Investors Chronicle articles from December 2004

Investors Chronicle archives from December 2004

Put on hold.
December 3, 2004... Doesn't time fly? Today (Friday) BT is celebrating the 20th anniversary of its privatisation. At a Stock Exchange ceremony this morning, BT started the day's trading to commemorate its first day of trading all those years ago. And, at a dinner...

Accepting your lot.
December 3, 2004... 'Hoisted by his own petard' is the phrase that comes to mind when I consider the fun and games surrounding the painful restructuring of the finances of holidays operator MyTravel. Shakespearian scholars will know exactly what I mean. It's when...

Cold comfort at Christmas?
December 3, 2004... So it's going to be a cold Christmas for retailers. That, at least, is the indication coming from the high street. Groups such as M&S have launched special promotions to get the punters through the doors, and life is said to be more competitive...

Rates and credibility.
December 3, 2004... Although the bank of England's monetary policy committee is not expected to raise rates next week, several economists think it will have to do so in the new year. Tim Congdon, of Lombard Street Research, says that "base rates at 4.75 per cent...

Dollar & sense.
December 3, 2004... We should do the same thing about the falling dollar as we should do most of the time: nothing. The likely effect of the current weak dollar on earnings should be reflected in share prices by now. Unless analysts are even stupider than I think,...

The Nixon doctrine.
December 3, 2004... On June 23 1972, President Richard Nixon uttered some of the wisest words ever spoken about exchange rates: "I don't give a [expletive deleted] about the lira." Investors should have a similar view of the dollar, because its fall could...

Wishing I was Mark Twain.
December 3, 2004... Mine promoters! Save money! Save leg-work! Find punters fast! I have a list of 1,375 potential shareholders for you. They're all freshly pre-qualified for your purpose, since they all either requested or were deemed interested in receiving the...

Ofgem review ends in score draw.
December 3, 2004... Ofgem's final review proposals, which set out operating conditions for the electricity distributors for the next five years, seem to have struck the right note. The listed distributors' share prices crept upwards and, given the absence of an...

Return of service.
December 3, 2004... After nearly four stagnant years, rental growth is returning to London's commercial office market. According to property consultant CB Richard Ellis, West End rents jumped 20 per cent in the first half of 2004. British Land has even reported...

FLOAT OF THE WEEK: Marine business ready to float.
December 3, 2004... Raymarine, which supplies navigation equipment and fishfinders for leisure boats, is to float on 6 December at 152p, valuing it at GBP125.5m. But the company, which boasts a strong cash position, isn't floating to raise funds. Chief...

Helical Bar ready to return GBP111m.
December 3, 2004... Property developer Helical Bar has finalised details of its GBP111m return of cash to shareholders, as part of a 5-for-8 share reorganisation. Holders will have the option to receive the GBP4-a-share offer as a one-off special dividend...

Blackstone looks set to pick up NHP.
December 3, 2004... Buy-out fund Blackstone Group has confirmed a GBP564m offer for nursing homes provider NHP. Blackstone wants the company to complement its existing UK care home business, Southern Cross Healthcare, which it bought in September. Irrevocable...

Incepta and Chime talks off.
December 3, 2004... Incepta and Chime, which own Citigate Dewe Rogerson and Bell Pottinger - two City public relations groups - have called off merger talks. These talks had not previously been announced to investors, but the two groups say that they failed to...

Eidos closer to finding buyer.
December 3, 2004... Eidos is in the advanced stages of due diligence with a potential acquirer, according to the company's recent AGM statement. The struggling video games developer has been up for sale for months, and prospective buyers will be encouraged by...

US slowdown finally arrives.
December 3, 2004... The US economic slowdown has arrived. The Bureau of Economic Analysis reported this week that corporate profits fell in the third quarter. Annual growth in them has fallen to 8.4 per cent, from 27.8 per cent in the first quarter. This...

Gatekeeper Systems to list on Aim.
December 3, 2004... Gatekeeper Systems, a US-based group that produces technology to prevent the theft of supermarket trolleys, is to float on Aim next week. The system sends out an electronic signal that locks the wheels of wandering trolleys as they pass through...

Malcolm Group soars on takeover hopes.
December 3, 2004... Shares in Malcolm Group, the haulage and construction company, hit a five-year high of 103p following the announcement that chief executive Andrew Malcolm may take the company private. Brothers Andrew and Walter Malcolm - whose father...

Rentokil faces hygiene problem.
December 3, 2004... Rentokil sprayed more rat poison on its shareholders last week, issuing a downbeat trading statement. The pest-control to plant-hire conglomerate said that profits this year would be below the City's expectations, and that next year would be...

Friends Provident to raise funds.
December 3, 2004... Life assurer Friends Provident is to raise GBP380m by securitising the cash flows from a life-business book. The money will be used to fund new business growth. Changes to the distribution regime, to take effect this week, are likely to favour...

Bidders circle brewer Burtonwood.
December 3, 2004... Northern pubs minnow Burtonwood could soon be swallowed by one of the industry's Moby Dicks. The company - which owns 460 mainly tenanted-run pubs - has confirmed that it is in talks with a potential bidder. Names in the frame include...

Bank deposits signal higher spending.
December 3, 2004... Fears of a sharp downturn in house prices and retail sales were dampened this week when the Bank of England reported that households' bank deposits rose by a hefty 8.8 per cent during the past 12 months. This matters, as these are good...

UK Coal slumps by more than a quarter.
December 3, 2004... UK Coal shares slumped 26 per cent to 132p after it said it would take a GBP16m hit in its 2004 accounts. The reason is a failed planning application. Increasing costs and lower production rates are also expected to dent profits. Seymour...

Aricom outlines plans.
December 3, 2004... Aricom, which aims to become a vertically integrated titanium dioxide producer, has outlined plans for its titanium mine and processing facilities in the far east of Russia. It's estimated that the company's Kuranakh licence contains around 12m...

Glisten gets its Halo.
December 3, 2004... Glisten expects to double in size following its acquisition of Halo Foods for up to GBP8m - its fifth deal since floating on Aim in 2002. Halo is a supplier of cereal bars and slimming bars to high-street retailers, and trades from three sites...

Premier Research tests big pharma.
December 3, 2004... Aim-newcomer Premier Research could benefit from increased outsourcing of clinical trials. Premier conducts trials for Wyeth, Aventis and the US National Institutes of Health, and claims outsourcing is on the rise, driven by cost-cutting and...

African Eagle shares fly on drilling results.
December 3, 2004... Shares in African Eagle rose sharply after the company released positive drilling results from its Miyabi gold project in Tanzania and its Eagle Eye copper-gold project in Zambia. The company said that a 13 sq km mineralised structure has...

Week Ahead...
December 3, 2004... NEWS Tuesday 7 December If you ever encounter a rattlesnake, you may be reassured to know that there is an anti-venom made by Protherics. But when the UK biotech reports its first-half results, the market will be focusing on a product...

ILX announces Mindscope acquisition.
December 3, 2004... Ambitious training firm ILX has unveiled the acquisition of rival Mindscope for up to GBP1.9m. Based in St Albans, Mindscope specialises in classroom training for the project management accreditation PRINCE2. The deal should provide a useful...

Goals Soccer Centres ready to take aim.
December 3, 2004... By providing high-quality pitches, Aim-hopeful Goals Soccer Centres is planning to boost the number of sites to its name and increase footfall. The group charges GBP5 a head and, with around 3,000 customers a week at each of its 11 sites, it...

More misery for Marlborough.
December 3, 2004... Marlborough Stirling, the financial services software provider, has effectively put itself up for sale after announcing yet more dire trading news. Shares in the company had already slumped last month on news that revenues this year would fall...

Smaller offer for Big Food Group.
December 3, 2004... A bid for supermarket operator Big Food Group - owner of the Iceland chain - is still in the offing. But shareholders aren't likely to be offered the 110p-a-share that they originally thought. Icelandic would-be buyer Baugur Group is only...

Tesco shines again.
December 3, 2004... Can Tesco do no wrong? The UK's leading supermarket chain has once again put rivals to shame with cracking sales growth. Takings at the tills rose by 9.8 per cent on a like-for-like basis during its past three months of trading. The...

Potential suitors court Courts.
December 3, 2004... The administrator appointed to fend off bankruptcy at furniture retailer Courts has said that there is enormous interest in the group from potential buyers. Shares in Courts were suspended on Monday at 13.5p as the group was close to breaching...

Axis-Shield to unveil diagnostics system.
December 3, 2004... Axis-Shield is to hold a research and development day on 9 December for City investors. The diagnostics company, based in Scotland and Norway, will be outlining plans for its new point-of-care diagnostics system, Afinion, launched last month....

Capital punishment.
December 3, 2004... It goes without saying that, once a person dies, the options for inheritance-tax (IHT) planning are limited. Nor can it be left too late. "There isn't a massive amount that can be done at the last minute," says Gary Rogerson, tax planning...

Dixons faces debt downgrade.
December 3, 2004... Moody's, the ratings agency, has placed Dixons under review, and may downgrade its debt rating from Baa1. Moody's is concerned that Dixons may be unable to continue cutting costs to offset downward pressure on gross margins. In November,...

Beating the yellow strip.
December 3, 2004... Take a look at any table comparing stockbrokers' commission charges, and you very quickly realise that you'll pay a lot more for some companies' services than for others. For example, if you bought GBP5,000-worth of shares online through...

New controversy hits GlaxoSmithKline.
December 3, 2004... No stranger to controversy, GlaxoSmithKline (GSK) has been accused by a BBC2 programme of involvement in US trials forcing underprivileged children to take Aids drugs. Guinea Pig Kids claims that HIV-positive children in the trials, whose...

Student buy-to-lets.
December 3, 2004... Traditionally, when students went to university, they lived in halls of residence or crammed into dilapidated houses owned by shark-like landlords. The notion of parents forking out to buy a house, in which they installed their offspring as...

Pensions news.
December 3, 2004... NEW SIPP FROM STANDARD LIFE Standard Life - the Scottish mutual that is about to demutualise - has brought another self-invested personal pension (Sipp) to the table. It has launched an in-house managed Sipp, and says it is "an innovative...

Seeing through choices.
December 3, 2004... When seeking financial advice, you currently have to use an adviser tied to one particular provider, or one described as 'independent' - neither kind has to tell you about the scope and value of the service they provide in any great detail....

Bread and butter shares.
December 3, 2004... "There seems to be an unwritten rule on Wall Street: If you don't understand it, put your life savings into it. Shun the enterprise around the corner, which can at least be observed, and seek out one which manufactures an incomprehensible...

BUSINESS SERVE (BRV).
December 3, 2004... Business Serve announced another acquisition last month, its sixth since floating on Aim in February. Pipemedia was bought with cash and shares, and future earn-outs could bring the eventual consideration to GBP2.1m. The company specialises in...

STAGECOACH THEATRE (STA).
December 3, 2004... Stagecoach's shares were over 100p before it issued a profit warning in June. The sharp fall in 2003-04 profits is blamed on fewer-than-expected school openings, which attract a GBP12,500 upfront franchise fee - followed by a 12.5 per cent...

Questions & Answers.
December 3, 2004... ENDOWMENTS My son lives in Italy and has an endowment policy with six years to run but he wishes to sell it. Could you kindly let me know the best people he could get a good deal from? John McLeod replies Never surrender, as...

PAN ANDEAN RESOURCES (PRE).
December 3, 2004... Pan Andean is starting to build up oil and gas production from four onshore and three offshore Texas projects. At the same time, higher oil and gas prices, plus increased reserves, cut 2003-04's depreciation charge from GBP1.22m to GBP325,000....

ILX (ILX).
December 3, 2004... ILX (formerly Intellexis) seems to have turned the corner. First, costs were cut in the Intellexis business offering financial training to non-financial managers. Then, it bought a bargain in Key Skills. It was acquired for GBP2.16m, net of...

ARGYLL CONSULTANCIES.
December 3, 2004... Despite a "sound start and a strong finish", Argyll reported a deficit last year. Most of the damage was done in the third quarter when it recorded a GBP100,000 loss. Less tech work is one reason, another was an income ratio switch from 80:20...

VANTIS (VTS).
December 3, 2004... YOUR CHRISTMAS QUIZ QUESTION: how do you incentivise an accountant? Last month ( 19 November, page 57), we reported how Numerica has been forced to switch staff from employee to limited-liability status. But Vantis seems determined to stick...

HALFORDS (HFD).
December 3, 2004... Bumper sales of in-car entertainment and satellite navigation systems helped Halfords deliver double-digit underlying sales growth in its maiden results. The company only came to the market in June, but is benefiting from a reorganised supply...

COMPUTER SOFTWARE (CSW).
December 3, 2004... When Computer Software joined Aim in 2000, it was called Software For Sport and offered membership and client-relationship software, mainly to football clubs. Two prominent users were Chelsea and Manchester City. But, following a series of...

SOUTHERN AFRICAN RESOURCES (SFU).
December 3, 2004... South African Resources (SAR) is about to more than double its exploration acreage at Leeuwkop, its "flagship" western Bushveld property. It has been granted exploration rights on an area called Imbasa and its application for rights over Inkosi...

CENTRAL AFRICAN MINING & EXPLOR. (CFM).
December 3, 2004... Central African Mining & Exploration (CAM) was again profitable in 2003-04, thanks to a GBP2.55m gain on the sale of part of its holding in Southern African Resources (see left). CAM still holds 19m shares in the company. Its turnover is...

FEEDBACK (FDBK).
December 3, 2004... Not surprisingly, Feedback's large 2003-04 loss has led to rationalisation: a number of senior staff have left, and the data and instruments businesses have been merged into one plant. The operating deficit more than doubled to GBP487,000, due...

ABBEYCREST (ACR).
December 3, 2004... Abbeycrest was hit by a triple whammy in the first half. Firstly, it has been forced to drop unprofitable products. Second, a big customer over-ordered before Christmas last year, which affected subsequent order levels. And finally, problems...

HEREWARD VENTURES (HEV).
December 3, 2004... In October, the Isle of Wight council granted Northern Petroleum planning permission to drill an exploration well at Bouldnor Copse, east of Yarmouth. Hereward has a 10 per cent stake in the venture and a successful well would be a "company...

PARAMOUNT (PMN).
December 3, 2004... Cash shell Paramount bought ailing restaurant chain Chez Gerrard for GBP15.22m in April 2003. Now with the backing of 67 per cent shareholder JO Hambro, chairman Guy Naggar and partner Peter Klimt want to take it private via a management buyout...

AFRICAN GOLD (AFG).
December 3, 2004... 'My word is my bond' is an age-old stock market phrase but, nowadays, it can clearly be misinterpreted. Back in December 2003, African Gold raised GBP400,000 via the issue of 40m shares at 1p, with warrants. A number of new directors came on...

GLENMORANGIE (GMGA).
December 3, 2004... Afore ye go, a wee taste of what ye'll be missing. Barring any last-minute shock, the UK's last major independent Scotch whisky distiller will soon pass into the hands of luxury goods and booze maker Louis Vuitton Moet Hennessy (LVMH). ...

HOMEBUY (HBG).
December 3, 2004... It's early days for Birmingham-based Homebuy, which joined Aim in August following a placing that raised GBP3.5m at 80p a share. But so far, the hoped-for growth is being achieved. The basic concept of the company is to offer televisions,...

AVOCET MINING (AVM).
December 3, 2004... Avocet's sales and costs are incurred in dollars, and its accounts are denominated in dollars, too. That means that, over the year, the rising gold price should have increased margins, while the weakening dollar had little immediate impact. In...

EUROPEAN DIAMONDS (EPD).
December 3, 2004... European Diamonds' big bet on Finland has so far failed to pay off. So, to secure cash flow and avoid diluting shareholders' funds further, it has bought itself a production mine in Lesotho, Southern Africa. Mining is scheduled to start within...

HOME ENT'MENT (HET).
December 3, 2004... Last year, Home Entertainment spent GBP3m installing a new electric-point-of-sale (Epos) system in its 223 stores, and GBP1.3m on a new distribution centre in Peterborough to replace seven old units. Disruption and duplication knocked around...

INFLEXION (IFX).
December 3, 2004... Inflexion is very much in investment mode and, with plenty of cash in the bank, it's hoping to take advantage of a vibrant market. The company's focus is still on buy-outs of profitable businesses in the UK mid-market and the recent opening of...

ENTERPRISE INNS (ETI).
December 3, 2004... The City had been expecting a dividend hike, but a 40 per cent increase beat even the most optimistic predictions. Dividend cover is still a healthy four times, and this isn't a one-off - the company says that dividends this year will be in...

PARK GROUP (pkg).
December 3, 2004... Park's founder and chairman, Peter Johnson, has put the company up for sale. He is asking for bids for his 74 per cent shareholding now that Park has disposed of its last non-core business - marketing services. If losses from discontinued...

IMAGINATION TECHNOLOGIES (IMG).
December 3, 2004... Imagination's chief executive, Hossein Yassaie, reckons that, despite a slow first half, the microchip designer's business "is truly locked and loaded" for future growth. It now has five of its chips in production, against just one a year ago,...

CRESTON (CRE).
December 3, 2004... When a group is making as many acquisitions as Creston is, it can be difficult to get a true picture of its performance. Overall organic revenue growth was weak, at 2 per cent, but the picture is muddied because Creston also shed much of its...

ASOS (ASC).
December 3, 2004... Online retailer ASOS recently won an award as the best-performing share on Aim - little wonder, given it was trading at just 5p a year ago. The huge growth is due to its ability to tap in to the needs of its growing fashion-conscious audience....

SOVEREIGN REVERSIONS (SVN).
December 3, 2004... Sovereign offers home reversion plans to the elderly. A homeowner sells all or part of their home to the company for a price dependent on life expectancy and the property's value. When they move out or dies, Sovereign sells the property, and...

2ERGO (RGO).
December 3, 2004... Central to 2ergo's success is its Multiserve platform, which facilitates the delivery of information and services, such as ringtones, to mobile phones. The platform can now handle GBP100m-worth of transactions a month, which will support...

VICTORIA (VCP).
December 3, 2004... Victoria was unlucky that a cooling of the property and consumer spending markets in its key business areas, the UK, Ireland and Australia coincided with production problems at its Axminster manufacturing business. These are now more or less...

PLASMON (PLM).
December 3, 2004... "Challenging" is how Plasmon chairman John Barrie Morgans describes the data-storage company's half-year performance, and he has a point. So far, the company has spent four years and GBP25m on developing its new Ultra Density Optical (UDO) data...

CAFFYNS (CFYN).
December 3, 2004... A GBP3.39m VAT refund from Customs and Excise buoyed these figures from south-east car dealer Caffyns but, strip out exceptional items, and pre-tax profits edged up 2 per cent to GBP1.51m. This underlying improvement is encouraging,...

TOPPS TILES (TPT).
December 3, 2004... It seems that the British public wants to keep on tiling. Continued growth in second bathrooms, conservatories and increasing kitchen sizes meant that Topps Tiles reported a 20.3 per cent increase in like-for-like sales last year. And there are...

UNIDARE (UDRU).
December 3, 2004... A stronger economy in the US boosted business at industrial wholesaler Unidare. It's North American distribution arm, which supplies welding and oilfield equipment, enjoyed a big uplift in operating profits from $3.6m to $6.8m. Besides the...

LASTMINUTE.COM (LMC).
December 3, 2004... It's been a difficult year for online travel group lastminute.com. And its full-year results illustrated some of the challenges the business has been facing as the travel market becomes more and more competitive. Its expansion strategy has...

UNITED DRUG (UDG).
December 3, 2004... Based in Dublin, United Drug might not be well-known in the UK - but it should be. Benefiting from the collective woes of the global pharmaceutical giants, the company provides outsourced sales and distribution services to Pfizer, Eli Lilly and...

GREENCORE (GNC).
December 3, 2004... Greencore, the Irish food group, recovered from a difficult first half caused by a sharp rise in the price of raw materials. Although its convenience-food arm reported like-for-like sales growth of 4 per cent, profits declined 6 per cent to...

JOHNSON MATTHEY (JMAT).
December 3, 2004... These results came in at the top end of forecasts, although the weak dollar wiped GBP6.3m from operating profits compared with last year's first half. The acquisition of AMC and Lancaster Synthesis, coupled with the closure of Matthey's UK gold...

SEVERN TRENT (SVT).
December 3, 2004... Severn Trent's water and sewerage business turned in a satisfactory first half, as did Biffa, the group's waste-management business. However, Ofwat's 'Final Determination' (which sets out price increases for the next five years) and recent...

UNITED UTILITIES (UU.).
December 3, 2004... With the future of ITS regulated businesses clouded by impending Ofwat and Ofgem reviews, United Utilities was understandably keen to emphasise the strength of its non-regulated businesses. That side of the operation now accounts for roughly...

BSS (BTSM).
December 3, 2004... The City welcomed the progress made in BSS's industrial division, where operating profits moved up 30 per cent to GBP7m. This improved performance was driven by public-sector work in the health and education sectors. In the domestic arm,...

CARDIFF PROPERTY (CDFF).
December 3, 2004... Thames valley real-estate specialist Cardiff Property reported a noticeable uplift in enquiries for office space - although, due to economic concerns, prospective tenants are taking longer to sign on the dotted line. Even so, it believes that...