Investors Chronicle articles from January 2003

Investors Chronicle archives from January 2003

MISPLACED LOYALTY.
January 2, 2003... I got a pleasant surprise the other day when I was filling my trolley with Christmas booze. The supermarket took GBP60 off my bill. Just like that. Its those hateful little loyalty cards that I have to thank. Apparently, I could cash in the...

astrazenecas lung cancer drug in trouble.
January 2, 2003... The prognosis for AstraZenecas lung cancer treatment, Iressa, is deteriorating rapidly. This week, health watchdogs in Japan - the only market where the drug is on sale - announced tighter prescribing rules after drug-related deaths reached...

Goldshield faces price-fixing allegations.
January 2, 2003... The Department of Health is suing Goldshield and two other generic drug manufacturers to the tune of GBP28.6m for alleged price-fixing. The claim concerns the sale of warfarin, a blood-thinning drug, to the NHS between 1996 and 2000, when the...

Whatmans chairman wields the axe.
January 2, 2003... Bob Thian has demonstrated no mercy in the two months since he was appointed chairman at Whatman, the struggling laboratory services group. The companys chief executive and two non-executive directors have already left and, in his latest move,...

Power sale lacks spark.
January 2, 2003... British Energy has agreed the sale of its stake in Bruce Power, its Canadian nuclear subsidiary, along with Huron Wind Partnership, to a consortium led by uranium miner Cameco. The sale price is a maximum of GBP306m at current exchange rates,...

Momentum investors prove to be on a roll.
January 2, 2003... Readers who followed our momentum portfolios over the past decade have done rather well (see Winning Strategies, 14 November 2002). By shorting the 10 worst-performing shares from the previous calendar quarter, and buying the 10...

Housing market set to head South in 2003.
January 2, 2003... The housing market may be booming in certain parts of the country but, as ever, only one thing counts: location. And for once, Londoners are living in the wrong place. At least, thats what spread betting punters in the City believe. IG...

Debt mountain forces sell-off at SMG.
January 2, 2003... Media group SMG will halve its debt mountain by selling off three Scottish newspapers and 11 magazines in a GBP216m deal with US group Gannett. The cash raised gives a timely boost to SMGs balance sheet ahead of a shake-up in media ownership...

Fitness First sweats over Cinven offer.
January 2, 2003... Fitness First looks set to become the latest health club operator to exit the stock market amid reports that the private equity house Cinven is planning to make a GBP370m offer for the company. The proposed deal would value Fitness Firsts...

HP BULMER (BULM).
January 2, 2003... Bulmers recent travails - which include failed overseas expansion, the pursuit of sales at the expense of margins, and a wave of profit warnings - are worthy of a business school study. The management team responsible for these disasters...

AIRBATH (ATU).
January 2, 2003... The nation has a serious shortage of plumbers - or so the contention goes at specialist bath manufacturer Airbath. It supplies a high-quality spa product that pumps warm air through the bath. But while customers have been willing to buy,...

WINTRUST (WTT).
January 2, 2003... Wintrusts shares are currently languishing at a five-year low, reflecting concerns about its exposure to property developers in the south-east and dire predictions of a housing market downturn. But Wintrust may be better-placed to weather a...

WARTHOG (WHOG).
January 2, 2003... Reporting a profit warning on the same day as two others in its sector was hardly going to enamour Warthog to the market. Early indications from Europes leading computer games retailer, Game, are that Christmas could prove sluggish, so...

PLANIT (PLN).
January 2, 2003... Planit continues to find trading"challenging", particularly in the US, where more than half its revenue is made. A weaker dollar - sterling appreciated by 8.5 per cent in the period - and a continued economic slowdown led US sales to slip by 2...

HBOS (HBOS).
January 2, 2003... HBOSs management has always been ambitious. Born from the September 2001 merger of Bank of Scotland and Halifax, the bank soon embarked upon a strategy of rapid expansion with demanding targets. These included (for 2002) taking a 20 per cent...

GALEN (GAL).
January 2, 2003... When it comes to product acquisitions, Galen has a reputation for taking its time over making the right choices. Last month, it paid $295m (GBP189m) for Eli Lillys Sarafem, a treatment for severe forms of pre-menstrual tension. The drug earned...

SPIRENT (SPT).
January 2, 2003... With the stock market in a bombed-out state after last years carnage, investors may be tempted to hit the January sales. There are certainly some bargains on offer, but you will need to tread carefully as some of these special offers are likely...

Logistical nightmare?
January 2, 2003... Think about it. Companies are outsourcing more and more of their operations to tackle costs. Theyre trying to finesse inventories to improve cashflow. And theyre buying parts from factories scattered across the globe. It stands to reason that...

A HUNCHBACK AMONG FORECASTERS.
January 2, 2003... The turn of the year always brings forth bravura performances in the area of forecasting. For many investors, they make compelling reading, and no editor can afford not to pander to such readers. Accordingly, every medium under the sun contains...

ALLIANCE & LEICESTER (AL.).
January 2, 2003... The UK banking sector is currently in the doldrums after downbeat trading updates from Lloyds TSB and Barclays, and further bad news from Abbey National. The sectors weighting is over 20 per cent of the entire FTSE 100, so its importance to the...

IMI (IMI).
January 2, 2003... IMIs update ahead of full-year results in March was comfortingly unspectacular. It said like-for-like sales volumes will be similar to the second-half last year, and that operating profit and margins will improve due to cost reductions achieved...

MERSEY DOCKS AND HARBOUR (MDK).
January 2, 2003... It was hardly all plain sailing for shareholders in Mersey Docks and Harbour after the ports operator issued a downbeat pre-Christmas trading update. Although results for 2002 should be in line with analysts expectations, the company is...

SECURE TRUST BANKING (SCU).
January 2, 2003... Secure Trusts acquisition of stockbroker Old Mutual Securities (OMS) caught the market by surprise. Though the mini financial conglomerate already owns small merchant bank Arbuthnot Latham, the deal means a significant expansion of its...

AIM (AIM).
January 2, 2003... Aim makes aircraft interiors including luggage bins and galley kitchens, but excluding seats. Last year, orders dried up after 11 September, but Aim has found a new market: bullet-proof cockpit doors. It has already secured orders for 500-plus...

GALLEON (GON).
January 2, 2003... Galleon was an unsuccessful mining shell called Andaman until it acquired new businesses a year ago. Then, a key component was a half-share in 3D animation Astro Knights, a cartoon based around a lunar academy for astronauts. It still is, but...

BAKERY SERVICES (BKE).
January 2, 2003... Bakery Services spun off its Coffeeheaven business (see this page) just over a year ago. Now its left with 30 in-store bakeries (mainly in Co-op stores) and 12 franchised Don Millers bakery/cafes. Inbake sales are declining, so Don Millers is...

VIROTEC INTL. (VTI).
January 2, 2003... Virotec joined Aim via a placing at 14p in July 2001 and says its technology is one of the worlds"great environmental breakthroughs". During 2001-02 the company developed two new reagents to remove chromium from tannery wastewater and heavy...

HARROGATE (HGP).
January 2, 2003... Harrogate was set up as an Aim shell to purchase Axiom Internet and its personality behavioural testing software in September 2000. It cost GBP6.9m in shares - almost all of which was written off as a goodwill impairment last year. Much of the...

COFFEEHEAVEN INTERNATIONAL (COH).
January 2, 2003... Coffeeheaven plans to open 50 coffee shops in Poland by end-2006 and, after opening just nine, is already operating close to break-even. It seems to have chosen its market well - Poland has a population of 39m and drinks the same amount of...

WORLD TRADE SYSTEMS (WTS).
January 2, 2003... World Trade Systems is a shell that survived the demise of nursing home operator Tamaris. It was requoted in October 2000 and set up a subsidiary in Hong Kong to sell branded luxury goods, china and porcelain in the Far East. But none of its...

COUNTY CONTACT CENTRES (CUY).
January 2, 2003... when County Contact wanted to go public, brokers were chocablock with new issues. So it had to raise finance directly from investors (over GBP5m) and move to Aim without raising further money in September 2000. Back then, almost all its...

ASTON VILLA (ASV).
January 2, 2003... Back in July, Aston Villas finance director Mark Ansell said"it would be incorrect to assume that amortisation is an accounting entry and not a real cost". For many companies, its an annoying debit on the profit-and-loss account that analysts...

PROFILE THERAPEUTICS (PTP).
January 2, 2003... Profile Develops drugs and drug delivery systems. Its Promixin drug is an antibiotic for controlling infection in the lungs of cystic fibrosis patients and will be taken using a second-generation"intelligent inhaler", to ensure a prescribed...

CONTEMPORARY ENTERPRISES (CPY).
January 2, 2003... Contemporary Enterprises was one of a number of cash shells launched on Aim in 2001 looking for a business. It gave itself two years to make an acquisition or return funds and has recently announced the takeover of AuSPeD, which produces...

SWALLOWFIELD (SWL).
January 2, 2003... Swallowfield had been reporting a high order intake for some time but, in November, it issued a profit warning. It was facing"severe pressure" on margins and had been unable to ramp up production because of a lack of labour. The problem centred...

BITS CORPORATION (BIT).
January 2, 2003... Bits suffered two setbacks last year. One was every game developers nightmare: falling out with your publisher. Bits was developing a game when a change of personnel at the publishers company led to a dramatic slowdown in communications....

FAIRPLACE CONSULTING (FCO).
January 2, 2003... Fairplace loves recessions. Last year, it reported strong demand from financial services clients and revenues from its City business jumped from GBP2.46m to GBP3.41m in 2001-02. Demand seems certain to increase in 2003. Its re-employment...

SRS TECHNOLOGY (SGY).
January 2, 2003... SRS Technology floated on Aim in August 2001 via a placing at 125p. And it has already started to benefit from contracts with the NHS in all English regions and NHS buying centres in Scotland. Its core product is SRS 100, which uses radio waves...

HAYNES PUBLiSHING (HYNS).
January 2, 2003... Haynes success story of 2002 is not a car manual but a human manual. Such is demand for Man 120,000 BC to Present Day that it has been reprinted twice in two weeks. Last years profit bounce-back was due to increased US sales following the...

PO NA NA (POA).
January 2, 2003... shares IN Po Na Na have suffered ever since the company joined Aim in August 2000. Much of last years loss is blamed on outlets that should have been disposed of long ago. At end-2001, Po Na Na owned 58 short-leasehold outlets mainly in...

ARMITAGE BROTHERS (ATG).
January 2, 2003... This time last year, brokers were forecasting that Armitage would turn in profits of GBP1m in 2001-02. Thats their target for this year, too. In May, the company warned that profits would be lower although, if one-off items are ignored, last...

HYDES BREWERY.
January 2, 2003... Some brewers want to go all-tenanted and others all-managed. Hyde prospers by developing both types of pub, plus the free trade and distinctive beers such as this years heavy dark bitter, Winter Warmer. Last years profits benefited from...

MINCO (MIO).
January 2, 2003... Minco may be sitting on rich zinc prospects north of Limerick City. The property comprises 13 contiguous licences covering 375 sq km. Noranda has spent around E1.28m over three years to earn a 75 per cent interest, which it keeps. But 2002 and...

ASSOCIATED BRITISH ENGINEERING (ASBE).
January 2, 2003... ABE is about to become a cash shell. It has closed part of its remaining subsidiary, diesel engine refurbisher British Polar Engines, and management, in association with former chairman Rupert Pearce Gould, has bid for the rest. But as Mr...

POCHINS (PCH).
January 2, 2003... Last year, Pochins could not under- stand why it was not winning more contracting work and, as a result, that business reported a loss. So it asked potential customers. They thought the firm was only interested in working on joint-ventures. Its...

WEST BROMWICH ALBION (WBA).
January 2, 2003... Theres a touch of the blarney in the Baggies latest report from chief executive and ex-Misys director Mike OLeary. He talks about last years profits being flattered by a number of unspecified non-recurring items, but its difficult to see what...

COMLAND COMMERCIAL (COM).
January 2, 2003... Comlands dramatic return to profit last year was based on the sale of a small office block (Hampden House) in High Wycombe for GBP940,000 (last years turnover), and a subsidiary which owned Verwood Industrial estate in Dorset. That deal...

PRIMARY HEALTH PROPERTIES (PHP).
January 2, 2003... There cant be a much safer and higher- yielding property group than Primary Health, which finances new doctors surgeries and associated services such as pharmacies. During 2001-02, the annualised rent roll grew from GBP5m to GBP6.2m - yielding...

MILLWALL (MWH).
January 2, 2003... None of Millwalls five directors are paid anything. With no more ITV Digital money, the club has to run a tight ship and half of its professional squad are graduates of its youth scheme. Nor has it given up future revenue streams for immediate...

NORTHAMPTON SAINTS.
January 2, 2003... Unlike football, top rugby union teams have their wages bill under control. Premiership clubs like Northampton Saints have an annual wages cap of GBP1.08m and that has not changed for five years. On the field, Northamptons fortunes have...

AIRBATH (ATU).
January 2, 2003... At the end of October, the British Coal and Mineworkers pension schemes sold their combined GBP1.53m (6 per cent) shareholding in Airbath. But they dont seem to have sold it very well - they only received 3p a share. Airbath demerged from...

AVANTI CAPITAL (AVA).
January 2, 2003... Avanti Capital is the new name for e-capital following the acquisition a year ago of Corporate Finance Investors and Aim-listed Avanti. A third Aim company - Sigma Technology - has been brought in to realise e-capitals technology portfolio, and...

FUSION OIL & GAS (FOG).
January 2, 2003... fusion hopes there will soon be news of how many wells will be drilled in 2003 on the highly productive acreage off Mauritania. The decision was taken in Perth, Western Australia in December 2002 and it could be as many as seven wells. Fusion...

AQUARIUS GROUP (AQG).
January 2, 2003... Aquarius demerged upholstery furniture maker Collins and Hayes in July 2001 and Airbath (see left) the following month. Now it could disappear as one or both of its businesses may be sold on. They are Welwyn Lighting Designs and Turner Brothers...

Misery ends for Monotub shareholders.
January 2, 2003... A year of woe is finally over for investors in Monotub. Having left shareholders in a spin when it suspended production in February, the washing machine manufacturer has finally announced plans to sell its intellectual property, tooling and...

Bikenet buys up car clinics.
January 2, 2003... Aim-listed cash shell BikeNet is to buy damaged vehicle repair firm Car Clinics from Dixon Motors for GBP3.05m cash, and an additional GBP2m cash consideration payable over the next two years. Barry Whittles, managing director of Car Clinics,...

EQ EYES QUAESTOR ACQUISITION IN GBP2M DEAL.
January 2, 2003... Acquisition-hungry EQ has unveiled plans to buy Leeds-based research agency Quaestor for up to GBP2m. This is the fourth deal by EQ, and brings a useful opportunity to cross-sell its services, particularly to market research arm Buckingham. ...

INVERESK PLANS GBP4.5M FUND-RAISING.
January 2, 2003... Question marks continue to hang over the future of Inveresk. The beleaguered group is planning to raise up to GBP4.5m in a bid to stave off administration. The debt-ridden paper group, which ended talks over a possible sale in November,...

PURA (PUA).
January 2, 2003... Edible oils manufacturer Pura is nothing if not candid in its interim statement. This time round, after delivering several positive items of information, the chairman pulled no punches when he stated that the outlook is"unrelentingly tough and...

CARDPOINT (CASH).
January 2, 2003... On the basis that hard cash still talks in todays society, there is plenty of growth opportunity for cash machine operator Cardpoint. The group, which raised GBP2.5m and floated on Aim last June, has significantly grown its estate of machines...

TRIO (TRN).
January 2, 2003... London-based money broker Trio recently reported a sterling set of results - the best since it came to public life in 1993. Trio thrives on volatility, has an active private investor following and, with good profits and plenty of cash, is...

Large Company Tips Update.
January 2, 2003... LONDON BRIDGE SOFTWARE (LNB) FAIRLY PRICED So much for the theory that London Bridge, which makes debt collection software, would prosper in a downturn. The company recently warned that full-year profits would miss forecasts, and...

Smaller Company Tips Update.
January 2, 2003... HALLADALE (HDG) aim: property HOLD Halladale, the property group with a speciality in provincial retail units, has had an active past few months. In October, it sold properties in Southampton, Paisley, Fleet and Daventry. Then, in...

WAIT AND SEE.
January 2, 2003... My primary tool for timing the entry of positions in individual equities is my chart of the FTSE 100 index. As Ive mentioned before, only about 20 per cent of a stocks movement is stock-specific. Eighty per cent of it is sector or...

Building blocks.
January 9, 2003... The trouble with the first column of any new year is the implicit obligation to say something profound; to take a longer view; to write a column that will have resonance for the coming 12 months. And we all know that profundities flow from...

Goodwill to corporate UK.
January 9, 2003... To start the New Year on a cheery note, I would like to extend my post-festive greetings to all finance directors and chief executives in the UK. This act of goodwill comes at a cost, however, because in return I would like the leaders of UK...

Stick(ing) up.
January 9, 2003... Its time for more awkward home truths. We need to stand up for City analysts. Thats not going to please those of you who bought tech shares on the back of some scribblers recommendation, and then saw your money vanish in a puff of smoke. We...

INVESCO JAPAN DISCOVERY.
January 9, 2003... In a deflationary environment, share selection is critically important for net asset value success. So, last year, Invesco Japan Discovery started by concentrating investment on companies able to generate sustainable increases in earnings....

PACIFIC HORIZON.
January 9, 2003... Back in April, Pacific Horizons manager, Gerard Smith, bet a colleague that in 2002 the depressed Hong Kong market would outperform South Koreas. He looked a loser for most of the year, but won (HK down 18 per cent, Korea 13 per cent lower)...

INTL.BIOTECHNOLOGY.
January 9, 2003... Not every tech or bio trust (see Thompson Clive, next page) should switch to a limited partnership - or at least not yet. Consider the case of International Biotechnology Trust (IBT) standing on a 30 per cent discount to NAV. In December, its...

JPMF MID CAP.
January 9, 2003... James Inglis Jones became leading manager on Fleming Mid Cap last July. Before then, he had been reducing overexposure to growth shares - and particularly technology, media and telecoms - in the first six months to end-December 2001. Out went...

THOMPSON CLIVE.
January 9, 2003... Thompson Clive switched from being a limited company to an investment trust 14 years ago. That way, it avoided a double capital gains tax charge on both the investment vehicle and its investors. But the trust route looks increasingly dated for...

BRITISH EMPIRE SECS.
January 9, 2003... Veteran fund manager John Walton has handed over management of British Empire to John Pennick, and this general fund continues to shine. That is thanks to a combination of value investing (so low-technology) and a speciality in investing in...

Peacock enjoys solid Christmas.
January 9, 2003... Among this weeks post-Christmas trading statements, discount clothing retailer Peacock reported a 3 per cent rise in like-for-like sales for the five weeks to 4 January. This reflected a 1 per cent improvement at Peacock, and a 7 per cent...

Rexam expands in Germany.
January 9, 2003... Having built up a powerful position in the drinks can- making industry, Rexam has made no secret of its ambition to get bigger in glass packaging, too. Its a logical progression as the sector needs consolidation in Europe and Rexam has a good...

Travis Perkins enjoys strong 2002.
January 9, 2003... Builders merchant Travis Perkins released a bullish trading update this week, confirming that it had a good year in 2002. The company said that market conditions had been generally favourable and that it would meet analysts forecasts. Teather &...

Inland revenue relaxes ISA rules.
January 9, 2003... The Inland Revenue has relaxed its rules on individual savings accounts (Isas) so that mistakes by investors will no longer result in the complete invalidation of their annual Isa allowances. If you take out two Isas in the same year, the...

Elan appoints banker as new boss.
January 9, 2003... Troubled drugs group Elan has appointed Kelly Martin, a former senior banker at Merrill Lynch, as chief executive. The company has a long tradition of filling its top positions with people whose backgrounds lie in finance, not pharmaceuticals -...

Gilbertson quits BHP Billiton.
January 9, 2003... Brian Gilbertson has unexpectedly quit as chief executive of BHP Billiton, citing irreconcilable differences with other board members. Many observers reckon that the South African wanted to pursue an acquisition-led growth strategy, and...

Next to beat targets despite tough Christmas.
January 9, 2003... Clothing retailer Next saw its shares rally 3 per cent to 766p this week after the company said that full-year profit forecasts were likely to exceed market expectations. Thats despite subdued like-for-like store sales growth of only 1.7 per...

WHO MADE THE MOST OF CHRISTMAS?
January 9, 2003... If you believe the latest survey from the Confederation of British Industry (CBI), the UKs retailers may have had their last hoorah. The CBIs retailing survey, released last week, said that pre-Christmas sales were static for the first time in...

Amey and Jarvis seal tube contract.
January 9, 2003... After two years of delays, the first public-private partnership to run part of London Undergrounds infrastructure was finally closed last week. The Tube Lines consortium, comprising support services groups Jarvis and Amey and US construction...

Britannic hit by equity markets.
January 9, 2003... There doesnt appear to be much for life assurer Britannic to look forward to in 2003. This week, the company issued a trading update, warning policyholders that the annual bonus payment for 2002 would be deferred. Management blames the"worst...

SkyePharma partners lead products.
January 9, 2003... SkyePharma kept its promise of partnering its two lead products by the year-end. But whether it has met its pledge of reaching profitability in 2002 still hangs in the balance. The drug delivery specialist sold the North American rights to...