Investors Chronicle articles from June 2004

Investors Chronicle archives from June 2004

Benefiting from fraud.
June 4, 2004... First there was the Treaty of Versailles, then there was the company called Versailles. What do they have in common? How about betrayal? The treaty, as history books tell us, betrayed the German people. On a somewhat smaller scale - although...

The marvel of models.
June 4, 2004... In the story 'Holes in the ground', I show that my model of mining stocks points to the sector falling. But should you believe the model? There are many legitimate criticisms of this approach to investing. Two of the more popular ones, though,...

Warning signals.
June 4, 2004... Apparently, the British manufacturing industry is in rude health. Forget the bearish tone of the official data, a new survey from the Chartered Institute of Purchasing & Supply suggests that manufacturing activity in the UK actually expanded in...

The Kookolds of Forminster.
June 4, 2004... Instances of ineffective non-executive directors and over-generous remuneration committees are never in short supply, and fantastical examples at household-name companies get plenty of exposure. But I recently came across a real stunner in a...

Oil terror.
June 4, 2004... One of the first ever assignments I had as a rookie business reporter for the BBC (alarmingly, 10 years ago this autumn) was to meet with some middle-ranking executives from the oil industry for a briefing on their latest initiative to cut...

The rate effect.
June 4, 2004... You get no prizes for knowing that the monetary policy committee will probably raise the repo rate next week. What's more interesting is the impact this will have on gilts. In theory, there are two contradictory possibilities. The market...

Fighting back.
June 4, 2004... The situation is familiar to all of us. A company is on the ropes following a savage profit warning and breaches its banking covenants. We panic and sell, expecting to see the company collapse. Six months later, a glance at the share price...

Life goes on.
June 4, 2004... Here's a novel investment proposition - buy shares in a company that has little chance of winning substantial new business, few prospects for growth, and the near certainty of closure over the medium to long term. Doesn't sound too...

Waterford cooks up big profit on All-Clad.
June 4, 2004... Waterford Wedgwood is selling All-Clad, its US-based cookware subsidiary, for $250m. It bought the company five years ago for $110m. The Irish luxury goods group also announced that tighter margins and higher-than-expected pension costs at...

End in sight to consumer boom.
June 4, 2004... Signs are emerging of an end to the consumer boom. The Bank of England (BoE) reported this week that annual growth in consumer credit fell to 12 per cent in April, its lowest since May 2001. Also, annual growth in the M0 money stock - which is...

Sparks fly as Aerobox and Watermark fall out.
June 4, 2004... A spat has blown up over a 50:50 joint venture between Aerobox and Watermark, with each company accusing the other of being in breach of contract. In September 2003, Aerobox, which makes air-freight containers, teamed up with Watermark, a...

Halfords revs up for float.
June 4, 2004... Halfords, the car and bike accessories retailer, insists that its float is on track, despite last week's setback for Umbro. The sportswear manufacturer had to cut its float price at the last minute to 100p, from the original price range of...

Anite reports GBP14m hit for loss-making deals.
June 4, 2004... Software and computer services group Anite reported stronger trading in its end-of-year update. But the outlook was marred by GBP14m of provisions against loss-making deals. Finance director Christopher Humphrey says the provisions were...

IFX offers hedge fund exposure through CFDs.
June 4, 2004... Exposure to the potentially high returns that hedge funds deliver is something that many investors would like, but only a wealthy minority can afford. Now, though - thanks to a new product from a financial betting company - experienced retail...

Hunting risks shareholders' wrath.
June 4, 2004... Hunting, the oil services group, has infuriated holders of its convertible preference shares by proposing to cancel them on highly unfavourable terms. The board argues that the pref shares, issued in an era of much higher interest rates,...

The names of the game.
June 4, 2004... Lloyd's of London is still a mutual entity, with many of its managing agents still funded by 'Names'. But in recent years, the focus of attention has been far more on the stock-marklet listed Lloyd's players, whose shares have delivered good...

Systems Union buys lasata.
June 4, 2004... Systems Union (SU) is taking the next step in growing its business intelligence (BI) division by paying up to GBP10m for BI software provider, Lasata. Having paid GBP23.7m for German-based BI group MIS at the tail end of last year, this is...

Madisons Coffee plans name change.
June 4, 2004... Madisons Coffee plans to change its name to Gourmet Holdings, and hit the acquisition trail imminently. Having exited the coffee bar market last November, the focus has been on its Richoux restaurant chain, which has performed well. And...

XL TechGroup looks to list on Aim.
June 4, 2004... This week, US-owned XL TechGroup is expected to announce that it will seek an Aim listing to raise about GBP25m from both institutional and private investors. The Florida-based company has a network of contacts in the US patent world that it...

Next week.
June 4, 2004... MONDAY 7 JUNE Finals: Acal, Belhaven, Healthcare Enterprise, Intellexis, IFX, Merrydown, MITIE, Top Ten AGMs: Bertham, Rowe Evans EGM: European Nickel Economics: British Retail Consortium's May retail sales monitor ...

M&S comes out fighting.
June 4, 2004... Marks and Spencer (M&S) has come out fighting after last week's surprise bid from Philip Green, owner of BhS and Arcadia. The group is determined not to succumb to the fate that has befallen other victims of Mr Green's shopping sprees: bought...

UBM expands its medical business.
June 4, 2004... United Business Media (UBM) has unlocked its acquisition war chest, buying a European medical publisher, MediMedia, for E283m (GBP188m). After paying for MediMedia, UBM will have over GBP300m of acquisition funding left - so its shopping...

De Vere checks out of race for rival.
June 4, 2004... Hotelier De Vere has withdrawn from the contest to acquire budget inn chain, Premier Lodge. Although De Vere's management thought that Premier would make a useful addition to its own budget hotel business, it said that it was determined not to...

Estates & General falls to low bid.
June 4, 2004... Shares in city-centre office specialist Estates & General (E&G) leapt 19 per cent this week, to 253p, after its board accepted a 255p-a-share bid from Winten. Winten has already secured acceptances from 75.2 per cent of E&G's shareholders....

Contract wins boost Jarvis.
June 4, 2004... Jarvis, the struggling support services group, has sealed two new contracts. One is to provide a new secondary school and public library in Croydon. The other is to provide operational and maintenance services at Plymouth University's halls of...

Cable & Wireless splashes out in Monte Carlo.
June 4, 2004... Cable & Wireless (C&W) signalled its return to financial health this week with a spending spree. First it bought Bulldog, a UK broadband internet specialist, for GBP18.6m. Then, on Wednesday, came the E162m (GBP108m) acquisition of a 55 per...

Jigsaw fits nicely into Nord Anglia.
June 4, 2004... Nord Anglia, the education support services specialist, has expanded its presence further in nursery schools, buying up to 28 nurseries from rival group Jigsaw for GBP13.25m, plus up to GBP720,000 in 'transitional costs'. The deal values each...

New Chinese hedge launch from Baring.
June 4, 2004... Baring Asset Management is launching a Chinese hedge fund, which aims to produce returns of between 15 and 25 per cent a year. Manager Khiem Do, based in Hong Kong, and his team will invest in a portfolio of between 30 and 40 stocks on a...

IFX offers CFDs on UK hedge funds.
June 4, 2004... IFX now offers a range of contracts for difference (CFDs) on UK hedge funds. A major obstacle for many hedge fund investors is the high initial investment, which can be up to GBP60,000. Many funds are also illiquid, allowing one dealing day...

Low-risk portfolio hits all-time high.
June 4, 2004... Our low-risk portfolio has reached an all-time high relative to the FTSE 100. Since September 1998, it has gained 51.8 per cent, while the FTSE 100 has returned just 2.2 per cent. This is strong evidence that the standard capital asset...

Crown sells South American contracts.
June 4, 2004... Crown Corporation, which listed on Aim last October and raised GBP140m in the process, has announced the sale of its South American contracts for $350m. The contracts were originally awarded last November, and related to the installation of...

Amerindo team facing calls for removal.
June 4, 2004... Amerindo investment trust chairman John Botts and fund manager Alberto Vilar are under fire from Millennium Partners. The activist investor, which owns almost 30 per cent of the fund, has tabled two resolutions for the trust's upcoming annual...

Tradinglab certificates can protect from falls.
June 4, 2004... New derivative certificates from Tradinglab offer enhanced exposure to the FTSE 100 or six shares with full capital protection and no requirement for a margin deposit. If you think that the market or a share will rise in price, these...

A question of trust.
June 4, 2004... The financial services industry must improve the standard of information made available to the public. The Financial Services Authority (FSA) has already introduced new rules governing the presentation of fund performance data in...

Cutting the cake.
June 4, 2004... High levels of volatility in financial markets look set to be with us for some time. The threat of international terrorism, unresolved conflict in the Middle East and rising oil prices will inevitably impact both world trade and economic...

Double take.
June 4, 2004... One of the joys - and perils - of running your own pension scheme is that you can take punts that the typical occupational pension fund trustee just wouldn't stomach. So it was that I found myself the other day "doubling up" on an...

BOOTS (BOOT).
June 4, 2004... Boots' chief executive Richard Baker admits that taking on the supermarkets will be hard work. "This business is catching up in a very competitive market and Boots needs to change fast," he says. Prices are being lowered, with a new basic range...

MYTRAVEL (MT.).
June 4, 2004... As any savvy holidaymaker knows, you have to be sceptical about pictures of the resort in the brochure - the place is seldom as nice in real life. A similar rule applies for investors considering Mytravel's own assessment of the outlook for its...

RYANAIR (RYA).
June 4, 2004... These results provided further proof, if any were needed, that the low-cost airline bubble has properly burst. As presented, the numbers don't look too bad. But it's Ryanair's performance in the fourth quarter that shows just how much pressure...

SCI ENTERTAINMENT (SEG).
June 4, 2004... A salvo of games is to be fired into the market in the second half to take advantage of peak selling time in September, so SCI is assured of a profitable year. As it is, first-half losses were well below market expectations of GBP4m, mostly...

ITE (ITE).
June 4, 2004... Good news on forward bookings and cost controls has seen ITE enjoy forecast upgrades. Chief executive Ian Tomkins says that 2004's sales are already 92 per cent booked against targets, and bookings for 2005 are ahead 9 per cent, on a...

GWR (GWG).
June 4, 2004... GWR is feeling justifiably pleased with itself, and has decided to share its bonhomie with investors in the form of its first dividend increase in four years. Looking at underlying numbers, turnover from continuing operations grew 8.8 per cent...

EUROMONEY INSTITUTIONAL INVESTOR (ERM).
June 4, 2004... After a horrible two years, business is getting better for Euromoney. The upturn is still fragile - a strong first quarter was followed by disappointment in the second - but the outlook for May and June is good. House broker UBS has...

NXT makes all the right noises.
June 4, 2004... NXT, the loudspeaker technology company, sent its share price rocketing by over 50 per cent with three announcements in as many days. TVR will use NXT speakers in its sports cars, QinetiQ and Lufthansa Technik will use them in aircraft...

Find comfort in commodities.
June 4, 2004... The gold Bullion Securities (GBS) exchange-traded fund (ETF) has seen more trading by volume in the past two months than any other ETF listed in London. Despite being launched just six months ago, its market capitalisation is now $540m and,...

Property and your portfolio.
June 4, 2004... Residential Investing in residential property has certainly paid off recently. Over the 10 years to the end of 2003, the Nationwide House Price index rose by 163 per cent, compared with a 49 per cent rise in the FTSE All-Share index over...

PLASMON (PLM).
June 4, 2004... After four years and GBP25m of development costs, Plasmon's new data storage technology (UDO) is now in production, albeit after a few teething problems. Shareholders must now wait to see how well it sells. UDO is an optical storage...

SYNSTAR (SYN).
June 4, 2004... Synstar has completed phase 4 of its restructuring programme - business realignment - and is now entering the final phase: turnover and margin growth. In December, GBP5m was allocated for these tasks, of which half has since been spent. A...

INVESTEC (INVP).
June 4, 2004... Investec received a big boost from the stock market recovery last year, and also benefited as recent cost-cutting came through. This was particularly noticeable in the UK, where profits jumped 72 per cent to GBP39m on the back of solid results...

BTG (BTG).
June 4, 2004... BTG's shares tumbled by more than 50 per cent last November, after the US drugs regulator halted Phase II clinical trials of its lead product, Varisolve - a treatment for varicose veins. Varisolve has passed Phase III in the EU, but North...

DOMESTIC & GENERAL (DGG).
June 4, 2004... Adjust for the fact that Domestic & General (D&G) has changed its year-end from end-June to end-March, and the company's pro-forma pre-tax profits jumped 158 per cent, EPS rose 156 per cent and turnover grew 6 per cent. The wide discrepancy...

LIONTRUST ASSET MANAGEMENT (LIO).
June 4, 2004... Though the overall increase in profits from this niche UK equities fund management group appears modest, core pre-tax profits (which exclude performance-related fees) doubled to GBP8.5m, due to strong growth in recurring fees....

PARAGON (PAG).
June 4, 2004... The integration of the Mortgage Trust business, bought last year from Britannic, is part of the reason for these impressive numbers. The operation added GBP275m of the GBP798m of new loans, a 141 per cent increase on the GBP331m advanced in the...

TOPPS TILES (TPT).
June 4, 2004... The British obsession with the weather has, for once, helped a retailer. Topps Tiles chief executive Nick Ounstead says the reason why the group has continued to increase market share is because of its sponsorship of Carlton's TV weather...

KELDA (KEL).
June 4, 2004... In spite of last yeaR's hot, dry summer, Kelda's main UK business, Yorkshire Water, put in an encouraging trading performance, lifting profits by 8 per cent to GBP253m. A 6 per cent price increase that went through on 1 April last year, and...

PENNON (PNN).
June 4, 2004... Pennon has had an interesting couple of weeks. It was bidding for Shanks' UK landfill activities to boost its Viridor waste management business, but walked away when its GBP203m offer was trumped by private-equity firm Terra Firma's GBP228m...

BRISTOL WATER (BWG).
June 4, 2004... Capital efficiency has now been sharpened after a thorough refinancing, which resulted in Bristol Water Holdings becoming Bristol Water Group. By raising long-term debt in the regulated water arm to 'ring-fence' the business, some GBP51m of...

GREAT PORTLAND ESTATES (GPOR).
June 4, 2004... In common with other London office players, Great Portland is now seeing signs of a pick-up in the West End, where 75 per cent of its portfolio is located. But this wasn't enough to stop its portfolio dipping 1.4 per cent in value, with a...

BIG FOOD GROUP (BFP).
June 4, 2004... Big Food (BFG) has admitted that trading has deteriorated at its Iceland chain. Underlying sales in the past six weeks are down 1.9 per cent, compared with a fall of just 0.2 per cent in the final quarter of last year. "I'd hope sales won't be...

PILLAR PROPERTY (PLL).
June 4, 2004... Following another wave of property disposals, including the sale of its 50 per cent stake in the Glasgow Fort retail site to the Hercules Unit Trust (HUT), Pillar plans to return GBP108m - or 100p a share - to shareholders in August. Its main...

DE LA RUE (DLAR).
June 4, 2004... What do De La Rue and radical Shi'ite cleric Moqtada al-Sadr have in common? Answer: they've both received a big boost from regime change in Iraq. The support services company won the contract to print Iraq's new Saddam Hussein-free banknotes....

ELECTRO- COMPONENTS (ECM).
June 4, 2004... A pick-up in trading during the second half ensured the results were marginally up on the previous year. Strong sales growth in North America and a return to growth in the UK were the main factors behind an 11.3 per cent like-for-like...

SONDEX (SDX).
June 4, 2004... Sondex is keen to stress that its pre-flotation capital structure, featuring very high interest charges, distorted these results. On a pro-forma basis, operating profits were up 17 per cent to GBP5.3m, despite a substantial increase in research...

CHLORIDE (CHLD).
June 4, 2004... With the world apparently becoming increasingly vulnerable to power failures - witness the recent blackouts in North America, the UK, Italy and Scandinavia - Chloride thinks that heightened awareness of deteriorating power quality and...

PILKINGTON (PILK).
June 4, 2004... Although a cyclical recovery is on the way, for now there's no escaping the depressed conditions that Pilkington has to put up with. But that hasn't stopped the world's largest glass manufacturer from being impressively cash-generative, with...

BREWIN DOLPHIN (BRW).
June 4, 2004... The stock market recovery is to thank for the rise in Brewin Dolphin's profits. Not only are these results a big improvement on the first half of last year, but profits are also 27 per cent ahead of the same period two years ago. Discretionary...

SCAPA (SCPA).
June 4, 2004... The green shoots of recovery seem to be sprouting at Scapa. This has enabled the company to restore a small dividend payout - it was forced to skip the last two payments as a result of write-offs in 2003 that wiped out distributable reserves....

SHANKS (SKS).
June 4, 2004... These results were overshadowed by news that Shanks is selling its landfill activities to private equity group Terra Firma in a GBP228m deal. The disposal radically alters the shape of Shanks, leaving it as a Benelux waste-services operation...

HOMESERVE (HSV).
June 4, 2004... Homeserve (formerly South Staffordshire Group) only came into being on 6 April 2004 after demerging from the water business. It's now focused on its 'insured repair solutions' business - essentially marketing, administration and handling of...

SSL (SSL).
June 4, 2004... SSL's mammoth divestment programme is at last complete. Only a week before these results, the company agreed to sell its Regent Infection Control business (Biogel gloves and Hibi antiseptics) to a management buy-out group backed by Apax...

DAIRY CREST (DCG).
June 4, 2004... Dairy Crest's management is unperturbed by Asda's decision last month to select Arla as its sole liquid milk supplier. Finance director Alastair Murray says that milk sales to Asda generated just GBP20m in annual turnover, and that the loss has...

CELSIS INT. (CEL).
June 4, 2004... CELSIS Shareholders will be delighted to have received their first dividend, which demonstrates management's confidence in the business's prospects. It makes tests that identify microbial contamination at least five times faster than...

UA GROUP (UAS).
June 4, 2004... Over the past 12 months, UA's shares have soared from around 350p to over 800p. Some 20 per cent of the shares have changed hands, as farmers have sold their holdings and private investors have bought. The purchasers have an eye on UA's...

SIGMA TECH. (SGM).
June 4, 2004... Sigma floated in April 2000, and now manages two funds: a GBP17m technology fund, and a GBP6m Innovation fund investing in companies in the east of Scotland that have European Union backing. The idea of managing other people's tech portfolios...

TALENT (TTV).
June 4, 2004... Talent reversed into internet shell RMR, and has been recruiting talent ever since. New recruits include Anne Miles, former managing director of Fox Kids UK, and Alexandra Henderson, deputy head of political programmes at the BBC. Talent wants...

PROTHERICS (PTI).
June 4, 2004... Protherics moved into the black this year, thanks to strong sales of CroFab, an antidote for rattlesnake bites - CroFab's sales climbed 55 per cent to GBP13.2m. Management reckons the potential annual market for rattlesnake antidotes totals...

API.
June 4, 2004... Main market. The foils and laminates business continues to improve, but there is still much to be done at API's metalled-paper division. The group expects to return to profitability in the second half.

Dowding & Mills.
June 4, 2004... Main market. Debt was cut by just over GBP5m during the period, as cash flows continued to improve, but the debt-to-equity ratio remains high at over 200 per cent.

GB Group.
June 4, 2004... Main market. GB scaled back its profits estimates earlier this year. Acceptance of URU, a joint venture with BT, continues to prove encouraging. Current trading is marginally ahead of last year.

GREENCORE (GNC).
June 4, 2004... Greencore reported a 6 per cent gain in like-for like sales of convenience foods in the first half. That demonstrates an impressive degree of resilience to the pricing squeeze currently being forced on food manufacturers by the big...

BIOTRACE (BOI).
June 4, 2004... Biotrace has become much more of an international business following two acquisitions last year. In July, it bought Maltec, a loss-making sales operation in Scandinavia, for up to GBP0.43m, and then International Bioproducts (IB), for as much...

Treatt.
June 4, 2004... Main market. Sales in US dollars were up by 54 per cent, but fell by 9 per cent in the UK. Strong cash flow continues to help the company cut debt, which now stands at GBP3.1m.

Unidare.
June 4, 2004... Main market. Central costs were reduced following the downsizing of Unidare's central office, and conditions were ripe for growth during the period.

Chamberlin & Hill.
June 4, 2004... Main market. Chamberlin's markets have started showing signs of improvement. The acquisition of Russell Castings significantly increases Chamberlin's foundry capabilities.