Investors Chronicle articles from February 2003

Investors Chronicle archives from February 2003

The six-pack solution.
February 6, 2003... What was special about 1974? It was a momentous year in many ways: Abba gave us Waterloo, Mel Brooks gave us Blazing Saddles and McDonalds Corporation gave London its first Big Mac. Minor things happened as well: such as two general elections...

War and peace.
February 6, 2003... Well, it works. The war in the Middle East may not have kicked off just yet, but our strategy to maximise returns when it does has already had its dummy run. Two weeks ago, I made the case for playing a high-risk game (War Games, 24 January...

Injury time.
February 6, 2003... If customer service was truly important in football, then Leeds United would be in big trouble - and chairman Peter Ridsdale would probably be out of a job. He had to face-down angry fans last weekend, after he sold off yet another top player -...

AWG to sue Morrison directors.
February 6, 2003... Water company AWG launched into legal action this week against Sir Fraser Morrison and Stephen McBrierty, the former chairman and group operations director of Morrison, the construction group that the company bought in September 2000. The...

Lavendon shares fall as bid talks fail.
February 6, 2003... Lavendon has pulled out of bid talks with a venture capitalist, because it said negotiations were taking too long. The potential buyer was concerned that Lavendons troubled German operations could take up to five years to recover. It was...

Hunter drops Allders bid.
February 6, 2003... Tom Hunter has dropped his attempt to get hold of Allders. The Scottish retailer had built up an 11 per cent stake in the department store group - enough to block Scarlett Retails original bid of 160p. However, Scarlett Retail, controlled by...

Marketing boost for Vernalis drug.
February 6, 2003... The fortunes of drug delivery company Vernalis took a turn for the better this week with news that Irish giant Elan is selling its primary care division to US-based King Pharmaceuticals for $850m. Elan has been forced into making a series of...

Markets forecast to fall again.
February 6, 2003... Anyone hoping that three years of falling markets makes a fourth successive drop less likely should think again. Thats the argument put forward this week by three finance professors from the London School of Business. In their study of stock...

Marlborough stirling warns of flat sales.
February 6, 2003... Marlborough Stirling, the life, pensions and mortgage software developer, warned investors this week not to expect any sales growth this year. The company, whose shares halved after a profit warning last September, also said that last years...

Platinum prices soar on production fears.
February 6, 2003... Platinum prices leapt to over $700 an ounce (a 23-year high) last week amid worries about a strike at a major Russian supplier, and constrained production at Lonmin in South Africa. A pledge by US president George Bush, in his State of the...

Shock as Schwab is sold to Barclays.
February 6, 2003... In a surprise move, stockbroker Charles Schwab Europe has been sold to Barclays Stockbrokers, which will acquire more than 150,000 accounts through the deal. Three years of bear markets have pushed down dealing volumes, hitting brokers...

Silentnight provides little comfort.
February 6, 2003... Sleepless nights have become the norm for Silentnight shareholders. But the latest profit warning - the fourth in under 12 months - was a real nightmare. The new management team has admitted that margins at the successful bed business are under...

Tough January tests investment theories.
February 6, 2003... January was a torrid month on the stock market, and even well-worn investment theories struggled to bear fruit. One such theory states that the 10 worst-performing shares in the three years to the end of December will rise in January. Over the...

BAE Systems wins carrier job.
February 6, 2003... In a typical political compromise, the Ministry of Defence has chosen BAE Systems as the prime contractor on the GBP2.7bn CVF carrier project while selecting its bidding rival, Thales, as the main subcontractor. BAEs success in securing the...

Abbey gets electric bid for First National.
February 6, 2003... Abbey National is selling its consumer finance arm, First National, for GBP848m to GE Consumer Finance, the consumer credit business of the General Electric Company. On an exit multiple of 12-13 times 2002 forecast earnings, the price achieved...

British Energy decision looms.
February 6, 2003... D-Day for British Energy shareholders arrives next Friday when the nuclear generators bondholders must agree a restructuring plan with the government. Failure to do so could see equity holders get wiped out if the struggling business is put...

Avis Europe motors ahead with expansion plans.
February 6, 2003... Car rental group Avis Europe this week stepped up its overseas expansion plans by paying E8.5m (GBP5.6m) to take full control of one of its few remaining European licensees. Only last month, the group announced plans to buy the European, Middle...

Allied Domecq leaves investors punch-drunk.
February 6, 2003... Allied Domecqs glass always seems to be half empty rather than half full. The spirits and wine maker lags way behind more dynamic rival Diageo, though its businesses recently seemed to be making progress. However, investors will have to wait a...

EMI rumours surface again.
February 6, 2003... EMI merger speculation has become a regular feature of the Sunday papers. This week, it was suggested that AOL Time Warner wants to combine its music arm with EMI. European competition authorities have vetoed such plans twice before, but...

OSMETECH (OMH).
February 6, 2003... Osmetech has bought a US-based blood diagnostic firm from Roche for $3.5m (about GBP2.1m) in a deal that should help cut its cash-burn. As part of the agreement, Roche will invest $1m in Osmetech, giving it a 4.5 per cent stake. The acquisition...

SURFCONTROL (SRF).
February 6, 2003... Since its transformation into an internet filtering company, Surfcontrol is one of the few technology companies not to have let investors down - and none has managed to sustain its astronomical rate of growth. Though tempting fate, on the...

REGENT INNS (REG).
February 6, 2003... Having shown rivals how to do it with the phenomenally popular Walkabout pubs, Regent Inns is once again trying to lead by example. The company is refusing to join the highly damaging price war on the high street. It believes the appeal of both...

EURODIS ELECTRON (ELH).
February 6, 2003... Life isnt getting any easier for Eurodis Electron. The dismal conditions in the electronics components market took their toll on the interim results, forcing the board to shelve the dividend. Chief executive Steven Swayne has done his best to...

AMVESCAP (AVZ).
February 6, 2003... As investors shift AWAY from equities - and out of the struggling growth funds offered by the likes off Amvescap - into the fixed-income arena, bad news is going to be hard to avoid. Analysts estimate that Amvescap suffered something like a...

BOOKHAM TECHNOLOGY (BHM).
February 6, 2003... Bookham believes it will break even by the end of the year. Thats a serious leap of faith, given its current position. Operating losses hit GBP20.7m in the fourth quarter of last year and it has a projected cash-burn of up to GBP21m in the...

CHEMRING (CHG).
February 6, 2003... Chemring is still grappling with the problems caused by an accident at Kilgore Flares, the US decoy company it bought for $23m in 2001. Not only did the accident disrupt trading, it also resulted in a protracted compensation claim with Kilgores...

CREST NICHOLSON (CRST).
February 6, 2003... The slowdown in the central London luxury apartment market is widely chronicled, but Crest says the situation is similar in other cities like Birmingham and Manchester, as well as in the south-easts GBP1.5m-plus housing bracket. The companys...

NORTHERN ROCK (NRK).
February 6, 2003... Northern Rock kicked off the banking sectors reporting season with another storming set of results. In a mortgage market that continued to defy the pundits by remaining healthy, the bank boosted its commercial loan book by 18 per cent during...

RIO TINTO (RIO).
February 6, 2003... Sales to China account for around 5 per cent of Rios turnover. China now consumes more steel and copper than the US, so its eye-popping growth rates are good news for commodity prices. Nowhere is this more apparent than in Rios iron ore...

AQUARIUS PLATINUM (AQP).
February 6, 2003... Platinum is at a 23-year high, but Aquarius shares continue to slide. The main culprit is the strengthening of the rand against the dollar. Since platinum is sold in dollars, a strengthening rand means higher operating costs and lower sales. In...

ASTRAZENECA (AZN).
February 6, 2003... AstraZenecas figures exceeded expectations - largely thanks to its success in switching patients onto Nexium, the replacement for its hugely successful ulcer drug, Prilosec (which has lost patent protection). Nexium sales approached $2bn and,...

FITNESS FIRST (FTF).
February 6, 2003... When venture capitalists are regularly sniffing around a sector, its a good sign that theres value to be had. Thats what is happening in the health club industry right now. Many investors who bought enthusiastically at the top of market are now...

DIXONS (DXNS).
February 6, 2003... It may seem odd to recommend Dixons shares as a buy considering the group had a poor Christmas with no sales growth. But since we decided that Dixons shares were fairly priced last month, they fell 15 per cent. Indeed, the shares have...

ARM (ARM).
February 6, 2003... We last wrote a sell recommendation on ARM shares 16 months ago. At the time, many City analysts assumed ARM would sail relatively unscathed through the tech sector turmoil. We said, however, that it could not remain immune from the...

UK COAL (UKC).
February 6, 2003... Search for the UKs highest-yielding stocks, and youll find UK Coal somewhere near the top of the list. On the interim dividend alone, the shares yield 9 per cent. But investors often pull back when they see UK Coals profit-and-loss account....

Brightening from the east.
February 6, 2003... Britains exporters are in trouble. Figures released next Monday are likely to show that manufactured export volumes fell last year - their worst performance since 1981. There is, though, reason for optimism: the ratio of inventories to...

The third way.
February 6, 2003... For years, thinking about share prices has been dominated by two ideas: efficient market theory, which says prices reflect all information; and behavioural finance, which says investors can sometimes make money by exploiting others cognitive...

A new lease of life.
February 6, 2003... For all its modern trappings, Biotechnology is a surprisingly old science. Vaccines date all the way back to the 18th century, when Edward Jenner observed that exposure to cow pox could protect people against small pox. By priming the immune...

Ryanair deal unsettles investors.
February 6, 2003... Europes low-cost airline industry has taken its second major step to consolidation with the acquisition of KLM-owned Buzz by Irish carrier, Ryanair. The deal unsettled the City as the planned takeover marks a departure from the groups previous...

Call this a utilities trust?
February 6, 2003... Last week, when holders of the Legg Mason International Utilities Trust personal equity plan (Pep) received interim statements, their jaws hit the floor. The decimal point seemed to be in the wrong place. Surely it was not possible that an...

BRITISH AMERICAN TOBACCO (BATS).
February 6, 2003... Cigarettes are meant to calm the nerves in stressful situations, but theyre not doing the job just at the moment. Lately, supposedly defensive tobacco stocks have done just as miserably as the wider stock market. After three years of...

GLAXOSMITHKLINE (GSK).
February 6, 2003... In his State of the Union address, President Bush pledged an additional $400bn (GBP243bn) over the next decade to reform and strengthen Medicare. Although difficult to quantify, the extra slug of money will result in the writing of additional...

WH SMITH (SMWH).
February 6, 2003... WH Smith has long had a reputation for disappointing shareholders by performing well in one area and slipping up in another. Sadly, for its long-suffering investors, the company lived up to this reputation with its Christmas trading statement,...

STAFFWARE (STW).
February 6, 2003... Staffware remains one of the few companies in the software sector going against the grain of depressed corporate IT spending. A trading update last month assured the market that the companys full-year results - due on 25 February - would mark a...

REED ELSEVIER (REL).
February 6, 2003... Reed Elsevier - which announces its full-year results on 20 February - issued a trading update in early December, leading analysts to trim their forecasts. For example, Merrill Lynch has sliced 3 per cent off its earnings forecast for 2003, now...

WSP (WSH).
February 6, 2003... The downturn in the commercial construction industry has wreaked havoc on WSPs share price. The civil engineering consultancy issued another profit warning in December, forcing City analysts to downgrade their forecasts as a result of"a...

CALEDONIAN TRUST (CNN).
February 6, 2003... Caledonian Trust is suing the Secretary of State for the Environment for more than GBP4m of dilapidation damages under a full repair and insurance lease on St Margarets House in central Edinburgh. Two government departments have vacated this...

QUADNETICS (QDG).
February 6, 2003... Quadnetics share price shot up ahead of the latest interim results - and with good reason. Following last years restructuring, the half-year figures to end-November 2002 show continuing subsidiary sales up from GBP5.68m to GBP9.59m, with...

GET (GTG).
February 6, 2003... GET is about to reap the benefits of its long-term links with China, which today provides three-quarters of its imports - up from half five years ago. Gets main supplier currently works from a 350,000 sq ft factory but, in about 12 months, it...

KNOWLEDGE TECH. SOLUTIONS (KTS).
February 6, 2003... One of the best accolades a company can receive is if its customers invest in its shares. So its perhaps not surprising that Knowledges equity has held up well since it joined Aim just over two years ago at 4.5p. HSBC Investment Bank and...

CHEERFUL SCOUT (CLS).
February 6, 2003... Ord price: 2pMarket value: GBP3.69m Touch: 13/4-21/2p12-month High: 31/4p Low: 11/4p Dividend yield: nilPE ratio: 12 Net asset value: 2.21pNet cash: GBP848,000 Year toTurnoverPre-taxStated earningsNet dividend 30...

WADWORTH.
February 6, 2003... Back in 1996, Wadworth booked a GBP10m gain when it signed a sales and marketing agreement with Interbrew to distribute its ales. Turnover never met expectations, though, so last year Wadworth bought the rights back for GBP2.95m. That payment...

ACQUISITOR (ACQ).
February 6, 2003... Acquisitor has proved to be a formidable venture capitalist by increasing fully-diluted net asset value (NAV) by a quarter since it joined Aim in January 2000. Until recently, most investments had been in the US but, last October, the company...

DISPERSE TECHNOLOGIES.
February 6, 2003... Disperse Technologies spends an impressive amount of money on research and development (R&D) - all expensed through the profit-and-loss account. Last year, the R&D spend rose from GBP755,000 to GBP1.06m - without it profits would have more than...

NETCALL (NET).
February 6, 2003... After five unprofitable years building intelligent telephone platforms, Netcall seems to have produced a winner called QueueBuster. Its a real-time, automated call-back system that means callers no longer have to wait in telephone queues....

CARDIFF PROPERTY (CDFF).
February 6, 2003... Cardiffs property interests are dotted along the M4 high-tech corridor - office rents there sank by up to a fifth during 2002. So why has Cardiffs share price held up? The answer is that, over the past two years, Cardiff prepared for harder...

Finelot bids for relaunch as mining group.
February 6, 2003... Long-suffering shareholders in Finelot received news last week that the ill-fated auction house plans to reinvent itself as a mining investment company focused on South-East Asia. Having joined the Alternative Investment Market (Aim) at the end...

Select set to net Fairplace Consulting.
February 6, 2003... Select Appointments has taken advantage of independent financial adviser Park Rows decision to sell non-core assets by snapping up its 22 per stake in outplacement specialist Fairplace Consulting. Select paid 75p a share, a significant discount...

MV Sports in a spin over tandem offer.
February 6, 2003... Investors in Aim-listed minnow MV Sports can at last breathe a sigh of relief thanks to a recommended all-share bid from bicycle manufacturer Tandem. Since floating at 3p a share under the guise of Snakeboard six years ago, MVs range of...

PRIMARY HEALTH properties (PHP).
February 6, 2003... Primary Health Properties (PHP) owns and rents out doctors surgeries. Its the UKs largest independent operator in this niche sector and, at a time of economic uncertainty, its reassuring that 92 per cent of the companys rent roll is derived...

TOP TEN HOLDINGS (TTH).
February 6, 2003... Its nearly a year since Top Ten took over former cash shell XS Leisure, and early signs are that things are progressing well for the bingo hall operator. In the six months to 29 September, Top Tens sales rose by 5 per cent to GBP3.7m, giving...

LAWRENCE (LAC).
February 6, 2003... In a nutshell, the main reasons for investing in animal health group Lawrence are the potential for a lucrative demerger of pet accessories provider Interpet, and the growing number of drug approvals given to its 50 per cent-owned subsidiary,...

Large Company Tips Update.
February 6, 2003... HAVELOCK EUROPA (HVE) Shares in Havelock Europa received a useful shot in the arm last week with news of cluster buying by five directors. Ahead of its closed period, the directors bought 250,000 shares just two days after 275,000 shares...

Smaller Company Tips Update.
February 6, 2003... SPORTINGBET (SBT) Third-quarter figures from Sportingbet show a strong underlying performance. However, the firms shares continue to languish, as the quasi-legal basis on which it does business in the US continues to generate uncertainty....

To be continued.
February 6, 2003... How low can we go? Last weekend, the press was full of phrases such as"ridiculously cheap" and"the time to buy". And who knows, maybe the holders of those opinions are right. But its such talk that gives the bears confidence. The bears point...

Funds News Digest.
February 6, 2003... News round-up Equitable Life has refused to offer compensation to 68,000 investors expecting to benefit from a rectification scheme for mis-selling of income drawdown plans. Investors bought income drawdown schemes between 1993 and 2000...

200 and counting.
February 13, 2003... I mportant column this one, because its the 200th Bearbull that this particular writer has produced. A word of explanation - though Bearbull traces its roots back to the 1950s, a bit like Dr Who, the Bearbull persona has been filled by various...

Full house for rank.
February 13, 2003... Bingo may have as much appeal to the young as a night on the town with Des OConnor, but its a cash business and a valuable one at that. So much so that shareholders in privately-owned Gala group, which owns 165 bingo clubs and 28 casinos in the...

Ta-ta Isa.
February 13, 2003... I remember the only time I was really shocked by a financial adviser. It wasnt when I was told I was destined for poverty in old age because I wasnt saving enough in my pension. Nor was it when I was warned I wouldnt be able to afford a house...

CLOSE FINS. EUROTECH.
February 13, 2003... When Close Finsbury EuroTech floated in August 2000, manager Michael Bourne invested GBP250,000 at 100p. Oh dear - perhaps his wife, who bought shares this December, will fare better. Though the technology sector has taken a two-and-a-half-year...

LONDON & ST. LAWRENCE.
February 13, 2003... At the age of 92, London and St Lawrences chairman and investment manager Gerald Ashfield can tell competing pipsqueaks a thing or two about portfolio investment. Few of them can match this trusts steady NAV record, and being heavily invested...

LOWLAND INVEST. TRUST.
February 13, 2003... Back in the 1950s when equities were just starting to become popular, the first question youd ask a stockbroker when discussing a share was"whats the yield?" Lowlands manager Jamie Henderson has brought dividend-yield demand up to date with his...

Another blown deal for Universal Salvage.
February 13, 2003... Universal Salvage, the car salvage specialist, revealed this week that it has lost another contract with an insurer. The agreement, with Zurich Financial, was terminated because of a disagreement over pricing. It follows major contract losses...

Resources shareholders face dividend cuts.
February 13, 2003... Attention all readers seeking safe dividend stocks: some companies are cutting their dividends while proclaiming that they are increasing them. This is not the latest example of corporate subterfuge, but a consequence of the weaker dollar. ...

iSOFT bosses under fire for bonuses.
February 13, 2003... Executives at healthcare IT group iSOFT are the latest to come under fire for a controversial compensation scheme. Under the iSOFT scheme, management stands to receive a bonus equal to 40 per cent of its salary simply by meeting analysts...

UBM and Aegis fight for market research firm.
February 13, 2003... United Business Media (UBM) and Aegis are bidding for NFO WorldGroup, a market research firm put up for auction by Interpublic, the giant US advertising group. Neither company would comment, but the two companies see the auction as a rare...

Invensys shares plummet on US fears.
February 13, 2003... Invensys shares fell by more than a quarter this week to 38.5p, as fears grew over the companys exposure to the US. Because of the weak American economy and the slide of the dollar, the market is worried that Invensys wont be able to meet...

Boosey & Hawkes finally sells instruments.
February 13, 2003... Boosey & Hawkes has finally agreed the sale of its instruments division, over 18 months after the group put itself up for sale. The sale of its music publishing business (which has attracted three bidders) is expected to follow shortly. Final...

BA continues to struggle on.
February 13, 2003... British Airways is making the best of a bad situation. Third-quarter profits announced this week came in ahead of expectations at GBP25m, thanks to cost-cutting. In the corresponding period last year, BA made a GBP160m loss. But...

Exchange figures point to uncertain market.
February 13, 2003... This weeks monthly market report from the London Stock Exchange (LSE) served up yet more evidence of difficult equity market conditions. While the total number of UK and international trades through the exchange were up on January 2002s...

Thus serves-up bullish trading news.
February 13, 2003... Telecoms operator Thus shrugged off industry concerns this week with a bullish trading update. Along with its rivals, Thus is suffering from pricing pressure as distressed operators search for business. But Thus is concentrating on...

Gent goes shopping again.
February 13, 2003... A shopaholic to the end, Vodafones outgoing chief executive, Sir Christopher Gent, is making a few last purchases. This time, Sir Christopher is buying out the minority interests in Vodafones remaining European listed subsidiaries. The...

BP to tap Russian oil in effort to boost growth.
February 13, 2003... BP has revealed a major investment in Russias oil industry as it attempts to get growth back on track following last years output warnings. The company will pay $6.75bn and contribute its existing upstream assets in Russia in return for a...

Analysts slash Enodis forecasts.
February 13, 2003... Analysts have slashed their profit forecasts for debt-laden food equipment group Enodis after the companys first-quarter results were accompanied by a downbeat trading outlook. Management warned that results this year could be harmed by the...