Investors Chronicle articles from December 2005

Investors Chronicle archives from December 2005

Forecast nonsense.
December 16, 2005... It's the time of year when people traditionally make fools of themselves. No, not office parties, something much, much worse: making forecasts for the FTSE 100 next year. Such predictions are not just intellectually wrong, but morally wrong....

Echo bubble?
December 16, 2005... "The online gambling sector is booming again. The online gambling sector is booming again." That's not me repeating myself - there's an echo in here. Having already experienced a miniature bubble and crash earlier this year, internet poker and...

Share and share alike.
December 16, 2005... Maybe it's the festive spirit, maybe it's the goodwill to all men, or maybe it's just the eggnog, but Christmas always seems to be a time for forgiveness. Or, to put it another way, a time when you can get away with anything - both at home and...

Dear minister...
December 16, 2005... Before I am overtaken by the season of goodwill to all men and women, I must first dispense a little bile in the direction of the government, the Confederation of British Industry and the Quoted Companies Alliance. But most of all, the...

A Faltering economy.
December 16, 2005... In the Pre-Budget Report (PBR) on 5 December, the chancellor of the exchequer was forced to admit to the House of Commons that he had got his growth forecast for this year badly wrong. In his March Budget, Mr Brown had predicted that the...

The ineffable and the inedible.
December 16, 2005... Real turkeys are heavier than imagined turkeys. Regardless of the size of bird you stick into the oven in nine days time, in one sense, this statement has to be true. A real turkey must be heavier than an imagined one, since the latter has no...

Vodafone gets Telsim.
December 16, 2005... Vodafone has outbid four rivals to win an auction to buy Turkish phone company Telsim, the second-largest mobile operator in the country. The telecoms group succeeded with a $4.55bn (GBP2.57bn) bid and plans to target the country's young,...

Highbury House shares suspended.
December 16, 2005... Shares in magazine publisher Highbury House Communications were suspended at 0.65p after the company said refinancing talks with lenders had ended. Highbury said it was clarifying its financial position. Executive chairman and former The Sun...

Civica launches Comino bid.
December 16, 2005... Public-sector software specialist Civica has launched a recommended GBP49.8m cash offer for Comino, which provides software to the local government, social housing and occupational pensions markets. The bid values Comino's shares at 335p each -...

How to beat the US bears.
December 16, 2005... Major US stock market indices have risen markedly since the lows experienced during October 2002. Popular explanations for the recovery have been robust economic growth and rising corporate profitability. However, a closer look below the...

Not so sweet for Cadbury.
December 16, 2005... Rising costs are set to keep nibbling away at Cadbury's profit-margin improvement targets. Admittedly, the confectionary and fizzy-drinks maker is enjoying good sales growth. But, despite efficiency gains, it won't fulfil its aim of improving...

Brogue Trader.
December 16, 2005... The self-scribed CV of Bernard jones Age: 623/4 State of mind: feeling increasingly fat, feeble and frustrated by investment. Marital status: Married to Eunice (and Hermes, a cat she named after a scarf for God's sake!)....

BAA buys into Budapest.
December 16, 2005... The Hungarian government has named BAA as preferred bidder for Budapest airport. BAA will take a 75 per cent stake in the airport for GBP1.255bn. Analysts said that the price paid was on the high side, but that Budapest airport should offer...

Labelling blow to Glaxo antidepressant.
December 16, 2005... Weeks after US regulators put so-called 'black box' warnings on GlaxoSmithKline's asthma drug, Advair, officials have struck again, tightening the labelling of its antidepressant Paxil CR. Concerned at the risk of pregnant patients' unborn...

GW Pharma in EU marketing deal.
December 16, 2005... GW Pharmaceuticals has signed a European marketing deal for its cannabis-derived painkiller, Sativex. Private Spanish pharmaceutical company Almirall has snapped up the European rights to the multiple sclerosis drug, excluding the UK rights,...

Shire set to launch new attention-deficit disorder drug.
December 16, 2005... Shire Pharmaceutical's US partner, New River Pharmaceuticals, has filed its attention-deficit hyperactivity disorder (ADHD) drug, NRP104, with the US regulators ahead of approval. The company signed a co-development deal with New River last...

Buncefield fire hits ASOS warehouse.
December 16, 2005... Online celebrity fashion retailer Asos has emerged as the only major listed group, based close to the site of the Hemel Hempstead oil refinery fire, to suffer from the blast. Asos, which on Monday (12 December) suspended its shares at...

William Hill forced to sell Stanley shops.
December 16, 2005... Having bought Stanley Leisure's 624 betting shops just a few months ago, William Hill now has to sell 48 of them for half what it paid. This move was forced by competition watchdogs, which were concerned that Britain's leading bookie would be...

CardioMag float sets hearts racing.
December 16, 2005... CardioMag Imaging has become the latest in a long line of US companies to join Aim. The company has raised GBP5.3m at 137p to fund its cardiology technology. CardioMag's equipment allows cardiologists to diagnose non-invasively - in just 10...

Government unveils Reits details.
December 16, 2005... The government has now unveiled proposed legislation on UK real estate investment trusts (Reits): - Reits will pay no corporation tax in return for distributing 95 per cent of their taxable profits to investors; - Offshore businesses...

Soaring fuel costs stall go-ahead.
December 16, 2005... Transport operator Go-Ahead said this week that high fuel costs continued to weigh on its bus business in the first half. On the plus side, passenger levels at Thameslink have recovered since the terrorist attacks and Go-Ahead recently won the...

PD Ports agrees offer.
December 16, 2005... PD Ports has recommended a 148.5p offer from Babcock & Brown Infrastructure (BBI), which trumped an earlier 140.5p offer from Endeavour Ports. Together with the right to the the interim dividend, BBI's offer is worth 150p, which represents a 50...

Whittard agrees offer.
December 16, 2005... Tea and coffee retailer Whittard of Chelsea has agreed a 90p-a-share offer from Barney Holdings, a vehicle majority owned by acquisitive Icelandic group Baugur, valuing the company at GBP21.5m. Some 61 per cent of Whittard's shareholders have...

Carluccio's serves up a palatable prospect.
December 16, 2005... Existing shareholders, including the Carluccio family, raised GBP26.5m in the flotation of Italian cafe/delicatessen operator Carluccio's. It was valued at GBP53.6m at the placing price of 94.5p. However, it doesn't need to raise new money...

Hornby wins A1 rights.
December 16, 2005... Toy train and Scalextric manufacturer Hornby has secured exclusive worldwide distribution rights from A1 Grand Prix to produce a range of slot-car racing products. A1 Grand Prix is a new format of motorsport that pits teams from 25 countries...

ClearDebt reverses into Carrwood.
December 16, 2005... ClearDebt is the latest individual voluntary agreement (IVA) provider to join Aim. It is reversing into shell Carrwood in a deal valuing it at GBP3m. A placing at 2p a share will raise GBP1.2m. ClearDebt uses the internet to cut costs and...

Protherics comes good with GBP195m Astrazeneca deal.
December 16, 2005... Last December, when Protherics' chief executive Andrew Heath announced that he had eight out of 20 of the world's biggest pharmaceutical companies interested in licensing its sepsis product, Cytofab, the shares reacted positively. But when...

Uk miner goes for gold.
December 16, 2005... Toronto-listed gold miner Galantas plans to list on Aim in late January or early February, making it the first quoted company with an operating gold mine in the UK. Production from Galantas' high-grade mine in Northern Ireland is expected to...

Quadrise fuels takeover bid by zareba Cash shell Zareba Resources - a day-traders' and punters' favourite since listing in January - has finally done a deal. Zareba will acquire, via a reverse takeover, fuel-processing company Quadrise Energy, part of the.
December 16, 2005... Cash shell Zareba Resources - a day-traders' and punters' favourite since listing in January - has finally done a deal. Zareba will acquire, via a reverse takeover, fuel-processing company Quadrise Energy, part of the Masefield Group. ...

Week Ahead...
December 16, 2005... NEWS Tuesday 20 December First Technology will report first-half results on Tuesday. It has issued a series of profit warnings and a steep fall in last year's profits, from GBP14.8m to GBP7.9m. Its automotive business has been overly...

Drax fuels comeback.
December 16, 2005... This week, Drax - the largest coal-fired power station in Western Europe - listed on the London market. In effect, though, this is a relisting, rather than an initial public offering. The financial institutions that own the North Yorkshire...

Economic data signals that US stock markets are rising.
December 16, 2005... There's mixed news for investors in the Federal Reserve's latest flow of funds figures. The good news is that yields on equities are high. Non-financial companies bought a net $111.6bn of shares from investors in the third quarter, on top...

Lloyds TSB warns on consumer bad debts.
December 16, 2005... Lloyds TSB reported mixed news with its trading update this week. While the Scottish Widows life unit and the mortgage lending operation are doing well, consumer lending growth is slowing. Higher impairment levels in the unsecured consumer book...

Communisis pays bidder's costs.
December 16, 2005... Printer Communisis, which is in takeover talks, is contributing towards potential buyers' bidding costs. Communisis has spent GBP1.4m on the talks so far. The bill is understood to include costs for customer due diligence and business-modelling...

Provident to close Yes Car Credit.
December 16, 2005... Sub-prime lender Provident Financial is closing its Yes Car Credit division and making 820 redundancies. Trading losses for 2005 are expected to reach GBP24m and the decision comes after negotiations with prospective buyers were terminated. The...

Carillion improves Mowlem bid.
December 16, 2005... Carillion has improved its cash and shares offer for Mowlem from 196.3p per share to 220p per share. It already has the backing of 63 per cent of Mowlem shareholders. The move came after Balfour Beatty admitted that it, too, was considering a...

Seven simple portfolios.
December 16, 2005... Sometimes investment just seems too complicated for our own good. There is a profusion of products on offer, endless debates about expected returns and types of risk, plus the inevitable discussion about tax wrappers and regulation. So new...

Bargain shares.
December 16, 2005... As Benjamin Graham, the father of value investing, once said: "If we assume that it is the habit of the market to overvalue common stocks which have been showing excellent growth, or are glamourous for some other reason, it is logical to expect...

FIRST CHOICE HOLIDAYS (FCD).
December 16, 2005... Terrorist atrocities, natural disasters and weak consumer confidence are like water off a duck's back to First Choice. Despite coming up against all these phenomena during the past year, the holiday firm has again put in an impressive...

Double rail win for FirstGroup.
December 16, 2005... FirstGroup has won both of the rail franchises up for renewal next year. It will retain its Great Western franchise and, from next April, will also take over the merged Thameslink/Greater Northern franchise. The two franchises combined are...

NORTHUMBRIAN WATER (NWG).
December 16, 2005... The sale of non-core businesses, Entec and FPS, contributed GBP14.6m to Northumbrian Water's net profit and will fund a special dividend of 2.82p in February. And this special dividend comes on top of a chunky increase to the normal dividend,...

Goindustry valued by grasshopper.
December 16, 2005... Aim cash shell Grasshopper Investments is buying GoIndustry, which values and auctions used industrial equipment, in an all-share deal that values the company at GBP29.6m at the current share price of 18.5p. GoIndustry has acquired some of...

LSE spurns Aussie advance.
December 16, 2005... The writing was on the wall for Australian bank Macquarie's indicative 580p-a-share offer for the London Stock Exchange (LSE) when Threadneedle Asset Management increased its stake in the LSE to above 12 per cent by purchasing 300,000 shares at...

HARDYS & HANSONS (HDYS).
December 16, 2005... Hardys & Hansons plans to move from the main market to Aim in February, which should please the heirs of its private shareholders, given the inheritance tax implications. However, the cash pile has shrunk somewhat, as Hardys has been spending...

CENTER PARCS (CPK).
December 16, 2005... Consumers may be spending less on the high street, but they remain willing to splash out on a few days away. Accordingly, Center Parcs' four UK resorts were 91.5 per cent full during the recent six-month period - the same as a year ago. But, on...

ACCIDENT EXCHANGE (ACE).
December 16, 2005... It's difficult to determine how high Accident Exchange will go. Previous estimates of its performance have been woefully conservative, and the latest half-year results are again littered with superlatives. The company provides replacement...

TOLUNA (TOL).
December 16, 2005... Toluna is a relatively new kid on the block, joining the Alternative Investment Market (Aim) in May this year when it raised GBP4.4m and acquired trading company Cjudge. As a result, these half-year figures cover just a four-and-a-half month...

MEDISYS (MDY).
December 16, 2005... Medisys was already suffering the effects of having to write off its Futura safety-syringe business and now things seem to have deteriorated further. Production of its NewTek glucose-monitoring system has also been shelved as sales were simply...

DEWHURST (DWHT/DWHA).
December 16, 2005... It was mainly a rise in interest receivable and a GBP102,000 profits contribution from Australian acquisition Lift Material, that helped Dewhurst move profits up in a challenging year. Lower capital spending and tighter stock control also...

PENNON (PNN).
December 16, 2005... Pennon has announced a GBP200m capital return to give it a more efficient balance sheet. The package consists of a GBP55m buy-back and a 110p return to shareholders. What's more, Pennon says it will raise the dividend by 20 per cent this year...

NUMIS (NUM).
December 16, 2005... An exceptionally active new-issues market has been good news for Numis. A total of GBP1.06bn was raised for corporate clients, with GBP758m raised in 26 Alternative Investment Market (Aim) flotations, making Numis the largest fund-raiser on...

SAVOY ASSET (SMN) MANAGEMENT.
December 16, 2005... A shareholder dispute has dominated life at Savoy Asset Management over the past six months. In October, rebel shareholders tried to oust chairman Kenneth Clarke, but failed, and now the company is trying to find a buyer for their shares. ...

GOOCH & HOUSEGO (GHH).
December 16, 2005... Gooch & Housego, which produces components for controlling lasers, plans to move its operations into a state-of-the-art factory next year, which will double its manufacturing capacity. This new facility will cost around GBP4m and is due for...

WARNER ESTATES (WNER).
December 16, 2005... Property fund manager Warner Estates, whose largest shareholder is Jack Petchey's Trefick vehicle, has had an active six months. The group has bought and sold GBP657m-worth of property and established two new funds. The first, Apia, is run...

EUROPEAN HOME RETAIL (EHR).
December 16, 2005... Formerly called Kleeneze, the company changed its name at the end of September to European Home Retail (EHR), to reflect the push that has been made into television and internet shopping. So these results reflect the cost of this investment, as...

LAWRENCE (LAC).
December 16, 2005... Lawrence's profit slide isn't as grim as it appears and largely reflects a goodwill hit after the company bought the 50 per cent of ECO Animal Health that it didn't already own. In fact, cash profits before tax from continuing operations grew...

BRITISH ENERGY (BGY).
December 16, 2005... British Energy went into financial meltdown in 2004, but has risen from the ashes - its shares are up 70 per cent since relisting in January. The group's fortunes have been helped by rising electricity prices and resurgent interest in nuclear...

TEN ALPS (TAL).
December 16, 2005... Ten Alps' first-half results beat analysts' expectations, largely thanks to an unexpectedly big performance-related payment for Teachers TV, a channel in which the company has a 70 per cent stake. But the core business, which produces...

ASHTEAD (AHT).
December 16, 2005... In six months, equipment-hire group Ashtead has already made 70 per cent of the full-year earnings analysts were predicting before these results. This stellar growth is down to a booming north American construction market and extra work arising...

MULBERRY (MUL).
December 16, 2005... The world's shoppers may be reluctant to open their purses, but they are still keen to buy Mulberry's luxury handbags. Like-for-like sales in Mulberry's shops rocketed ahead by 35 per cent in the first half, while the third-party accessories...

BRISTOL WATER (BWG).
December 16, 2005... Since the start of October, Bristol Water's share price has risen by over 20 per cent. Chief executive Alan Parsons puts this down to "quality management", but analysts believe it could have more to do with continued corporate activity in the...

AEA TECHNOLOGY (AAT).
December 16, 2005... AEA has had a pretty torrid time of it recently after a spate of profit warnings. But the new management seems to be getting to grips with things. There has been a major reorganisation, which has seen the problematic rail division downsized. A...

TELECOM PLUS (TEP).
December 16, 2005... Telecom Plus, which provides its customers with a one-stop shop for all their utility requirements - including telephone, internet, electricity and gas - has been struggling recently with high gas prices. So, in a bid to cut its gas-related...

DS SMITH (SMDS).
December 16, 2005... Buy high, sell low is hardly a formula for business success. But that is exactly the unhappy situation in which DS Smith finds itself. The packaging maker is having to purchase raw materials and energy at high prices. And at the same time, its...

PROTHERICS (PTI).
December 16, 2005... Protherics' share price had been hit by a lack of news on its efforts to secure a marketing deal for its antisepsis drug, CytoFab. So the shares leapt on the announcement accompanying these half-year figures that a deal had been done with...

CARPETRIGHT (CPR).
December 16, 2005... Carpetright was floored by tough market conditions in the first half. Retail spending has been weak and Carpetright is heavily exposed to the housing market. Home-movers generate around 15 per cent of sales, so lower numbers of housing...

MINSTER (MPM) PHARMACEUTICALS.
December 16, 2005... It's a leap from insurance to drug development, but Minster Pharmaceuticals has made it. The Aim-quoted company began life as Riceman Insurance, then became investment firm Rii, and acquired private biotech company Biopartners in 2001, changing...

ATH RESOURCES (ATH).
December 16, 2005... ATH delivered a solid set of results in line with expectations as a strong coal price helped make uneconomic sections of its old Skares Road mine viable. ATH now has three mines in production, and could bring two more on stream this year. That...

UNIVERSAL SALVAGE (UVS).
December 16, 2005... There's a lot of good faith and optimism in Universal Salvage's share price. In 2002, there were fears that the business - which sells vehicles involved in accidents - would itself crash. It had lost two of its major contracts, which analysts...

VEGA GROUP (VEG).
December 16, 2005... Vega provides consulting and tech-nology to aerospace, defence and government markets in the UK, Germany, Holland and France. And all areas posted double-digit revenue growth in the first half, while the company managed to maintain margins...

IDOX (IDOX).
December 16, 2005... Chief executive Andrew Fraser points out that IDOX reached sustainable profitability in 2005, in line with the timetable that he set out in 2000. Profits in the core information management business, which mostly serves local authorities, rose...

ULTRAFRAME (UTF).
December 16, 2005... If Ultraframe were a dot-com outfit, the 93 per cent drop in its share price over the past five years would pass by almost unnoticed. But it's not. It's a leading specialist in conservatory systems, and the past year has seen a catalogue of...

ALTERNATIVE NETWORKS (AN.).
December 16, 2005... these Maiden full-year results from Alternative Networks (AN) were encouraging, as the telecoms reseller's strategy of pursuing organic growth and expansion via bolt-on acquisitions has clearly paid off. It has made two purchases since...

WINDSOR (WNDR).
December 16, 2005... Windsor has done well to record its eighth consecutive year of increased profitability at a time when many business classes have suffered reductions in premium rates - sometimes by as much as 20 per cent. Brokerage and fee income was...

RENOLD (RNO).
December 16, 2005... Engineering company Renold continues to struggle with high raw material prices, and increasing utility and freight costs. It is now attempting to deal with the increases, which are affecting its industrial power-transmission business, by...

CIVICA (CIV).
December 16, 2005... Public sector software specialist Civica's decision to focus on its higher-margin owned software business has paid off, with turn-over in consulting, software systems and managed services up by 38 per cent to GBP48.6m. Third-party software...

INNOVISION RESEARCH & TECH. (INN).
December 16, 2005... First-half results from Innovision Research & Technology were disappointing, but the company remains confident about the prospects for its radio frequency identification (RFID) chips and has signed a number of new licences for its low-cost...

CITY LOFTS (CTF).
December 16, 2005... City Lofts had already warned that there wouldn't be any sales until early next year. So all eyes will now be on the company in 2006. It has six projects, amounting to 1,686 flats, currently in construction, with a gross development value of...

CENTRAL AFRICAN MINING & EXPLORATION (CFM).
December 16, 2005... Central African Mining has an impressive trading record thanks to large gains taken on African Platinum shares. But that profit source is coming to an end. The two remaining investments are Botswana gold explorer Central African Gold, and White...

GAMINGKING (GGK).
December 16, 2005... In May, Gamingking paid GBP1.35m in cash and shares for rival Kelly's Eye and, in October and November, it acquired two other suppliers for undisclosed cash sums. Both supply private clubs with lottery machines in the Manchester and Durham...

CONSOLIDATED COMMUNICATIONS (CCM).
December 16, 2005... Consolidated Communications (CC) moved to Aim from Ofex via a placing at 2p in September. Last year's turnover growth looks impressive, but includes a full 12-month contribution from the NDNT satellite telecoms business acquired in November...

NEWMARK SECURITY (NWT).
December 16, 2005... Newmark reported "healthy" orders a year ago, and they, plus the acquisition of CMP - a supplier of time and attendance hardware - boosted 2004-05 sales. But the latest results were disappointing due to losses from two businesses set up to sell...

Arlington Group.
December 16, 2005... Aim. Arlington's net asset value is 53.1p a share, the majority of which is cash. Management is looking at a number of potential investment opportunities.

Bartercard.
December 16, 2005... Aim. Management buyout negotiations have now ended. Bartercard expects to award new licences for South Africa, Saudi Arabia and Turkey by the end of March, which will generate $1.95m in fees.