Investors Chronicle articles from March 2003

Investors Chronicle archives from March 2003

Three steps to heaven.
March 7, 2003... Well done, Rick Haythornthwaite. The man charged with turning round engineering hotch-potch Invensys - and pretty well having the freedom to do anything he wanted, such was the mess in which the group floundered - has so far presided over a 75...

Heady brew.
March 7, 2003... Is the coffee house the new pub? Gerry Ford, chief executive of Caffe Nero certainly thinks so. Its his explanation for the companys latest massive jump in sales - up 70 per cent over the past year. And he sees plenty more where that came from....

iSOFT boosted by GBP34.2m injection.
March 7, 2003... Healthcare IT specialist iSOFT is to benefit from a GBP34.2m investment from private equity firm General Atlantic Partners. Under a deal announced this week, General Atlantic will subscribe for 5.89m new shares in iSOFT and buy another 10m from...

PizzaExpress offer price leaves investors cold.
March 7, 2003... As a former chairman of PizzaExpress, Luke Johnson ought to know what the business is really worth. So investors are rightly cynical about his 367p-a-share cash offer for the restaurant chain. His move comes when the companys fortunes are close...

Overseas investors pile in to US markets.
March 7, 2003... Foreign investors confidence in US assets is at near-record levels - despite the sluggish economy, the threat of war and the weak stock market. Figures released by the US stock market last week showed that overseas investors bought...

Glaxo to appeal after Paxil ruling.
March 7, 2003... A ruling by a Chicago judge has paved the way for a cut-price copy of GlaxoSmithKlines (GSK) best-selling drug, the anti-depressant Paxil. Judge Posner ruled that the formulation belonging to Apotex - a Canadian generics firm - did not infringe...

Shire boosted by Fosrenol approval.
March 7, 2003... Shire Pharmaceuticals has provisional approval from the US regulators for Fosrenol. In an approvable letter, the US Food and Drug Administration said it is prepared to permit the drug - which mops up toxic levels of phosphates in the blood of...

Accounting woe at Waste Recycling.
March 7, 2003... Accounting irregularities, bad debts and planning problems look set to turn forthcoming results from Waste Recycling Group (WRG) into ugly reading. The shares have tumbled 10 per cent to 231p since the waste management company unveiled the...

Six Continents offer short on detail.
March 7, 2003... Hugh Osmonds hostile bid for Six Continents has given shareholders in the hotel and pub operator an alternative to the companys own plan to split itself in two. But the choice is still not particularly appetising. Under Mr Osmonds offer,...

Jarvis highlights hotels gloom.
March 7, 2003... A profit warning from Jarvis Hotels has underlined the difficulties facing the industry. The company was already feeling the pinch from the downturn in business travel in the UK, and conditions have recently taken a further turn for the worse....

Retail gurus slam Safeway bids.
March 7, 2003... Two giants of the retail world have lambasted both Wm Morrison's and J Sainsbury's bids for Safeway. David Simons is currently chairman of Littlewoods but is perhaps best-known for the messy merger of Somerfield, where he was chief executive,...

HILTON (HG.).
March 7, 2003... As a well-managed business with a top brand name, you might expect Hilton to do better than the competition - even when times are bad. But its recent performance has been distinctly lacklustre, leading to a sharp derating of the shares. And...

TELEMETRIX (TMX).
March 7, 2003... At first glance, this looks a robust set of results from a company operating in some very depressed sectors. Zetex, Telemetrixs analogue semiconductor manufacturing arm, turned in an operating profit of GBP1.5m despite the detrimental impact of...

ELEMENTIS (ELM).
March 7, 2003... On an underlying basis, these results were a major improvement on 2001 - operating profits before acquisitions, goodwill amortisation and one-off charges rose by two-thirds to GBP20.7m, with margins up from 3.2 per cent to 5.7 per cent. ...

PROJECT TELECOM (PJT).
March 7, 2003... Project Telecom continues to buck the telecoms trend. As rivals scramble for customers and funding, Project is growing profits and dividends at an impressive rate. The good results come thanks to growth in the core business, which sells...

MICHAEL PAGE (MPI).
March 7, 2003... The recruitment industry remains depressed and the bad news is that it seems to be getting worse. Michael Page said that, in the second half of 2002, its revenues were 6.2 per cent below those of the first half. And in the first two months of...

SHERWOOD INTERNATIONAL (SHC).
March 7, 2003... Insurance companies have had a turbulent year, and the IT budget is often the first victim of cutbacks. That made 2002 tough for Sherwood International, and the group has warned that a strong 2003 pipeline will be undermined by more order...

RAC (RAC).
March 7, 2003... Lex Service finally renamed itself RAC last year - three years after it acquired the motoring services organisation - to take advantage of its strong brand. But more recent acquisitions and disposals were behind the reported fall in earnings....

Insurance investigation could dent Dixons.
March 7, 2003... Dixons shares hit a seven-year low of 89p this week as the Competition Commission made it clear that its investigation into extended warranties is likely to hit the retailer hard. The commission is investigating the insurance policies sold by...

RPS (RPS).
March 7, 2003... RPS has spent the past few years buying up a host of businesses. Last year, it combined four of these to form a new planning, transport and environment division. Adding to the mix is Decembers GBP2.8m acquisition of ecological consultancy...

REED HEALTH (RHG).
March 7, 2003... After the shocking events at Reed Healths AGM last November, when a well-regarded management team was ousted by majority shareholder Alec Reed, the group needed a steady set of results to calm investors nerves. What shareholders got actually...

BRAMBLES (BI.).
March 7, 2003... When a company becomes known for issuing profit warnings, a set of shock-free results can do wonders for its share price. That's the position Brambles finds itself in - on the day it released these figures, the shares jumped 11 per cent. ...

WHITE YOUNG GREEN (WHY).
March 7, 2003... Investors may have thought that figures this strong were a thing of the past in the support services sector, but the City is struggling to find a bad word to say about White Young Green (WYG). Growth was helped by the E3.2m (GBP2.2m)...

THISTLE HOTELS (THO).
March 7, 2003... BILSs bid this week for the 54 per cent of Thistle it does not already own can only be described as opportunistic. The cash offer, pitched at 115p a share, values the hotelier at GBP555m - or almost half net asset value. Shareholders are...

AGGREKO (AGK).
March 7, 2003... Despite power supply contracts for the Winter Olympics and the World Cup, Aggrekos 2002 could not have been much worse. If the collapse of the North American temporary power market wasnt bad enough, the company also had to contend with the...

AVIS EUROPE (AVE).
March 7, 2003... The economic slowdown has sent corporate spend on plane, train and automobile travel spiralling down the plughole, so its no surprise that Aviss car hire business has slumped. Corporate hire represents 22 per cent of Aviss sales, but the...

DAVIS SERVICE (DVSG).
March 7, 2003... The important news at Davis is that last years big acquisition - Copenhagen-based textile maintenance company Sophus Berendsen - is being successfully integrated. Berendsen chipped in with eight-month profits of GBP24.7m, but this was offset by...

INCHCAPE (INCH).
March 7, 2003... After two bumper years in a row for new car sales, UK motor dealers are preparing for a quieter time in 2003 - although current industry forecasts suggest this year will still be the third-highest market ever recorded. Given the likelihood that...

NESTOR HEALTHCARE (NSR).
March 7, 2003... The introduction of NHS Professionals, the NHSs in-house nursing agency, has eaten into Nestors long-term contracts. NHS Professionals has been adopted by 52 of the 304 NHS trusts. Success has centred in London, but it has faltered in the...

AMERSHAM (AHM).
March 7, 2003... Currency weaknesses and a curb on research spending in the pharmaceutical industry have made it a tough year for Amersham. In discovery systems, which makes the laboratory equipment for drug discovery, sales slipped 1 per cent to GBP394m, while...

RENTOKIL INITIAL (RTO).
March 7, 2003... James Wilde, Rentokils new chief executive, used these results to flesh out the changes he will make to the way the business is run. They are hardly revolutionary. Changing the management structure and streamlining back-office functions looks...

ISOTRON (ISO).
March 7, 2003... Last years acquisition of Gammaster, for GBP34m, made Isotron the world leader in contract sterilisation of medical products - and added GBP6.2m of revenues. Otherwise, revenues rose 17 per cent to GBP9.5m, largely on the back of increased...

GENEMEDIX (GMX).
March 7, 2003... Protein-based drugs like alpha- interferon are still protected by patents in the US and Europe. So GeneMedix set out to supply these drugs in the Far East, where the patent laws are more relaxed. Last year, it launched GM-CSF, which regenerates...

SHIRE PHARMACEUTICALS (SHP).
March 7, 2003... Shire Pharmaceuticals has acquired MethyPatch from Noven for $25m, plus up to $125m in milestone payments. MethyPatch - which should win US approval this year - is a treatment for attention deficit hyperactivity disorder (ADHD), administered...

QUEENS MOAT HOUSES (QMOT).
March 7, 2003... With business travel in the doldrums, Queens Moat Houses (QMH) has been filling rooms by offering more leisure deals. But this isnt as profitable as corporate business, and trading conditions have been aggravated by increased insurance and...

EASYNET (ESY).
March 7, 2003... Easynet is eking its way to profitability, but theres still some way to go. Losses before interest, tax, depreciation and amortisation were reduced by 23 per cent, but still came in at GBP22.6m, and net cash outflow last year was a hefty...

MFI FURNITURE (MFI).
March 7, 2003... MFI suffered badly during the last major housing slowdown a decade ago. But the company insists that, despite making two-thirds of the furniture it sells, its a far more flexible outfit now. Chief executive John Hancock says that just 15 per...

KERRY (KYGA).
March 7, 2003... Kerry is confident that the increased advertising in the past few months from the likes of Unilever and Nestle - Kerry's main customers - augurs well. After all the distractions of 2000 and 2001, when most of the food giants were wrapped up in...

FYFFES (FFY).
March 7, 2003... Fyffes was mulling over a potential acquisition of Chiquita, the worlds second-biggest banana producer, which emerged from Chapter 11 bankruptcy protection last year. It decided to hold on to its cash pile, however, and plans to make smaller...

PERSIMMON (PSN).
March 7, 2003... Beating City forecasts is something of a requirement for housebuilders these days, and Persimmon did so comfortably. The pre-goodwill, pre-tax profit of GBP268m was well ahead of the expected GBP237m-GBP260m range, as the company concentrated...

TAYLOR WOODROW (TWOD).
March 7, 2003... Chief executive Iain Napier has had a busy first year in the job. Hes restructured the company, cut GBP30m of costs and moved the headquarters. Taylor Woodrow is now primarily a housing business, with operations in the UK and US. Theres also a...

NOVAR (NVR).
March 7, 2003... The economic slowdown has left Novar at a strategic dead-end. Management recognises that there is little sense in keeping the company together in its present form. After all, theres not much overlap between making aluminium construction...

TDG (TDG).
March 7, 2003... Last year was a lot tougher for tdg than these figures suggest. Chief executive David Garman says that there were one-third fewer projects up for tender, and those that were up for grabs often took a long time to come through. The company did...

MAYFLOWER (MFW).
March 7, 2003... These were a mixed set of results from Mayflower. The bus manufacturing division, TransBus, turned in a resilient performance and stands to benefit from increased demand, certainly if the congestion charge experiment in central London forces...

MERSEY DOCKS & HARBOUR (MDK).
March 7, 2003... Mersey Docks had already flagged up the higher insurance, interest and depreciation charges that increased costs by GBP5.3m. Most of this was absorbed by the main port operations, which saw operating profits fall from GBP52.3m to GBP51.6m....

PADDY POWER (PAP).
March 7, 2003... Foot-and-mouth played havoc with the sporting calendar in the first half of 2001, and this has flattered Paddy Powers results for the year just gone. But dont underestimate the companys snappy progress so far. It now has 129 betting shops...

MARLBOROUGH STIRLING (MAS).
March 7, 2003... Marlborough Stirlings first full year as a public company was one that it will want to forget. A profit warning in September, followed by a cautious sales outlook last month, shattered the firms reputation as a safe haven in the software...

St Jamess Place Capital.
March 7, 2003... In our results report on St Jamess Place (28 Feb 2003, page 54), the embedded value should have read 109p a share and not 65p as stated. The recommendation remains fairly priced.

LINX PRINTING TECHNOLOGIES (LPT).
March 7, 2003... Tight cost-control, product innovation and a strong worldwide dealer network helped Linx withstand tough market conditions. The Far East remains the companys main area of strength. Whereas its operations in the US and UK only produced low...

COLT TELECOM (CTM).
March 7, 2003... At the end of last year, the judge who ruled against an aggressive US funds petition to wind up Colt - on the basis it had no chance of being able to repay its bonds when they become due in 2005 - said:"There is not, and never has been, any...

HSBC (HSBA).
March 7, 2003... Despite global economic uncertainty, HSBC cut its bad debt charge by a chunky $716m on the year to $1.3bn - that represents a healthy 0.38 per cent of average advances. But strip out the effect of falling provisions and the groups operating...

ROYAL BANK OF SCOTLAND (RBS).
March 7, 2003... RBS may have lost its crown as the Citys favourite bank - the reassuringly dull Northern Rock and the fast-growing (too fast, wed argue) HBOS are now more favoured by City analysts. But it still manages to churn out impressive numbers. Its...

SINGER & FRIEDLANDER (SFL).
March 7, 2003... With equity markets in such a poor way, Singer & Friedlanders (S&F) results were bound to suffer. Restructuring - mainly 2001s flotation of Nordic stockbroker Carnegie - explains much of the slide in profits. S&F now owns just 30 per cent...

SCHRODERS (SDR).
March 7, 2003... The 20 per cent fall in funds under management to GBP88.3bn looked grim, but the bulk of this came from market movements. Schroders only endured a net outflow of GBP2.2bn last year, well short of the GBP6bn it suffered in 2001. That seemed to...

AVIVA (AV.).
March 7, 2003... The most important point about Avivas figures was that they were no worse than expected. After the City had been spooked by Prudentials less-than-optimistic assessment of its future dividend policy, there was relief at Avivas robust words....

ULTIMATE LEISURE (ULG).
March 7, 2003... Bar operators are hardly flavour of the month - and with good reason. A downturn in consumer spending and overambitious expansion by the industrys big boys has led to a big de-rating of the sector. But not everyone is suffering, as Ultimate...

BRITANNIC (BRT).
March 7, 2003... Britannics less than ideal figures did, at least, deliver few surprises. In line with the companys gloomy pronouncements in January, the dividend was scrapped and policyholders will have to put up with a deferral of the annual bonus. Worth...

DOMESTIC & GENERAL (DGG).
March 7, 2003... Short-term pain for long-term gain is the process that Domestic & General is still going through. The turnover hike shows it has some chunky new manufacturers warranty contracts, but benefits will not begin to flow through until next year. For...

SPORTECH (SPO).
March 7, 2003... Sportech may be an outsider in the UK bookmakers stakes, but it certainly has potential. Its Littlewoods brand has a fine pedigree within sports betting, albeit in football pools. If exploited correctly, it could help the firm to win new...

RANK (RNK).
March 7, 2003... Rank believes Hard Rock Cafe remains a strong brand, hence plans for new outlets in provincial towns and the development of Hard Rock casinos. The market, too, believes its one of Ranks major assets. So although it is only 15 per cent of the...

SMG (SMG).
March 7, 2003... SMG had a debt problem, so IT decided it could do without its newspaper business. A deal to sell that division to US group Gannet for GBP216m was agreed before Christmas, and regulators will decide whether or not to give approval in the next...

TRINITY MIRROR (TNI).
March 7, 2003... New chief executive Sly Bailey says her job is to unlock value from the group and deliver it to shareholders. Thats intensified talk of a break-up. Trinity Mirror reportedly turned down a 450p-a-share venture capitalist bid last month....

PROVIDENT FINANCIAL (PFG).
March 7, 2003... Provident Financials 7 per cent operating profit growth to GBP182m was better than hoped. But it was news of the launch of a new"small sum" UK credit card and a move into Mexico that delighted the City. These are the latest new ideas following...

UNITED BUSINESS MEDIA (UBM).
March 7, 2003... Few businesses can have had to contend with sales falling as fast as CMP, the group's US technology magazine publisher. Sales there were down 44 per cent, following on heavy declines in 2001. Frantic cost-cutting dragged it back into...

PEARSON (PSON).
March 7, 2003... Pearson gets 64 per cent of revenues from the US education market, and state budget deficits have got investors rattled. Chief executive Marjorie Scardino says books and testing account for under 2 per cent of education budgets, and President...

CLS (CLI).
March 7, 2003... CLS spent over GBP68m last year building up its property portfolio in France, where it bought 11 office properties, and Sweden, where it acquired further commercial and residential developments. The new properties chipped in with profits of...

LEGAL & GENERAL (LGEN).
March 7, 2003... Social trends are a double-edged sword for Legal & General (L&G). Growing concerns about state pension provision are forcing people to make their own arrangements, and theyre looking to the better-quality providers, like L&G. The contribution...

WEMBLEY (WMY).
March 7, 2003... As any savvy gambler knows, you should always quit while youre ahead. Investors in Wembley might well be tempted to take that advice right now. Shares in the greyhound track and betting operator have raced ahead recently. Profit-taking...

BENCHMARK (BMK).
March 7, 2003... Market conditions continue TO BE"challenging" for West End property company Benchmark, with tenants trying to extract better terms. Rental levels for good modern offices in St Jamess and Mayfair have dropped around 20 per cent in the past six...

CRH (CRH).
March 7, 2003... CRH was pleased with these results, achieved against the backdrop of a nasty triple whammy. For a start, conditions in its core US and Irish markets were poor, especially in the industrial and commercial sectors. On top of that, the company had...

WILSON CONNOLLY (WSNC).
March 7, 2003... Wilson Connollys progress last year is not quite as good as it looks, as 2001s results were depressed by GBP4.5m of restructuring costs. Nevertheless, profits before goodwill amortisation and exceptionals rose by 29 per cent to GBP61m, and the...

AGGREGATE INDUSTRIES (AGG).
March 7, 2003... Aggregate has strengthened its position in the UK building materials market with 15 acquisitions. Here, demand quickly recovered from the hiatus caused in the summer by the Jubilee celebrations and the World Cup - UK operating profits rose 23...

BBA (BBA).
March 7, 2003... BBA is under the same dreadful macroeconomic pressures as the rest of the airline industry, but there are glimmers of optimism. Business aviation saw fuel volumes up 3 per cent as the corporate jet market became more popular after 11 September....

BRITISH VITA (BVIT).
March 7, 2003... This was a resilient performance, given the lacklustre demand afflicting most of British Vitas markets. Operating profits, before goodwill amortisation and a GBP46.6m one-off gain from the sale of shares in US associate Spartech, climbed by 9...

CLOSE BROTHERS (CBG).
March 7, 2003... Close Brothers may have a diverse operational base, but the profitability of three of its four divisions - corporate finance, asset management and market-making - is closely correlated to the health of the stock market. So, considering the...

WILSON BOWDEN (WLB).
March 7, 2003... Another set of record results from Wilson Bowden came in ahead of expectations. Profits from housebuilding jumped 30 per cent on the back of a 7 per cent rise in completions to 4,164, with average selling prices up by one-fifth to GBP198,600....

LAVENDON (LVD).
March 7, 2003... Lavendons push into the powered access equipment market in Germany proved ill-timed, given the downturn in construction and manufacturing in that region. And there was a double whammy as the German involvement led to the failure of a bid...

CRODA (CRDA).
March 7, 2003... Dont be fooled by the figures - Croda actually did pretty well last year. Pre-tax profits from its continuing, predominately oleochemical-focused operations, rose by 23 per cent to GBP38.3m, with sales up 3 per cent to GBP295m. Reported...

URBIUM (URM).
March 7, 2003... Demergers are often a good way of unlocking shareholder value but, for Urbium, this hasnt so far proved the case. The fashionable bar operator split from film production licensing group Chorion last year, but its share price has drifted...

COOKSON (CKSN).
March 7, 2003... Last summer, Cookson launched a rights issue in truly lousy stock market conditions. The company was being pummelled by the slump in the electronics and steel industries, and it risked losing investors confidence for good. Largely because the...

ROLLS-ROYCE (RR.).
March 7, 2003... Rolls-Royce is pulling out all the stops to appease its City critics. It needs to. The companys shares languish close to an all-time low amid concerns over its weak cash flow, high debt levels - both on- and off-balance-sheet - and accounting...

ANGLO AMERICAN (AAL).
March 7, 2003... Dont be too perturbed by the apparent plunge in profits - 2001s figures were inflated by a large exceptional gain from the unwinding of the cross-holding with De Beers, and the disposal of other non-core holdings. On a headline basis, profits...

ROBERT WALTERS (RWA).
March 7, 2003... When your market is tough and getting worse, its important to get the basics right. So far, so good at Robert Walters. The company, which has a big exposure to the struggling financial services and IT industries is getting rid of the dead wood...

SHL (SHL).
March 7, 2003... SHL's management won its long- running battle with the company's founders in December by ousting them from the board. It also managed last month to get rid of the cyclical Park business, which has been dragging down the company's performance,...