Investors Chronicle articles from September 2005

Investors Chronicle archives from September 2005

Investing in yourself.
September 2, 2005... If you have been investing for some time now, you'll know the standard approach to any investment: what is its expected rate of return and how does that compare with the risk-free rate? For instance, if the expected return of a risky investment...

Oil shocks.
September 2, 2005... The stock market is starting to get queasy about the price of oil. While the world economy uses a lot less oil to produce a unit of GDP than it did in the bad old days of the first oil shock, oil and associated energy costs still remain a...

Wise men's folly.
September 2, 2005... It pays to listen to City analysts' views - if you do the exact opposite of what they say. Had you bought their 10 least favourite shares - as I suggested doing in February - you'd be 10.6 per cent up by now. By contrast, the FTSE All-Share...

Two stories.
September 2, 2005... There are compelling reasons to be bullish about US - and therefore UK - equities. Several indicators, most especially the price-earnings (PE) ratio and foreign buying of US stocks, suggest that investors are relatively risk-averse now. This...

When to sell.
September 2, 2005... I have borrowed my title from Philip Fisher's excellent book, Common Stocks and Uncommon Profits, featured in this column many times. Mr Fisher said there are "three reasons, and three reasons only" to sell a stock. The first, is that you...

End of summer.
September 2, 2005... It's September. This is an important investment fact. Traditionally, September has been the worst month for equities. Since 1966, the average total return on the FTSE All-Share index in September has been minus 0.8 per cent, against an average...

Yes - the global economy matters.
September 2, 2005... Some very important, and unjustly neglected, figures are released next Friday: the Organisation for Economic Co-operation and Development (OECD)'s index of leading indicators for the world economy. Our chart, right, shows why it matters....

The big freeze.
September 2, 2005... The National Health Service has always been a tricky customer. Having to cope with bureaucracy is a fact of life for businesses relying on the NHS for their bread and butter. As a result, it can take considerable time for sales of a new...

Housebuilders to reveal profit squeeze.
September 2, 2005... A flood of results is due from the UK's housebuilders in the coming weeks. Although dark predictions of a 20 per cent drop in house prices during this year have so far proved wide of the mark, the market has clearly cooled. Recent figures from...

Exubera breath of fresh air for Bespak.
September 2, 2005... Shares in Bespak could receive a boost when Pfizer's drug Exubera goes before the US regulators on 8 September. The inhaleable insulin product, for which Bespak is making the inhalers, could revolutionise the lives of insulin-dependent...

Protherics faces Texan challenge.
September 2, 2005... New technology discovered by scientists in Texas may make Protherics' BSE test obsolete. US researchers have found a new method of screening for Creutzfeldt-Jakob disease-causing prions in the blood. Conventional tests, including Protherics'...

Eckoh to spin off Symphony.
September 2, 2005... Eckoh Technologies is to float subsidiary Symphony Telecom Holdings on Aim. It plans to raise GBP4.51m for Symphony, which will have a market capitalisation of around GBP12.75m when it floats. The hope is that, following April's acquisition of...

The rate red herring.
September 2, 2005... Everyone's got an opinion on where interest rates are going. But why should equity investors care? Our chart, right, shows that this is not a stupid question. It shows that the correlation between annual changes in official interest rates...

Bird 'flu could infect markets.
September 2, 2005... Investors should begin to worry about Avian 'flu, the economists now say. The World Health Organisation estimates that more than half the humans infected with the virus have died. And it warns that bird 'flu is "presently considered the...

Opening shot in battle for BPB.
September 2, 2005... French building materials group St Gobain has fired off its hostile offer document to BPB's shareholders. Despite speculation that the price would be raised, the French raider stuck to its 720p bid. Plasterboard maker BPB has rebuffed the...

US Engineers Battle For Domnick Hunter.
September 2, 2005... The bidding war for Domnick Hunter stepped up a gear after US engineer Eaton tabled a 675p-a-share offer for the filtration specialist. The offer values Domnick Hunter at GBP242m, but is not yet recommended by management. Initial bidder Parker...

Ottakar's management tables bid.
September 2, 2005... Ottakar's management has agreed the terms for a 350p-a-share cash offer for the bookshop chain. Meanwhile, David Roche, product director at Waterstone's, has been appointed chief executive of Book Store Acquisitions, the bidding vehicle. ...

Tough times for Matalan.
September 2, 2005... In a trading statement, Matalan, the out-of-town value clothing retailer, has reported a fall in underlying sales of 3.4 per cent for the eight weeks to 27 August, and a 6.4 per cent fall for the 26 weeks to 27 August. Gross margins have,...

Oil shares surge as Katrina pushes up crude prices.
September 2, 2005... Not for the first time in recent years, shares in independent oil exploration and production (E&P) companies have surged to new highs on the back of soaring oil prices - despite yet more poor news on the exploration front. The trigger for...

Bad Girls boost for Shed.
September 2, 2005... TV production company Shed Productions has reported that ITV has recommissioned two of its programmes. Shed will produce an eighth series of Bad Girls and a second series of Footballers' Wives Extra Time. The shares were flat at 109p. The...

Trafficmaster accelerates on portable deal.
September 2, 2005... Trafficmaster has signed a milestone three-year agreement to provide its traffic information to Garmin, the global navigation products company. This is Trafficmaster's first contract with a major portable navigation unit manufacturer, and its...

Eurotunnel faces damages claim.
September 2, 2005... Eurotunnel is being sued by TransFerry, its former ticket agent, which dealt with smaller haulage companies under the EurotunnelPlus name. TransFerry is pursuing damages for a string of alleged failings, which include breach of contract and the...

Opromark opens up property market.
September 2, 2005... Investors can now buy and sell shares in individual houses using a new trading exchange. The Opromark exchange, launched in June, has just sold its first property, a one-bedroom terraced house in Leeds, to 65 investors. Opromark traders can buy...

Augean makes Proactive buy.
September 2, 2005... Waste-management specialist Augean has bought Proactive, a hazardous-waste treatment specialist, for GBP8m. The acquisition will improve Augean's geographic coverage by adding a site at Cannock, in the West Midlands, to its facilities in...

Poor sales hit Imagesound.
September 2, 2005... Shares in Imagesound were savaged as it warned on full-year profits. One-off system sales are weak, and the cost of servicing and maintaining the existing customer network are high. The hope now is that Imagesound will benefit from increased...

Week Ahead...
September 2, 2005... Tuesday 6 September Taylor Woodrow reports its half-year figures on Tuesday. While exposed to a weak UK housing market, its diversification into the US, Spain and other overseas market is a distinct advantage. The group's UK completions in...

Pension sales rise.
September 2, 2005... UK consumers may be starting to spend less and save more towards retirement and old age, according to latest figures released by the Association of British Insurers (ABI). New business rose by 13 per cent in the second quarter on an Annual...

Inter Moly gears up for Greenland production.
September 2, 2005... International Molybdenum (Inter Moly) has signed up HB Advisers to help sell molybdenum from its Malmbjerg mine in Greenland. Production should start by the second half of 2008. HB Advisers, a division of global minerals consulting business...

Value shares survive high-street massacre.
September 2, 2005... Value stocks are holding up remarkably well in the face of falling retail sales. The Confederation of British Industry (CBI) reported this week that 45 per cent of retailers have seen falling sales in the past 12 months, with only 27 per cent...

Quantica expands with RK buy.
September 2, 2005... Quantica is bolstering its position in the recruitment industry via the GBP12.35m acquisition of RK Group. To help fund the addition, it is raising GBP10m via a placing and open offer at 55p a share. Broker Numis forecasts full-year profits of...

Robinson to snare Rentokil?
September 2, 2005... Former Granada Television chief, Sir Gerry Robinson, this week reiterated his interest in bidding for pest-control group Rentokil Initial. He confirmed that his investment vehicle, Raphoe, has spoken to Rentokil's advisers and that it is also...

MediaZest strengthens customer base.
September 2, 2005... Marketing agency MediaZest is paying up to GBP3m for rival TouchVision. This is its first acquisition since joining Aim earlier this year and strengthens MediaZest's customer base by bringing on board the likes of BAA, Electronic Arts and HMV....

Bids soon for Somerfield?
September 2, 2005... Also-ran supermarket chain Somerfield may soon be at the top of the shopping list after watchdogs clarified the issue surrounding the hole in its pension fund. Any potential buyer would have to plug the gap quicker than would be the case if the...

Jurys bid not out.
September 2, 2005... Precinct's Investments has withdrawn its E17.5 per share bid for Irish hotel owner Jurys Doyle. Uncertainty over Precinct's financial backing and share purchases by a possible rival bidder appear to have scuppered the approach. As an 18 per...

INVESTMENT TRUST NEWS - Underperformers under fire.
September 2, 2005... - The board of corporate bond trust ACM European Enhanced Income is to announce proposals to wind the fund up, under pressure from hostile institutional shareholders (known as arbitrageurs). Arbitrageur Carrousel Capital has a 27 per cent stake...

Bonus horribilis.
September 2, 2005... City regulator the Financial Services Authority (FSA) has reported that the capital strengths of the UK's with-profits providers improved by 16 per cent over the year to the end of June. The FSA's David Strachan announced: "This is good news...

HENDERSON GROUP (HGI).
September 2, 2005... Steady progress at Henderson Global Investors (HGI) and Towry Law pushed profits upwards during the last six-month period. This was despite an GBP18.6m loss taken on the disposal of its life-services business. A better return on cash balances...

Highbury stake-building boosts takeover prospects.
September 2, 2005... Former editor of The Sun, Kelvin MacKenzie, has continued to build his stake in publisher Highbury House with the purchase of a further 15.5m shares - that gives him a 19.8 per cent stake in the company. Prospects of a takeover of Highbury...

CRH (CRH).
September 2, 2005... Irish construction and building materials group CRH saw its US operations more than compensate for a somewhat subdued performance elsewhere. The US products division was helped by a strong housing market, as well as non-residential construction...

RENTOKIL (RTO).
September 2, 2005... Once renowned for its 20 per cent a year growth during most of the 1980s, Rentokil is now in the process of slipping back - first-half profits fell 40 per cent. The company is still struggling to gain any momentum, and the findings of a...

HAMMERSON (HMSO).
September 2, 2005... Hammerson's results will provide cheer for the UK retail property sector, currently suffering from a downturn in consumer spending. The property developer, which owns London's Brent Cross shopping centre, has nearly 60 per cent of its portfolio...

TOMKINS (TOMK).
September 2, 2005... Weakness in North American automotive markets hit growth at diversified engineer Tomkins, following production cuts at key US customers General Motors and Ford and delays to the introduction of the TREAD Act, which will mandate the use of...

FAYREWOOD (FWY).
September 2, 2005... In June, Fayrewood raised GBP11.1m by reducing its holding in German subsidiary ComputerLinks from 50.1 per cent to 27.8 per cent. This resulted in an exceptional gain of GBP6.6m. The move has allowed Fayrewood to focus on its niche...

IQE (IQE).
September 2, 2005... IQE is making steady progress and achieved profitability in June at the operating level for the first time in four years. The number of wafers made for semiconductors fell slightly compared with last year, but the total area of the wafers...

OPTIMISTIC ENTERTAINMENT (OEP).
September 2, 2005... Television channel owner and operator Optimistic Entertainment managed to boost group revenues by 588 per cent in the first six months since listing on Aim in January this year. And it has a four-point plan for further expansion. The main...

GIBBS & DANDY (GDYO).
September 2, 2005... Builders' merchant Gibbs & Dandy expects full-year profits to be down between 10 and 15 per cent from the record levels of 2004. First-half profits were up a little, but profits in the second half are not expected to hit the levels seen last...

INMARSAT (ISAT).
September 2, 2005... Inmarsat, which provides services such as phone, video and internet access via satellite, has made a promising stock market debut: it listed in June at 245p and has since risen to 316p. The company is currently in a period of transition as it...

TITAN EUROPE (TSW).
September 2, 2005... Titan has done well to deal with steel supply difficulties and a high, yet sometimes unpredictable, level of customer demand. The company used some of its cash to stockpile steel stocks in order to counter customer and supply irregularities,...

BUNZL (BNZL).
September 2, 2005... Profits at Bunzl were boosted by a strong performance in Europe, as well as the benefits of recent acquisitions. The company demerged its Filtrona arm earlier this year to concentrate on its core business of delivering paper towels and cleaning...

CRC (CCG).
September 2, 2005... CRC is exploiting the outsourcing boom in the technology-repair market. The company repairs consumer products such as mobile phones, laptops and MP3 players, as well as business equipment such as point-of-sale terminals, cash dispensers,...

MEARS GROUP (MER).
September 2, 2005... The residential property market may be treading water, but social housing is a growing market. And Mears, which provides maintenance services to this sector, is poised to benefit. The group secured GBP220m of new work in the first half alone,...

DANIEL THWAITES.
September 2, 2005... A fall in property disposal gains from GBP900,000 to GBP100,000 accounted for the dip in Daniel Thwaites' 2004-05 profits. It remains a big spender, though. Last year, it paid GBP7m for a pub company with 14 tenanted outlets and nearly GBP15m...

MERCURY RECYCLING (MRG).
September 2, 2005... In the UK, we throw away 100m fluorescent tubes and sodium street lamps each year. At present, around 12m of them are recycled, of which Mercury Recycling takes 6m - the rest usually end up in landfill sites. The company was the first in the UK...

SLOUGH ESTATES (SLOU).
September 2, 2005... Slough Estates, whose greatest claim to fame is that its massive Slough Trading Estate was featured in the titles to Ricky Gervais's hit comedy The Office, is not exactly high-profile. But this industrial property behemoth is going to be...

SCREEN FX (SFX).
September 2, 2005... ScreenFX is rolling out a new form of advertising. It installs 63-inch digital flat screens at just above head height in shopping malls. Below them it puts an "info pod" that provides shoppers with a touch-screen directory of retailers in the...

WYNNSTAY PROPS. (WSP).
September 2, 2005... Following a property revaluation, Wynnstay Properties' shares are at a peak. Last year's trading figures, which included disposal gains of GBP443,000 (GBP81,000), have also helped. More than half the portfolio now consists of industrial units...

TEP EXCHANGE (TEX).
September 2, 2005... The improvement in TEP's 2004 turnover shows that life is returning to the second-hand with-profit endowment trading market. That's largely thanks to the Germans, who buy traditional endowment policies for tax-efficient collective investment...

FRONTIER MINING (FML).
September 2, 2005... Frontier joined Aim last September via a placing at 15p a share and raised GBP3.5m. Although that was considerably less than the GBP10m it had hoped to raise at 42p a share, the company has made good progress developing its mining interests....

REAL GOOD FOOD (RGD).
September 2, 2005... Real Good Food (RGF) is growing fast by acquisition. In 2003, it bought bakery interests and moved to Aim. Then it snapped up frozen fish distributor Five Star Fish for GBP16.6m in May 2004. Now it has nabbed family-controlled Napier Brown...

News round-up.
September 2, 2005... - HM Revenue & Customs has confirmed that inheritance tax will be applied to any pension funds left behind after death under the new pension regime post-A Day (6 April 2006). It will be possible to remain invested after the age of 75,...

BHP BILLITON (BLT).
September 2, 2005... BHP Billiton's chief executive, Chip Goodyear, delved deep into history to justify current commodity prices. One of his presentation slides featured a chart of US commodity prices dating back to 1801. The message was that we are entering a...

PGI (PGI).
September 2, 2005... PGI (formerly Plantation & General) has changed tack. Since exiting from a Brazilian hand-tool maker and from loss-making tea and sisal estates in Tanzania in 1999, the company was left with a variety of plantation businesses. It now...

SOLID STATE SUPPLIES (SSP).
September 2, 2005... Solid State has revealed that the "substantial" acquisition it talked of, is Systems integrator Wordsworth, bought for GBP1.67m. Last year's results were split between improved distribution profits and disappointing figures from radio maker...

PITTARDS (PTD).
September 2, 2005... Times are hard for Pittards and they're unlikely to get much easier in the short term. Last year, demand for glove leather fell by one-fifth, while sales of leather for footwear, sport and luxury goods fell by 27 per cent, 2 per cent and 9 per...

MAVERICK ENTERTAINMENT (MVK).
September 2, 2005... Muffin the Mule is lolloping to the rescue of Maverick in full-colour animation. The first 26 episodes have been delivered to the BBC and the initial fee for a five-year licence will exceed last year's total income. Maverick's large 2004 loss...

SPECTRUM TECH.
September 2, 2005... Times have come good for Spectrum Technologies. After a lean period for aircraft spending post 9/11, orders for Spectrum's specialist lasers, which mark identity codes on aircraft wires (ink isn't suitable), have been coming in fast since...

OCEAN WILSONS (OCN).
September 2, 2005... Nine months on and no more news of Ocean Wilsons' strategic review of its Brazilian assets, announced last December. Its main move in recent years has been to expand its port facilities, although towage, shipyard and oil-platform supply vessels...

WESTSIDE ACQUISITIONS (WST).
September 2, 2005... Westside is likely to remain loss-making as its subsidiary, Reverse Take-Over Investments (RTO), takes share stakes and warrants as its remuneration for organising deals. At end-December 2004, it held 2m shares in two Aim-listed companies: York...

ELEKTRON (EKT).
September 2, 2005... Elektron's impressive 2004-05 figures benefited from a 12-month (five-week) contribution from appliance-switch-maker Arcoelectric, which generated GBP1.29m out of a total of GBP1.65m operating profits. Elektron reported a satisfactory start to...

REXAM (REX).
September 2, 2005... Rexam's decline in first-half profits reflected a GBP24m pre-tax loss on the sale of its UK glass business. But, excluding that, performance was solid with underlying sales, adjusted for asset sales and acquisitions, up 4 per cent, year on...

PUBS 'N' BARS (PNB).
September 2, 2005... Pubs 'n' Bars is a community pub chain, and so has no discounts or happy hours. At end-December, the company's estate was split into 22 freehold and 44 leasehold outlets, with 37 managed and 25 tenanted. This February, it bought three more...

ASHFORD INT. HOTEL.
September 2, 2005... 2004 started poorly for Ashford International Hotel, with a lack of late bookings in the first quarter. But results have since picked up, with first-half 2005 profits up from GBP90,000 to GBP229,000 on sales just GBP248,000 higher at GBP2.25m....

AMICREST.
September 2, 2005... After four years delay, Amicrest is hopeful that a dispute over light problems at its Tib Street development off Manchester's Piccadilly is about to be resolved. If so, it has planning permission for a 13-floor building, including 150 flats,...

VISTA (VST).
September 2, 2005... Vista's shares debuted on Aim at 95p in November 2003 via a cash shell and as a buy-out from its private parent, BHD Group. Its core activity was making conservatories and shower enclosures for sheds. Then, last autumn, BHD went into...

LONDON TOWN (LTW).
September 2, 2005... This February, London Town completed the sale of its residential development in Hopton Street, London, for GBP11.2m. Opposition from local residents had held up planning permission for two years, and it's doubtful the company would have...

EMPRESARIA.
September 2, 2005... Empresaria moved up from Ofex to Aim last October and raised GBP2.5m (GBP1.8m net) to expand its recruitment business, both in the UK and now overseas. As a list of subsidiaries in the accounts shows, at end-December 2004, it owned between 51...

TANDEM (TND).
September 2, 2005... Tandem's 2004 results were below expectations and "must be improved". The main problem was the acquisition of Pot Black in 2000, which "lost a lot of money" both on its snooker and pool products and on outdoor play equipment. In time, a general...

WALKER GREENBACK (WGB).
September 2, 2005... Thanks to a GBP2.26m gain from the sale and leaseback of its Milton Keynes warehouse - and the sale to Braintree Museum of its Warner Archive of designs - Walker Greenback (WG) reported a much-reduced loss last year. However, disposal proceeds...

IVY MEDICAL.
September 2, 2005... Ivy Medical's main drug product is CV 247. It's a mixture of mineral compounds that is said to stop the supply of blood to cancer cells. For nearly two years, Cambridge Laboratories has been financing clinical trials at Bedford Hospital and...

INTERCEDE (IGP).
September 2, 2005... Intercede missed its stated target of "approaching break-even" last year, but the company did manage to report its first ever six-month profit in the second half of 2004-05. That followed increased interim losses of GBP558,000, principally...

TOP TEN (TTH).
September 2, 2005... A few weeks ago, little-known Top Ten paid GBP5.35m (mainly in cash) to buy 13 Walkers bingo clubs, taking its total to 37. This means it's now the third-biggest bingo operator in the UK, although it is still well behind Gala and Mecca. Last...

WPP (WPP).
September 2, 2005... WPP is increasingly tied to the technology revolution. During the first half it reported a 6 per cent rise in like-for-like sales, excluding the impact of acquisition and currency movements, with sales up 24 per cent to GBP11.3bn. That growth...

PYV.
September 2, 2005... At first sight, it looks as if PYV turned in an improved performance in 2004-05. However, last year's loss was reduced by a GBP271,000 gain on the sale of a marginally profitable compliance division. Before net interest receipts, losses from...

PLANT HEALTH CARE (PHC).
September 2, 2005... As broker Evolution says, Plant Health Care (PHC) is a "jam tomorrow" story. It floated on Aim last summer via a placing at 52p and, in October, acquired VAMTech for $1.95m, plus interest-free debt of $800,000. It's a key purchase because of a...