Investors Chronicle articles from January 2005

Investors Chronicle archives from January 2005

Christmas story.
January 7, 2005... It's the Same old story. When it comes to the corporate crunch, shareholders pick up the bill. Over the Christmas break, shareholders in the holiday company MyTravel agreed a financial shake-up that wiped them out. The banks cancelled GBP800m...

Where did your pension go?
January 7, 2005... Four years ago, most members of corporate pension schemes felt pretty smug. Although emerging companies were not setting up new defined-benefit (DB) schemes, only a handful of leading companies had closed such schemes to new employees....

Bull markets... take three.
January 7, 2005... Contemplating my investment strategy for 2005, I was drawn to the thoughts of American novelist Willa Carther, who once said: "There are only two or three human stories, and they go on repeating themselves as fiercely as if they had never...

A human tragedy.
January 7, 2005... Watching the stock market screens flicker between Christmas and New Year was a surreal experience, when juxtaposed against the enormity of human suffering in southern Asia. Global stock markets barely budged. In India, they actually rose. It...

Bricks and rubble.
January 7, 2005... With the house-price boom now over, the question is: how far can prices fall? The answer is: a long way. On reasonable assumptions about economic growth and interest rates, a simple econometric model points to prices dropping around 7 per cent...

A new price-earnings ratio.
January 7, 2005... We all hear a lot about price-earnings (PE) ratios. But here's one important PE ratio you don't hear so much about. It's the ratio of share prices, not to corporate earnings, but to wage earnings. Our second chart (below right) shows two...

Radio control.
January 7, 2005... Late 2004 proved an odd time for investors in the radio sector. Shares in radio broadcasters were initially hit as the sector delivered bad news about the state of advertising spending. But it was redeemed just in time for Christmas by some...

Tsunami disaster.
January 7, 2005... For all the death and destruction wreaked by the Asian tsunami, this tragedy may not have such a deep or lasting effect on either tour operators or insurers - the two main sectors at risk. Holiday companies First Choice and MyTravel had,...

Whatman looks good despite missing targets.
January 7, 2005... DNA purification specialist Whatman announced that it has missed its full-year sales target by 3 per cent. The company also said that the acquisition of German rival Schleicher & Schuell will incur one-off charges of GBP13.8m - well above...

SSL in bid speculation.
January 7, 2005... Shares in the Durex condoms-to-Scholl sandals group, SSL, rose 13 per cent between Christmas and New Year as rumours circulated that it's in bid talks. Possible buyers include Reckitt Benckiser and Kimberley Clark. The company was last in...

Record profits expected by CRH.
January 7, 2005... Building materials group CRH has announced that pre-tax profits for 2004 will top E1bn (GBP0.7bn) for the first time. But after a 71 per cent profit increase in the first half, higher energy prices and the weakening dollar held back the...

Marshalls sells bricks to Hanson.
January 7, 2005... Marshalls has sold its bricks business to Hanson for GBP65m (approximately nine times earnings). The proceeds will initially be used to pay down debt, but Marshalls will also look to reinvest in acquisition opportunities, or return cash to...

Kingspan settles tate dispute.
January 7, 2005... Building materials group Kingspan has reached a settlement with the former shareholders of Tate, a subsidiary that it bought in 2001. Following the acquisition, Kingspan had to issue a number of profit warnings due to poor performances at...

Highway attracts numerous suitors.
January 7, 2005... Motor insurer Highway says that it has received bid approaches from a number of parties. That follows last spring's attempt by rival motor insurer Cox to buy Highway. Since then, Cox itself has aroused bid interest - it announced in...

Countryside Properties offer extended.
January 7, 2005... The 275p offer for Countryside Properties from Copthorn (backed by the company's chairman Alan Cherry) has been extended until 12 January. The offer has received only 22.6 per cent acceptances so far as investors hold out for a counter-bid from...

TV Corp sells Visions.
January 7, 2005... Television Corporation, the independent TV production company, has sold Visions, its outside production business, for GBP16.8m. City investors disliked the division because it is highly capital intensive. The sale will allow more money to...

International Energy boosts gas presence.
January 7, 2005... International Energy has acquired Scottish Power's portfolio of gas transportation and metering assets. It's paying GBP15.1m in cash, which values the assets at 1.2 times book value. The acquisition is expected to be earnings-enhancing from the...

Watermark to meet market expectations.
January 7, 2005... Fast-expanding airline services firm Watermark has calmed investors' nerves with news that results for 2004 will be in line with market expectations. The company supplies a raft of major airlines with everything from food to cutlery. But even...

Slow Christmas hits retailers.
January 7, 2005... The retail sector is expected to remain under pressure over the next few weeks as major high-street chains give updates on Christmas trading. Despite early discounting from some of the big names, the run-up to Christmas 2004 was slower than the...

Company profits still struggling.
January 7, 2005... Company profits are still below 1960s' levels. Official figures this week showed that non-oil companies earned a net return on capital of 12.6 per cent in the third quarter. Although up from 2003's trough, this is still below the returns seen...

Cash holdings point to share-price rises.
January 7, 2005... Financial institutions' cash holdings are rising strongly. Bank of England figures this week showed that they grew 0.9 per cent in November, to stand 10.3 per cent higher than a year ago. At GBP248bn, institutions' bank balances are...

FTSE 350 dogs beat fund managers.
January 7, 2005... You can outperform most fund managers without even thinking. If, at the end of September, you had bought the 20 stocks in the FTSE 350 that had fallen most in the previous three years, you would have made 15.5 per cent in the past three months....

FLOAT OF THE WEEK - Zetar aims for sweet spot.
January 7, 2005... One of the first Aim new issues of the year is shell company Zetar, set up to focus on the snack-food market. Zetar has been established by Ian Blackburn, the former chief executive of convenience food producer Perkins Foods, which went private...

Sino-Asia to raise GBP200,000.
January 7, 2005... With the bull market in commodities rolling on into 2005, there's no stopping the torrent of new mining companies planning to come to Aim. The latest is Sino-Asia, which plans to invest in companies and projects with a focus on base metals...

Computer softwaRE acquires Alveston.
January 7, 2005... Fast-expanding Computer Software has completed the acquisition of rival Alveston for GBP4.8m in cash and shares. Alveston's trading operation is called Systems Team (ST) and is based in Bristol. Founded in 1982, the company focuses on supplying...

IDS on course for a record year.
January 7, 2005... Recent Aim issue, Immunodiagnostic Systems, (IDS) is on course for a record year due to buoyant demand for its diagnostic testing kits. The firm was the subject of a 3i-backed management buyout in 1996, but has grown significantly since by...

Optimistic listing.
January 7, 2005... Mike Edelson, whose success in floating shell companies during the 1990s earned him the nickname 'Shellmeister', is back with a new Aim listing: a media company called Optimistic Entertainment. Back in October, Mr Edelson put together a...

Week ahead...
January 7, 2005... NEWS Wednesday 12 January Dixons releases half-year results, and investors are already bracing themselves after management seemed to hint at an unpromising Christmas. Sales and profit margins are expected to have come under further...

Patent victory for Retail Decisions.
January 7, 2005... Patent infringement litigation against payment-card services group Retail Decisions is likely to be put on hold, following a decision by the US Patent Office to re-examine patents held by claimant Cybersource. Retail Decisions filed the...

AstraZeneca's Iressa drug not destined for Europe.
January 7, 2005... AstraZeneca has abandoned a European approval application for Iressa, its lung-cancer drug, but secured conditional Japanese approval for cholesterol-buster Crestor. Although Iressa is approved elsewhere, trial results have shown it does...

Xstrata hostile bid rejected by WMC.
January 7, 2005... The festive season may be over, but Xstrata and Australia's WMC Resources are still insulting each other like panto dames. WMC has rejected Xstrata's A$6.35-a-share hostile bid, saying the shares are worth up to A$8.24 each. 'Oh no they're...

Premier Foods in a fiery pickle.
January 7, 2005... Smouldering Branston pickle held back sales at Premier Foods last year. The fire that broke out at one of its factories disrupted progress, particularly for Branston, one of its most popular products. But for the disruption, Premier says...

Babcock to keep aircraft construction.
January 7, 2005... Shares in Babcock, the shipbuilder, were boosted this week by news that a ministerial veto could keep construction of the Navy's two new aircraft carriers at its Rosyth shipyard. Earlier reports that the physical-integrator role would be...

Splits compensation fails to impress.
January 7, 2005... The Financial Ser-vices Authority (FSA) has finally agreed a compensation package for investors in split-capital investment trusts (splits). Although the Association of Investment Trust Managers (AITC) estimates that retail investors lost a...

Stanley Leisure suffers setback.
January 7, 2005... Hot on the heels of the disappointment over casino deregulation, Stanley Leisure has unveiled another of its periodic profit warnings. The usual suspects are to blame: sporting events have gone against its bookmaking operations, while its...

Demand a tighter spread.
January 7, 2005... Dealing costs aren't just about commissions. Spreads - the difference between the price you are charged when buying shares and the price you get when selling them - are just as important, if not more so. So rather than simply poring over...

Get the bigger picture.
January 7, 2005... The great and the good of the art and finance worlds gathered at Sotheby's in London last month for a conference on investing in art. A similar meeting will be held in New York in April. The aim of these conferences is to capitalise on the...

Thinking outside the box.
January 7, 2005... The outlook for the housing market is subdued. The Nationwide forecasts an average rise of just 2 per cent for 2005. In contrast, it reports that the price of the average house has risen by more than 13 per cent so far this year (although...

Eastern promise.
January 7, 2005... I've sold my shares in a structured investment trust run by Merrill Lynch called the FTSE Reverse fund. This fund rewards investors if the FTSE 100 starts to consistently fall below 4472, gearing each 1 per cent drop with a 3.5 per cent return....

JARVIS (JRVS).
January 7, 2005... Jarvis tried to use these results, issued between Christmas and New Year, to draw a line under its annus horribilis. With GBP240m of write-offs (mainly from goodwill) contained within them, they make ugly reading. But Jarvis says that they...

EUROVESTECH (EVT).
January 7, 2005... As its name suggests, Eurovestech is a pan-European fund that invests in undervalued companies. Headed up by former Schroders analyst Richard Bernstein, Eurovestech bought software provider Knowledge Support Systems (KSS) in 2003. However,...

ELITE STRATEGIES.
January 7, 2005... Aim. Independent financial adviser

Hopes for 2005.
January 7, 2005... By now, the so-called experts have told us their hopes and expectations for 2005. As usual, though, they've missed the point. The question isn't: what will happen in 2005? It is: what could we learn in 2005? Here are some things I'd like others...

FTV.
January 7, 2005... Aim. Advertising space provider

FORMSCAN.
January 7, 2005... Aim. Document solution supplier

IMAGESTATE.
January 7, 2005... Aim. Media licensing

LO-Q.
January 7, 2005... Aim. Electronic queuing systems

SCHRODER INCOME GROWTH (SCF).
January 7, 2005... in its search for dividend yield and capital growth, Schroder Income Growth invests in undervalued companies with strong balance sheets. And although its yield is average for the UK Income Growth investment trust sector, it has delivered strong...

NEW OPPORTUNITIES (NOI).
January 7, 2005... New Opportunities was only launched in July 2002, but the trust was converted into a realisation vehicle at an extraordinary meeting in November 2003. Cash has been returned to investors and 37 per cent of shares were repurchased at NAV, minus...

TR EUROPEAN GROWTH (TRG).
January 7, 2005... TR European Growth's performance has been volatile over the past few years, in line with market conditions. But, despite the trust's name, manager Stephen Peak has adopted a value bias, which helped the trust outperform over the past year,...

CIRCLE OIL (COP).
January 7, 2005... Circle Oil, which listed on Aim in October, currently has two exploration licences, and has submitted an application for one more. By far its biggest asset is the licence for 160,000 sq km of exploration ground onshore in Namibia, in a joint...

CHERWELL CAPITAL.
January 7, 2005... Cherwell backs university spin-outs, usually investing GBP25,000-GBP150,000 for a 3-10 per cent stake. But its small size and "lack of available investment funds" means that, since April 2004, it has had to turn down a number of spin-outs that...

FAIRPLACE CONSULTING (FCO).
January 7, 2005... Not before time, Fairplace has introduced "a more flexible resourcing model" that involves some recruitment work. Last year's loss can be blamed on its City of London outsourcing business, where a switch from fire to hire - plus more...

MINCO (MIO).
January 7, 2005... Minco has transformed itself from a lonesome zinc explorer in Eire (not good news when your costs are in euros) into one that has signed heads of agreement and almost completed due diligence for the acquisition of a majority stake in a...

EARTHPORT.
January 7, 2005... Aim. Electronic payment services

MONDAS (MDS).
January 7, 2005... After 13 years of consecutive losses, Mondas has sacked chief executive Tim Simon following a review instigated by the non-executive directors. The review followed a profit warning in April. The company now plans to contract out non-core...

AVANTI SCREENMEDIA (ASG).
January 7, 2005... Avanti Screenmedia joined Aim via a placing at 130p last summer. It started with television services in 200 bars - that number is now 500, with a target of 2,000 outlets within 18 months. Avanti supplies the kit, and pub owners then receive...

LATIN AMERICAN COPPER.
January 7, 2005... Ofex. Copper and gold explorer

NETCALL (NET).
January 7, 2005... New broom Henrik Bang joined Netcall in March, around the time the company reported poor interims. One result was a one-fifth cut in employee numbers, followed by a sales push. This worked well - especially when you consider that turnover in...

EGDON RESOURCES (EDR).
January 7, 2005... Last month, Egdon raised GBP4m net when it moved to Aim via a placing at 30p. Back in December 2002, it boldly stated that its aim was to build a minimum reserve base of proven and probable reserves of at least 5m barrels of oil (or oil...

DAEJAN (DJAN).
January 7, 2005... Property investor Daejan's business model is remarkably simple. It invests in secondary properties with above-average yields, and looks for rental growth over the long term, while keeping administrative overheads to a bare minimum. But net...

POLARON (POL).
January 7, 2005... Polaron's mission is to be a significant player in the emerging nanotechnology market with its 3D Atom Probe instrument. It can chemically identify atoms via an analytical microscope. Between October 2002 and end-June 2004, Polaron received...

BITS CORP. (BIT).
January 7, 2005... Tough times in the games industry are forcing companies such as Bits not to take any financial risks. That means less for-hire work, a flexible workforce (which peaked in September 2004 and is now shrinking) and development of its own...

OSMETECH (OMH).
January 7, 2005... In September 2004, Osmetech paid GBP3m for Molecular Sensing. The acquired company has a device for analysing DNA chain reactions, which can be sold to the same customer base as Osmetech's OPTI gas analysers. OPTI performed better than expected...

ASAP.
January 7, 2005... ASAP floated on Ofex at the height of the internet boom in March 2000, raising around GBP5m. The offer at 80p was oversubscribed and closed early. Unfortunately, all that money has been spent on unsuccessful ventures, including selling...

NORTHAMPTON SAINTS.
January 7, 2005... Northampton has strong finances, with reduced youth academy costs helping to cut 2003-04 admin expenses by GBP490,000 to GBP3.21m. Membership and gate receipts amounted to just 26 per cent of 2003-04 turnover - both hospitality and sponsorship...

TALBEX.
January 7, 2005... Tony Hoskinson (See ASAP) became chief executive of Talbex in September, and intends to take the company back to basics: debt and equity investment in small companies, and property development. At the moment, Talbex's only assets are a one-acre...

CH BAILEY.
January 7, 2005... Aim. The hotel in Malta traded well, as did the safari camp in Tanzania. Overall trading was ahead of expectations.

CENTRAL AFRICAN MIN. & EXPL.
January 7, 2005... Aim. Central African Mining & Exploration's cobalt-processing plant will be in operation by the middle of this year. Tantalum and gold output should also increase this year.

Questions & Answers.
January 7, 2005... Q: Inheritance tax In the December issue of MoneyPlanner, you say that shares listed on the Alternative Investment Market (Aim) are free from inheritance tax (IHT) liability. Does this mean that a portfolio can become exempt from IHT...

CITYBLOCK.
January 7, 2005... Aim. CityBlock has two sites in Lancaster. One was not fully let until the middle of September, so it did not contribute fully at the interim stage.

VICTORY CORPORATION (VRY).
January 7, 2005... "The word must be 'disappointing'", says Richard Ratner, analyst at house broker Seymour Pierce, following Victory Corporation's profit warning and lacklustre half-year results last month. The Virgin-branded cosmetics company - 89 per cent...

GTL RESOURCES.
January 7, 2005... Aim. Methanol markets remain strong and GTL's plans to jointly develop a methanol plant in Oman are progressing. Meanwhile, the company continues to look for other deals.

LOYALWARD.
January 7, 2005... Ofex. Results were in line with expectations as Loyalward continues with its development plans in Greece. An Aim listing is planned.

ORYX INT'L GROWTH FUND.
January 7, 2005... Main market. Oryx had a mixed performance with good returns from Mentmore and Paramount, but falls in Ennstone and Austin Reed. The outlook is cautiously optimistic.

SAFELAND.
January 7, 2005... Main market. Net asset value per share was 94p at the year-end, compared with 91p a year ago. UK trading was up on last year, but losses from the Italian self-storage business also rose.

SKY CAPITAL HOLDINGS.
January 7, 2005... Aim. Soft market conditions have held back progress at Sky. Plans are under way to raise GBP7.5m by way of an offer for subscription at 100p a share.

AFRICAN DIAMONDS.
January 7, 2005... Aim. African Diamonds is now producing diamonds from its Koidu kimberlite pipe in Sierra Leone. Exploration progress was made in Botswana and Guinea. The diamond market looks strong, too.

CALEDONIAN TRUST.
January 7, 2005... Aim. Net asset value per share rose by 3.3p to 173.9p, but income from rent and service charges was down. At the year-end, there was over GBP6m in the bank. The long-term outlook looks favourable.

ACC.
January 7, 2005... Ofex. Nursing homes & care services

GOODWIN (GDWN).
January 7, 2005... "The UK is not a big market for us," says chairman John Goodwin, and that's how this UK manufacturer survives. At GBP16.62m, last year's sales to the rest of the world - primarily China, India and Turkey - were double those to the UK, and were...

SKY CAPITAL ENTERPRISES.
January 7, 2005... Aim. Increased legal and professional fees led to a widening of losses at Sky. The group is in final stages of acquiring a defence and

PENTAGON PROTECTION (PPR).
January 7, 2005... Pentagon was set up to develop a specialist range of security and tinted glass for cars. Estimates suggest that a vehicle break-in takes place every 21 seconds in the UK, providing a ready market for the company. So far, it has won approval...

WYATT (WYT).
January 7, 2005... Wyatt was set up As a risk consultancy business. So, following its limited success in selling fire-risk software, it bought Premier Employment Services (PES) in May 2004 for GBP41,000 in cash and a maximum GBP2m deferred consideration (based on...