Investors Chronicle articles from November 2003

Investors Chronicle archives from November 2003

Starting grid.
November 28, 2003... We got a reminder this week of what the stock exchange is supposed to be about, and it came from the unlikeliest of places - motor sport. A young British driver is selling shares in himself to the general public. Sam Hancock, a 23-year-old...

An American nightmare.
November 28, 2003... Andy Haste, the chief executive of beleaguered insurer Royal & Sun Alliance (RSA), seems to have a certain amount in common with Tony Blair right now. While Mr Blair's woes increasingly reflect his support for America's cause, so it is the case...

Markets v equities.
November 28, 2003... Free markets are under attack. In the US, President Bush has compounded the imbecility of steel tariffs by imposing quotas on imports of Chinese textiles. And in the UK, next month's pre-Budget report will probably tighten the stranglehold that...

Insurance winners.
November 28, 2003... Things haven't gone well for Lloyd's insurer Goshawk. In October, the company hiked reserves to cover losses on events such as the Columbia Space Shuttle disaster and the Accident Group's collapse. Its shares have dropped from 140p in February...

Living in the present.
November 28, 2003... Once I stumbled across a piece of investment research written in 1912. Yes - can you believe it? - investment research, or something purporting to be that, was being written even then - a good 20 years before anyone talked of price/earnings...

No fidelity to the cause.
November 28, 2003... It's raining corporate governance state- ments. It must be five or six years since some institutional investors started to publish policy documents setting out how they viewed and would implement their responsibilities in this sphere. Now, I...

Next week.
November 28, 2003... Monday 1 December Interims: Acal, Belhaven, BSS, BTG, Christian Salvesen, VP Finals: Dawson Holdings, Richmond Foods, Economics: UK October Consumer Credit, UK Final M4/M4 Lending, UK Confederation of British Industry service...

Medicare boost for UK drug companies.
November 28, 2003... After a year of dilly- dallying, US Congress has finally agreed on sweeping reforms to the country's huge Medicare programme. The $395bn plan to help American senior citizens pay for their prescription drugs is the biggest shake-up in the...

Clothes sales boost Tesco.
November 28, 2003... Analysts are predicting that Tesco will be one of the few retail stars this Christmas, after the company revealed that underlying sales were even stronger in the third quarter than in the second. Like-for-like UK sales grew by 6.9 per cent,...

Shares rise as Hays completes restructuring.
November 28, 2003... Hays unveiled the final big step in its restructuring programme this week when it confirmed plans to sell the bulk of its logistics arm to US private equity group Platinum Equity for GBP102m. Hays will separately sell GBP100m of the division's...

Secure Trust warns on Arbuthnot trading.
November 28, 2003... Analysts have slashed profit forecasts for Secure Trust Banking after the mini financial conglomerate warned of disappointing trading at its stockbroking arm, Arbuthnot Securities. Management said that equity trading volumes have been...

ScS issues third profit warning since August.
November 28, 2003... Shares in ScS Upholstery plunged 27 per cent on Wednesday to 171p as the company issued its third profit warning since August. It also admitted it had called in accountancy firm Ernst & Young to investigate a shortfall in last year's profits....

Wembley braced for bidding war.
November 28, 2003... A bidding war is set to break out over Wembley, the scandal-hit gaming parlour and greyhound stadium owner. Penn National, an American racetrack and casino operator, has confirmed that it is in early negotiations with the company, and several...

Defensive stocks rally.
November 28, 2003... The defensive stock anomaly has strengthened. Although the All-Share index has risen 2.9 per cent in the past month, the 10 lowest-beta stocks have outperformed the 10 highest-beta stocks, rising by 3.1 per cent against 0.7 per cent. On...

London Stock Exchange agrees clearing deal.
November 28, 2003... London Stock Exchange (LSE) ended uncertainty surrounding its clearing arrangements this week by signing a new contract with London Clearing House (LCH), its traditional partner. The relationship had been threatened by LCH's proposed merger...

Bookies cheer video decision.
November 28, 2003... High-street bookmakers are celebrating victory in their battle over the legality of fixed-odds betting terminals (FOBTs) in their shops. FOBTs are high-tech video gambling machines that offer computerised versions of roulette and other...

Industrial recovery more likely in europe.
November 28, 2003... An industrial recovery is more likely in Continental Europe than the UK, according to business surveys released this week. Business confidence in Germany rose to its highest level since January 2001 in November, while the National Bank of...

Carillion sells mature PFI stake.
November 28, 2003... Building contractor Carillion has fulfiled its long-held commitment to sell-off its stakes in mature private finance initiative (PFI) projects, with the disposal of its holding in Darent Valley Hospital. The sale will generate an exceptional...

Network aims to expand at home and abroad.
November 28, 2003... Network Limited is the latest Australian firm to adopt a dual listing on Aim. It has joined the junior market in a bid to broaden its shareholder base, while also providing access to capital to continue its acquisition programme. Network...

Hunting earns boost with Gibson purchase.
November 28, 2003... Hunting's shares perked up after the oil services company said it was buying the remainder of Gibson Energy, its Canadian marketing and transportation business, from ChevronTexaco. The shares had slumped to an eight-month low following a profit...

CeNes looks set to acquire Therasci.
November 28, 2003... Following a two-year restructuring period, CeNes is back in good health, with news that it has agreed the acquisition of biotechnology minnow TheraSci for up to GBP3.7m in shares. TheraSci is focused on low-risk research into the central...

BKN International gets animated.
November 28, 2003... Frankfurt-listed television firm BKN International is joining Aim next month via its fast-track listing system. BKN focuses on the international distribution and marketing of animated children's television programmes and the exploitation of...

Sell GW Pharma, say bankers.
November 28, 2003... The first cannabis-based medicine in 30 years could become available throughout the UK before the end of this year. But Canadian investment bank Canaccord Capital is urging investors to sell shares in the company behind the product, Aim-traded...

Ofex agrees to add more market makers.
November 28, 2003... Historically based on just one market maker, Ofex has finally bowed to pressure from institutional and private investors alike by agreeing to introduce leading market maker Winterfloods. This is a major coup for Ofex and follows a recent move...

Christmas boom for Wolfson.
November 28, 2003... Wolfson Electronics' first trading statement as a listed company saw its shares leap 7 per cent, when it revealed strong demand from manufacturers gearing up for Christmas sales. The company said that the rate of sales growth in 2003 would...

UK biotechs target extra funds.
November 28, 2003... Two of the UK's high-profile biotechs are taking advantage of renewed enthusiasm for the sector. Antisoma hopes to raise GBP15.2m, while Xenova is seeking GBP21.1m - both are using a placing and open offer, and both are fully underwritten by...

The old guard: still going strong.
November 28, 2003... The personal finance sector thrives on change - new concepts, new buzzwords and innovative schemes to encourage us to invest. So how come the largest investment fund easily accessible to private investors - so large it is in the FTSE 100 - was...

Rich pickings.
November 28, 2003... Private equity is the grown-up end of the venture capital market, investing in established companies in need of a change of ownership or management to unlock unrealised potential. Economic and market cycles are turning in its favour. Investor...

Make the change.
November 28, 2003... It's an industry that's full of sharp practice, rip off interest rates, unfair and enormous penalty charges and grossly misleading advertising. Have you guessed which one we're talking about? No, it's not loan-sharking, it's credit cards. ...

Tomkins hit by weak dollar.
November 28, 2003... FTSE 100 engineering group Tomkins has unveiled a mixed set of third-quarter results. A strong trading performance at the company's Gates automotive arm was undermined by the weakening of the US dollar. Tomkins generates around 70 per cent...

Crest benefits from midlands move.
November 28, 2003... Crest Nicholson's decision to beef up its exposure to central England and move away from the expensive central London market is paying off. In an end-of-year trading statement, Crest said that unit sales are slightly ahead of last year, and...

EMI jilted as Warner deal falls through.
November 28, 2003... EMI has been left standing at the altar, again. Crushed bouquet in hand and mascara running with tears - it's a sight to move the hardest of hearts. But how should dispassionate investors feel? EMI had offered around $1.6bn for Warner...

Close Finsbury Eurotech considers merger or share issue.
November 28, 2003... The future of tiny specialist trust Close Finsbury Eurotech, which has turned in a sparkling performance this year, will be discussed at a meeting in December. The investment trust, which is managed by Michael Bourne and has outperformed rival...

COMMENT: Don't get swept away by rising house prices.
November 28, 2003... Interest rates have gone up, and further rises are expected, but it's making no difference to those of us investing heavily in bricks and mortar. If we're worried about a housing market crash, it's not being reflected in house prices. A survey...

Money makers.
November 28, 2003... The days of double-digit returns are over. In today's environment of low inflation and low growth, not to mention excess capacity and heightened competition, income is becoming an ever more important component of total returns. Even if you...

Bearbull portfolio update.
November 28, 2003... The major problem facing the Bearbull portfolios is a long-standing one: how to invest the surplus cash lying in the Growth and Speculative Portfolios. The recent performance of the Growth Portfolio highlights the possible opportunity loss...

Baronsmead targets GBP9m fund-raising.
November 28, 2003... Baronsmead VCT 4, a generalist venture capital trust, is looking to raise an additional GBP9m of funds, which will increase its size to GBP30m. Chairman Philip Dunne says the funds will be used to increase the number of investments from the...

Pick winners in 5 minutes.
November 28, 2003... Finding undervalued shares can be hard work. You could spend days calculating ratios such as EV/Ebitda multiples, working out free-cash-flow figures or estimating return on capital employed. And undertaking all this research is no guarantee...

Final-salary scheme closure gathers pace.
November 28, 2003... One in four final-salary pension schemes in the UK closed their doors to new members in the year to April - and the closure of these schemes is accelerating, says the National Association of Pension Funds. Companies are opting to offer...

Assured Care Centres.
November 28, 2003... Traded on Ofex. The lower figures reflect the sale of the Borehamwood Care Village in January 2003. Occupancy levels at its remaining nursing home were poor during late summer.

Ten Alps.
November 28, 2003... Ten Alps benefited from increased revenues from TV and advertising activities. It is now targeting larger TV contracts, and acquisitions of a far greater scale than it has made before.

E*Trade launches warrants service.
November 28, 2003... E*Trade has launched a covered warrants trading service. The cost of a trade in Soc Gen and Goldman Sachs' warrants - with a minimum deal size of GBP250 - is GBP1. Trades in Soc Gen, Goldman Sachs, JP Morgan and Trading Lab warrants where there...

Pre-budget statement to shake up tax rules.
November 28, 2003... Gordon Brown's pre-Budget statement, due in a couple of weeks' time, could result in airport tax being doubled from 1 April next year, just in time for the holiday season, and the capital gains tax-free period cut to two from three years on a...

William Ransom.
November 28, 2003... There was a small decrease in branded sales at Ransom's consumer healthcare division. But a proposed site move should bring operational savings.

Acquisitor.
November 28, 2003... This is Acquisitor's first set of results since its capital reorganisation. It recorded a net profit of GBP50,081 and net assets of GBP1.1m (39p a share), at the year-end.

Cardpoint.
November 28, 2003... The acquisition of Green Machine and Securicor Cash Machine provided a step-change for Cardpoint. It continues to benefit from falling costs and increased charges per transaction.

Conroy Diamonds & Gold.
November 28, 2003... Drilling for gold continues in Ireland and further results are expected before the end of the year. The rising gold price is providing a useful backdrop for Conroy.

CELLTALK (CLT).
November 28, 2003... Celltalk reversed into Aim-shell General Industries in June 2000, raising GBP1.79m via a placing at 115p. Shortly after that, margins were squeezed by a combination of a shortage of phones and reductions in handset subsidies. The main...

Medical House.
November 28, 2003... Medical House continued to develop its drug delivery business and expanded its orthopaedics manufacturing capacity. Its strong product portfolio should help to underpin growth.

STAGECOACH THEATRE ARTS (STA).
November 28, 2003... Stagecoach joined Aim in December 2001. It must be one of the cheapest and easiest franchises to run - and it's expanding fast. Providing you have experience in performing arts, have worked with children and are a "positive, friendly person",...

Pipehawk.
November 28, 2003... It was a difficult year for Pipehawk, which is now focusing on becoming a GPR technology and service-based organisation. The group took steps to make cost savings of GBP500,000 a year.

Coffeeheaven.
November 28, 2003... Like-for-like store sales growth was up 20 per cent. The plan is to continue opening new stores. Trading in the first few weeks of the second half has been in line with expectations.

PARK GROUP (PKG).
November 28, 2003... Park's main business is its cash-savings scheme, offering vouchers exchangeable at 70 retail chains. It increased 2002-03 operating profits from GBP745,000 to GBP2.22m, and accounted for net interest receipts of GBP1.33m (GBP1.77m last year)....

STODDARD (SDD).
November 28, 2003... The guessing game at Stoddard is what it will be worth when it has finished its downsizing from three factories in Elderslie and two in Kilmarnock, to one in Kilmarnock. Two-thirds of the Elderslie site now has planning consent for...

DIMENSION RES. (DMR).
November 28, 2003... A currency mismatch hit North Cape Province-based Dimension Resources (DR) hard last year. DR's costs are paid in rands, while its stone is sold is US dollars. Without this currency drag, DR expected to report a profit last year. It supplies...

GAMINGKING (GGK).
November 28, 2003... Gamingking supplies more than 2,500 private clubs with lottery machines, either using paper-tab or electronic pull-tab tickets. Just over a year ago, it bought the Littlewoods pull-tab operations for GBP500,000 cash and, in January 2003,...

INTELEK (ITK).
November 28, 2003... Happier stock markets have pushed defined pension deficits into the background. But they have not gone away, and are now introducing new items into company accounts. Consider, for example, the accounts of Intelek, whose 2002-03 results were...

INTER LINK FOODS (ITF).
November 28, 2003... Inter Link continues to impress. Indeed, 2002-03 profits would have been GBP300,000 higher, but for the size of the increase in its insurance premium. The results include 10 weeks' contribution from Soreen malt loaf (the UK's third-largest...

ICAP (IAP).
November 28, 2003... ICAP has been hit by controversy of late. July's AGM saw protests about executive remuneration from institutional shareholders, and ICAP is facing legal action from Cantor Fitzgerald over patent infringement. Then, just last week, three of...

UNIVERSAL SALVAGE (UVS).
November 28, 2003... Universal Salvage is still suffering from the loss of its most important customer, Royal Bank of Scotland's Direct Line, in mid-2002. In 2001, it put 50,000 vehicles Universal's way, which contributed 40 per cent of turnover. Universal has...

SSL INTERNATIONAL (SSL).
November 28, 2003... A disposals programme conducted by SSL will leave it focused on the consumer business - which includes key brands, Durex and Scholl. Last month, the healthcare group sold Marigold gloves for GBP22m, and it should complete the sale of the...

NATIONAL GRID TRANSCO (NGT).
November 28, 2003... Although National Grid Transco insists that it has delivered virtually all of its power successfully over the past decade in the UK, London's power blackout in August remains a blot on the company's copybook. Management admits that its...

SOUTH STAFFORDSHIRE (SSF).
November 28, 2003... The home services division was the star performer at South Staffordshire - turnover increased 63 per cent and operating profits more than doubled to GBP8.3m. Operating margins in this unit jumped from 9.6 per cent to 17.3 per cent. Selling home...

SCAPA (SCPA).
November 28, 2003... To say that Scapa has come unstuck in recent times is something of an understatement. The maker of adhesive tapes for technical uses has been hit hard by weak industrial demand, issuing three profit warnings in its last financial year....

FKI (FKI).
November 28, 2003... New chief executive Paul Heiden isn't due to report back on his strategic review until January next year. But judging by his remark in these results that FKI is "expected to remain as a diversified industrial group", a major shake-up is...

TEN ALPS COMMS. (TAL).
November 28, 2003... Ten Alps communications looks a win-ner if the new broadcasting regulator, Ofcom, ensures that ITV and BBC make greater use of independent producers. Last year, it bought documentary producer Brook Lapping plus animator Red Welly for just...

Flintstone Technologies.
November 28, 2003... The investment portfolio within Flintstone continues to make good progress. A recent investment has been made in electric motor developer Ultra Motor.

BPB (BPB).
November 28, 2003... After making substantial acquisitions in the US and Europe over recent years, BPB's focus has now turned to internal investment. Management plans to increase spending on new plants to take advantage of growth opportunities. In the first half,...

TBI (TBI).
November 28, 2003... TBI has a simple message: it owns three regional UK airports, each of which is running under capacity, so it can handle growing traffic from low-cost airlines without really increasing its costs. So profits should grow disproportionately. That...

WORKSPACE (WKP).
November 28, 2003... At a time when most London property companies are struggling, Workspace's business model - providing accommodation for small businesses - continues to deliver impressive results. Its property portfolio enjoyed a GBP14.4m valuation uplift...

BABCOCK INTERNATIONAL (BAB).
November 28, 2003... Babcock has sold the remnants of its materials-handling business, completing its transformation into a dedicated support services group. That shift was cemented after the half-year end when Babcock was named preferred bidder for a contract...

GLOTEL (GLO).
November 28, 2003... Glotel has become the latest recruitment consultant to highlight a sunnier outlook for the industry, which has been in a dire trough over the past two years. But while rivals have talked tentatively about improving conditions, Glotel is able to...

JARVIS (JRVS).
November 28, 2003... Following October's decision to exit the rail maintenance business - one of its key income streams - Jarvis served up a few more nasty surprises with these results. One interim chairman, Paris Moayedi, is being replaced by another, Steven...

DE LA RUE (DLAR).
November 28, 2003... De La Rue's shares shot up nearly 10 per cent on the day that these results were announced, with the group insisting that it was confident of having a good second half. It does have a history of overpromising, but these results, which beat...

WYNDEHAM PRESS (WDSW).
November 28, 2003... Wyndeham's trading statement earlier this month helped soften the blow of this disappointing first-half performance. The commercial and direct-mail divisions went into reverse as customers went out of business and it lost out on price to...

SCOTTISH RADIO (SRH).
November 28, 2003... Scottish Radio is gradually adding to its portfolio of local radio stations. In July, it bought GWR's share of the Vibe 101 and Vibe FM stations in England for GBP17.6m. Scottish has also agreed to buy Dublin's FM 104 station, but the Irish...

Hartest.
November 28, 2003... The group restructured its balance sheet. Progress at its instrumentation division looks promising, but delays have hit the medical division.

SABMILLER (SAB).
November 28, 2003... A big frothy head is no guarantee of not getting small beer. That goes equally for corporate profits as it does for lager. Favourable currency movements and acquisitions helped SABMiller's cash profits to fizz upward by 61 per cent in the first...

GLENMORANGIE (GMGA) (GMGB).
November 28, 2003... You might have thought that the current signs of economic recovery both here and in the US would foretell good times for the malt whisky trade. But management at Glenmorangie doesn't share this view. Instead, it's distinctly cautious about the...

MERCHANT RETAIL (MRT).
November 28, 2003... Merchant Retail's small fragrance shops are a storming success with its customers. Sales at the Perfume Shop grew at an underlying rate of 13 per cent during the most recent half-year period. However, the company's less-focused retail...

SAFEWAY (SFW).
November 28, 2003... Safeway's shareholders remain in the dark as to the future of their company. William Morrison is likely to bid again before Christmas, once it has finalised bid details with the Office of Fair Trading (OFT). Safeway stresses that the past 10...

GUS (GUS).
November 28, 2003... Did GUS overpay for Homebase last year? Many questioned whether GUS was making a sensible purchase when it bought the DIY chain from venture capitalists for GBP900m - and the numbers don't yet stack up. Homebase's sales increased by 4 per cent...

Intercede.
November 28, 2003... Gross profit margins increased from 72 per cent to 82 per cent as the proportion of Edefice software sales rose from 52 per cent to 62 per cent. Pre-sales activities are at an all-time high.

ENTERPRISE INNS (ETI).
November 28, 2003... Although Enterprise Inns' shares have outperformed massively this year, the company's management thinks that some investors still doubt the sustainability of its tenanted pub model. The most often repeated concern is that Enterprise squeezes...