Investors Chronicle articles from June 2005

Investors Chronicle archives from June 2005

Hedge hogs' crossroads.
June 3, 2005... Do you remember where you were when the Berlin Wall came down, or when Margaret Thatcher resigned, or even when the last episode of Crossroads was broadcast? In at least two of these instances, you probably do. That's because they marked the...

Time to untangle the web.
June 3, 2005... The Investor Relations Society recently handed out its annual awards for the best investor-relations websites. But when I had a look at the winning sites, I was deeply uninspired. These were the WINNERS? The big question is: when are companies...

Hedge fund troubles.
June 3, 2005... The one thing that's grown faster than hedge funds in recent years is hedge-fund journalism. And a lot of it misses the point. Hedge funds are not a major force for instability in the financial system. Sure, some will go belly-up in the next...

Credit crunch.
June 3, 2005... So has the consumer credit crunch finally hit us? After months and years of headlines about Britons being a trillion pounds in debt, saving too little and relying on the plastic in their purses to satisfy their every conceivable whim, there are...

A passing smell.
June 3, 2005... The US is sniffing a whiff of stagflation. Consumer price inflation, at 3.5 per cent, is now close to a four-year high, while industrial production growth has slowed down. This matters. Stagflation is terrible for shares. Our chart, below,...

Not so moronic.
June 3, 2005... Are pension fund managers cretins? That's the question raised by figures from Russell Mellon Caps, which show that they have been switching out of UK equities into overseas ones - the latter now account for a record 32.3 per cent of funds'...

The value effect.
June 3, 2005... Value stocks are fall-ing out of fashion. Since 21 January, the FTSE 350 value index has underperformed the growth index by 3.4 percentage points. So, with retail sales - which have traditionally been correlated with value returns - faltering,...

Premiums sky high.
June 3, 2005... The destruction of New York's twin towers in September 2001 was always going to have huge implications for the world's insurers. And while this event turned out to be the most expensive catastrophe in the history of the global insurance market...

ITV beats the advertising gloom.
June 3, 2005... ITV confounded some sceptics this week, posting an upbeat trading statement. Fears had grown that a lack of news from the commercial broadcaster meant that advertising sales had hit a sticky patch. But, in the six months to June, advertising...

Pace lands huge US order.
June 3, 2005... Pace Micro's shares leapt almost 70 per cent, to 60p, when the set-top box maker revealed a huge new order with the leading US cable TV company, Comcast. The three-year deal - which replaces an existing arrangement - could be worth $550m. ...

Marconi lifted by Cable & Wireless.
June 3, 2005... Cable & Wireless has selected Marconi equipment to support the transition to its next-generation network. The initial five-year agreement is believed to be worth tens of millions of pounds, and there could be more to come. For Marconi, it...

Whitbread soars on bid rumours.
June 3, 2005... Rumours of a takeover bid have pushed Whitbread's shares to a record high. Apparently, a private equity firm is interested in buying the leisure conglomerate and carving up its rich assets. But weak consumer spending and Whitbread's pension...

Tech the opportunity.
June 3, 2005... Technology investors have had to put up with some pretty lacklustre performances from their portfolios over the past year or so, as the market has favoured other sectors. For example, while higher energy prices and an increased demand for...

Mining trouble.
June 3, 2005... There were more shenanigans in the Aim resources sectors this week. First White Nile, the mining company set up by former England cricketer Phil Edmonds, returned from a three-month suspension only to find its shares suspended again within four...

Cash holdings point to stock market rise.
June 3, 2005... There was mixed news for equity investors in Wednesday's Bank of England money- stock figures. The good news is that financial institutions' cash holdings are still high, despite a dip in April. They are equivalent to 18.7 per cent of the...

Emap aims for Scottish Radio stake.
June 3, 2005... Emap revealed this week that it had made a takeover approach to buy the remaining 63 per cent stake that it does not already own in radio broadcaster Scottish Radio (SRH). SRH rebuffed Emap's advances on 22 April, believing that the...

It's grim down south for morrison.
June 3, 2005... Although Morrison has revived the ailing stores it bought from Safeway, the improvements of late haven't lived up to optimistic investors' hopes. The supermarket chain is getting more customers into the ex-Safeway stores and they're spending...

Hanson relief at senate asbestos claims fund.
June 3, 2005... A bill to establish an asbestos compensation fund has been passed by the US Senate Judiciary Committee. The fund would provide some protection for companies such as Hanson that are facing costly asbestos lawsuits. But the bill needs to get...

Aiming high.
June 17, 2005... The Alternative Investment Market's (Aim) 10th birthday this week is unlikely to end people's distrust of the companies listed on the market. And Aim's rude health after 10 years has not discouraged the doubters. Yet it is not cliched criticism...

Bonds vs equities.
June 17, 2005... Even Federal reserve board chairman Alan Greenspan has been surprised by the lowness of US Treasury yields - real yields are below 1.8 per cent. Equity investors, however, shouldn't be surprised. Instead, they should be worried. In what...

A strong defence.
June 17, 2005... Are fund managers' cyclical fears abating? Their switch out of cyclical sectors into defensive ones, such as electricity and tobacco, in the early part of this year was widely reported. What's been less widely recognised, though, is the...

Pensions grow on trees.
June 17, 2005... I must be getting old. Well, older. 50 is still a long way away, I can assure you. Nevertheless, my children have started to consult me about pensions. My daughter has recently taken up waitressing. I said if she spends too much time...

Not for youngsters.
June 17, 2005... There's yet more evidence that traditional financial advice is wrong. Financial advisers often recommend that young people invest heavily in equities - one popular rule of thumb is that the percentage of financial wealth you should have in...

Limited predictability.
June 17, 2005... Where is the FTSE heading? This mundane question disguises a much more interesting one: how can the market be predictable at all? Obviously share prices next year will depend on investors' opinions then. And, if you're anything like me, you...

COMMODITY COMMENT: Oil - black gold.
June 17, 2005... For the past year, the fluctuating oil price has dominated financial headlines. Despite significant technological advances since the 1970 oil shocks, the world is still reliant on hydrocarbons as a principal source of energy. So, unfortunately...

The best home for your money.
June 17, 2005... It's been full steam ahead for property for the past five years or so, leaving buyers of residential and commercial buildings laughing all the way to the bank. Investors in shares, meanwhile, have had to make do with slim pickings over the same...

Internet's casino kings look to list.
June 17, 2005... Talk about 'casino capitalism'. Within a couple of weeks, the UK stock market's online gambling sector will have soared in value to several billion pounds. Following a huge rise in the shares of several smaller players, two giants are now...

Berkeley listens to Crosby bids.
June 17, 2005... Berkeley, the housebuilder, has received approaches for Crosby, its northern and Midlands subsidiary. Analysts believe bidders, which are known to include Australian property group Lend Lease, could pay around GBP250m for Crosby, which is 49.9...

Simon's trading worsens.
June 17, 2005... Ports operator Simon Group has warned that full-year pre-tax profits will be substantially below the board's previous expectations due to the loss of business with a key customer. Discussions concerning a possible 47.5p-a-share cash offer,...

Regent Inns approach for Urbium.
June 17, 2005... Despite being a takeover target itself, Regent Inns has made a bit approach to bar-owning rival Urbium. Putting Regent's Australian-themed Walkabout pubs with Urbium's swisher late-night bars may sound odd, but the cost savings would justify...

Budget hotels boom for Whitbread.
June 17, 2005... Consumer spending may be slowing, but Whitbread's trading suggests that we're still shelling out for some of their services. The group reported that its eateries and health clubs aren't doing so well, but its budget hotels are booming. ...

Imagination comes back for more cash.
June 17, 2005... Semiconductor group, Imagination Technologies, is to raise GBP9.5m through an institutional share placing. The company will issue 15m shares at 63p - equivalent to just under 8 per cent of the existing share capital - but has excluded private...

Corvus eyes Royal & Sun Alliance.
June 17, 2005... News that Aim-traded investment company Corvus Capital is considering a bid for insurer Royal & Sun Alliance (RSA) helped boost RSA's shares this week. RSA, however, denies that it has received an approach. The City is sceptical that...

TSL to sell tissue patch in Canada.
June 17, 2005... Tissue Science Laboratories (TSL) has won clearance from regulators to sell soft tissue patch Permacol in Canada. The company, which develops human tissue replacements from pig skin, has registered the product for the surgical repair of hernias...

US debt rise sparks spending fear.
June 17, 2005... There are growing fears of a downturn in US consumer spending. This week's figures show that retail sales last month fell by a bigger-than-expected 0.5 per cent. This follows figures from the Federal Reserve showing that households are...

Debtmatters set for Aim debut.
June 17, 2005... Bleak economic forecasts combined with growing consumer debt - which passed GBP1 trillion last year, and is increasing by around GBP1m every four minutes - provide the perfect backdrop for Debtmatters, which is to float on Aim next week. ...

Abraxus board under pressure.
June 17, 2005... Aim-listed cash shell Abraxus Investments has become the subject of an attempted boardroom coup by a property industry stalwart and a senior City lawyer. Neil Sinclair, a former non-executive director of Tops Estates, Robert Burrows, a partner...

Vodafone Japan launches NXT phones.
June 17, 2005... Shares in NXT jumped 15 per cent to 74p on news that Vodafone's Japanese operation will launch a phone featuring its SoundVu technology, which lets the display double as a loudspeaker. The new model - supplied by NXT licensee Toshiba - will...

Interest rates spur dollar recovery.
June 17, 2005... The US dollar's rise to a nine-month high against the euro isn't only due to the collapse of the EU constitution, economists say. The dollar has been driven up by interest rate expectations - futures markets expect US short rates to be two...

Thor to land on Aim.
June 17, 2005... The latest company to join the swelling ranks of Aim's junior miners is Thor Mining, an Australian company with a tungsten-molybdenum project near Alice Springs. Thor is raising between GBP1.2m and GBP1.8m from UK institutions, with prominent...

Zi Medical returns with oxford newtech deal.
June 17, 2005... Zi Medical is paying GBP5m for Oxford NewTech. The reverse takeover signals Zi's return to trading, following the suspension of its shares in March when the deal was first mooted. It's raising GBP3m via a placing at 7p a share to help fund...

UK Coal scraps bid talks.
June 17, 2005... UK Coal said that it has terminated bid talks, and denied a fresh approach from private-equity group Alchemy. It said that the potential bidder did not give enough information to justify continuing the talks. UK Coal's property assets are...

Fun Technologies adds Fanball Interactive.
June 17, 2005... Fun Technologies is paying up to $22m (GBP12.2m) for fantasy sports firm Fanball Interactive. The addition strengthens Fun's suite of products, and completes a busy few days. During the past week, Fun's gaming subsidiary, SkillJam, has signed...

Hope springs eternal for Consolidated.
June 17, 2005... Shares in Consolidated Minerals were temporarily suspended this week as the company confirmed that it was in talks over the possible acquisition of a stake in Australia's Hope Downs iron ore project. Hope Downs should produce 30m to 50m tonnes...

Week Ahead..
June 17, 2005... NEWS Wednesday 22 June Dixons' full-year figures, due out on Wednesday, may well be supported by continuing demand for must-have electrical goods, such as plasma televisions, but this is unlikely to make up for falling sales at PC...

Bunzl and Corus to fall out of footsie.
June 17, 2005... Support services group Bunzl and Anglo Dutch steelmaker Corus bid their farewells to the FTSE 100 on Monday 21 June when the quarterly index changes take effect. And if our theory on the subsequent performance of these laggard shares holds true...

GW Pharma's sativex plans go up in smoke.
June 17, 2005... The launch of the UK's first cannabis-derived drug faces another setback after regulators told GW Pharma this week that further clinical trials are needed before its multiple sclerosis drug, Sativex, can be approved. Analysts say that a...

Provalis issues profit warning.
June 17, 2005... Serial disappointer Provalis issued a profit warning this week. The diagnostics company has been unable to cope with the strong demand for its new 'in2it' doctors' surgery analyser, after teething problems with the analyser and its cartridge....

Shares' beta link breaks down.
June 17, 2005... Economists' oldest explanation for share price moves has broken down completely this year. During the past six months, there has been no correlation between shares' betas - their sensitivity to moves in the market - and returns. Although...

AstraZeneca faces GBP40m patent fine.
June 17, 2005... AstraZeneca has been fined by the European Commission for illegally extending the patent life of stomach ulcer drug, Prilosec. Officials fined the company E60m (GBP40m) after a six-year investigation into allegations that it illegally obtained...

Land Securities swoops for Lxb.
June 17, 2005... Land Securities has topped up its retail portfolio with the GBP360m acquisition of Lxb Properties. Lxb owns two retail warehouses and 10 supermarket sites, and tenants include Tesco and Walmart. The deal follows May's GBP517m purchase of...

Rolls-Royce takes off in China.
June 17, 2005... Rolls-Royce has landed an $800m (GBP442m) order to supply Air China with engines for its fleet of new Airbus A330s. The deal with China's flagship airline includes long-term TotalCare service contracts. Meanwhile, in a presentation at the Paris...

Choosing the right package.
June 17, 2005... To the untrained eye, the technical analysis software market has changed little in the past 10 years. But the sophistication and diversity of products available has vastly improved, to the point where some of the companies are guilty of...

EXPERT VIEW - Richard J Hunter.
June 17, 2005... It has been said that fear and greed drive the markets and, from a psychological standpoint, this statement contains a great deal of truth. Indeed, the whole issue of investor psychology has become something of a science in itself, with...

WHAT TO BUY - Best and worst.
June 17, 2005... Websites ADVFN 4 out of 5 Of the really big portals, ADVFN is still probably the best. It's great strength is the sheer depth and breadth of information available, although it's relatively expensive to access these tools and to...

Software basics.
June 17, 2005... Most investment software systems fall into one of two camps: those aimed at frequent traders who require detailed technical analysis, or those aimed at 'fundamentals' investors who probably trade less often and who need powerful data-mining...

MAJESTIC WINE (MJW).
June 17, 2005... Majestic Wine has turned in another vintage performance, posting its 12th consecutive year of profit growth, with underlying pre-tax profits rising 24 per cent to GBP13.2m, and like-for-like sales up 8.3 per cent. But what makes these figures...

GRAINGER TRUST (GRI).
June 17, 2005... Since the year-end, Grainger has secured a deal with Norwich Union that will bulk up its home-reversion assets. Home-reversion is a type of equity release where a company buys a house below market value and allows the tenants to live in it...

FIRST PROPERTY (FPO).
June 17, 2005... Property underwriting is the main earner for First Property at the moment. The company guarantees vendors a minimum price for their property. If the property is sold for more than that, First gets a share of the upside. If not, First buys the...

WORKSPACE (WKP).
June 17, 2005... London and South-East small business landlord Workspace says that it remains on track to grow its GBP718m portfolio to GBP1bn by September 2008. Although the company missed its GBP60m purchase target for the last financial year by GBP17m,...

CARCLO (CAR).
June 17, 2005... Carclo is selling its traditional specialist wire business for up to GBP8.6m, which will complete the group's restructuring, and allow it to focus on specialist technical plastics. Profits at the specialist wire arm dropped 27 per cent to...

DELTRON (DET).
June 17, 2005... Deltron's interims reflect the start of a recovery period in the electrical components cycle that most industry-watchers were taking as read. But first-quarter 2005 figures from the Association of Franchised Distributors of Electronic...

PARK (PKG).
June 17, 2005... Current executive chairman Peter Johnson founded Park Group in 1967 as a supplier of Christmas hampers. Park has since branched out into savings clubs, lending activities and high-street gift vouchers. In October, Mr Johnson - who owns 74...

CHARLES STANLEY (CAY).
June 17, 2005... in order to reduce its reliance on volatile trading commissions, Charles Stanley has been shifting towards fee-based work such as investment management and corporate finance and the sale of personal equity plans and individual savings accounts....

RENOLD (RND).
June 17, 2005... With these results, Renold has lost its status as an income stock, as it passed its final dividend. After two profit warnings, there were no surprises in the figures - profits were flattened by steel price rises averaging around 40 per cent,...

IFX (IXF).
June 17, 2005... IFX says volatility made a welcome return to the financial markets during the second half after a dull summer in 2004. But while volatile markets are good news, it was IFX's volatile revenues that were causing the concern. Exposure to...

PAYPOINT (PAY).
June 17, 2005... PayPoint is delivering on the growth promises made at the time of its September 2004 flotation. It now has 13,000 terminals installed - up 15 per cent on a year ago - and plans to roll out another 1,600 this year. What's more, the public can...

WINCANTON (WIN).
June 17, 2005... Wincanton has its sights set on the fragmented continental European logistics market. Its acquisition of P&O's Trans European business in 2002 laid the foundations for what Wincanton hopes will be a growth area. Turnover in continental Europe...

GALAHAD GOLD (GLA).
June 17, 2005... Broker coverage on Galahad is a bit thin on the ground these days after deputy chairman Jim Slater helpfully informed the press last month that London's mining analysts didn't understand the industry. Perhaps that's why Galahad has switched...

HAMBLEDON MINING (HMB).
June 17, 2005... Hambledon raised GBP5m in April to finish off the feasibility study on its Sekisovskoye gold deposit in Kazakhstan. It needed the new money in part because the initial open-pit stage of the project has proved richer than was envisaged at the...

CHAMBERLIN& HILL (CMB).
June 17, 2005... Chamberlin & Hill's acquisition of Russell Castings in Leicester last year is proving a wise move. Russell neatly plugs a gap between the small castings Chamberlin makes in its Leicester foundry and the larger ones made at Scunthorpe. Russell,...

LANDROUND (LDR).
June 17, 2005... Landround has seen a strong bounce from a poor first half a year ago, when it was hit by nearly GBP500,000 of additional costs associated with a large voucher promotion. But interest really centres on the company's Buy and Fly! promotion. Buy...

CHAPELTHORPE (CPL).
June 17, 2005... The Chapelthorpe soap opera reached a crescendo earlier this year with rebel shareholders calling for a break-up of the company to release shareholder value, and forcing an extraordinary general meeting (EGM) in March. Eventually, however, an...

DEWHURST (DWHT/DWHA).
June 17, 2005... Even though it lost a big US order for next-generation ATM machines, Dewhurst's keyboard division had a good year in 2004, and this carried on into the first half. There was strong demand for the new chip-and-pin keyboards, while the lift...

VP (VP.).
June 17, 2005... VP's group managing director Neil Stothard says that negative sentiment towards the housing market is having no effect on the group's hire sales to the housebuilding industry. Indeed, the specialist equipment rental provider grew revenues and...

PENNA CONSULTING (PNA).
June 17, 2005... Penna's recruitment and outplacement divisions are, by their nature, counter-cyclical to each other. Depending on how you look at it, this either prevents the company from ever firing on all cylinders, or provides the business with defensive...

WILLIAM RANSOM (RNSM).
June 17, 2005... William Ransom has had a mixed year. While its newly acquired Health Perception arm performed strongly, the rest of the business was hit by the collapse of its UK sales agent, Food Brokers, which went into administration in February. This led...

WHITEHEAD MANN (WHT).
June 17, 2005... Whitehead Mann has been fighting for its survival, with staff defections, a lack of new business and high debt levels making life tough. The company was forced to pass the final dividend - and another payment looks unlikely for at least 12...

FUTURE (FUTR).
June 17, 2005... Future says that it intends to double the size of revenues and profits over the next four years, so the GBP30.5m acquisition of 38 titles from Highbury, expected to complete in June, is certainly a step in the right direction. But, in the short...

TEN ALPS COMMUNICATIONS (TAL).
June 17, 2005... Ten Alps posted excellent growth last year as it delivered some 50 TV programmes to broadcasters. And this year should be no different. It is already working on 35 more programmes and, in February, it began producing a TV channel for education...

FIRST CHOICE (FCD).
June 17, 2005... Life is still a beach for First Choice. The tour operator has once again shrunk the size of the seasonal loss that it always makes during the off-season. And business is shaping up nicely for the key summer trading period, where it makes its...

FKI (FKI).
June 17, 2005... FKI is close to completing its complex restructuring programme, but this has led to large exceptional costs - GBP105m last year relating mainly to business disposals. Future losses from business sales, and from closing businesses that can't be...

TELECOM PLUS (TEP).
June 17, 2005... Telecom Plus is growing revenues thanks to the strength of its broadband business, but its energy division is dragging it down. The alternative utility operator still aims to be a one-stop shop for utility needs, with customers saving money by...

PURSUIT DYNAMICS (PDX).
June 17, 2005... Pursuit Dynamics' innovative PDX system uses steam and supersonic shockwaves to pump, heat, mix and process liquids, without any moving parts. Originally developed for marine motors, the system has now found applications across various...