Investors Chronicle articles from July 2006

Investors Chronicle archives from July 2006

The end is nigh.
July 7, 2006... Whenever I am struck by umbrage over director pay packages, I remind myself that the benchmark is what the US pays. The result is both terrifying (UK director pay inflation hasn't even started...) and restraining. It is restraining because I...

Listen with Mother.
July 7, 2006... Tuesday 9 May: Keeping up with the Joneses A moment long dreaded: Trying to explain to my senile mother that Dad's share certificate in English Electric (EE) circa 1938 is now worth GBP600,000 and discuss the hurdles we need to cross to...

Track strength.
July 7, 2006... Had a rough second quarter? looking for an alternative to index funds that draw you into every rally and toss you out when the markets fall? In this way, market shake-outs do have a silver lining. They remind us of the fallibility of...

Animal logic.
July 7, 2006... Maybe it's something to do with the enormous vets' bills clocked up by the three cats in the Bearbull household - Monty, Bertie and Toby - but, for several years, I have liked Dechra Pharmaceuticals, which makes and distributes veterinary drugs...

It's a no-brainer.
July 7, 2006... Woody Allen, while musing on the subject of business models and operating profit margins, once quipped: "Organised crime in America takes in over $40bn a year and spends very little on office supplies...". So this week, I can't help but wonder...

A heavy load.
July 7, 2006... The logistics business is all about getting stuff from A to B as quickly as possible. But, while logistics companies are good at delivering fresh produce to supermarkets or clothes to warehouses on time, the industry as a whole is making much...

More anomalies.
July 7, 2006... It's not just value stocks that outperform over the long term. A new paper by Eugene Fama (one of the originators of the efficient market hypothesis) and Ken French establishes yet more deviations from the capital asset pricing model. ...

Efficient markets.
July 7, 2006... Here's a paradox. On the one hand, we increasingly know that there are lots of different types of shares that outperform on average over the long run: value, momentum, low accruals, defensives and high net buy-backs. But, on the other...

BAE Systems' Airbus sale is grounded.
July 7, 2006... BAE Systems' strategy to get out of commercial aerospace and focus on defence, and to concentrate on business in the US at the expense of Europe, has gone into limbo. The key to this strategy had been the sale of the group's 20 per cent stake...

Matalan chairman weighs up takeover bid.
July 7, 2006... Matalan, which recorded flat underlying sales for the nine weeks to 1 July, says that chairman John Hargreaves may bid for the company. The Hargreaves family, which owns 53 per cent of the shares, announced that it will not support inadequately...

Penna suffers as the city booms.
July 7, 2006... Happy days in the City mean misery for Penna Consulting. The human resources consultancy warned of weak demand for its outplacement services business, which helps companies to find new jobs for unwanted employees, and last year accounted for 40...

Vecture fund-raising oversubscribed.
July 7, 2006... Inhaled therapies developer Vectura has raised GBP43m net of expenses in a placing at 85p. The proceeds will be used to develop the company's portfolio, reducing the necessity to out-license products early, which will help retain value for...

Ofcom slashes radio licence fees.
July 7, 2006... Ofcom has cut annual licence fees for a number of analogue radio stations. It has slashed GCap's annual fee for Classic FM from GBP1.1m to GBP50,000 from 1 October 2007. Virgin Radio owner SMG has also had its licence fee reduced from GBP2m to...

Sales slump at Floors 2 Go.
July 7, 2006... Shares in Floors 2 Go plunged 9 per cent to 20.25p after the laminate and wooden-floor specialist revealed that underlying sales fell by 8.6 per cent in the six months to 30 June. The company previously announced that like-for-like sales...

Satellite sales hit new highs at Avanti.
July 7, 2006... Avanti Screenmedia has sold network services and capacity for GBP25m on its HYLAS satellite, which will be launched in 2008 to provide broadband and television services. The company also said that results for the year to 30 June would be in...

More hazardous waste is good news for Augean.
July 7, 2006... Hazardous waste specialist Augean is reaping the benefits of its acquisition spree as tougher regulation pushes more hazardous waste its way. Augean received 120,000 tonnes of hazardous waste at its landfill sites in the first half -...

Generators to face new carbon curbs.
July 7, 2006... Environment secretary David Miliband has announced tough new carbon dioxide emissions targets. Power generators will be watching closely - as some of the UK's biggest polluters, they'll be expected to raise their game. Under the...

Ofex to change name.
July 7, 2006... Plus Markets has announced that it will change the name of Ofex. Shares traded on Ofex will in future be known as Plus-quoted shares. But confusion surrounds Plus's other activity, a trading platform for main-market and Aim companies. The...

Share-price slump for Stream.
July 7, 2006... Stream shares crashed after it warned that mobile revenues in the UK slumped in April and May. It has also been hit by a delay in the launch of mobile bingo. The company now expects first-half pre-tax profits before amortisation to be...

Sylvania to raise GBP12m on Aim.
July 7, 2006... Sylvania, a recycler of South African chrome and platinum waste dumps, will float on Aim within the next few weeks, following a placing of shares through broker Williams de Broe, which will raise GBP12m. The company will use the proceeds to...

Victoria downgrades its reserves.
July 7, 2006... Shares in Victoria Oil & Gas plunged 33 per cent to 95p after an update on its West Medvezhye gas and condensate project in Russia. On the advice of independent consultancy DeGolyer & MacNaughton, the company downgraded its reserves by 100m...

Oxus pulls out of Eurogold deal.
July 7, 2006... Shares in eastern European gold explorer Eurogold were briefly suspended after fellow Aim miner Oxus Gold pulled out of a deal to acquire the company. Oxus cited a "material adverse change to the business and assets of Eurogold". Oxus shares...

Frank Timis retains stake in Sierra Leone Diamonds.
July 7, 2006... Frank Timis, notorious in the City for his role in the collapse of Regal Petroleum's share price last year, has received an offer for his stake in Sierra Leone Diamonds. Investment group Audley Capital has offered to buy Mr Timis's entire 34...

CODASciSys set to split business.
July 7, 2006... CODASciSys is to demerge its two businesses, CODA and SciSys. CODA provides financial software, while SciSys is a specialist consulting division servicing the public sector. The demerger is expected to happen in September and, for every share...

Market loses touch with profits.
July 7, 2006... The stock market has lost touch with corporate profitability. Official figures this week showed that the non-oil profit rate in the first quarter, at 13.4 per cent, is well above the post-1990 average. However, the PE ratio is below its...

Bionic Biodiesel surges on Aim.
July 7, 2006... Shares in China Biodiesel powered up by 26 per cent in their first few days of trading on Aim, after the company raised GBP8m at 85p to fund expansion of production in its fuel-hungry homeland. Unlike quoted UK rivals such as D1 Oils and...

Week Ahead...
July 7, 2006... News Tuesday 11 July Property developer St Modwen focuses on regenerating industrial space and, from the positive tone of April's trading update, investors can expect good news with the group's half-year figures on Tuesday. Because...

Aim brokers feel the heat after IPO market slowdown.
July 7, 2006... The recent market turbulence has put the brakes on the initial public offering (IPO) market, and knocked the valuations of publicly quoted stockbrokers. And there could be little respite this side of September. After peaking in April,...

Smith & Nephew's US subpoena.
July 7, 2006... Smith & Nephew has been subpoenaed by the US Department of Justice. The US government believes that competition laws relating to the manufacture and sale of orthopaedic devices may have been violated. And many of the company's competitors,...

Hard Rock between places.
July 7, 2006... Rank could soon take another step towards becoming a pure gambling company, as the conglomerate plans to offload its Hard Rock Cafe business. The iconic restaurant chain is achieving strong growth, which should help Rank obtain a decent...

Sage picks up ubs.
July 7, 2006... Sage is to take control of Malaysian software vendor UBS. Sage bought 50.2 per cent of the company in late May, and will now make an offer for the shares that it doesn't own. The offer values the company, which has 100,000 customers, at GBP14m....

Kier to exceed expectations.
July 7, 2006... Kier, the housebuilding, contracting and services group, expects to see full-year profits well ahead of expectations. Cash generation on the construction side has been especially strong, and the group has made a special GBP31.5m contribution...

IT overspend hits Provident Financial.
July 7, 2006... Sub-prime lender Provident Financial has admitted that half-year profits will be hit by a GBP5m cost overrun on IT spending. The good news is that marketing investment is starting to pay off, with customer numbers up for the first time in three...

Findel considers demerging divisions.
July 7, 2006... Findel's management is considering a demerger of its two divisions. The home-shopping division operates a resilient business model. Its customers come predominantly from lower-income categories and tend not to have mortgages. Their spending is...

Keeping the faith.
July 7, 2006... A quarter of a million people who invest in the Fidelity Special Situations (FSS) fund are facing tough choices over its role in their portfolios. The GBP6bn fund has become so large that it could now be difficult to manage effectively, given...

10% after six months.(Company overview)
July 7, 2006... Despite the big market corr-ection in May, our tips of the year are still healthily ahead of the stock market, delivering a 10 per cent return compared with the 2.3 per cent return on the FTSE All-Share index. In particular, the decision to buy...

Riding out turbulent markets.
July 7, 2006... Massive volatility, heavy losses, gloomy prognostications - it's not easy being a private investor in these turbulent times, especially if you're having to manage your one and only substantial nest egg - your self-invested personal pension...

No-thought benchmark portfolios outperform fund managers - again.
July 7, 2006... Nearly all fund managers have yet again underperformed investors chronicle's no-thought benchmark portfolios. During the second quarter, our low-risk portfolio - the 20 FTSE 350 stocks with the lowest volatility of monthly returns in the past...

ARDANA (ARA).
July 7, 2006... Ardana may be small, but its products target the huge human reproductive health market, which is worth nearly $26bn in annual sales. And it's now aiming to create value for shareholders by selling products in the UK through its fledgling sales...

CEPS.
July 7, 2006... Aim. Footwear components

XANSA (XAN).
July 7, 2006... Xansa returned to revenue growth in the second half following a sales decline that was triggered by outsourcing to India. More than half its employees are now based in India, but canny UK companies know that it's cheaper for Xansa to produce...

BERKELEY (BKG).
July 7, 2006... Berkeley Homes is mindful of the scheme of arrangement that governs the return of capital to its shareholders. It has already returned 500p a share (in December 2004) and the next scheduled payment is 200p a share in January 2007, followed by...

Choose your focus fund with care.
July 7, 2006... Focus funds are growing in popularity because they emphasise fund managers' stock-picking abilities. Focusing on returns The focus-fund concept itself is simple: holding fewer companies should make a manager focus on his or her best...

MICRO FOCUS (MCRO).
July 7, 2006... Micro Focus has been restructuring and cutting costs in a bid to regain investors' confidence. The company provides software that allows customers to upgrade 'legacy IT assets' ( ie, old stock), rather than buy costly new products. But it...

ASHTEAD (AHT).
July 7, 2006... The US housing market might be jittery right now, but non-residential construction is booming. So, plant-hire business Ashtead, which makes most of its money in the US and derives 94 per cent of sales from commercial construction clients, is...

AMTEUS (AUS).
July 7, 2006... You may not have heard of Amteus, but you've probably come across its board members before. The company, which floated on Aim in January, provides secure, instant-messaging services, and is chaired by former Prudential deputy chairman Michael...

JAMES LATHAM (LTHM).
July 7, 2006... Disposals affected profits at timber merchant James Latham in the past two financial years but, strip these out, and adjusted pre-tax profits for the past year rose 43 per cent to GBP5.42m. Ceiling, drylining and partitioning distribution...

ECKOH TECH. (ECK).
July 7, 2006... Eckoh had a busy year reorganising itself, culminating in the GBP11.2m sale of its 65 per cent stake in telecoms operator Symphony Telecom just before these results. What remains of the company will now be split into two divisions. The...

RENOVA ENERGY (RVA).
July 7, 2006... America's determination to wean itself off its oil addiction has meant strong demand for Renova Energy's ethanol, which is mixed with gasoline to improve emissions. And strong production, supported by buoyant fuel prices, has helped Renova...

INVOCAS (INVO).
July 7, 2006... Invocas specialises in Protected Trust Deeds (PTDs), the Scottish equivalent of individual voluntary arrangements (IVAs). And, like its counterparts south of the border, it is enjoying rapid growth thanks to the increase in the number of...

BEGBIES TRAYNOR (BEG).
July 7, 2006... Begbies has benefited from an upturn in corporate insolvency work since the turn of the year, as banks tighten their lending criteria in anticipation of an interest-rate rise. As a result, reported insolvencies in the first quarter and the...

DS SMITH (SMDS).
July 7, 2006... Soaring energy prices have really turned up the heat on DS Smith. The cost of powering its factories leapt by GBP23m in the last financial year - a huge hike for a firm that made underlying operating profits of just GBP82.6m in the previous...

ORIEL RESOURCES (ORI).
July 7, 2006... Oriel Resources's shares have never really recovered following the difficulties the company faced immediately after it listed in London, when heavy selling by institutions taking profits, and the lack of a managed aftermarket, cut its market...

LA TASCA (LAT).
July 7, 2006... La Tasca's shares slipped almost 7 per cent on these results after the Spanish-themed restaurant group admitted that it has struggled during the World Cup. And, looking ahead, as its restaurant-opening programme is weighted towards the end of...

ALPHAMERIC (ALM).
July 7, 2006... Alphameric announced a share placing in June to raise GBP7.9m for the expansion of its leisure business. It plans to exploit its potential through a joint venture in the media rights market, which will provide pictures, audio and data to...

SOVEREIGN REVERSIONS (SVN).
July 7, 2006... Sovereign Reversions specialises in buying houses at a discounted price, and then allowing the occupants to remain in residence rent-free. And demand for these equity-release schemes is growing as retired couples seek to increase their...

BETEX (BTX).
July 7, 2006... Chairman Johnny Hon set up Betex last year with a view to creating an Asia-focused gaming company. Not surprisingly, start-up costs were responsible for a loss in the company's first year of trading. However, business levels in the last...

PORVAIR (PRV).
July 7, 2006... Porvair has a number of new products in the pipeline, and believes that it only needs one to take off to deliver significant growth. Its low-cost fuel-cell plates and diesel exhaust filters are designed to reduce environmental pollution. And...

NORTHGATE (NTG).
July 7, 2006... Northgate's growth has been as aggressive as the drivers of its white vans are reputed to be. During the past five years, the company's vehicle fleet has trebled and its share price has more than doubled. This success story hasn't gone...

DTZ (DTZ).
July 7, 2006... DTZ convincingly beat analysts' forecasts, and showed its confidence in the future with a 40 per cent rise in its final dividend. The group's investment in its international expansion helped power the performance, and even DTZ's previously...

CARNIVAL (CCL).
July 7, 2006... The elements have not been kind to Carnival recently. The world's largest cruiseliner operator, behind brands such as Cunard and P&O Cruises, has been battered by hurricanes in North America, falling US consumer confidence and rising fuel...

GREENE KING (GNK).
July 7, 2006... A strategy of expanding by quaffing half-pint rivals is paying off nicely for Greene King. The East Anglian brewer and landlord enjoyed 21 per cent growth in adjusted operating profits from GBP158m to GBP191m. Equally impressively, underlying...

FORBIDDEN TECHNOLOGIES (FBT).
July 7, 2006... When Forbidden Technologies went public in 2000, it gave itself seven years to become profitable. That's a long shot, but it looks as though it may be on the right track. Rather than licensing copies of its video compression software, the...

FRONTERA RES. (FRR).
July 7, 2006... Before March 2005, Frontera Resources had spent $70m on drilling operations in Block 12, an 5,000 sq km area of central Georgia. Then, in April, it raised $88.7m (GBP37.3m) on Aim via a placing at 150p a share. The key target is the 80 sq km...

STAGECOACH (SGC).
July 7, 2006... Just days before these results were announced, Stagecoach sold its London bus operations for GBP264m to Australian bank Macquarie. "London had peaked for us," explains chief executive Brian Souter, and passenger growth was starting to slow....

DDD (DDD).
July 7, 2006... DDD's problem is not its technology - which converts two-dimensional (2-D) images into three-dimensional (3-D) ones - but getting that technology used, notably in mobile phones. Around GBP500,000 of last year's turnover related to one contract...

ASOS (ASC).
July 7, 2006... Asos, the celebrity-inspired online fashion retailer, has posted a set of results that reflect the strong growth potential of its business. In fact, registered users to the company's website were up 60 per cent to 960,000. But what's even more...

PORTMEIRION (PMP).
July 7, 2006... Portmeirion's shares have moved sideways for seven years, but they may finally be climbing out of the rut. Its 2005 results benefited from a fall in exceptional debits from GBP1.19m to GBP319,000. And, before exceptional items, UK operating...

Beale.
July 7, 2006... Main market. Second-half results will be hit by the pre-opening costs at the Horsham store, and by disruption to trading caused by the refurbishment at the Bournemouth outlet.

SIGMA CAPITAL (SGM).
July 7, 2006... Sigma Capital is the new name for Sigma Technology and recognises the success of the company's property advisory activities. The sale this April of an office building in Liverpool for GBP46.5m earns Sigma a gross fee of GBP2.2m, before...

Advanced Smartcard Tech.
July 7, 2006... Aim. Higher operating profits, despite reduced turnover, indicate a change in the company's order mix.

Blue Star Capital.
July 7, 2006... Aim. One of Blue Star's Aim investment companies - Gasol PLC - is still pursuing a suitable acquisition within the oil and gas sector.

Driver.
July 7, 2006... Aim. The company has recently expanded operations in Scotland and the south-west of England.

IDOX.
July 7, 2006... Aim. Trading for the current year is now expected to be close to 2005's level. Management is attempting to refine the focus of the separate divisions.

Medisys.
July 7, 2006... Main market. The company continues to operate in a highly competitive market, and is now considering a move from the Official List to Aim.

Metals Exploration.
July 7, 2006... Aim. In the near term, Metals Exploration will be looking to upgrade the Runruno Project in terms of its size and resource category.

Off-Plan Fund.
July 7, 2006... Aim. The fund anticipates steady if unspectacular growth in the UK residential property market, and will continue to pursue investments in or around urban areas in the UK.

SectorGuard.
July 7, 2006... Aim. The licensing of security officers is set to have a positive influence on the company's results over the next 12 months.

MARCHPOLE (MPH).
July 7, 2006... Marchpole's pre-tax profit figure may have been static, year on year, but this time around it was actually depressed by one-offs. Specifically, the legal costs and start-up losses relating to the design and administration of the Ungaro brand...

Ciref.
July 7, 2006... Aim. Since admission to Aim, the company has announced two development agreements in Newport and Crewe.

AdEPT Telecom.
July 7, 2006... Aim. Unlike many telecoms operators, Adept is seeing substantial growth in both revenues and profits, although it should be noted that much of this growth has come through acquisition.

China Goldmines.
July 7, 2006... Aim. The company is in an advanced stage of its initial exploration programme relating to the Guanzhuang gold project.

Blackstar Investors.
July 7, 2006... Aim. Some GBP35m has been raised to fund investment in black economic empowerment projects in South Africa, where several investments have already been made.

INTERNATIONAL GREETINGS (IGR).
July 7, 2006... International Greetings reckons these results are something to write home about. The group designs, manufactures and distributes a wide range of greetings products, and gift and novelty items (including Christmas cards and crackers, and...