Easy to overdo gloom on results

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The Independent Online

Some companies seem to enjoy keeping a low profile. They lift their head above the parapet only when there is no choice and even then their endeavours are often unnoticed.

Some companies seem to enjoy keeping a low profile. They lift their head above the parapet only when there is no choice and even then their endeavours are often unnoticed.

Anglo Pacific is such a group. It has determinedly adopted a low-key approach since coming under new management four years ago. Recently it produced its year's results. It could be argued that they were, on the surface at least, so poor it was probably wise not to make much of a song and dance about them.

In its last financial year profits were replaced by a £3.6m loss, although turnover was marginally higher. Most of the damage was done by a £4m writedown of some of the group's mineral assets. But profits had collapsed to £435,000 from £2.3m before the charge.

Anglo's performance came as something of a shock. Yet I believe it is easy to overdo the gloom. Although it had appeared that the group's Australian coal-mining interests were doing well it seems much of the trading downturn stemmed from an unexpected drop in coal royalty payments.

But income should be higher this year. The two Aussie mines where Anglo has an interest are working at full capacity and the group's royalty rate has been increased by 75 per cent. Anglo's coal interests are said to be worth 32p a share.

In Scotland, the group supplies sand for bottle-making and embraces marble interests. There is also a talc deposit in Shetland. These north of the Border activities attracted the surprise writedown with the resulting devastating impact on reported profits.

Anglo, which sold most of its interest in gold-miner Brancote, realising a £243,000 profit, is now logging on to the internet, although it has missed the feeding frenzy that sent anything relating to the World Wide Web surfing into the stratosphere.

It has created Anglo Digital to develop and license new technologies from government agencies and the Scottish universities. There are plans to float the fledgling operation on AIM.

Anglo is not the only no pain, no gain constituent to make announcements. The food group Global has told shareholders that demand remains strong and it is set to "produce another successful result". And Safeway has reported final quarter like-for-like sales growing by 5.7 per cent, and signalled better-than-expected year's profits of some £245m. Allied Domecq, the spirits group, has rolled out interim profits 16 per cent higher.

But it warned growth would slow in the second half-year. Although it is more than holding its own against the might of the industry leader,Diageo, the need for Allied to link with another senior spirits player is as strong as ever.

I suspect it will eventually forge an alliance with one of the other big groups living in Diageo's powerful shadow. The chief executive, Philip Bowman, has, in effect, confirmed Allied's need for a merger.

He said: "I still believe that consolidation is desirable in the spirits industry and we aim to be pro-active in this process."

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