Investors Chronicle articles from October 2006

Investors Chronicle archives from October 2006

Aiming higher.
October 6, 2006... The junior stock market, Aim, has been a huge success. I used to throw away the Aim volume of my REFS subscription - not on receipt, but as soon as the succeeding issue arrived. It contained too little information on too few companies, so its...

Strike it rich.
October 6, 2006... Which sector currently offers the higher potential returns: oil & gas producers, or oil equipment & services? Right now, after a sustained period of high oil prices, it's arguably the smaller sector that's coming into its own. That's because...

Happy christmas?
October 6, 2006... Two years ago, in the middle of November, I predicted that Christmas was going to be the worst in 25 years. Half the market and half the retailers thought that this 'old fool' had gone off his rocker. It turned out to be the worst for 23...

Death of certificates.
October 6, 2006... Amove to total electronic share trading now appears inevitable, following a consultation process carried out on behalf of the Treasury. The consultation, conducted by the Institute of Chartered Secretaries and Administrators (ICSA),...

Break up on the cards for Jarvis.
October 6, 2006... Troubled support services group Jarvis has appointed Close Brothers to work alongside management on a strategic review that could result in a break up of the company. A slow first half for Jarvis' Rail and Plant business means full-year profits...

Northern Rock bounds ahead.
October 6, 2006... Mortgage lender Northern Rock reported impressive third-quarter figures this week. The total pipeline of new business at the end of September was 18 per cent up on the end of June position. Credit quality remains robust - residential arrears...

Trafficmaster pay-as-you-drive launch revs up.
October 6, 2006... Norwich Union is rumoured to be planning to take its pay-as-you-drive insurance trial, which uses Trafficmaster's black box technology, into full rollout. Norwich Union insures one in seven of the UK's 26m cars and is expected to offer the new...

ASPs outlawed by the back door.
October 6, 2006... Alternatively-secured pensions (ASPs) appear to have been outlawed by the back door for all but certain religious groups. A note on the Financial Services Authority (FSA) website warns advisers to take into account Treasury secretary Ed Balls'...

Dogs of the S&P line up.
October 6, 2006... It's the time of year when some investors think about the dogs of the S&P strategy. Some believe badly performing stocks are under-priced in early October, because investors overreact to long streams of bad news and because fund managers...

Momentum investing.
October 6, 2006... Momentum investing is still working. In the third quarter, the 20 best-performing FTSE 350 stocks in the second quarter returned 3.8 per cent, just beating the index. In the past 12 months, our momentum portfolio has returned 39.4 per cent...

Manufacturing sector loses ground.
October 6, 2006... The gap between profitability in services and manufacturing has hit a record high. Official figures this week showed that the net return on capital in the services sector was 20.1 per cent in the second quarter - the highest since records...

Takeout bid for Retail Decisions.
October 6, 2006... Retail Decisions has recommended an offer from private equity outfit Palamon European Equity. The company will pay 205p a share in cash, valuing Retail Decisions at GBP168m. The payment card and fraud prevention group announced in July that it...

A bitter pill.
October 6, 2006... The biotechnology new-issue market has suffered a bout of poor health this summer. And although more pharmaceutical and healthcare companies joined Aim this year than ever before, the poor performance of some of them has now ruined prospects...

Misys shares in freefall.
October 6, 2006... Shares in software company Misys crashed after it ended bid talks and announced that chief executive Kevin Lomax, who launched a failed management buyout attempt, would leave the group. Misys also warned that EPS in the current financial year...

Accsys Technologies.
October 6, 2006... Accsys Technologies, the developer of Accoya, a 'new species' of hard-wearing wood, is to sell a licence to Hong Kong-based Seaquest Technologies to make the product. Seaquest wants to use Accoya for its premium marine market. Accoya is...

The deal done.
October 6, 2006... Thursday 17 August: Sign on the dotty line Glory be, Dot's had the letter we've all been waiting for! Dad's position on the GEC shareholder register back in the 1960s has been confirmed. They accept there was no GW Jones living at 63,...

Castor ties up Merchant deal.
October 6, 2006... Suspended Aim cash shell Castor Investments has been saved from delisting through a reverse takeover by Merchant Securities. The private client and institutional stockbroking business, run by ex-HSBC Investment Bank director Tony Fabrizi plans...

Zijin takes Ridge stake.
October 6, 2006... China's largest gold miner, Zijin Mining, is to subscribe for 16m shares in nickel and platinum miner Ridge Mining at 45p a share. Zijin will also subscribe for 10m warrants, injecting a total of GBP8.2m into Ridge. The subscription price was...

UKbetting emerges unscathed.
October 6, 2006... There are five layers of checks and balances to prevent US customers accessing Ukbetting's online gaming services. And, in the past, Ukbetting's refusal to take US bets was not always been popular, as larger rivals like Sportingbet saw US...

Bet your bottom dollar.
October 6, 2006... Internet gambling shares have always been a game of double-or-bust. But the shock passing of new laws in the US this week has produced the most catastrophic bust so far. The forthcoming ban on financial institutions transferring funds between...

Consolidation false dawn for UK property sector.
October 6, 2006... Are we about to see a wave of consolidation in the listed property sector? Over the past week, two companies have announced takeover approaches. First, Grainger Trust, which focuses on the residential market, announced an approach from Merrill...

Xstrata unveils GBP2.9bn rights issue.
October 6, 2006... Diversified miner Xstrata has announced a fully underwritten rights issue intended to net GBP2.9bn (or $5.5bn). The money will be used to help pay down $7bn of bridging debt, which supported the $17bn acquisition of Canadian nickel miner...

AWG soars on counterbid hopes.
October 6, 2006... Bid target AWG revealed that it has received other approaches that could lead to a counter offer. AWG's board has already recommended a 1,555p cash bid from the Osprey bid consortium, which includes the Canada Pension Plan Investment Board,...

Britvic jumps on takeover talk.
October 6, 2006... Takeover speculation has injected much-needed fizz into Britvic. Private equity firm Permira said that although it has no immediate plans to buy the soft drinks company in which it has a 5 per cent holding, it might yet do so. Demand for the UK...

BSS issues bullish update.
October 6, 2006... Plumbing and heating products distributor BSS, issued a positive trading update this week, which said that first-half trading was slightly ahead of expectations. Both the domestic and industrial divisions are performing well with the social...

STANDARD LIFE (SL.).
October 6, 2006... These maiden half-year results from Standard Life offer little in the way of comparables because, until its flotation in July, it operated as a mutual company. As such, all profits were disbursed through bonus payments to policyholders....

BARRATT DEVELOPMENTS (BDEV).
October 6, 2006... "The biggest constraint on meeting demand for new housing is the delay in getting planning consent," complained retiring chief executive David Pretty. Even so, the UK's second largest housebuilder still managed to increase profits and volumes...

SKYEPHARMA (SKP).
October 6, 2006... Skyepharma may have swept a new broom through its management team and operations, but investors are getting jittery about the failure to dispose of the injectables division. The loss-making unit was put up for sale this year and chief executive...

CENTAUR MEDIA (CAU).
October 6, 2006... Centaur has ruled itself out of making a counter-offer for rival Incisive Media, which is the target of a private equity takeover. "No, we wouldn't," said chief executive Graham Sherren when asked if Centaur would bid. He argued that Centaur...

NATIONAL EXPRESS (NEX).
October 6, 2006... Last December's acquisition of Alsa, Spain's largest private coach and bus operator, proved to be a good move for bus and train operator National Express. Passenger numbers in Spain grew by 5 per cent and the business contributed GBP18.1m of...

Abbott blow to Biocompatibles.
October 6, 2006... Shares in Biocompatibles fell by almost a third after Abbott Laboratories dropped development of the ZoMaxx drug-eluting stent, which releases drugs into the body as well as holding arteries open. The product features Biocompatibles' coating...

Colliers in rights issue.
October 6, 2006... Property consultancy Colliers CRE is raising GBP15m in a one-for-three rights issue at 140p a share - a 33.8 per cent discount to its market price. The proceeds will fund European expansion, and the growth of its fund-management business. ...

ALPHA AIRPORTS (AAP).
October 6, 2006... Alpha Airports has been through the mill, losing a major contract as well as its chief executive and finance director. Then, the final ignominy was a share suspension after questions about corporate governance. Thankfully, this all now seems to...

INTERSERVE (IRV).
October 6, 2006... Interserve's share price has enjoyed a rapid rehabilitation after plummeting below 250p in August on news of accounting irregularities at its industrial services business. Net assets have been written-down by GBP25.9m as a result of these...

FORUM ENERGY (FEP).
October 6, 2006... these results coincided with a very encouraging exploration update on Forum's Sampaguita gasfield off the coast of the Philippines. According to the latest data, Sampaguita looks likely to contain 3.4 trillion cubic feet (tcf) of gas, with the...

DANA PETROLEUM (DNX).
October 6, 2006... Interim results from Dana Petroleum showed record cash flow from operations - up 44 per cent to GBP70.1m - even though production fell in the first half to an average of 18,408 barrels of oil-equivalent per day (boepd) due to shut-ins beyond...

HOUSE OF FRASER (HOF).
October 6, 2006... These results were overshadowed by the recent 148p-a-share bid from Highland Acquisitions, backed by Icelandic investment company Baugur, which values House of Fraser at GBP351m. And on the trading front, the figures were unspectacular, with a...

Week Ahead...
October 6, 2006... News TUESDAY 10 OCTOBER Northern Foods, which announces first-half results on Tuesday, has been busy selling off parts of the business in an attempt to restore some measure of financial fitness. Its loss-making Trafford Park bakery...

AMINEX (AEX).
October 6, 2006... Aminex boasts perhaps one of the most uniquely diverse portfolios of London's smaller oil companies. Time will tell how much the company's first-mover advantage in North Korea will be outweighed by the political risk of being there in the first...

FORTUNE OIL (FTO).
October 6, 2006... Chinese energy consumption play Fortune Oil saw its gas-distribution business, which serves commercial and domestic customers across a dozen Chinese cities, move into operating profit in the first half this year, as sales rose 240 per cent to...

CHINA SHOTO (CHNS).
October 6, 2006... China Shoto has seen an almighty surge in revenues following strong sales of its battery products. However, margins have slipped, hitting investor confidence. The company's high-margin business, supplying back-up batteries to China's...

RC (RCG).
October 6, 2006... Growing demand for ever-more sophisticated security systems is driving RC's business. The company specialises in biometric security systems, fingerprint and facial-recognition technology, and radio-frequency identification. And, now that...

INSPACE (INSP).
October 6, 2006... Inspace suffered in July, AS its social-housing maintenance businesses experienced a quiet period for tendering. At the same time, the company splashed out on Widacre, a social and affordable housing developer, a move that some analysts and...

STRAIGHT (STT).
October 6, 2006... Chief executive Jonathan Straight has called 2006 "the year of the water butt". The drought, and subsequent hose-pipe ban, encouraged gardeners to invest in Straight's water butts. Demand was so strong, in fact, that the company struggled to...

PFI INFRASTRUCTURE COMPANY (PFI).
October 6, 2006... PFI Infrastructure has been busy. It raised GBP30m in a placing in March, then invested in six new projects and increased its stakes in two existing projects. The overall result was a 15 per cent increase in the net asset value of its...

BETEX (BTX).
October 6, 2006... The Chinese love to bet, but there are very few ways they can do so legally. So, even if the vast majority of gambling there - an estimated $75bn a year - is done on the black market, the official lottery is still growing impressively. As a...

IRISH ESTATES (IERG).
October 6, 2006... Irish Estate's maiden half-year figures since its flotation a year ago were accompanied by news that it is to change its name to Veris. But the figures themselves only included results for its property and facilities management activities,...

JOHN DAVID (JD.).
October 6, 2006... John David looks all dressed up with somewhere to go, as its fashion-oriented, brand-led offering proves a hit with its core teenage market. Indeed, underlying sales rose 3.1 per cent - and by 4 per cent in the sports shops - for the period...

NORTHERN RACING (NOR).
October 6, 2006... Bad weather, a switch in race meeting days and the World Cup meant a fall in operating profits for Northern Racing. In fact, the number of fixtures abandoned due to bad weather rose from four to a record 13, while its two busiest race meetings...

CITY LOFTS (CTF).
October 6, 2006... The key metric with City Lofts has always been when its development pipeline - which consists of 3,354 apartments worth GBP696m - is likely to deliver. So, despite recording a loss in the period, the news in these results is actually rather...

TRADING EMISSIONS (TRE).
October 6, 2006... Trading Emissions (TE) is progressing well with its investments in projects and firms around the world involved in carbon-emissions reduction certificates (CERs). And, by financing these projects, in return for a guaranteed number of credits...

DIC ENTERTAINMENT (DEKE).
October 6, 2006... DIC Entertainment has been busy striking deals to diversify its revenue streams, making it less reliant on any single brand. These deals included an agreement with CBS for its Saturday morning kids time-slot, which will generate advertising...

REGAL PETROLEUM (RPT).
October 6, 2006... A cloud has lifted over Regal now that the Ukrainian courts have upheld the validity of its Ukrainian gas licences - its most valuable asset - reversing previous decisions against it. What's more, this also increases the likelihood of a...

ANDREWS SYKES (ASY).
October 6, 2006... Andrews Sykes tries to have it both ways by hiring out portable heaters and air-conditioning units. So, irrespective of whether the weather is very hot or very cold, it should do good business. And so it proved to be, with cold weather last...

LINCAT (LCT).
October 6, 2006... Most parts of Lincat's catering division maintained last year's levels of profitability. The one exception, though, was its IMC arm, which posted a small loss as Lincat continued to consolidate IMC's two divisions onto one new site at Wrexham,...

TEG ENVIRONMENTAL (TEG).
October 6, 2006... Interest is starting to build up in TEG's bespoke composting technology, which is used to treat waste that would, in the past, have been sent to a landfill site or incinerated. Contracts with Swansea City Council and Banham Poultry should...

BISICHI MINING (BISI).
October 6, 2006... A fatal accident at Bisichi Mining's Black Wattle Colliery led to serious disruption at the mine, with the suspension of specialist mining equipment there in the first quarter. At the same time, Bisichi found itself mining lower-yielding...

HR OWEN (HRO).
October 6, 2006... HR Owen's decision to focus its car retail business on London and the south-east has cost it dear. Chief executive Nicholas Lancaster, who is currently trying to put together a bid for the company, reckons London is the most expensive place in...

CHARLES TAYLOR (CTR).
October 6, 2006... Charles Taylor's profits were boosted by a first-time contribution from 'run-off' services following the acquisition of LCL, which owns various insurance firms that just let existing policies run until they expire. Indeed, 'run-off' services...

SYNDICATE ASSET MANAGEMENT (SAM).
October 6, 2006... Syndicate Asset Management (SAM) floated on Aim a year ago, and has been busy on the acquisition trail, purchasing five companies for a total of GBP47.8m. So funds under management of GBP1.45bn at the March year-end have now swollen to...

ZINCOX RESOURCES (ZOX).
October 6, 2006... ZincOx didn't have any revenues this time around, but the situation will be markedly different this time next year. That's not because ZincOx is going into production - at least not directly - but because mining has commenced on the Shiamerden...

SIBIR ENERGY (SBE).
October 6, 2006... It hasn't been easy for Sibir operating in Russia over the years, but at least these numbers look healthy. In fact, Sibir's management sees these results as: "A portrait of a company in transformation from an enterprise of promise into an...

KESA ELECTRICALS (KESA).
October 6, 2006... Kesa, which owns Comet and French electrical retailer Darty, has turned in a sparky performance, with underlying sales up 7.5 per cent. Chief executive Jean-Noel Labroue says this reflects a boom in demand for flat-screen televisions during the...

RAVEN MOUNT (RAV).
October 6, 2006... Now that Raven mount has almost finished winding down its Swan Hill housebuilding division, which it bought three years ago, the company has three strings to its bow: 'independent living' (homes for the elderly), residential development, and...

CI TRADERS (CI.).
October 6, 2006... Trading conditions have been difficult in the Channel Islands, CI's heartland, as financial firms have been moving out following harmonisation of European tax, and visitor numbers have been falling. This has hit CI's hotels and hospitality...

METAL-TECH (MTT).
October 6, 2006... Metal-Tech uses its technology to extract metals from industrial waste and mined materials, and then sells these metals on. And sales were particularly good during this first half. However, profitability dropped as the company was hit by a...

GULF KEYSTONE PETROLEUM (GKP).
October 6, 2006... Oil and gas exploration outfit Gulf Keystone has strengthened its position by taking on BG as a joint strategic partner in the company's key Hassi Ba Hamou (HBH) concession in Algeria. And this is a logical step, given that Gulf is a victim of...

TANZANITE ONE (TNZ).
October 6, 2006... Gemstone miner Tanzanite One's results were far from sparkling. A $2.8m provision to cover the withdrawal from wholesale jewellery manufacture sent the company into the red. And there were problems in the core mining business, too. In theory,...

SR PHARMA (SPA).
October 6, 2006... A couple of years ago, SR Pharma was a cash-hungry biotech struggling to develop an asthma drug. Now, under new management, it is back on the City radar, and its shares are up 28 per cent in the past week after the firm signed a $95m deal with...

SMITHS GROUP (SMIN).
October 6, 2006... Smiths Group reported a savage profit slide, which largely reflects a GBP325m write-down of the value of preference shares in US automotive components supplier TI Automotive. But this is a non-cash charge that doesn't affect Smiths' underlying...

SIMON (SMON).
October 6, 2006... Humber Sea Terminal and Port Sutton Bridge owner Simon Group is the latest UK port operator to sail off with an overseas owner. Mersey Docks, PD Ports, P&O and Associated British Ports have all been bought in the past year or so, and now Simon...

WALKER GREENBANK (WGB).
October 6, 2006... The return to fashion of prints and colours is proving a boon for Walker Greenbank. Its Harlequin and Sanderson brands are reaping the benefits, with first-half sales up 35 per cent and 12 per cent, respectively. As a result, both manufacturing...

OCEAN WILSONS (OCN).
October 6, 2006... Ocean Wilsons may be listed in London, but its heart lies in Brazil. The company is Brazil's largest provider of towage services, and 65 per cent of its net assets are located in the country. But while some might see it as something of a dark...

POWERLEAGUE (PWR).
October 6, 2006... This summer's World Cup was a "double-edged sword" according to Powerleague's chairman Claude Littner. But it did help the company attract more corporate sponsorship opportunities to its five-a-side football centres, although it also hit the...

PHOQUS (PQS).
October 6, 2006... Like Skyepharma, Phoqus markets a drug-delivery technology that helps pharmaceutical companies to extend the shelf life of products by developing controlled-release versions, or to solve other manufacturing problems. But Phoqus has fallen...

CENES PHARMA. (CEN).
October 6, 2006... "It's coming close to the proof of the pudding," says chief executive Neil Clark of CeNeS' pain relief drug M6G. That's in phase III trials in post-operative patients, and data is due by the year-end or early 2007, which could trigger a...

ADVENTIS (ATG).
October 6, 2006... Adventis's focus on niche businesses paid off in the first half as its results beat analysts' forecasts. The company owns advertising, public relations (PR) and media-buying agencies in the property, healthcare and financial services sectors....

D1 OILS (DOO).
October 6, 2006... D1 Oils is making good progress towards its aim of building a leading presence in the market for alternative energy fuels. It now has 110,000 hectares planted or earmarked for Jatropha trees, its preferred source of potential fuel oil, which...

SONGBIRD ESTATES, 'B' SHARES (SBDB).
October 6, 2006... Rising office rents and rocketing valuations continue to drift downstream from the City to Canary Wharf. In fact, Songbird, which owns GBP6.2bn of the Canary Wharf property, attributed most its 23.8 per cent rise in adjusted net asset value...

SCI ENTERTAINMENT (SEG).
October 6, 2006... These are SCi Entertainment's first full-year results since it bought computer games developer Eidos in May last year. And the acquisition seems to be performing well, with SCi taking it to profitability. Indeed, an independent valuation of...

CAFFE NERO (CFN).
October 6, 2006... It feels like deja vu with Caffe Nero. Once again, the Continental-style coffee house saw an increase in underlying sales of 4.5 per cent. And, once again, the new-store opening programme continued apace. This year, 48 new stores were opened,...

AVANTI SCREENMEDIA (ASG).
October 6, 2006... Avanti Screenmedia has made a strong start to the new financial year, signing agreements with SPAR, Setanta Premiership football, and Motional Media. And although its media operation, which provides plasma-screen networks for marketing, has...

PUNCH GRAPHIX (PGX).
October 6, 2006... Punch Graphix made good progress in the first half, considering it was without a chief executive until April. Now, the new boss, Ben van Assche, has reviewed the business, and wants to focus on printers that allow marketing companies to produce...

ALEXANDER MINING (AXM).
October 6, 2006... Although Alexander's share price is well below its May 2006 peak, the company is confident that it's on target to start mining two ridges on the 120,000-hectare Leon exploration property, in northern Argentina, in late 2007. Each of the ridges...