Investors Chronicle articles from November 2004

Investors Chronicle archives from November 2004

Falling out of favour.
November 5, 2004... If, like many investors, you're getting nervous about the prospect of an economic slowdown next year, the best advice may simply be to avoid cyclicals. But while that advice has its merits, it's also rather glib. Not all cyclicals have...

Linker puzzle.
November 5, 2004... One of the most annoying traits of financial commentators is their habit of assuming that investors are irrational just because they are not behaving as expected. However, I can't help doing this when I think of index-linked gilts (linkers)....

Debt of gratitude.
November 5, 2004... While the politicians were still arguing, the markets had already settled their bets. From the early hours of Wednesday morning, traders around the world made a working assumption that George Bush had won the US presidential election. As far as...

Broking on success.
November 5, 2004... I have been keeping more than a watchful eye on the stockbroking sector for most of this year - and for more reasons than one. In fact, I haven't really had a choice as brokers have been taking more than a small passing interest in investors...

Of builders and skimmers.
November 5, 2004... Lord Hanson, who died on Monday, was unquestionably one of the top 10 figures in British business over the past 30 years. Together with Lord White, he parlayed a modest inherited fortune into one of the 10 most valuable companies on the London...

Winter wonderland.
November 5, 2004... It's the time of year when we can usually look forward to the market rising. Since 1966, the All-Share has returned an average of 14.4 per cent between November and April, compared with just 1.9 per cent during the other six months. The...

Growth disappointments.
November 5, 2004... Is economic growth associated with rising share prices? Investors piling into Indian and Chinese funds hope so. And some fund managers encourage this belief. Philip Ehrmann, manager of Gartmore's China opportunities funds, recently said: "We...

Oiling the industry.
November 5, 2004... It's taken long enough. But it seems that the prolonged period of high oil and gas prices, coupled with fears about supply, is finally filtering through to the oil-services companies. At the start of this year, consensus expectations were...

Bad night for casino operators.
November 5, 2004... The last time the British Parliament was dominated by Puritans was around the time of the English Civil War. But today's MPs have suddenly rediscovered the killjoy zeal of their 17th century predecessors. However, it's not maypole dancing or...

Retail Decisions beats market expectations.
November 5, 2004... Credit-card protection group Retail Decisions has said that it expects full-year profits to be materially ahead of market expectations - the second significant profit upgrade in two years. Much of the improvement stems from the soaring oil...

Lobbyists call for AstraZeneca drug ban.
November 5, 2004... US lobby group Public Citizen has renewed its campaign against AstraZeneca's cholesterol-lowering drug, Crestor. The group sent a letter this week to the US Food and Drug Administration claiming that the incidence of kidney failure in patients...

Techmark highlights incompetent managers.
November 5, 2004... This week's fifth anniversary of the launch of the FTSE techMARK index (see page 23) highlights the ineptitude of fund managers. According to Trustnet, only one specialist technology fund - Legg Mason's European TMT - has outperformed the...

Why inflation matters.
November 5, 2004... The recent rise in US inflation is more important than you might think, because it points to a rise in US bond yields. Our chart (see right) plots the gap between 10-year Treasury yields and core inflation - the 'real' yield - against...

techMARK finds its feet.
November 5, 2004... On 25 November, 700 company executives, analysts, brokers, PRs, and corporate financiers will gather in London's West End to celebrate the 5th anniversary of the techMARK index. The dinner jackets have gone to the dry cleaners, the champagne is...

US set to raise interest rates.
November 5, 2004... Futures markets are pricing in a quarter-point rise in the fed funds rate next Wednesday. Such a move would still leave the real interest rate at zero. Ordinarily, this would point to rates rising much further. However, some economists...

Current account not an excuse for falling greenback.
November 5, 2004... Investors shouldn't blame the weak US dollar on the country's current account deficit. The greenback has dropped 6 per cent against the euro since the summer - close to an all-time low. However, this reflects worries about the US economic...

Ennstone gets Johnston.
November 5, 2004... Ennstone has succeeded in taking over Johnston Group after an extraordinary meeting cleared the deal. Several major Ennstone shareholders, including Aggregate Industries, had attempted to block the transaction, but were narrowly defeated. The...

Sanctuary looks safe.
November 5, 2004... Music group Sanctuary announced a bullish trading statement this week. Its publishing business is recording strong growth, buoyed by sales from artists such as Morrissey and The Libertines. Sanctuary says that, with established fanbases,...

Beazley to tap market.
November 5, 2004... Lloyds underwriter Beazley has launched a rights issue to fund a US acquisition and bolster its capacity at Lloyd's. The company, which floated in November 2002 at 73p a share, is offering shareholders four new shares for seven existing shares...

Sexual Health hopes to excite investors.
November 5, 2004... The rapid increase in sexually transmitted diseases should provide a lucrative market for Ofex hopeful Sexual Health. Formed in 2000, the firm sells a range of 11 condoms to the NHS and plans to launch kits for chlamydia, pregnancy and vaginal...

Zimbabwe clouds future for aquarius.
November 5, 2004... It's one step forward and then two steps back for Aquarius Platinum, the South African mining group. It has completed a complex black economic empowerment (BEE) transaction, only to be faced with worries about its Zimbabwean joint venture, and...

Good week - Bad week.
November 5, 2004... Good week First Milk takes Wiseman stake The Wiseman family are likely to be licking their lips after a dairy co-operative offered to buy a stake in their company. First Milk is tendering for 15 per cent of Wiseman's shares. Between...

Project Dare not daring enough.
November 5, 2004... Eurotunnel outlined its plans for improving its financial performance this week. The strategy, known as Project Dare, will try to tie commercial traffic into using the tunnel on a regular basis, adjust pricing on truck and car shuttles, cut...

SHOCK OF THE WEEK - Christian Salvesen gets dumped at the alter.
November 5, 2004... Just as it appeared that haulier Christian Salvesen was about to be taken over, one of its potential suitors has walked away. TDG, a rival logistics operator, had been the first to approach Salvesen and had seemed a good strategic fit. But, on...

Ceres Power to raise GBP15m.
November 5, 2004... A revolutionary device developed by Aim-hopeful Ceres Power could provide combined heat and power for millions of homes. The environmental technology company is planning to raise up to GBP15m via an institutional placing and will be valued at...

Greystar fund-raising faces strong demand.
November 5, 2004... Greystar Resources, which plans to mine gold from its Angostura gold project in Columbia, is in the final stages of a C$18.6m (GBP8.5m) fund-raising. According to the company and its broker, Ocean Equities, the fund-raising could close off as...

DAT to offer smart phones.
November 5, 2004... Aim-hopeful DAT Group is planning to grow on the back of increasing mobile phone functionality. It offers investors exposure to the roll-out of smart phones - these are phones that can download data. By making smart phones easier to configure,...

Deltron shares rise on acquisition.
November 5, 2004... Shares in Deltron ticked up to a 12-month high following the GBP3.1m acquisition of Quiller Holdings. The addition, which is expected to be earnings-enhancing this year, strengthens Deltron's position in the UK. Quiller brings with it a number...

Europa brings its assets to Aim.
November 5, 2004... Husband and wife team Paul Barrett and Dr Erika Syba are bringing their oil and gas company Europa to Aim next week. The company is raising GBP5m gross, through a placing of shares at 25p a share. Following the listing, due on 11 November,...

Investors wait on news of Room Service case.
November 5, 2004... Investors in Aim- traded Room Service (now called Azure Holdings) could soon receive compensation from market makers following last year's short-selling scandal. Heavy short positions in Room Service resulted due to market makers selling more...

Week ahead...
November 5, 2004... NEWS Monday 8 November British Airways will update investors on October traffic figures alongside its half-year results, and should report a continuation of the upward trend seen last month. Passenger traffic in September rose 3.6 per...

Ryanair shares soar as capacity is filled.
November 5, 2004... Ryanair's shares surged 17 per cent this week as the Irish airline revealed that pricing pressure for the low-cost airlines is not as bad as had been feared. A 5 per cent decline in average yields in the first half of the year was at the bottom...

Berkeley Scott looks to expand.
November 5, 2004... Berkeley Scott, a specialist in recruitment for the leisure and hospitality sector, plans to join Aim before the end of this month. It has a network of 15 branch offices and, in the year to 30 September 2004, filled over 150,000 vacant...

Invesco Continental winds up.
November 5, 2004... The board of Invesco Continental Smaller Companies has announced plans for the winding-up of the trust. Investors can roll over into the open-ended Invesco Perpetual European Smaller Companies fund at net asset value (NAV) - sticking with fund...

demand for oriental income.
November 5, 2004... The board of Henderson Far East Income is to request powers to issue new shares, at an extraordinary general meeting on 11 November. The trust, managed by Michael Watt, has traded at a premium all year. The current premium is 7 per cent, and...

Deutsche abandons 3i rejects.
November 5, 2004... The planned hand-over of two 3i trusts TO DEUTSCHE has fallen though, following changes to the management structure at Deutsche. The trusts' futures are now in jeopardy. The collapse of the deal appears to signal the end of 3i European...

BAE Systems faces accounting probe.
November 5, 2004... The Serious Fraud Office is investigating allegations of false accounting on contracts involving BAE Systems and the Saudi Arabian government. Two men have been arrested after raids at locations in London and the south-east, although neither is...

US Air Force order lights up Chemring.
November 5, 2004... Defence group Chemring has won an order with the US Air Force worth an initial $18.4m. Around 700,000 decoy flares are to be delivered in the first year, and the contract could grow to $104m by 2008. The order secures Chemring's position as the...

Bespak hits the acquisition trail.
November 5, 2004... Inhaler manufacturer Bespak has revealed that it is looking to acquire speciality medical-device companies to reduce its reliance on big pharmaceutical clients. The company has GBP30m to spend. First-half trading is on track and Bespak is...

Jessops cuts float price.
November 5, 2004... Jessops, the photo retail group, has been forced to cut its flotation price in order to successfully list on the London Stock Exchange. The shares started trading at 155p, below the intended price range of 185p-220p set in October. Private...

Legacy problems hit Heywood Williams.
November 5, 2004... Shares in building materials supplier Heywood Williams slipped 4 per cent this week as legacy troubles returned to haunt the company. The issue surrounds Coldseal, a former subsidiary that was sold last year for a 20 per cent interest in...

Alpha Airports unveils new contract wins.
November 5, 2004... Shares in Alpha Airports, a provider of catering and retail services to airlines and airports, touched a five-year high this week when the group unveiled new contracts worth around GBP45m a year. Costs of GBP1m will be taken this year, so house...

From alpha to beta.
November 5, 2004... How good a fund manager is Bearbull? I ask the question not so much because I think readers want to know the answer - do they honestly care? - but because there's a generic question here that all serious investors should ask about themselves....

BAA (BAA).
November 5, 2004... Passenger volumes in 2003 were impacted by the double-whammy of Sars and the Iraq war, which flattered growth rates in the first half of this year. First-quarter traffic was up an impressive 9.7 per cent, against the weak comparable period last...

MOS takes second order from China.
November 5, 2004... The recovery at MOS International continues apace, with news earlier this week of a second significant order from China. MOS has secured a $1.9m deal with state-owned China National Offshore Oil Company (CNOOC) to supply two marine deck cranes...

SPORTINGBET (SBT).
November 5, 2004... The tabloids may these days be filled with horror stories about compulsive gamblers in a backlash against the government's new gaming bill but, if Sportingbet's results are anything to go by, the warnings are falling on deaf ears. The...

CHLORIDE (CHLD).
November 5, 2004... Capital expenditure in the oil and gas industry is expected to rise 10 per cent in 2005, which is great news for Chloride. Its rugged, uninterruptible power supplies (UPS) are used to make sure that mission-critical applications on oil rigs and...

LIONTRUST (LIO).
November 5, 2004... After a period of rapid growth (funds under management grew 45 per cent year on year to GBP5.05bn), Liontrust appears to have hit a bump in the road. The company has lost four institutional mandates worth around GBP277m since April and the...

PENNA CONSULTING (PNA).
November 5, 2004... Penna has rejigged its business plan in an effort to persuade more customers to spend more money. The aim is to create a one-stop shop, where companies can either find new staff or help unwanted employees find other jobs. But the changes, which...

Raising the standard.
November 5, 2004... Next year's preliminary results season will be something of a landmark. It will be the last reporting period where listed companies will present their results according to UK generally accepted accounting principles (GAAP). After that, they...

MATALAN (MTN).
November 5, 2004... Shares in Matalan have had a great run since the spring, as speculation rises that a bid for the discount retailer is imminent. Founder John Hargreaves owns 52 per cent of the shares, and is rumoured to be willing to accept an offer of 300p a...

CAMBRIAN MINING (CBM).
November 5, 2004... As commodities prices strengthened, and the market for smaller, quoted resources companies gathered strength in the UK, Australia and Canada, Cambrian Mining has been reaping the benefit. Not only did the value of its quoted investment...

ARMOUR (AMR).
November 5, 2004... Armour was once a heavily indebted conglomerate, but the current management has sold nine businesses. Now, Armour sells hands-free mobile phone gadgets and sales flourished following the ban on drivers using mobiles without the appropriate...

SHEFFIELD UNITED (SUT).
November 5, 2004... The fact that casinos have hit the headlines is good news for Sheffield United. As part of the company's plans to increase non-football-related revenues, it is hoping to win consent for a 200,000 sq ft hotel and casino complex to be built on...

OXUS GOLD (OXS).
November 5, 2004... In September, Oxus officially opened its Uzbekistan Amantaytau gold project - and the ceremony served as a nice backdrop for chief executive Bill Trew to outline his ambitious strategy of opening five new mines in the next five years. But that...

PILKINGTON (PILK).
November 5, 2004... The strategy at Pilkington is simple. The first priority is to get costs under control, then generate cash to pay down debt. Thereafter, it can invest for growth. The glass manufacturer is currently at the second stage of an extensive...

ASSURED CARE CENTRES.
November 5, 2004... While ADL (see above) wants to acquire more residential homes, Assured Care is exiting the sector. It has exchanged contracts for the sale of its 48-bed nursing home in Shouldham, Norfolk for GBP1.45m, against a book value of GBP1.2m. At the...

AVOCET MINING (AVM).
November 5, 2004... Avocet's impressive 2003-04 results were due to the rising gold price (average price realised $379 per ounce (oz) against $327 per oz in 2002-03) and a one-third increase in gold production to 180,000oz. Of that figure, 124,000oz came from its...

PRINTING.COM (PDC).
November 5, 2004... Printing.com is fast becoming a franchise business. Potential franchisees ("no previous experience please") pay GBP120,000 for one of 66 UK territories. By end-September, 24 territory stores had been set up and 55 bolt-ons established. Unlike...

ADL (AD.).
November 5, 2004... ADL is the new name for Matrix Healthcare. Last January, the co-founders of care-home owner NHP, Jeremy Davies and Richard Ellert, took control of the company and it now owns and manages 10 homes. Two years ago, the number of UK care homes was...

ANGLESEY MINING (AYM).
November 5, 2004... Anglesey mining holds mineral rights to the only polymetallic reserves in the UK (42 per cent copper, 38 per cent zinc), at Parys Mountain on the island of Anglesey. The area has been mined on and off since the Bronze age but, due to low...

ASSOCIATED BRITISH ENGINEERING (ASBE).
November 5, 2004... Associated British Engineering (ABE) is a cash shell desperate to secure a reverse takeover worth GBP8m-GBP10m. Anything will be considered, except "an old engineering company". The company had been held back by a defined-benefit pension...

Caspian eyes kazakhstan.
November 5, 2004... Caspian Holdings, which has onshore oil and gas assets in Kazakhstan, listed on Aim this week after raising just over GBP4m through a placing at 23p a share. On flotation, it was capitalised at GBP18.9m. Caspian's plan is to work up...

JOHN SWAN & SONS (SWJ).
November 5, 2004... Swan is chock-a-block full of assets and is starting to release them. Its defined-benefit pension scheme was so overfunded that last year's profits included a GBP1.25m surplus. It has now disposed of a farm used as a collection centre for its...

UNIVERSAL SALVAGE (UVS).
November 5, 2004... Universal Salvage has a lot to do to rid itself of its reputation for arrogance. This cost it dear in 2002 when it assumed that it was the only operator in town when negotiating a new contract with car insurer Direct Line - a contract that...

IWP INTERNATIONAL (IWP).
November 5, 2004... In September 2002, IWP sold its household products division for E102.2m (GBP70.7m), plus an E33m deep-discounted bond. That sale did not, however, solve the problem of a weak balance sheet, and IWP breached its banking covenants in December. If...

STARVEST (SVE).
November 5, 2004... Starvest is the new name for Web Share Shop. It's a sister company to Tiger Resource Finance and, like it, is headed by Aussie serial investor, Bruce Rowan. But whereas Tiger only buys resource shares in units of around GBP400,000, Starvest...

ZYZYGY (ZYZ).
November 5, 2004... Self-styled "deal junkie" Andy Moore is back in town and seeking to invest in businesses north of Watford. After less-than-successful stints (ie, presiding over big losses) at Aim companies '10' and '7', his new interests include being...

NORTHERN RECRUITMENT (NRG).
November 5, 2004... As Northern's 2003-04 results indicate, it's boom time in recruitment 'up north'. That's largely thanks to the government because, in two years, turnover from public sector work has jumped from a fifth to a half. There has also been a big...

SURFACE TRANSFORMS (SCE).
November 5, 2004... Surface Transforms joined Aim two years ago, and raised just GBP900,000 after costs, rather than the GBP2.5m hoped for. Consequently, it had to conserve cash resources last year - hence the sharp fall in research and development (R&D) spending...

AQUILO (AQL).
November 5, 2004... Aquilo (formerly Accidentcare) moved from Ofex to Aim in May this year. Around 85 per cent of its business is claims-management for the household and motor insurance markets. It utilises high-tech fraud-detection measures. Insurance company...

CARLISLE.
November 5, 2004... Aim. Tight cost-controls and a focused strategy for retaining customers made for a strong performance from Carlisle in the US, in spite of challenging conditions. Growth in the UK was also encouraging.

CASPIAN ENERGY.
November 5, 2004... Aim. These results relate to Northway Exploration, a company that merged with Caspian in September 2004. It's looking for oil & gas in Kazakhstan, and is currently gathering 3-D seismic data.

PLANIT (PLN).
November 5, 2004... Planit's 2003-04 results have improved because, once it knew the 2002-03 figures would be lousy, it added on GBP1.32m of restructuring and onerous lease costs to them. Continuing turnover was up 26 per cent to GBP25.82m, after including a...

COLLINS AND HAYES.
November 5, 2004... Aim. Increased competition from of imported products is a problem. Results for the period were affected by uncertain consumer demand, and continuing delays in range selections by major retailers - caused, in part, by corporate developments in...

EPIC RECONSTRUCTION.
November 5, 2004... Aim. The group has completed seven deals since listing on Aim 10 months ago. It now intends to make larger investments in companies, and has a strong pipeline of potential deals.

LHM.
November 5, 2004... Ofex. The board continues to consider alternative strategies for its core Alias Hotels subsidiary. LHM now wants to realise its remaining assets, and distribute the net proceeds to shareholders.

PREMIER MANAGEMENT.
November 5, 2004... Aim. Markets remain tough, and last summer's transfer window led to less business than hoped. The outcome for the second half will be determined by the performance in the January window.

PYV.
November 5, 2004... Ofex. The results reflected continuing difficulties within the IFA professional indemnity (PI) market. There has recently been an improvement in revenues from the solicitors' PI market, though.

STRATEGIC RETAIL.
November 5, 2004... Aim. Acquisition of retail operations is still the focus for Strategic Retail following the recent agreement to acquire Levey, a home improvement chain.

SYENCE SKIN CARE.
November 5, 2004... Ofex. Sales rose as Syence tried to broaden its distribution through the Moss Pharmacy Chain. But that expansion failed to deliver the hoped-for economies of scale, and profits fell away.

CARPHONE WAREHOUSE (CPW).
November 5, 2004... Buoyant consumer demand for mobile phones has rung up another bumper set of numbers for Carphone Warehouse, the country's leading mobile-phone retailer. Total connections increased by 23.6 per cent, to 2.77m, while subscriber numbers rose by...

WALKER GREENBANK.
November 5, 2004... Aim. This was the group's first profit since 2000. The acquisition of Sanderson increased group sales by 18 per cent over the same period last year. The market remains tough.

DANIEL STEWART.
November 5, 2004... Aim Corporate adviser Daniel Stewart (DS) recently moved from Ofex to Aim and, as its figures suggest, business is booming. The huge increase in new issue activity on Aim has created a fertile trading ground, and led to a number of client wins....