Investors Chronicle articles from February 2004

Investors Chronicle archives from February 2004

Ryanair - hot air.
February 6, 2004... Every now and again, the City gets into a complete tizzy. Tantrums are thrown. Share prices are smashed against the wall. Last week, the no-frills airline Ryanair lost more than a quarter of its value in a single day. That followed a warning...

Capital, just capital.
February 6, 2004... A KEY failing of conventional company-valuation techniques - almost all of which distil down to applying a discount rate to a stream of earnings - is that they struggle to cope with companies that don't make profits. Yet clearly such companies...

Fed shocker.
February 6, 2004... The Pope is a Catholic. This revelation will shock and amaze you - if, that is, you are one of those people stupid enough to have been surprised by last week's hint from the US Federal Reserve that it might raise interest rates some time. ...

Into the light.
February 6, 2004... The "trough of disillusionment" is now safely behind us, and the "slope of enlightenment" beckons. No, this isn't some passage from a cheap book on eastern spirituality, but the verdict of Robin Batchelor, a London fund manager, on why we...

Tops of the estate.
February 6, 2004... If last quarter's retail trade figures are anything to go by, the British consumer has once again proved the pundits wrong. True, life may be getting that bit tougher for retailers on the high street, but predictions of a dramatic slowdown in...

Share schemes of the gods.
February 6, 2004... The first half of Greg Hutchings' record at Tomkins - which he ran from 1983 until 2000 - was phenomenal, but the second was disappointing. Still, when I saw he planned to install himself at another small quoted company, I thought it worth...

PPP verses UIP.
February 6, 2004... Dollar accounts look tempting now. One reason for this is that the US currency seems hugely undervalued. The most common, and simplest, way of valuing the dollar is purchasing power parity (PPP) - a comparison of internationally tradeable...

Hidden gems.
February 6, 2004... Life Is not easy for income investors. Interest rates are low, long-term gilt yields are a paltry 4.75 per cent, and the long-term bear market has dulled the attraction of income shares. So when an opportunity comes along that offers the...

Next week.
February 6, 2004... MONDAY 9 February Interims: Albemarle & Bond Finals: Diagonal, Royalblue, Randgold Resources EGMs: ScS Upholstery Economics: UK December House Prices, UK December Industrial output, UK January Producers Price Index ...

Eurodis Electron plans cash call.
February 6, 2004... Shares in Eurodis Electron crashed 23 per cent to 9p after the embattled electronics distributor announced plans for an equity fund-raising when it reports results for the six months to 30 November 2003. The proposed placing of new shares...

Securicor poised for Group 4 merger.
February 6, 2004... Securicor, the security services company, has announced plans to lock up with Danish competitor Group 4 Falck to create the world's second-largest security group. Any deal would be via a nil-premium merger of the two. However, prior to...

Cairn boosted by Indian results.
February 6, 2004... Cairn Energy became a billion-pound company this week, its share price surging after strong test results from an oil discovery in Rajasthan, India. With the shares now trading at 685p, the company boasts a market capitalisation of GBP1.03bn....

Dollar fall hits Scapa.
February 6, 2004... The weak dollar has claimed another victim. Industrial tape and cable maker Scapa has warned that the weakening dollar, combined with production delays, will take GBP1.2m off profits this year. Cazenove now expects pre-tax profits, before...

iSOFT offloads retail division.
February 6, 2004... The healthcare IT group iSOFT, which is merging with software rival Torex, has confirmed that it plans to sell the latter's retail arm for GBP65m. Speculation as to the undisclosed buyer centres on Mark Pearman, the former chief executive of...

Allied Domecq toasts strong spirits.
February 6, 2004... Hard liquor maker Allied Domecq is exuding a rosy glow following strong recent performances by its top spirits brands. The beverage company - whose tipples include Malibu rum and Courvoisier brandy - has reported healthy sales during the first...

P&O dividend cut sinks shares.
February 6, 2004... P&O finally sold its container shipping business this week. Well, almost. The volatile joint venture, viewed by some analysts as a reason why P&O's shares should trade below the sum of their parts, is to be merged into P&O's Dutch joint venture...

Going up?
February 6, 2004... You might be surprised by the low opinion the City has of some of Britain's largest companies. Many analysts have all but written off several household names. J Sainsbury is a prime example. Despite a modest share rating and a generous yield,...

Maiden suffers profit warning.
February 6, 2004... Outdoor advertising group Maiden has warned that 2003's profits will not match expectations - pre-tax profit is expected to be around GBP5.5m as opposed to earlier forecasts of GBP6.2m. Inadequate fourth-quarter sales and cost pressures are to...

HIT Entertainment to launch US TV channel.
February 6, 2004... HIT Entertainment, the company behind Bob the Builder and Thomas the Tank Engine, has confirmed that trading over the Christmas period was in line with forecasts, but is keeping tight-lipped on its plans to launch a US cable television channel...

Myners pushes for voting changes.
February 6, 2004... Fund managers and stockbrokers have until next year to improve their systems for voting at company annual meetings. A report by Paul Myners, chairman of the Shareholder Voting Working Group, demanded that institutions and intermediaries...

Spring lifted by IT staffing contract win.
February 6, 2004... IT staffing company Spring has won a GBP100m, three-year contract to provide IT staff to a major high-street bank. The deal carries an industry-standard margin of 10 per cent, and follows a string of similar contract wins with companies...

Bioprogress buoyed by FMC agreement.
February 6, 2004... Bioprogress's shares jumped 24 per cent to 97p after announcing a deal with FMC BioPolymer this week, allowing FMC to gain access to NROBE pill-coating technology. Pills using traditional gelatine coatings must be highly compacted, but the...

Mining News round-up.
February 6, 2004... * Broker Brown Shipley is bringing a new mining company to Aim. Goldstone Resources, which is due to list in March, will prospect for gold in Guyana and Venezuela. The company will raise an as yet unspecified amount to fund an 86-hole drilling...

January bounce for LA Fitness figures.
February 6, 2004... Membership levels at healthclub operator LA Fitness performed their customary leap in January, fuelled by an influx of remorseful overindulgers after Christmas. But the middle-market gym chain's progress amounts to more than a seasonal fillip....

Flotation just the ticket for Civica.
February 6, 2004... Parking tickets may well be the bane of our lives, but Aim-hopeful Civica is proud to be the largest ticket supplier in the field, issuing 2m a year. The company was formed two years ago when venture capitalist Alchemy backed the GBP135m...

Market resurgence gives Aim a boost.
February 6, 2004... A 58 per cent surge in the value of the Aim index since April last year has been good news for investors in the junior market. Aim continues to magnify the highs and the lows of the main market, and the good times seem to be back. Growing...

Business Serve opens with a rally.
February 6, 2004... The latest technology-based company to spin on to Aim is Business Serve. And, having successfully raised GBP4.5m, the internet service provider (ISP) has had a good start - its share price rose 3 per cent on its first day of trading (3...

DFS profit warning highlights threadbare furniture market.
February 6, 2004... The profit warning from DFS this week has cast a shadow over the UK furniture market, leading many City analysts to question whether growth in one of the most popular retailing markets is coming to an end. DFS, long seen as one of the most...

iTrain on track for future expansion.
February 6, 2004... Training software minnow iTrain has raised GBP650,000 to help fund future expansion. The 6.5p-a-share placing should allow the Chichester-based firm to ramp-up its sales and marketing efforts. It has a strong client base of blue-chip names,...

BSkyB finance chief quits.
February 6, 2004... BSkyB finance director Martin Stewart resigned this week, realising the fears of many shareholders. When Rupert Murdoch's son James replaced Tony Ball at the helm of the satellite broadcaster late last year, one of shareholders' main concerns...

mmO2 receives data services boost.
February 6, 2004... mmO2 has once again staked its claim for leadership in the mobile data services market. The company said that, in the third quarter of its financial year, revenues from advanced data services such as photo-messaging and game downloads accounted...

Low cash holdings predict housing slowdown.
February 6, 2004... Expectations of a slowdown in the housing market have been reinforced by news that the ratio of households' money holdings to house prices has fallen to a 14-year low. Bank of England figures show that households' bank and building society...

Generation growth boosts Scottish Power.
February 6, 2004... Scottish Power issued sound third-quarter results earlier this week. The group, which owns electricity assets in the US and UK, said that underlying operating profits were up GBP24m, driven by an improved performance in its UK wires division...

BAA's Heathrow expansion is on track and on budget.
February 6, 2004... The project to build Heathrow's fifth terminal remains on budget and ahead of schedule. That was the most important news to come from airport operator BAA's third-quarter results this week. Some investors had panicked that BAA would let the...

Alpha loses Thomas Cook contract.
February 6, 2004... Alpha Airports, the airport retailing and in-flight catering group, revealed this week that it has lost a catering contract with package holiday specialist, Thomas Cook. The shares fell 4.5 per cent to 81p. The Thomas Cook contract was...

Be wary of hedge funds.
February 6, 2004... Having lived through a three-year bear market, it's no surprise that investors have turned to hedge funds and hedge fund strategies, but these are not without their risks. The Financial Services Authority has opened the way for onshore,...

Save on annual renewal commission.
February 6, 2004... UK investors pay independent financial advisers (IFAs) GBP1.5bn every year in annual renewal commission, but many receive little or no after-care service in return. The 0.5 per cent renewal commission payable on most open-ended funds can...

Options trading unravelled online.
February 6, 2004... A new website dedicated to unravelling the mysteries of options trading could open up a whole new world for UK investors. Aimed at both experienced and novice traders, www.optionswizard.com explains exactly what an option is and the part they...

Newcastle BS launch online share dealing.
February 6, 2004... Newcastle Building Society has launched NewcastleNet Shares, an online, execution-only sharedealing service. For an introductory period of four months, dealing will cost just GBP5 per trade, for up to 18 trades. After four months, the rate...

Safe as houses?
February 6, 2004... The average value of a UK rented house rose an astonishing 9.5 per cent in the three months to November last year, according to the Association of Residential Letting Agents (ARLA), while the average rental return rose from 5.3 to 5.4 per cent....

Sun, sand and saving.
February 6, 2004... Rumours of the saturation of the UK buy-to-let property sector have been greatly exaggerated. But while the buy-to-let market continues to grow, according to a UCB Home Loans report published in January, the overall rate of growth is slowing....

Rationalise your risk.
February 6, 2004... In investment, the only real certainty is uncertainty. Every move you make on the financial chessboard exposes you to one risk or another, so all you can do is be aware of the potential risks, and build a diversified portfolio designed to...

Base jumping.
February 6, 2004... The City seems unable to make up its mind whether another rise in interest rates will be the final straw for debt-ridden British consumers. Last week's news - that consumer credit growth was running at its slowest rate for seven years - split...

A sipp in the right direction.
February 6, 2004... The most exciting news on the Sipps front is nothing to do with the stock market. It's Gordon Brown's surprise decision to allow Sipps to invest in residential property from April 2005. This was the extraordinary goodie, dropped into his...

ICAP eyes futures.
February 6, 2004... Inter-dealer broker ICAP is expanding into the exchange-traded futures market. The broker already has a strong position in the over-the-counter (OTC) futures market, and hopes to leverage its expertise by promoting arbitrage between the OTC and...

Aberdeen Development.
February 6, 2004... Net asset value dipped 7.2 per cent during the period to 61p. Aberdeen continues to sell-down its listed portfolio. A number of investments in private companies have also been made.

Innobox.
February 6, 2004... The new Moss Cottage business is performing well, and Innobox has taken profits on its investment in packaging business, Aerobox. It is now looking for acquisitions in the licensed trade sector.

Leisure ventures.
February 6, 2004... Having sold its only trading division to Thomson Travel last year, Leisure Ventures is now a shell company seeking an acquisition.

Mediwatch.
February 6, 2004... Mediwatch was granted Federal Drug Administration approval for its Portascan product, and has distribution agreements in markets across the world.

Readybuy.
February 6, 2004... Losses were largely due to expenditure on product development, one-off costs and factory trials of new products, pending their planned launch in the second half of this financial year.

Osmetech.
February 6, 2004... Sales exceeded expectations, and costs were kept low. A GBP2m placing strengthened the balance sheet. New products will be launched over the next 12 months.

SiRViS IT.
February 6, 2004... Sales dipped, but costs were cut by 27 per cent. SirVis raised GBP2.9m to acquire Linetex Computers, which recorded sales of GBP4.68m and profits of GBP630,000 in the 10 months to August.

Southampton Leisure.
February 6, 2004... Broadcasting revenue was up slightly, and the club made GBP3.4m from player trading over the period - compared with a GBP2.4m loss last time. The club now needs to find a new manager.

Caledon Resources.
February 6, 2004... Following several rounds of fund-raising, Caledon now has a broad European and US shareholder base. The company plans to drill on four projects this year, and will look at other opportunities.

Chorion rejects Entertainment offer.
February 6, 2004... Chorion has rejected a proposed offer from fellow media minnow Entertainment Rights (ER), which has now withdrawn the bid. Chorion directors were always set against a deal, and had rejected previous offers, but ER had been barred from directly...

LPA.
February 6, 2004... A reduced cost base and more stable conditions in the rail market have helped LPA deliver an improved result. A profit of GBP200,000 is expected for the current year.

Bolton Group International.
February 6, 2004... The majority of the group's board resigned last month following the controversial sale of the company's major asset.

Game Group rallies.
February 6, 2004... Shares in Game Group jumped almost 7 per cent to 66p this week after the computer games retailer reached a deal with US group Electronics Boutique Inc (EBI) to end a services agreement between the two companies. Under the agreement, Game...

Manpower Software.
February 6, 2004... Manpower has recently secured a number of new contracts. New business is also being won in the NHS. Contracted sales for the current year are GBP3.1m.

XecutiveResearch.
February 6, 2004... Shares suspended. The trading subsidiary was placed into liquidation last year. Talks in connection with a potential reverse takeover are expected to be completed within two months.

SOUND ALERT.
February 6, 2004... Like many inventors, university spin-off Sound Alert has found that it takes longer than expected to turn technology into royalty revenues. But its (now one-third owned) associate, Sound Foresight, expects to launch a 'batcane' in August....

NEUTEC PHARMA (NTP).
February 6, 2004... Neutec is a model of financial virtue and success in biotech. It raised GBP7m as a private company in 1997 and GBP17m when it joined Aim in February 2002. It still has around GBP10m and, with a current team of just 15, has two products in phase...

AERO INVENTORY (AI.).
February 6, 2004... Aero Inventory issued a profit warning last October, but its shares hardly faltered. It has become focused on Asian markets (82 per cent of 2002-03 turnover), and was hard hit by the Sars epidemic. So although last year's profits rose...

JAMES R KNOWLES (JRK).
February 6, 2004... Knowles' 2002-03 profit jump looks impressive, but follows cost-cutting in the UK, and a number of overseas offices moving out of losses to break-even. A key to current prosperity is the Construction Act, which forces contractors to try to...

MANGANESE BRONZE (MNGS).
February 6, 2004... Manganese Bronze was transformed for the better last year by new chief executive, Ian Pickering. Out went the disparate loss-making components division for GBP8m cash, excluding two properties that might be sold later, and the taxi...

AIR PARTNER (AIP).
February 6, 2004... Air Partner's business divides into 60 per cent large aircraft charter, up to one-fifth executive jets, and the remainder freight delivery. The Iraq war and Sars epidemic reduced travel during 2002-03, but the main reason for last year's profit...

Albion.
February 6, 2004... The fall in turnover came after one of Albion's major customers went into administration. The knock-on effect on the volumes produced by its overseas associates is reflected in lower profits.

LATIN AMERICAN COPPER.
February 6, 2004... Latin American Copper (LAC) joined Ofex in August 2000 at 2p a share plus warrants. The GBP315,000 offer-for-subscription was substantially over-subscribed, and further tranches of shares have subsequently been issues at 2p since June 2003....

CLIPPER VENTURES (CLV).
February 6, 2004... Last year, Clipper sold its fleet of 10 38-foot corporate yachts. That business incurred a GBP370,000 loss, which prevented the company from reporting a maiden profit. It's now concentrating on its Clipper 2005 race, when 10 yachts will race...

NEWMARKET INVESTMENTS (NWN).
February 6, 2004... Sales of small parcels of shares seem responsible for the decline in Newmarket's share price since its peak of almost 125p in mid 2002. But it may soon be able to announce some good news to encourage investors. That's because its transformation...

INTERIOR SERVICES (ISG).
February 6, 2004... Interior's results should bounce back strongly this year, following 2002-03 exceptionals. There was an GBP8m write-down of acquisition goodwill, plus reorganisation costs of GBP1.62m. Remove them, and last year's profit was down only slightly...

PRESTON NORTH END (PNE).
February 6, 2004... The accounts of a number of football clubs outside the Premiership were improving until the collapse of ITV Digital. For Preston North End, that demise meant a GBP2.5m fall in 2002-03 turnover. So, once again, the main source of income is...

PROTEC (PRC).
February 6, 2004... The most impressive 2002-03 figure at Protec was the doubling of turnover. Unfortunately, profit recovery was not so spectacular. In the first six months, Protec failed to cope with orders totalling GBP28m. So, at the interim stage, the company...

WESTMOUNT ENERGY (WTE).
February 6, 2004... Westmount sold a 20 per cent stake in Fusion Oil & Gas to Sterling Energy, which enabled Sterling to acquire Fusion a few weeks ago. As a result, Westmount booked a GBP6.64m gain, which comes into this year's results. It now also owns a 9 per...

NBA QUANTUM (NAQ).
February 6, 2004... NBA Quantum has a new chairman, David Ridley (ex WS Atkins), and his brief must be to make the company bigger, with the help of new broker Brewin Dolphin. NBA's contract mediation business has had some big clients, including London Underground...

ACQUISITOR (ACQ) ACQUISITOR HOLDINGS (BERMUDA) (AOB).
February 6, 2004... In October 2002, Acquisitor transferred all its non-UK investments to a new company Acquisitor Holdings (Bermuda) (AOB), which is also listed on Aim. That move left Acquisitor with net cash of GBP1m and a brief to gee-up underperforming UK...

WADWORTH.
February 6, 2004... The 2003 Licensing Act is going to increase pub owners' costs. The responsibility for issuing pub licences will be transferred from magistrates to local authorities, who will demand a property report covering layout, health and safety and...

CELSTONE.
February 6, 2004... A combination of sharply higher sales and cost-cutting pushed Celstone into profit last year. Disguising mobile-phone masts is its core business and demand is recovering after a lean patch. That's partly due to demand for mast-disguises from...

INVOX (INX).
February 6, 2004... originally a scratch-card supplier, Invox has moved on to offering a range of premium-rate telephony competitions, with trials now taking take place on paid-for internet games, interactive TV-gaming and fixed-odds betting. Invox claims that 3m...

BALTIMORE TECH. (BLM).
February 6, 2004... Once, Baltimore Technologies sported a share price close to GBP14 and employed 1,200 people. Now it's a cash shell, after last summer's disposal of its SelectAccess R&D unit in Toronto for GBP8.3m and December's sale of internet security...

BAKERY SERVICES (BKE).
February 6, 2004... Bakery's shares have perked up on news that it is suing its former solicitor over the acquisition of certain assets relating to the purchase of Don Millers bakery and sandwich bars in March 2000. The claim - at more than GBP400,000 - is...

FRANCONIA MINERALS.
February 6, 2004... Franconia joined Ofex via an offer-for-subscription at 2.33p, plus warrants, in January 2002. It now controls some 21,000 acres of rolling hills in the Duluth Complex, Minnesota. There, South African platinum miner Impala is spending $800,000...

BOUSTEAD (BOU).
February 6, 2004... According to Boustead's chairman, Sir Thomas Macpherson, new chief executive Robert Lyons is a "pretty good number". Mr Lyons joined last July, but negotiations to acquire his Cayman Islands-based finance business (which mainly leases dredgers...

MINCO (MIO).
February 6, 2004... Minco's share price has risen sharply recently, following news of a change of direction. Until recently, Minco's main mining interest was five zinc exploration blocks covering 300 sq km in central Ireland. But low base metal prices have held...