Investors Chronicle articles from February 2006

Investors Chronicle archives from February 2006

A lot to prove.
February 3, 2006... Anyone dating back to the 1980s might want to skip this week's piece - you might find it a bit too painful. Here's a name: Nimslo. This Atlanta, Georgia-based company was founded by one Dr Jerry Nims to develop and commercialise a 3D camera for...

What bubble?
February 3, 2006... The stock market seems to think there's a bubble in gilts (see 'De-coupled' opposite). I don't. Certainly, there's some madness in the market. Some pension funds have bought long-dated gilts only because their yields have fallen. This is...

New year's irresolution.
February 3, 2006... It was February that made Don McLean shiver in his legendary song American Pie. But January would have done exactly the same to any investors who followed the 'New Year Dogs' strategy I wrote about recently ('Bank a Bonus in January', 16...

Deals on wheels.
February 3, 2006... Call it black humour, but it Is deliciously appropriate that the chief executive of Pendragon, the UK's biggest motor dealer, should be called Trevor Finn. Trevor would be up there with Vince and Arthur as the name of choice for any second-hand...

Change of heart.
February 3, 2006... I have a confession to make regarding Kathy Sykes, the telegenic professor of physics and - according to my colleagues who are expert in such matters - the thinking man's Carol Vorderman. While watching Prof Sykes' BBC2 programme on alternative...

De-coupled.
February 3, 2006... The equity market thinks there's a bubble in the gilt market. The chart, below, illustrates this. It shows that, between 1997 and 2004, there was a close correlation between annual changes in longer-dated index-linked gilt yields (linkers)...

Correlations and puzzles.
February 3, 2006... What moves the gold price? There are lots of theories. The table, below, shows some facts. It shows that a handful of macroeconomic numbers have had significant correlations with the gold price over the past 20 years. Better still, the...

Technical edge.
February 3, 2006... In the UK, our humour and even sense of nationality frequently hinges on self-deprecation. It follows that, compared with our US counterparts, we sometimes see ourselves as less entrepreneurial. And this leads to the perception that the US has...

Winter trends fail.
February 3, 2006... The traditional winter rally in value stocks hasn't materialised. In the past two months, the 20 per cent of FTSE 350 stocks with the highest dividend yields on 30 November have underperformed the 20 per cent with the lowest yields by 9.6...

Chasing returns.
February 3, 2006... Asset managers had a ball in 2005. As major holders of shares, these companies tend to rise when the wider stock market rises - and usually by a greater amount. The Datastream Index of UK Asset Managers soared by 23.8 per cent - beating the...

Expomedia falls after polish disaster.
February 3, 2006... Expomedia shares fell after 66 people were killed in the collapse of one of its exhibition centres in the Polish city of Katowice. The building is 51 per cent owned by Expomedia in a joint venture with the City of Katowice and The Polish State...

Provalis in fire sale.
February 3, 2006... Provalis has sold its pharmaceutical business to Kogen Limited for GBP10.5m. The struggling diagnostics company says the sale to Kogen, part of privately-owned Galen, is dependent on approval by shareholders at the forthcoming...

Go-ahead for Goosander.
February 3, 2006... The government has approved development of the Goosander oilfield by Dana Petroleum and Venture Production on a 50:50 basis. Venture's tried-and-tested marginal field strategy focuses completely on the North Sea, with potential upside in a...

DPW trumps PSA offer.
February 3, 2006... Just a day after PSA came up with its 470p offer for P&O, DP World (DPW) trounced it with a new 520p bid. P&O's board has recommended DPW's offer, and has agreed not to delay the bid process unless a rival bid in excess of 546p emerges. DP...

Rio's Norilsk venture.
February 3, 2006... Base metals giant Rio Tinto has agreed to establish an exploration and development company in Russia in a joint venture with Norilsk Nickel, the largest Russian miner. With Rio set to hold 49 per cent initially, the planned structure will allow...

Partygaming parties on.
February 3, 2006... The world's leading internet poker firm remains on a winning streak. PartyGaming signed up almost 230,000 new members during the last three months of 2005, although it is making less money from each player per day. Customers are also flocking...

Regal's Ukrainian woes.
February 3, 2006... Shares in Regal Petroleum fell 69 per cent to 34.5p after a Ukrainian legal ruling reiterated that its production licences were invalid. Regal intends to appeal the ruling, which awards title to the Ministry of Environmental Protection, the...

Qinetiq share opportunity for private investors.
February 3, 2006... The backlash against the lock-out of retail investors from Qinetiq's float has borne fruit, with a number of brokers now offering shares to individuals. The shares, which begin trading on 15 February, are only available to institutions. But...

Alea faces reserve hike.
February 3, 2006... Troubled Lloyd's underwriter Alea, which is running down its book after ratings agency downgrades hit its ability to write new business, has hiked reserves by $69m (GBP39m). That comes on top of $34.7m of reserve rises already flagged - Alea...

Score with SG Warrant.
February 3, 2006... With the football World Cup kicking off in five months, Societe Generale has a novel way of buying into firms likely to benefit from German domestic consumption, sportswear sales, sponsorship and advertising based around the event. Its SG...

Oakdene issues profit warning.
February 3, 2006... Shares in housebuilder Oakdene Homes slipped 10 per cent this week as the company warned that pre-tax profits for 2005 will come in at GBP5m, rather than the forecast GBP7.9m. The reason for the shortfall is a delay in the sale, from 2005 until...

Jubilee raises funds.
February 3, 2006... Jubilee Platinum has raised GBP1.5m through an unsecured loan note from City Natural Resources, convertible at 70p. Jubilee's shares rose 8.25p to 63p on the news. Jubilee's chief executive, Colin Bird, said that, on current operations, the...

Cambrian finance director Malins quits.
February 3, 2006... Cambrian Mining has parted company with Jo Malins, its finance director, after Mr Malins was found guilty of insider dealing by the Financial Services Authority (FSA) at the end of last year. Mr Malins gave up his directorship of Cambrian...

Peter Hambro details production targets.
February 3, 2006... Peter Hambro Mining (PHM) has outlined in detail plans to produce 1m ounces of gold by 2009. Some analysts have been sceptical that this target is achievable and, coming on the same day as a joint venture with Rio Tinto was terminated, there...

Cable & Wireless chief quits.
February 3, 2006... Just five months ago, Cable & Wireless's (C&W) chief executive, Francesco Caio, was waxing lyrical about the benefits of the company's acquisition of rival Energis. But, this week, Mr Caio has been restructured out of a job as the telecoms...

Fountains set for loss.
February 3, 2006... Shares in environmental services business Fountains fell 20 per cent after it said first-half results are likely to show a loss of GBP1m. Unexpectedly high costs on two contracts are to blame, but management, which was reorganised in October,...

Northgate seals deal.
February 3, 2006... Van-hire company Northgate is buying Arriva's commercial vehicle business, AVR, for GBP129m. Northgate will fund the deal through a GBP64m share placing. AVR adds 11,000 vehicles to Northgate's fleet, and is expected to be earnings-enhancing in...

Threat to commodities.
February 3, 2006... This week's rise in the Fed funds rate - which takes the real rate to a five-year high - could reduce commodity prices, say economists. Harvard University's Jeffrey Frankel points out that there has been a negative correlation between real...

OPT coasts to US contract win.
February 3, 2006... The US's desire to protect its coastline has led to a contract for wave-power generator Ocean Power Technologies (OPT). The Department of Homeland Security wants OPT's powerbuoys to power a network of acoustic sensors and communications...

Invesco City extends life.
February 3, 2006... Fund of investment trusts to change name and switch to boutique manager Shareholders in Invesco City & Commercial have voted to extend the trust's life under a new name and new management. The trust, which invests in other investment...

Sales boost hides margin slide.
February 3, 2006... Business is buzzing for UK life assurers. This week, Legal & General boasted a 32 per cent rise in UK new business and a 29 per cent rise overseas. Friends Provident pushed total life and new business ahead by 70 per cent in 2005, and new...

Week Ahead...
February 3, 2006... News TUESDAY 7 FEBRUARY Forget the Euro lottery millions, the oil majors deal in billions these days and BP - which reports final results on Tuesday - is no exception. The City is looking for record pre-tax profits of GBP19bn, up from...

NHS suppliers set to catch a cold.
February 3, 2006... A nasty bug is infecting NHS private sector suppliers. The symptoms include profit warnings and trauma for investors expecting what appeared to be a near-limitless flow of cash into the private sector. The cause is an NHS funding crisis. The...

Aim to tighten resource rules.
February 3, 2006... New guidelines for Aim's burgeoning resources sector are due out from the London Stock Exchange in the next few weeks. The guidelines are a response to worries expressed by a number of mining and oil and gas professionals over the past couple...

Brit to beat profit expectations.
February 3, 2006... Driven by a good performance in its non-catastrophe book and its investment portfolio, Lloyd's insurer Brit expects that its pre-tax profit for 2005 will be in the region of GBP60m - well ahead of market consensus expectations. That's despite a...

Sanctuary seeks comfort in equity issue.
February 3, 2006... Media company Sanctuary has announced a GBP110m equity issue, led by broker Evolution Securities, in a bid to restructure its finances. The board has also struck a deal with lenders for the cancellation of GBP35m of debt if the fund-raising is...

A charge too far.
February 3, 2006... Management fees for open-ended funds are rising, as management houses increase their charges to bring them in line with each other, according to a report from Lipper Fitzrovia. The average management fee for actively-managed open-ended...

A taxing burden.
February 3, 2006... No matter how many times you may have filled in your tax returns over the years, the arrival of your self-assessment form each April is a depressing moment. However, it is one that is shared by a lot of people - more than 9m UK taxpayers...

When off-plan can be a turn-off.
February 3, 2006... Buying property off-plan - before it is actually built - can sound attractive. Your friendly developer will entice you with a 'discount' and point out that your new investment will increase in value between now and completion, during which time...

Foreign policies.
February 3, 2006... A n increasing number of fund managers are looking outside the UK to make money, hoping to take advantage of the better growth prospects and comparable dividend yields offered by overseas markets. Philip Gibbs, the highly respected manager...

RENISHAW (RSW).
February 3, 2006... Renishaw's main business is focused on metal-cutting products. Within the next 10 to 15 years, however, the company wants to earn more from other areas. One such area is dental products but during the first half, its dental unit lagged behind...

ARM (ARM).
February 3, 2006... ARM is benefiting from the explosion of digital devices, such as MP3 music players. The company designs semiconductor chip parts, or microprocessor cores, which are licensed to partners with royalties earned when they are used in products, such...

SURFCONTROL (SRF).
February 3, 2006... Internet security company Surfcontrol continues its restructuring. That cost $6.9m in the first half - $2m more than expected and with greater redundancies - and hit earnings. Surfcontrol has closed four sales offices and 108 employees have...

COZART (CZT).
February 3, 2006... Cozart may have slipped into the red, due to increased investment in the business, and unpredictable revenues from the Home Office's Drug Intervention programme, but fortune is smiling on the drug-testing company once again. So much so, that...

MEDIA SQUARE (MSQ).
February 3, 2006... Former editor of The Sun newspaper, Kelvin MacKenzie, has found a new job as chairman of marketing services company Media Square, just months after quitting struggling magazine company Highbury House. He joins Media Square as the company...

STANLEY LEISURE (SLY).
February 3, 2006... The public has responded warmly to their new greater freedom to gamble. Not only can they now join casinos without a 24-hour wait but, once inside, they're faced with more slot machines. Attendances at Stanley's casinos are up 15.7 per cent...

NORTHERN ROCK (NRK).
February 3, 2006... It looks like Northern Rock's bean-counters have been struggling to implement IFRS accounting standards in a way that delivers a decent set of comparative figures and it's this, rather than any operational issues, that explains the apparent...

Mittal bid highlights steel value.
February 3, 2006... The bid by steel magnate Lakshmi Mittal for the Luxembourg-based Arcelor steel company, which also has operations in France and Spain, has highlighted the possibilities of consolidation in this fragmented sector. The price offered in the...

A-Day to remember.
February 3, 2006... The new pension regime will increase flexibility, but some investors must act now to protect their pots. Eight existing pension regimes will be merged into one new rule book from 6 April (known as A-Day), presenting opportunities for many...

Rentokil to SCRAP linen and workwear.
February 3, 2006... Rentokil is closing its underperforming linen and workwear business, with the loss of up to 1,700 jobs, after failing to find a buyer. The support services group announced plans to exit the business in November 2004. Rentokil will take a charge...

CREST NICHOLSON (CRST).
February 3, 2006... Shares in housebuilder Crest Nicholson have defied their critics by rising almost 25 per cent in the past 12 months. Admittedly, some of this may reflect bid speculation but, even so, it is clear that the company has weathered a housing market...

JELF (JLF).
February 3, 2006... A combination of organic growth and selective acquisitions helped Jelf deliver a strong performance. Indeed, acquisitions accounted for GBP970,000 of the group's GBP3.04m turnover increase during the year as Jelf picked off four smaller...

FILTRONIC (FTC).
February 3, 2006... Shares in wireless equipment manufacturer Filtronic plunged over 30 per cent as the group announced that chief executive Professor John Roulston had resigned. Mr Roulston joined as chief executive in September 2004, overseeing tricky debt...

HOMESTYLE (HME).
February 3, 2006... Homestyle was given a fresh start last July when international furniture group Steinhoff bailed it out of financial difficulties. Steinhoff underwrote a refinancing that raised GBP100m and settled Homestyle's bank debt. In return, Steinhoff has...

AMINO TECHNOLOGY (AMO).
February 3, 2006... Amino saw shipments of its internet TV set-top boxes jump from 174,000 last year to 314,000, the bulk of which came through in the second half. With increasing sales came a decent level of profitability and the first-half's loss of GBP0.88m was...

KENSINGTON (KGN).
February 3, 2006... Sub-prime mortgage lender Kensington continues to buck the trend, with new business up 53 per cent against a 4 per cent decline in the UK mortgage market. Underlying pre-tax profits rose by 8 per cent to GBP56.1m, despite the company incurring...

ANGLE (AGL).
February 3, 2006... The sharp reduction in first-half losses largely reflects the flotation of Provexis, one of the companies Angle established in order to commercialise scientific inventions. Provexis floated last April, and Angle's original GBP461,000 investment...

SYSTEM C HEALTHCARE (SYS).
February 3, 2006... System C Healthcare has hit a snag. The company, which develops and implements IT solutions for hospitals, is involved in the NHS' National Programme for IT - a GBP6bn government programme designed to computerise the health service and improve...

ISLAND OIL & GAS (IOG).
February 3, 2006... It might have been better if these results had gone out in November, according to Island's finance director Jack McKinney, as then the figures would at least have had some similarity to the firm's position at the time. But operational matters,...

Mediwatch.
February 3, 2006... Aim. Mediwatch is making good progress on product development and distribution, but sales growth is still in single figures and the company has had to raise new funds.

ITM POWER (ITM).
February 3, 2006... Fuel-cell developer ITM Power believes it is on course to make a significant breakthrough in the quest to replace fossil fuels with sustainable fuels. The firm has developed a membrane and a method of production for its fuel cells that makes...

Southampton.
February 3, 2006... Aim. Southampton has always been one of the more stable football clubs financially. That might change, though, if the club can't stop its dramatic descent down the league tables.

Swan (John) & Sons.
February 3, 2006... Aim. Market conditions are difficult and the board is still thinking about what to do with the company's GBP2.1m of excess cash.

First Artist Corporation.
February 3, 2006... Aim. Acquisitions completed during the past year should expand operations from football and celebrity representation into financial services, corporate events and conference management.

GOLD OIL (GOO).
February 3, 2006... Gold Oil's shareholders are a voluble lot - and excitable, too - judging from the significant share-price volatility over the past 18 months. The company itself hasn't exactly been pushing the story though, and directors weren't immediately...

MISYS (MSY).
February 3, 2006... Misys is to merge its retail and wholesale banking operations into a new unit called 'Core Banking' during the second half. The software company says that customers are centralising their back-office functions and that clients in developing...

IDN Telecom.
February 3, 2006... Aim. IDN is shifting its focus from fixed-line call traffic to line rental and mobile telecoms. So far, the move has been successful and the company has declared a maiden dividend.

Tadpole Technology.
February 3, 2006... Aim. Like-for-like sales growth was 60 per cent, although an acquisition boosted overall sales and operating profit margins. But a GBP6.7m goodwill impairment charge increased losses.

Ocean Power Technologies.
February 3, 2006... Aim. Despite increased losses, OPT still has plenty of cash in the bank, while projects for the US Navy in Hawaii and with European utilities bode well for the future.

Bolton International.
February 3, 2006... Main market. Property investment

Dragonfly Investments.
February 3, 2006... Aim. Investment company

Healthcare Communication.
February 3, 2006... Aim. Media communication

Catalyst Media.
February 3, 2006... Aim. Management expects the acquisition of a 17.6 per cent stake in Satellite Information Services, which provides sports content to UK bookmakers, to transform Catalyst's fortunes.

HHK.
February 3, 2006... Aim. Shell company

CRADLEY (CDLY).
February 3, 2006... Last year was "very testing" for Cradley. The company began implementing "employee flexibility" after agreeing manning levels with unions. As a result, manning levels fell from 104 to 67 in the 18 months to end-December 2005. Cost-cutting is...

Honeycombe Leisure.
February 3, 2006... Aim. Management of licenced premises

KeyWorld Investments.
February 3, 2006... Aim. Marketing of KeyWorld bond

BWA Group.
February 3, 2006... Aim. Shell company

Nadlan.
February 3, 2006... Aim. Property development

Newmark Security.
February 3, 2006... Aim. Security products

Henderson Morley.
February 3, 2006... Aim. Pharmaceuticals

NMI Security.
February 3, 2006... Aim. Security services

Isis Medical Technology.
February 3, 2006... Aim. Investment in healthcare industry

Titan Move.
February 3, 2006... Aim. Holding company