Investors Chronicle articles from December 2002

Investors Chronicle archives from December 2002

The scuttlebutt approach.
December 6, 2002... If there was a PanthEon of great investors - a sort of investors hall of fame - it is easy to identify some of the great and the good whose mortal remains would eventually lie there. Warren Buffett, George Soros and John Templeton spring...

SILVER BULLET.
December 6, 2002... Indulge my imagination for a moment. If the chairman of Coca-Cola were ever to say some customers should not drink his product, there would be a bit of a stir. If the head of the National Farmers Union were to declare that British beef was...

The hidden recovery.
December 6, 2002... Call it momentum investing, call it modern portfolio theory, call it a hunch that the sector had been bashed around about as much as it was ever likely to be. Whatever it was, four months ago I put my cards on the table and said that investors...

British Energy saved by government loan.
December 6, 2002... British Energy, the stricken nuclear electricity generator, agreed a restructuring plan with the government last week, preventing it from going into administration. The company will issue up to GBP700m in new bonds to its creditors - currently...

Geest confuses investors over current trading.
December 6, 2002... Shares in Geest dropped this week after the group issued a confusing statement on current trading. It said various factors"would impinge on second half profitability", but reiterated earlier guidance that full-year operating profits would be no...

BHP Billiton prolongs production outage.
December 6, 2002... When is a cutback not a cutback? Answer: when its a massive expansion. BHP Billiton this week said that a curtailment of copper production, originally announced in November 2001, will be prolonged, taking some 390,000 tonnes of annual capacity...

Further setback for ailing fitness sector.
December 6, 2002... Although almost all its competitors in the health club sector have been wheezing lately, LA Fitness seemed to be in good shape. Just eight weeks ago, the mid-priced gym operator was flexing its muscles and bragging about the resilience of its...

Rival drug blow for troubled Shire.
December 6, 2002... Shire Pharmaceuticals stumbles from one crisis to the next. First, it loses the driving force behind the company - chief executive Rolf Stahel resigned in October - now sales of its best-selling drug are under threat once again. Last week, Eli...

DFS warning hints at high-street slowdown.
December 6, 2002... Signs abound that consumer spending is slowing down. At its AGM this week, furniture retailer DFS said it had"experienced a softening of order intake in recent weeks, which will result in slower like-for-like sales growth in the latter part of...

Bad debts and slower growth hit banks.
December 6, 2002... Recent trading updates from Barclays and Lloyds TSB suggest that banking conditions are getting tougher. Barclays not only highlighted flat income and rising provisions at wholesale unit Barclays Capital, but the bank surprised sector...

WARRANTIES WORRY FOR ELECTRICAL RETAILERS.
December 6, 2002... The imposition of value-added taxes on extended warranties, proposed as part of the pre-Budget report last week, has ruffled feathers at Dixons and Kingfisher, both of which sell large volumes of electrical goods. Dixons said the move will add...

SCHRODERS SUFFERS IN FALLING MARKETS.
December 6, 2002... A steep fall in world stock markets in July pushed fund management group Schroders into the red during the third quarter. In a trading update for the three months to September, Schroders reported a loss before tax and goodwill amortisation of...

COMPUTACENTER Moves BACK INTO GERMANY.
December 6, 2002... A year after pulling out of Europes largest economy, Computacenter is moving back in again. The IT hardware reseller and services provider is buying Germanys GE CompuNet, and a small Austrian IT subsidiary of General Electric, for a combined...

City hit by swathe of boardroom bust-ups.
December 6, 2002... Investor dissatisfaction has reared its ugly head in a rash of boardroom disputes over recent weeks but, as usual, it is large institutions and former directors with big shareholdings that are getting their voices heard, rather than private...

Pace Micro issues fifth profit warning.
December 6, 2002... Five profit warnings in a year have wiped nearly one billion pounds off Pace Micro Technologys market value. The company is now worth less than GBP41m - or about one-fifth of this years forecast sales. That might look inexpensive, but...

NEW LOOK (NEW).
December 6, 2002... The shares wobbled on the day the results were released, after founder Tom Singh placed 12.5m shares at 250p apiece. Shareholders should be reassured that his family still owns 26 per cent of the company. Meanwhile, the results again...

COURTS (CRTO).
December 6, 2002... The shares fell 18 per cent on the day these results were announced as the market tried to fathom why this so-called recovery stock doubled first-half losses. Bruce Cohen, the chief executive, insists that the loss paradoxically signals an...

RICHMOND FOODS (RFD).
December 6, 2002... This is the first set of full-year results since Richmond bought Nestles ice cream business. As expected, the acquisition has transformed Richmond, giving it a 21.4 per cent share of the market - up from 15 per cent last year. Unilever has over...

GREENCORE (GNC).
December 6, 2002... Greencore has spent the Past 18 months trying to reshape itself from a sluggish commodity processor into an innovative food company along the lines of Geest or Cranswick. It has made progress, but remains reliant on the vagaries of the sugar...

BREWIN DOLPHIN (BREW).
December 6, 2002... Brewin Dolphins chief executive, John Hall, described the period under review as"extremely difficult", and thats certainly reflected in the figures. Not only have grim equity markets hit income, but the company was stung for a GBP2.5m provision...

ABERDEEN ASSET MGMT (ADN).
December 6, 2002... Aberdeen Asset Managements shares have plummeted this year on fears it would receive a hefty fine from the Financial Services Authority as well as claims from individual investors over its involvement in the split-capital investment debacle....

GRANADA (GAA).
December 6, 2002... In unison with Carlton, Granada is touting three consecutive quarters of year-on-year advertising growth, and a brighter future fuelled by an increased programming budget and the two companies merger. But after a strong October and...

AVON RUBBER (AVON).
December 6, 2002... After a torrid couple of years, Avon Rubber is getting its house in order. The bulk of European manufacturing activities have been transferred from Wiltshire to lower-cost sites in the Czech Republic and France. Not only should that produce...

BPB (BPB).
December 6, 2002... BPBs year was somewhat marred by a E138m (GBP88.8m) fine from the European Union for price-fixing. The culmination of a four-year investigation, the fine far exceeded analyst expectations of E40m-E80m. BPB vehemently denies the claims and plans...

CASTINGS (CGS).
December 6, 2002... Castings supplies iron castings and machined metals to the automotive industry. Unfortunately, car manufacturers have suffered from a drop in sales in recent months. But, although it has detected a slight weakness in orders in the past few...

CHARACTER (CCT).
December 6, 2002... Behind the scenes, an impressive turnaround story has taken place at fallen star Character. Following a successful GBP8m fund-raising last year, some GBP2.5m has been stripped out of the cost base and efforts to reduce stocks have helped free...

UNITED DRUG (UDG).
December 6, 2002... United Drugs figures offered few surprises. The pharmaceuticals wholesale business improved volumes by maintaining market share in its Northern Ireland operation, Sangers, and stealing yet a greater slice of the pie in the Republic from key...

PLASMON (PLM).
December 6, 2002... Having consolidated its US operations from two production plants into one at Colorado Springs, Plasmon is putting all its efforts into the development of its UDO drive, which promises to triple the storage capacity of laser disk drives. ...

ECKOH TECHNOLOGIES (ECK).
December 6, 2002... With more and more companies relocating call centres overseas to save money, Eckoh Technologies could soon see demand for its Speech Solutions products rocket. Despite the fact that Speech Solutions is loss-making, the GBP400,000 spend in...

MERRYDOWN (MYW).
December 6, 2002... With Christmas round the corner, Merrydown is currently working 24 hours a day to supply the major supermarkets with its range of Shloer and cider products. As expected, the story for the first half is the strength of Shloer - thanks to a...

GET (GTG).
December 6, 2002... Now firmly back on track after last years problems, the boom in consumer demand for new light sockets and other electrical products helped sales hit a 10-year high. GET supplies the likes of B&Q, Wickes and Homebase, and prides itself on...

CONNAUGHT (CNT).
December 6, 2002... This was a transformational year for Connaught, chiefly in its GBP22m acquisition of commercial gas maintenance firm GasForce. That was funded by a GBP13m placing and open offer at 240p, and 6m shares issued to the vendor. In addition, the...

SCOTTISH & NEWCASTLE (SCTN).
December 6, 2002... Lowly-valued, high-yielding stocks in defensive sectors are once again in fashion. That is, of course, unless you happen to be Scottish & Newcastle (S&N). The UKs leading brewer hasnt quite yet managed to shake off its reputation for...

COMPASS (CPG).
December 6, 2002... IF YOU bought into Compass a year ago, you may feel you have something in common with many of the people who visit motorway eateries - having paid a considerable amount for the privilege, you find the fare extremely disappointing. Despite the...

SAGE (SGE).
December 6, 2002... When customers are reluctant to spend too much on new software, its great to have a large and loyal customer base to fall back on. Nearly half of Sages licence revenue last year came from either selling upgrades, selling more advanced software...

JOHNSON MATTHEY (JMAT).
December 6, 2002... A sharp fall in precious metals prices may have tarnished Johnson Mattheys top line, but the groups diverse mix of businesses helped lift operating profits (before goodwill amortisation and exceptionals) by 5 per cent to GBP99.3m. Nearly half...

BRITISH LAND (BLND).
December 6, 2002... The strong run enjoyed by British Lands share price since March 2000 stalled this year amid fears over the weakening outlook for the London office market. That has been hit by job cuts at investment banks. Against this background, the 2.4 per...

ALLDERS (ADS).
December 6, 2002... Allders chief executive, Harvey Lipsith, was tight-lipped about the possible 160p-a-share bid from 25 per cent shareholder Minerva, the property company. He says that Allders, long believed to be too small to survive on its own, could remain as...

lonmin (lmi).
December 6, 2002... Lonmin did warn investors last year that platinum prices were unsustainably high, so the reported drop in sales and profits was widely expected. What it didnt reckon with, however, was the leaking of a radical draft plan for black economic...

DAILY MAIL & GENERAL TRUST (DMGT).
December 6, 2002... DMGT has again demonstrated why its shares deserve to trade at a premium to the sector, with a robust performance that did much to brush aside the media downturn. Advertising at national titles may have fallen 9.6 per cent over the year, but...

TRIBAL (TRB).
December 6, 2002... Nurses and firemen may grumble, but it is still possible to make a good living from the public sector. Tribal is one of a number of private firms cashing-in on the Chancellors largesse. As a provider of consultancy and support services to the...

SCAPA (SCPA).
December 6, 2002... Tough times call for tough measures. Having closed four plants last year, and one already this year, Scapa is shutting another five over the next 12 months to cut costs to offset weak demand in its UK and European markets. As part of that,...

NORD ANGLIA (NAE).
December 6, 2002... Last Mays disposal of the accountancy businesses saddled the profit line with an unsightly GBP20.1m one-off loss, but it has given Nord Anglia a sharper focus. In educational outsourcing, revenues were up 32 per cent to GBP39.1m. The swell in...

UNIVERSAL SALVAGE (UVS).
December 6, 2002... Universal Salvages shares have been consigned to the junkyard since it lost a major car salvage contract with the insurer Direct Line in April. This provided around two-fifths of its work. The contract terminated in June, and is reflected in...

KINGSTON COMMUNICATIONS (KCOM).
December 6, 2002... telecoms investors value cash flows above all else. And using cash profits (Ebitda) minus capital expenditure, chief financial officer Malcolm Fallen says that outflow from Kingstons business telecoms arm has dropped from GBP47m last year to...

MERRYDOWN (MYW).
December 6, 2002... With Christmas round the corner, Merrydown is currently working 24 hours a day to supply the major supermarkets with its range of Shloer and cider products. As expected, the story for the first half is the strength of Shloer - thanks to a...

BTG (BGC).
December 6, 2002... BTG is in the business of taking on early-stage ideas, developing the intellectual property, and then licensing the technology. The company licensed 10 technologies, compared with five last first-half. However, upfront payments are smaller in...

CHRISTIAN SALVESON (SVC).
December 6, 2002... Salvesens share price rose almost 10 per cent after it issued these results, not in testament to their strength but in relief that things havent got any worse. They certainly make unpleasant reading with the problems concentrated mainly in the...

MERANT (MRN).
December 6, 2002... Merant is gradually getting its house in order. Since his arrival in September 2001, chief executive Gerry Perkel has refocused the group on software configuration management (SCM) and stripped costs out of the business. The latter accounted...

HALMA (HLMA).
December 6, 2002... Halma again lived up to its defensive reputation with a typically robust set of results. Granted, operating profits fell 8 per cent to GBP20.7m. But, compared with the collapse in profitability witnessed at most other UK engineers, this was a...

BSS (BTSM).
December 6, 2002... Having got BSS back on track, chief executive Peter Woods main focus now is on achieving top-line growth. And, after a slow first quarter, group sales rose 3 per cent in the three months to September, and climbed by nearly 5 per cent in both...

SYNSTAR (SYN).
December 6, 2002... Synstar has refocused its operations in order to offer its customers more than just niche disaster recovery and IT maintenance services. Disaster recovery now makes up just 9 per cent of group turnover, while managed services contributes around...

PROTHERICS (PTI).
December 6, 2002... Ignoring last years contribution from the drug discovery unit, Protherics underlying revenues rose 10 per cent. CroFab, an anti-venom for rattlesnake bites, generated GBP3.9m of sales - although a manufacturing glitch at the end of last year...

SHAFTESBURY (SHB).
December 6, 2002... Shaftesbury shares lost over 8 per cent after it announced net assets per share of 285p, significantly below forecasts. Its own stockbroker, Merrill Lynch, had expected 301p, and downgraded its recommendation to neutral. The big hit came...

WARNER ESTATES (WNER).
December 6, 2002... Warner Estates has long trumpeted the advantage of building up a geographically-diverse portfolio, with negligible exposure to the London market. Following the softening of the London office market, investors are beginning to appreciate that...

COMPCO (CMP).
December 6, 2002... The weakening central London office market - which accounts for around 80 per cent of Compcos portfolio - took its toll, and net asset value fell by 2 per cent. Valuers put an estimated annual rental value of GBP35m a year on Compcos portfolio....

LONDON MERCHANT SECURITIES (LMSO).
December 6, 2002... As a hybrid property group and venture capitalist, London Merchant Securities (LMS) certainly isnt one for the purists. A TMT bias in its venture capital portfolio hasnt helped its recent investment performance much, either. At its...

PILLAR PROPERTY (PLL).
December 6, 2002... Is Pillar a property company or a fund management group? Its often seen more as the latter now that it has transferred the bulk of its property assets into two unit trusts: the Hercules Unit Trust (HUT) and the City of London Unit Trust...

COUNTRYSIDE PROPERTIES (CYD).
December 6, 2002... Countrysides future is in the city. Its development pipeline is now increasingly focused on innercity brownfield"urban renewal" projects in London. These typically take longer to complete than building an estate in the suburbs. Thats one reason...

DE LA RUE (DLAR).
December 6, 2002... Two summer profits warnings from De La Rue are reflected in this poor set of results. But the problems that prompted the warnings seem largely behind it and a return to growth looks imminent. Before an GBP18.7m exceptional charge, arising...

WAGON (WAGN).
December 6, 2002... Wagons transformation from a sprawling mass of businesses to a dedicated car body company was completed in the summer when it sold off its pallet-rack-making interests. While the sharper focus is welcome, fewer new cars are being sold, and a...

SPEEDY HIRE (SDY).
December 6, 2002... The various construction markets that Speedy Hire serves are thriving right now - from housebuilding to home improvement - and Speedy has been growing faster than the competition. But there is a risk that slowing economic growth will dent...

ISOFT (IOT).
December 6, 2002... Seven new hospital trusts have bought iSofts electronic patient record (EPR) systems this year, signing seven 10-year support contracts in the process. And six other customers have agreed extensions to their existing support contracts. Combined...

MACDONALD HOTELS (MDH).
December 6, 2002... The downturn in business travel IN the aftermath of 11 September made its presence felt most at MacDonalds hotels within the M25 area, where revenues per available room fell 11 per cent in the year. Provincial hotels grew revenues per room 4...

HOLIDAYBREAK (HBR).
December 6, 2002... Along with the no-frills airlines, Holidaybreak is one of the few travel operators not to have suffered from last years terrorist attacks in New York and Washington. With travellers wary of long-haul air travel, and conscious of security...

MYTRAVEL (MT.).
December 6, 2002... These results represent the culmination of the worst 12 months in MyTravels 31-year history. Dire trading in the wake of the 11 September terrorist attacks had given rise to three profit warnings since last May. But it was the extent of the...

ULTRAFRAME (UTF).
December 6, 2002... Ultraframe is riding high on the back of the nations appetite for spending on home improvements. UK sales at the companys continuing operations rose 7.8 per cent to GBP90.5m, benefiting particularly from the seasonal uplift in the second half....

DAWSON (DWN).
December 6, 2002... In some cases, Dawson receives a percentage of a newspapers cover price, in others it gets a fixed fee per paper. So the combination of broadsheet price rises and tabloid price wars over the past year was a mixed blessing. Its effect was a 1.1...

SCS UPHOLSTERY (SUY).
December 6, 2002... ScS had planned to open 10 stores this year. In the event it opened 14, so capital expenditure swelled to GBP7.4m. Because the company does not book revenue until settees are shipped to buyers, new stores do not generate turnover for at least...

BRISTOL WATER (BTW).
December 6, 2002... The next couple of years will be tough for Bristol Water. The regulator is demanding that the water supplier holds its prices steady next year and then cuts them by 1.9 per cent the year after. That looks set to damage profitability. The...

EAST SURREY (ESH).
December 6, 2002... Large exceptional gains flatter a decent, if unspectacular, performance from East Surrey. These gains came in the form of a GBP2.4m profit on the sale of a bottled water business and a GBP1.8m profit on a land sale. However, for future profits,...

PENNON (PNN).
December 6, 2002... For a company thats heavily involved in the waste sector, Pennons results were very good. Competitors like Shanks have warned of tough competition, which has damaged profitability. But Viridor - Pennons waste subsidiary that now accounts for a...

GOLDSHIELD (GSD).
December 6, 2002... Goldshield must find a new supplier for its Antigen range of injectable products after deciding against buying Dublin-based Miza, which hit the skids some months ago and now faces liquidation. Goldshield had been forced to support Miza to...

LEOPOLD JOSEPH (LJH).
December 6, 2002... Tougher equity conditions appear to be taking their toll on Leopold Joseph, but thats not a huge surprise given that it warned of difficult times ahead back in September. Costs, too, have been on the rise, growing by a fairly chunky-looking 7.4...

ACAL (ACL).
December 6, 2002... "Expectations of growth have been deferred for the foreseeable future, and certainly beyond this current financial year," admits Acals chairman, John Curry. His optimism at the full-year results six months ago has been soured by a continued...

INTEC TELECOMS (ITL).
December 6, 2002... Despite the gruesome telecoms market, Intec is still winning business - but its coming at the expense of margins which fell from 8.6 per cent in 2001 to 7.9 per cent. The firm is still making acquisitions, too, despite the substantial losses...

ICAP (IAP).
December 6, 2002... Being the middle man between banks wanting to trade products such as government bonds and derivative contracts is proving to be lucrative for ICAP. That reflects market volatility - while short-term official interest rates have been fairly...

ANGLO IRISH BANK (ANGL).
December 6, 2002... Anglo Irish Bank managed another storming performance. However, as the bank diversifies away from Ireland, not all of that can be explained by the solid economic conditions still delivered by the Celtic tiger. Just 52 per cent of the book...

AWG (AWG).
December 6, 2002... Water companies should be solid, predictable, conservatively-run businesses capable of paying a safe dividend year after year. When they stray from that path, they get punished - and thats what has happened to AWG. The owner of Anglian Water...

HARDY UNDERWRITING (HDU).
December 6, 2002... nvestors could be forgiven for giving insurers a miss in the wake of the World Trade Center disaster. After all, that event was the costliest in the history of insurance, and is estimated to have stung the global insurance industry for anything...

HILTON (HG.).
December 6, 2002... Owning one of the strongest brand names within an industry should be useful during economic downturn. It can help to win business away from less prominent rivals, thereby providing insulation from the worst of it. Many investors had hoped that...

Tapping into beer.
December 6, 2002... Trying to sell beer to the vodka-loving Russians may sound like a funny idea. But for the big boys of international brewing, its becoming a very serious business. Carlsberg, Heineken and Scottish & Newcastle have already forked out substantial...

Stagecoach plans major overhaul of US subsidiary.
December 6, 2002... Stagecoach, the public transport operator, this week unveiled heavy goodwill write-offs and plans for major surgery on Coach USA, its struggling North American subsidiary. The moves are an attempt to put the brakes on Stagecoachs sliding share...

Ashes to ashes.
December 6, 2002... I first came across Ashtead - then a tiny company - in an article I read in the Financial Times in the 1980s. It was a very positive piece which left a big impression on me, and I made a mental note to keep an eye on this promising company. For...