will be merged into Metal Bulletin's financial and economic research subsidiary, BCA. The...

Migrating Brits benefit Medsea.
August 6, 2004... Aim newcomer Medsea Estates has already established itself as a favourite among Brits looking to move to warmer climes. The Spanish estate agency business makes its money by acting as an intermediary between developers in Spain and property...

Britain joins Eurozone.
August 6, 2004... Britain has joined the eurozone - in the sense that sterling is becoming more correlated with the euro and less correlated with the dollar. One sign of this is that in the past 12 months, the correlation between weekly changes in the GBP/$...

High-street slowdown bodes ill for growth.
August 6, 2004... The looming high-street slowdown is a danger to tech and telecom stocks. The Confederation of British Industry reported this week that retail sales growth fell last month. That followed figures from the Bank of England showing that growth...

IP Live muscles in on Human Body.
August 6, 2004... Recent new issue IP Live has wasted little time in investing its float proceeds - it has acquired an undisclosed stake in the Human Body Exhibition. Set up to take advantage of opportunities in the live entertainment sector, IP has invested in...

Pessimistic Ryanair receives boost.
August 6, 2004... Ryanair revealed this week that yield pressures are not as great as had been feared. Average fares fell by 6 per cent over the first quarter of this year, which is at the low end of the 5-10 per cent range that Ryanair had previously warned of....

Next week.
August 6, 2004... Monday 9 August Interims: British Airways (Q1), Marconi Corp (Q1), Management Consulting, Morgan Sindall Economics: UK July PPI, UK June house prices - ODPM, UK BRC July retail sales monitor Tuesday 10 August Interims: Old...

FTSE members face pension pressure.
August 6, 2004... Some of the UK's most prominent FTSE 100 companies are at risk of becoming little more than geared plays on the stock market. A report from consultants and actuaries Lane Clark & Peacock has highlighted BAE Systems, British Airways, BT, ICI,...

Nestor Healthcare issues profit warning.
August 6, 2004... Nestor Healthcare has announced that a further deterioration in trading at its PrimeCare unit (which provides out-of-hours GP services), along with the impact of a business reorganisation, will mean that it is unlikely to meet current analysts'...

Royal & SunAlliance sells UK life unit.
August 6, 2004... Royal & SunAlliance (RSA) has finally completed its withdrawal from the life assurance market after finding a buyer for its UK life unit. The company is selling its UK life business to Resolution Life Group for a total consideration of GBP850m,...

Sipp shake-up to slash property borrowing.
August 6, 2004... The amount of money you can borrow to buy property through a self-invested personal pension (Sipp) will be slashed following new lending limits. Under the current rules, you can borrow up to three-quarters of the value of a commercial...

3i European tech fund looks to stay afloat.
August 6, 2004... The board of 3i European Technology investment trust is proposing and recommending to shareholders a tender offer for up to 50 per cent of its share capital at net asset value, minus costs. It is also offering shareholders the right to redeem...

Foster takes time out with 10-week sabbatical.
August 6, 2004... James Foster, manager of the ISIS Strategic Bond and Extra Income Bond funds, is taking a 10-week sabbatical, casting doubt over his long-term future with the firm. ISIS says that, after 15 years of service, Mr Foster is merely bringing...

Cofunds to sell life products with L&G.
August 6, 2004... Fund supermarket Cofunds has teamed up with Legal & General to offer life and pensions products. The first investment bonds and personal pensions should be available in the new year.

Select committee on the commission trail.
August 6, 2004... One of the key recommendations to come out of the Treasury Select Committee's report on the long-term savings industry is the need to clamp down on independent financial advisers' (IFAs) trail commissions. After all, it argues, why should IFAs...

Property partnerships can build greater returns.
August 6, 2004... Commercial property is primarily an income investment, with the possibility of capital growth. But if you invest through a mainstream property fund, you'll find the yield is lower than the yield from a direct investment - because funds often...

Give me a break.
August 6, 2004... Before the 40 per cent income tax relief available on new venture capital trust (VCT) shares tempts you to invest, you need to be aware of the problems involved with investing in venture capital. Although overall private equity returns have...

Dare you do the splits?
August 6, 2004... The Financial Services Authority (FSA)'s attempt to wrestle GBP350m-worth of compensation from the 21 companies involved in the split-capital investment trust debacle continues. Sentiment towards the sector is undoubtedly suffering, which is...

Patientline proves a turn off.
August 6, 2004... In the past few days, I've taken a bath on one of my biggest holdings: Patientline. Always a volatile stock, it has plunged by one-quarter, and I'm almost GBP1,000 worse off. But, on the face of it, nothing has changed at the company, which...

AMVESCAP (AVZ).
August 6, 2004... Problems in the US continue to cause major headaches for Amvescap. The Anglo-American fund management group has been accused of trading abuses and is trying to come to a settlement with the regulators, but the process is taking longer than...

TRINITY MIRROR (TNI).
August 6, 2004... Chief executive Sly Bailey is at pains to point out that Trinity Mirror is "more than a cost-cutting story," but these results show what can be achieved by getting costs down while sales are rising. On the cost side, Trinity says that it will...

CARBO.
August 6, 2004... Aim. Carbo suffered from a severe shortage of working capital throughout the period, although GBP3.2m has now been raised through the issue of new equity. New bank financing is also in place.

Prudential to keep Egg.
August 6, 2004... Life assurer Prudential has conceded defeat in the seven-month search to find a buyer for its 79 per cent stake in internet bank Egg. Despite Egg's announcement last month that it will close its loss-making French unit to help attract a buyer,...

FISHWORKS.
August 6, 2004... Ofex. Fishworks focused on strengthening the brand, the style of its outlets and its systems. Sales were boosted by almost a full year's contribution from its Chiswick site.

Biotech cash crisis looms.
August 6, 2004... A handful of biotech companies could be facing a cash crunch. According to research from broker ING Financial Markets, Alizyme, CeNeS, Pharmagene, Phytopharm, SR Pharma and Xenova have less than two years' cash. Alizyme is estimated to...

PATHFINDER PROPERTIES.
August 6, 2004... Aim. Following an extraordinary general meeting, new management is now in place. Administrative expenses have been cut drastically, and some debts settled.

HARROGATE.
August 6, 2004... Aim. Harrogate has made cost savings and reduced staff numbers. Overseas distributor numbers have increased, though.

HARTEST.
August 6, 2004... Aim. Recently appointed chief executive Geoff Spink has undertaken a restructuring exercise at Hartest. Trading is satisfactory and acquisitions are a possibility.

PREMIER MANAGEMENT.
August 6, 2004... Aim. The company restructured its debt and now has eight licensed agents. The outlook remains uncertain, but current trading is encouraging. *Year to 30 April 2004.**Nine months.

AMINO TECHNOLOGIES (AMO).
August 6, 2004... Amino listed on Aim on 9 June this year, raising GBP6.3m in the process. The company's plan is to take advantage of maturing broadband networks and use them to deliver television and video services via its range of set-top boxes. At the moment,...

CENTRICA (CNA).
August 6, 2004... Centrica has a tough few months ahead of it. The problem is that wholesale gas prices have risen sharply, and have dragged electricity prices up with them. Centrica has already pushed one price hike through to its retail customers this year,...

BOOKHAM TECHNOLOGY (BHM).
August 6, 2004... Will Bookham finally manage to drag itself into profitability? You will have to turn to the American media for the next instalment of this exciting story, because the company plans to relocate across the Atlantic in September. Bookham will...

JARVIS (JRVS).
August 6, 2004... Jarvis has secured some breathing space, but no more. Its bankers have increased the interest on loans and will be entitled to acquire 5 per cent of the company's shares (at 5p a share) up-front and up to another 10 per cent in lieu of a...

LAIRD (LARD).
August 6, 2004... The electronics cycle is finally working in Laird's favour. Demand is rising for telecoms equipment and consumer electronics, boosting sales of Laird's electromagnetic shielding products. And much of the production for Laird Technologies (the...

ULTRA ELECTRONICS (ULE).
August 6, 2004... A recovery in the civil aviation market, combined with increased defence spending in the UK and US, has helped to fuel Ultra Electronics forward order book to GBP385m - it was GBP375m at the start of the year - which represents around 15 months...

SCOTTISH & NEWCASTLE (SCTN).
August 6, 2004... These results provided some proof that, under the guidance of the new chief executive, Tony Froggatt, trading at Scottish & Newcastle is improving. This was most marked in the key UK market, where volumes of the group's top four brands -...

ISIS ASSET MANAGEMENT (ISIS).
August 6, 2004... This is the last time that investors will hear from ISIS in its current form. Last month, the fund manager announced the takeover of larger rival Foreign & Colonial, saying it will issue 331m shares (equating to about GBP660m at ISIS's...

ROLLS-ROYCE (RR.).
August 6, 2004... It has been a turbulent ride for Rolls-Royce, but its interim results show that the group is finally operating at full throttle. The recession in the airline industry - its largest customer base - after 11 September 2001, really hit the...

INCHCAPE (INCH).
August 6, 2004... Although trading at Inchcape's UK operations was softer in April and May, the international motor distributor still posted a 33 per cent jump in operating profits. Management believes that September will be the big acid test for the industry,...

UNITED BUSINESS MEDIA (UBM).
August 6, 2004... Everything is heading in the right direction for UBM. During the half-year, all but two of UBM's divisions did better than expected, and earnings expectations have been upped again by a few percentage points. According to house broker Merrill...

GlaxoSmithKline faces Chinese patent challenge.
August 6, 2004... A group of Chinese generic drug manufacturers, believed to include Shanghai Sunve and Chongqing Taiji, are to dispute GlaxoSmithKline's patent for diabetes drug Avandia. A State Intellectual Property Office hearing is set for 18 August -...

TAYLOR WOODROW (TWOD).
August 6, 2004... Taylor Woodrow's management says that market conditions in the UK have returned to "more normal" levels - meaning annual house price growth of between 4 per cent and 5 per cent. However, much of the group's more impressive profit growth is...

DAEJAN (DJAN).
August 6, 2004... Shares in Daejan reacted positively to the group's preliminary results but, with a free-float of just 21 per cent, trading volumes were small. The chairman, Benzion Freshwater, and his family control 79 per cent of the company, so getting your...

BEN BAILEY (BBC).
August 6, 2004... Ben Bailey has again reported record results but, more importantly, the company has seen little sign of a slowdown in house prices across its northern heartland. It sells homes in a well-defined region from Leeds through to Lincolnshire, and...

GENETIX (GTX).
August 6, 2004... Despite difficult trading conditions in the depressed biotech market, Genetix succeeded in doubling profits. The company, which provides automated research instruments for cell biology and high-throughput screening to academic researchers and...

NATIONAL EXPRESS (NEX).
August 6, 2004... National Express has rid itself of the problems it faced in Australia, the US and in its UK rail business, and is moving steadily forward. Underlying operating profits improved by GBP5.3m to GBP61.9m. Subsidies have been renegotiated on...

EXEL (EXL).
August 6, 2004... On one level, Exel is performing just fine. Organic revenue growth was a healthy 11.2 per cent and the logistics group won net new business worth GBP260m - enough to maintain a growth rate of 7 per cent. But the profits line is much weaker....

RAC (RAC).
August 6, 2004... "This is a marathon not a sprint," says chief executive Andy Harrison, defiantly pointing to strong underlying growth in reaction to the City's disappointment at the sluggish performance of the consumer services business - RAC's main profit...

FLYING BRANDS (FBDU).
August 6, 2004... Since taking the helm in 2002, Flying Brands' chief executive, Mark Dugdale, has successfully turned the business around - the mail-order retailer now focuses on its branded home-shopping operation and has streamlined overheads. He now has...

DATACASH (DATA).
August 6, 2004... At present, all of Datacash's revenues come from the 'card-holder-not-present' market. But it really needs to muscle in on the 'card-holder-present' market, too - through chip and PIN technology - to stay ahead of the game. The company says...

RAB CAPITAL (RAB).
August 6, 2004... It has been a prickly few months for the hedge-fund managers generally, and RAB Capital has been no exception. But the first quarter went well, helping funds under management rise by 50 per cent to $1.5bn since the end of December. It also saw...

TDG (TDG).
August 6, 2004... TDG's recovery is gathering momentum. New business wins have increased significantly: contracts with a combined value of GBP44m have been secured with companies such as Diageo, BOC, Daewoo and Littlewoods. And, for the full year, TDG is...

SHIRE PHARMA. (SHO).
August 6, 2004... Shire broke the mould by announcing its first ever dividend, suggesting that the pharmaceutical pretender to GlaxoSmithKline and AstraZeneca has come of age. Excluding restructuring charges and losses from the disposal of its vaccines business,...

DATAMONITOR (DTM).
August 6, 2004... Datamonitor certainly appears to have cemented its recovery. Revenues grew by an estimated 10 per cent on an underlying basis. And adjusting for currency effects and sales, which include orders not yet invoiced, they were up 14 per cent. Chief...

HANSON (HNS).
August 6, 2004... There was little news in Hanson's interim result statement as the company had already warned investors back in June that first-half profits would be below expectations. At that stage, City analysts pared back their full-year forecasts and most...

ELAN (ELA).
August 6, 2004... Ireland's largest drug company is still getting its house in order following a torrid two years that have included accounting scandals, and an investigation by the US Securities and Exchange Commission (SEC). At one stage, Elan could have gone...

XP POWER (XPP).
August 6, 2004... It seems nothing can stop XP, not even the flagging greenback. Sales in the US power-supply solutions business, which account for 60 per cent of group revenues, stormed ahead 20 per cent in the first half, and still rose 6 per cent in sterling...

STANLEY GIBBONS (SGI.
August 6, 2004... Business has been good lately at Britain's premier shop for stamp collectors, as stamps continue to prove attractive as an alternative investment. The company's new focus on high-value products increased average order value and average spend by...

STANDARD CHARTERED (STAN).
August 6, 2004... Even after stripping out gains from selling stakes in Koram Bank ($95m profit) and BOC Hong Kong ($36m profit), it's still hard to fault Standard Chartered's progress. During the year, the bank's return on equity jumped nearly five percentage...

ICI (ICI).
August 6, 2004... ICI pleased the market with an improved set of results following the disappointing full-year figures in February. Ignoring goodwill and exceptional items, underlying pre-tax profits of GBP185m were 23 per cent above the corresponding half-year...

ALFRED MCALPINE (MCA).
August 6, 2004... If it's not careful, Alfred McAlpine will get a reputation for nasty surprises. Last year, it was the decision not to go ahead with a promise to return GBP100m to shareholders that unnerved the City. This time, the surprise was a disappointing...

ELEMENTIS (ELM).
August 6, 2004... "Nothing to rejoice about", was how Elementis chief executive Geoff Gaywood described his company's latest results. And he's right: the figures make disappointing reading as the sliding US dollar wiped out the benefits of the 6 per cent...

CRODA INTERNATIONAL (CRDA).
August 6, 2004... The year-on-year sales growth of 3 per cent may look thin, but sales on a constant currency basis grew by a more attractive 10 per cent. Indeed, strip out GBP2.5m of exceptional charges, following the disposal of the non-core fire-fighting...

INTERNATIONAL POWER (IPR).
August 6, 2004... It was a busy week for International Power. The energy group announced a substantial acquisition, a rights issue, a new debt facility and a proposed 2.5p-a-share final dividend payable next summer. The GBP1.2bn acquisition of the...

RIO TINTO (RIO).
August 6, 2004... The first half was not without its problems for Rio, but sustained high prices for many of its products, combined with some new production capacity, meant that interim earnings came in at a record high. Higher prices should continue to...

CHRISTIE (CTG).
August 6, 2004... Christie needs to get to grips with its five laggard European offices. They racked up operating losses of GBP1.66m (up from GBP1.35m) last year. And that deficit meant the tax charge remained high at 59 per cent (61 per cent previously). But,...

ALLIANCE UNICHEM (AUN).
August 6, 2004... The drug distributor put in another strong performance, but shock management changes took centre stage. Chief executive and 30 per cent shareholder Stefano Pessina has stepped aside, becoming executive deputy chairman. Ian Meakins has been...

TOYE & CO (TOYE).
August 6, 2004... Small companies with sizeable FRS 17 pension deficits should take note: they, too, may have to follow Toye's example and utilise all spare cash to bolster wound-up pension funds. Toye continues to contribute around GBP200,000 a year to its...