Investors Chronicle articles from January 2007

Investors Chronicle archives from January 2007

The sobering truth.
January 5, 2007... New Year is not a good time for hangovers or forecasts. I base this less than startling insight partly on experience of this week's non-existent Hogmanay, or more accurately Sogmanay, celebrations. Apparently unaccustomed to gale-force winds...

Flight of angels.
January 5, 2007... Monday 4 December: Quornered Another food merger. After losing out in its attempt to get hold of United Biscuits in October, Premier Foods has now tried to swallow RHM, the maker of Mr Kipling cakes (and by Royal appointment, supplier to...

Reits aren't petites.
January 5, 2007... Any investment class worth nearly GBP40bn just 60 seconds after it was launched is a BIG NEW THING. So that's how you'd have to describe the nine UK property companies - including the two leaders, Land Securities and British Land - that became...

Dow direction.
January 5, 2007... The Dow is undoubtedly the world's most famous index. But it is also a bit of an oddity. Modern indices are mainly like the FTSE 100 - weighted by the size of the company. The Dow, however, is weighted as if a shareholder of the 30 stocks in...

Directive deals.
January 5, 2007... Banks are good customers for software and IT services providers. Revenues at the world's top-10 banking software providers grew by one-fifth between 2001 and 2005, according to Financial Insights, a financial technology research firm. And, as a...

Shell faces fresh reserve worries.
January 5, 2007... The new year has brought little relief for Shell, with the effective nationalisation of its flagship Russian project hitting its already-parlous reserve base, and the insurgency in Nigeria's Delta region showing no signs of abating. ...

Nothing to whine about at majestic.
January 5, 2007... Majestic Wine's claim that we are increasingly becoming a nation of wine drinkers seems borne out by the fact that like-for-like sales for the group rose by 4.4 per cent for the nine weeks to 1 January 2007. In addition, the group's...

Rentokil cleans up.
January 5, 2007... Rentokil Initial is sprucing up its washrooms business with the GBP9m acquisition of environmentally-friendly washroom company, EnviroFresh. Rentokil hopes to exploit the market for EnviroFresh's SaniSleeve and EnviroFlush products which,...

Savills stake up for grabs.
January 5, 2007... A 19.2 per cent stake in estate agency Savills is on the block following the acquisition of Trammell Crow, a major Savills shareholder and strategic partner, by property services group, CB Richard Ellis. Broker Numis Securities believes that...

Vodafone looks for greater Indian imprint.
January 5, 2007... Vodafone is competing for control of India's fourth-largest mobile operator, Hutchinson Essar. The 67 per cent stake held by Hong Kong-based conglomerate Hutchinson Whampoa is up for auction and a bidding war may now develop. Indian group...

Miners see iron ore boom.
January 5, 2007... BHP Billiton and Rio Tinto have achieved a 9.5 per cent price increase on benchmark iron ore sales contracts into China. This follows a 19 per cent increase last year, when protracted negotiations ran well past the official April contract...

CRH builds on success.
January 5, 2007... Irish building materials giant CRH said this week that 2006 had been another bumper year. Despite higher raw material costs and the softer US housing market, CRH has delivered record organic growth and expects full-year pre-tax profits to rise...

The January effect.
January 5, 2007... Recent history suggests that investors shouldn't expect a January bounce in the market. In the past 10 years, returns on the All-Share in January have been negative (minus 0.1 per cent), on average. Value stocks have done even worse - the FTSE...

Tullow's gift of the Gabon.
January 5, 2007... Tullow Oil has purchased a portfolio of new interests in Gabon, which should add 1,000 barrels of oil-equivalent per day to production by 2008. The price paid is confidential, but is less than GBP26m. The company also announced first...

BG firing on all cylinders.
January 5, 2007... BG has bought a second gas-fired power plant in the New England region of the US, following a much smaller deal in October. New England is a buoyant market in the US power sector, and the newly acquired asset is a sizeable play. BG is...

Empire Online to sell gaming assets.
January 5, 2007... Empire Online is to sell its online gaming assets to PartyGaming in exchange for 66m shares in the group, worth around $38m (GBP19m). Following the proposed transaction, Empire will become an investment company, using the proceeds and its...

Skyepharma's new year surprise.
January 5, 2007... SkyePharma's shares fell 5 per cent this week after the company took on expensive debt. It raised GBP35m through specialist lending provider Christofferson, Robb and Company (CRC) in a surprise fund-raising. The facility is repayable over...

Evolutec disappoints.
January 5, 2007... Shares in tick-saliva drug developer Evolutec slumped 19 per cent to 15p after it admitted its lead product, rEV131, had failed a second set of Phase II trials. The product failed studies in hay-fever in December, prompting a 77 per cent fall...

Imprint to miss expectations.
January 5, 2007... Recruitment group Imprint warned this week that the strengthening pound and a higher proportion of revenues from lower-margin regions would mean that its 2006 pre-tax profit would miss expectations. Imprint's shares fell 4 per cent to 248p. ...

Worthington Nicholls' European foray.
January 5, 2007... Worthington Nicholls, which supplies air-conditioning systems, has announced its first contract in continental Europe. The contract with the Park Hotel in Amsterdam is worth E350,000 (GBP236,000), but, if successful, it could lead to further...

IX Europe in contract win.
January 5, 2007... Datacentre operator IX Europe has signed up the first customer for its new London datacentre, six months before the facility is due to open. The contract, with an unnamed company, is worth GBP20m over five years. We suggested buying the...

Week Ahead...
January 5, 2007... News Monday 8 January Recruiter Michael Page releases a trading update on Monday. The shares have enjoyed a strong run since August, and the statement should point to a robust recruitment market. The size of Christmas bonuses paid out...

Benchmark portfolios beat the market in 2006.
January 5, 2007... You don't need brains to beat the market. This is the lesson of the performance of our no-thought benchmark portfolios in 2006. In fact, five of these beat the FTSE 350 index last year. And two - momentum, and the smallest stocks within the...

London initial public offerings raise spectre of dot-com bubble.
January 5, 2007... The London Stock Exchange (LSE) raised more money for initial public offerings (IPOs) in 2006 than the New York Stock Exchange (NYSE) - the first time this has happened since 2000, the height of the dot-com boom. Funds raised in London rose by...

HMRC to tax investment income early.
January 5, 2007... Higher-rate tax-payers are being sucked into paying tax on dividend and interest payments even before they have confirmed how much income - if any - they will receive from their investments and savings. HMRC has begun adjusting higher-rate...

Axis-Shield launches Afinion in US.
January 5, 2007... Axis-Shield has finally launched Afinion, its point-of-care diagnostics system for doctors' surgeries, in the US. The system, marketed by Abbott Laboratories, is thought to be faster than rival Bayer's product. It initially launches with one...

Biocompatibles' Chinese boost.
January 5, 2007... Biocompatibles' US partner, SciClone, has filed the company's DC bead for regulatory approval in China. This product treats primary liver cancer, of which half the world's cases are in China. SciClone now hopes to carry out a trial of the...

Corac finally receives LMF order.
January 5, 2007... Intellectual property and licensing group Corac has announced an order for four high-speed compressors from LMF, an Austrian industrial air compressor group, after a successful trial over the past year. Chairman Professor Gerry Musgrave called...

Liberty lifts retail gloom.
January 5, 2007... The view of some analysts that the performance of more upmarket retailers is holding up has been lent support by Aim-traded Liberty, the Regent Street emporium. The company had a record Christmas period, with sales up 6 per cent, despite a 20...

Starting a Sipp.
January 5, 2007... You've never had so much investment choice In this column, I write a lot about slightly obscure products that most private investors don't even get to hear about. These include exchange-traded funds (ETFs) or index trackers - there are more...

Rich pickings in private equity.
January 5, 2007... The current international interest in private equity creates opportunities for investors to profit. However, you must be aware of the risks and understand the type of exposure you are taking before you attempt to jump on to the bandwagon. ...

THE INNOVATION GROUP (TIG).
January 5, 2007... Personal experience may often suggest otherwise, but the UK's insurance industry is apparently one of the world's most efficient. Elsewhere, insurers are only just waking up to the potential for outsourcing systems and that offers a significant...

TRIPLE PLATE JUNCTION (TPJ).
January 5, 2007... Following encouraging news in its interims, Triple Plate's shares rose by 16 per cent in the last week of 2006. On the exploration front, the good news was the discovery of a second, major gold-bearing structure parallel to the initial...

TRICORN (TCN).
January 5, 2007... Tricorn's share price has been on the up ever since it ditched its loss-making blue-sky projects in order to concentrate on making 'just-in-time' tubular components. With an average product batch size of just 15 for clients such as Caterpillar...

WHITE NILE (WNL).
January 5, 2007... Last year, White Nile undertook a survey of the Ba oil exploration block that it hopes to exploit in autonomous southern Sudan, in addition to identifying targets analogous to existing massive oilfields elsewhere in Sudan. And this year, the...

CARNIVAL (CCL).
January 5, 2007... Despite the unfavourable currents of a slowing US economy and dearer fuel, Carnival once again sailed to record earnings last year. In fact, had fuel prices remained at 2005's levels, operating profits would have been $210m higher than the...

PHOTO-ME INTERNATIONAL (PHTM).
January 5, 2007... These results can hardly be described as 'flash'. However, after excluding 2006's exceptional restructuring credit, and 2005's GBP5.4m exceptional non-operating profit on insurance recovery, Photo-Me's pre-tax profits fell by a less drastic 30...

ARTISAN (UK) (ART).
January 5, 2007... Although house prices are predicted to rise by another 15 per cent in 2007, there are regional differences and sales are tough in the East Midlands. That's at least the experience of Artisan's housebuilding subsidiary, Rippon. In the six...

PLASMON (PLM).
January 5, 2007... A number of city institutions (led by Invesco with a 28 per cent stake) own two-thirds of Plasmon's shares. And, looking at the share-price chart, other investors will be glad they don't hold them - particularly since March 2006's GBP6m placing...

APPIAN TECH. (APN).
January 5, 2007... Appian Technology bought the Racal number-plate-recognition camera system in July 2000 and, six years later - after lots more development - the company has moved into profitability. Indeed, company broker JM Finn forecasts current-year sales...

DATONG ELECTRONICS (DTE).
January 5, 2007... As Datong says, it's "a nice business in a nice market" - referring to its business providing security services with sophisticated beacons and receivers to keep track of terrorists and criminals. But this begs the question: why, in this...

EUROVESTECH (EVT).
January 5, 2007... Eurovestech is a "lean and mean" company - just three people run it from one room in central London. It floated at 5p one day before Lastminute.com in March 2000 and for three years its share price has been equally lean, falling as low as 1.5p....

SLIMMA (SLM).
January 5, 2007... For six long years, Slimma (which is an abbreviation of 'slim mothers') has been restructuring its business. It is moving away from contract clothing work and towards becoming a fashion brand. Fashion now accounts for 98 per cent of sales, with...

AIRSPRUNG FURNITURE (APG).
January 5, 2007... Like Tricorn (see opposite), Airsprung has been through a major restructuring programme - although, in its case, the benefits are only just starting to show through and have not yet been picked up by the share price. In fact, almost everything...

ANGLO IRISH BANK (ANGL).
January 5, 2007... E15.39 - Banks - With the Central Bank of Ireland forecasting that the Irish economy will grow by more than 5 per cent in 2007, it looks as if the Emerald Isle will continue sidestepping the economic malaise - characterised by high unemployment...

TANFIELD (TAN).
January 5, 2007... 55p - Aim - Tanfield's electric vehicles business, Smiths, grabbed the headlines in December when it was chosen by global logistics group TNT to provide two test vehicles to its London depot. This move could lead to an initial order for 200 of...

HMV (HMV).
January 5, 2007... Things just aren't getting any easier for the specialist retailer of books, CDs, DVDs and games. Its products aren't big-ticket items, yet the cheap prices offered by online retailer Amazon, as well as by the supermarkets, have forced HMV to...

PERSIMMON (PSN).
January 5, 2007... Persimmon's acquisition of Westbury just under a year ago was a masterstroke. The deal catapulted Persimmon into the FTSE 100 index, and the price tag of nine times forward earnings looked like a real bargain now that the housebuilders'...

IMPERIAL ENERGY (IEC).
January 5, 2007... 653p - Aim: oil & gas producers - A well-known Oil industry consultant has just completed a survey of some of Imperial Energy's lesser-known Russian oil reserves. It makes nice reading. According to consultancy DeGolyer & MacNaughton (D&M),...

BURREN ENERGY (BUR).
January 5, 2007... 862p - Oil & gas - Burren Energy's 31.5 per cent stake in the M'Boundi oilfield in Congo Brazzaville - the mainstay of its current production - could yield significantly enhanced returns in the near future if the recently-mooted sale of...

KINGSPAN (KGP).
January 5, 2007... 1,891 - Construction & materials - Recommending shares that have risen more than 10 times in the past four years requires some courage, and still more justification. But, as Europe's largest supplier of insulated panels and boards, Kingspan...

MWB BUSINESS EXCHANGE (MBE).
January 5, 2007... 166p - Support services - Soaring London office rents look set to drive profits from MWB Business Exchange (MBE) in 2007. After a long period of stagnation, buoyant demand was already producing solid growth in central London office rents in the...

NATIONAL GRID (NG.).
January 5, 2007... 744p - Gas, water & multiutilities - National Grid has always been seen as a safe, if somewhat dull, haven. And the safe part remains true. But, under new chief executive Steve Holliday, National Grid looks anything but dull. Indeed, with...

NATIONWIDE ACCIDENT REPAIR SERVICES (NARS).
January 5, 2007... 164p - Aim: support services - Last year was a tough one for the alternative Investment Market (Aim). The index performed poorly and there was a rising wave of discontent among investors about the quality of some of the companies floating. By...

SMITHS (SMIN).
January 5, 2007... 965p - Aerospace & defence - Industrial conglomerates have become unfashionable - the potential lack of focus that can accompany a collection of often unrelated businesses understandably leaves investors cautious. But not all conglomerates are...

SPICE HOLDINGS (SPI).
January 5, 2007... 415p - Aim - Outsourcing group Spice is positively sizzling as it starts this year with demand strong in its key markets of electricity, water, telecoms, facilities management and energy services. And the group has now grown to a point where...

David vs Goliath.
January 12, 2007... Round one of David vs Goliath went to script as, against many commentators' expectations, small- and mid-cap companies outperformed large caps in 2006. At the time of writing, the one-year performance of the FTSE 100 lagged the broader FTSE...

CEO pay heroes.
January 12, 2007... As Bob Nardelli tidied his desk and collected $210m from lurching giant US DIY retailer Home Depot last week, I, too, was tidying my desk. Every three months, I sweep away many PDF printouts, news clippings and annual reports to make space for...

Lordy, lawdy.
January 12, 2007... I am doing something right, I just don't know what it is. How characteristically vague of Bearbull to start 2007 with such a thought. Yes, but within this assertion is a kernel of truth that enlightens much investment management, indeed much...

Sick as a parrot.
January 12, 2007... A few weeks ago while strolling in London's Richmond Park, I was amazed to see a flock of squawking green parrots rise from a tree. Now, as far as I'm aware, green parrots are not native to these shores. Sparrows, thrushes, the odd robin - yes,...

Kiss of delight...
January 12, 2007... Thursday 21 December 1am: Countdown continued... There was no doubt Ken O'Riordan would have demolished the house to get at Astrid, but I wasn't going to open the door. I gripped my only weapon, the Dambuster's memorial clock plate, like a...

Shop 'til you drop.
January 12, 2007... s New Year scare stories go, it was right up there with the Millennium bug and the ski-jump competition at the XV Winter Olympiad. Just over seven years ago, you may recall, we were warned that overloaded computer chips, unable to process any...

Still in gear.
January 12, 2007... The New Year brings a sense of optimism. Slates are swept clean, slick new gym shoes are purchased and self-improvement projects are begun. And that optimism seems to feed into investor behaviour, with cyclical sectors typically leading the way...

Mixed Christmas for retailers.
January 12, 2007... The doomsayers have been, if not been silenced, at least quietened by the post-Christmas trading statements from the retail sector. Some companies such as Jessops, Blacks Leisure, Next and Alexon, have posted negative like-for-like sales over...

St James's Place left high and dry.
January 12, 2007... Wealth-management group St James's Place has lost its chief executive, Mark Lund, who has left with immediate effect. He has no other job lined up. The company stressed that the departure was amicable, although Mr Lund has held the position for...

VT suffers after navy downsizing rumours.
January 12, 2007... Market speculation that a further six Royal Navy destroyers and frigates are to be mothballed has weighed on VT Group's shares. Such news would add to pressure on Fleet Support (FSL), the 50:50 joint venture between VT and BAE Systems, which...

BA pension plan cleared for takeoff.
January 12, 2007... British Airways' (BA) unions have agreed to its pension proposals. BA will make a one-off contribution of GBP800m and, in return, employees will make higher contributions or retire later. These moves will slash BA's pension deficit from...

BG Group tanks up.
January 12, 2007... BG Group has ordered two new, state-of-the-art liquefied natural gas (LNG) tankers from Korean shipyard Samsung which will be the largest carriers in its fleet. And by using a previously-agreed option, BG is side-stepping both the new-build...

Cape on a winning streak.
January 12, 2007... Following a period of strong trading, Cape, which provides services to the energy sector, said that full-year earnings would be ahead of expectations. It also reported that visibility is "excellent", thanks to more than GBP150m of contract wins...

LionOre forges ahead.
January 12, 2007... Nickel miner LionOre has secured a 9.5-year $250m (GBP129m) loan for a commercial-scale build-out of its innovative Activox smelting technology. The loan comes at a low margin of 1 per cent over interbank rates. This coup guarantees funding for...

McAlpine to top City forecasts.
January 12, 2007... Alfred McAlpine said that it expects its full-year profits to be at the higher end of market expectations. All three of its businesses - facilities management, infrastructure services and construction - performed well and McAlpine enters 2007...

Ethics aren't expensive.
January 12, 2007... Ethical investing doesn't cost money, according to new research. David Hobson and Anne-Marie Anderson, of Lehigh University in Pennsylvania, estimate that portfolios that selected ethical stocks or avoided unethical ones did, on average, as...

Europa doubles up.
January 12, 2007... Shares in Europa Oil & Gas rose 12 per cent, to 27p, after the company revealed that it had doubled its oil and gas production for December to 587 barrels of oil equivalent (boe) a day. In 2006, Europa produced a total of 114,000 boe. We...

Hardy Oil & GasSurges ahead.
January 12, 2007... Shares in Hardy Oil & Gas jumped 22p, to 319p, after the company announced an oil and gas discovery off the coast of south-east India. Hardy plans to evaluate the commercial potential of this find, ahead of more drilling on another licence...

BP touted as a recovery play after production disappoints.
January 12, 2007... Shares in BP dropped by 4 per cent this week after the company warned in a trading statement that fourth-quarter production fell below expectations, down 5 per cent year on year, with refining and marketing margins also squeezed. So...

ADT makes its debut.
January 12, 2007... Advance Display Technologies (ADT) will float on Plus Markets (formerly Ofex) on Monday, with a likely market value of GBP25m. The company specialises in nanotechnology for the display industry. It has a portfolio of nine technologies that were...

Sterling stumbles against the dollar.
January 12, 2007... Sterling has started the year badly, by falling 2 per cent against the US dollar. David Woo at Barclays Capital says that this may reflect an unwinding of speculative positions in the pound: figures from the US Commodity Futures Trading...

The week ahead.
January 12, 2007... Monday 15 January Finals: Arden Partners EGMs: Aquilo, NBA Quantum Trading statement: Carillion, Vedanta Resources production figures Economics: December producer price index, November house-price index Tuesday 16 January...

Wage inflation fears could fuel interest rate rise.
January 12, 2007... The Bank of Eng-land's worst fears about inflation might be realised, according to a report this week. Research group Incomes Data Services (IDS) said the median pay settlement so far this month has been 4 per cent, compared with 3 per cent in...

EXCLUSIVE: Petchey targets Germany.
January 12, 2007... more canny at spotting opportunities in the property market than octogenarian property guru Jack Petchey. And now, investors chronicle can exclusively reveal that, with the cost of UK property sky- rocketing, the multi-millionaire eastender is...

Phytopharm's green shoots.
January 12, 2007... Phytopharm chief executive Richard Dixey is stepping down. Mr Dixey will be succeeded by Daryl Rees, previously chief operating officer. Piers Morgan has also joined the company as chief financial officer. Mr Dixey does not intend to sell any...

Dialight shares dim in market slump.
January 12, 2007... LED manufacturer Dialight has warned that GBP1m in revenues will be deferred until the next financial year and that sales of components have slowed. Finance director Cathy Buckley says that delayed US traffic-light orders are a "tiny issue"....

Wolfson chips in.
January 12, 2007... Apple's iPhone launch boosted Wolfson's share price by 9 per cent this week. Analysts believe Wolfson's October profit warning was probably due to the delayed Apple mobile phone, which has been in development for over two years and is likely...

Rathbone Brothers' on the rise.
January 12, 2007... Wealth-management group Rathbone Brothers confirmed that funds under management rose 28.4 per cent in 2006 to GBP12.2bn. Funds held in discretionary accounts were up 24.1 per cent at GBP10.3bn, while funds managed in the unit trust division...