No Pain, No Gain: Avesco has the potential to create more millionaires

Avesco has had an adventurous time since slipping quietly on to the stock market in the late 1980s. It has changed its direction and shape, indulging in at least two demergers and buying and selling businesses.

I vaguely recall attending a low-key City presentation at the time of the flotation. I was not particularly impressed by yet another electronics enterprise and paid little attention to it. But perhaps I should have been more alert. It has certainly enjoyed an eventful ride, with its shares, like so many in the hi-tech zone, having a highly volatile run.

The current Avesco supplies equipment for occasions such as showbiz award ceremonies and high-powered motor shows as well as cameras and such for television groups covering major events like next year's football World Cup. It has just recorded an £800,000 interim loss but is expecting a strong second-half performance, and should achieve full-year profits of about £2.2m.

But the present group bears little resemblance to the old operation I encountered in the tumultuous late 1980s (remember Big Bang and the devastating Black Monday-led stock market crash), nor indeed to the various shapes it acquired in subsequent years.

Besides occasionally buying and selling businesses, it undertook a major spin-off when it split from the old Videologic operation. Then, last year, came the biggest deal of all with the demerger of its media division, InvestinMedia.

The departure of the media side, famed for its near-50 per cent stake in the owner of the long-running Who Wants To Be a Millionaire? TV quiz, stripped Avesco of much of its old-style glamour. Comparing today's Avesco with the pre-demerger group is rather hazardous and, perhaps, a trifle unfair. Still, there is no escaping the simple fact that in the madness Avesco shares were above £10 and, largely thanks to the media side, profits zoomed ahead .

Indeed, the acquisition of the stake in the money-spinning TV quiz is probably a contender for the deal of the (last) century. In 1996, Avesco paid £713,000 for its interest; in 2000 alone it contributed £11.7m to the group.

The man behind the Avesco story is 57-year-old Richard Murray, now a non-executive director and chairman of the quoted InvestinMedia. He is a significant shareholder in both companies. Murray is also chairman of Charlton, the listed football club. He has been a major influence in its transformation from no-hoper into a leading constituent of the Premiership.

The head of Avesco is Ian Martin. He has the task of proving that he is not running the poor relation of the Murray empire. And he has a strong hand. For the advent of high-definition TV, offering much sharper images, provides tantalising possibilities.

Gearing up for HDTV is expensive. But Avesco has the resources, helped along by a summertime £2.4m share placing (at 90p). It believes HDTV will take off next year. Already, it is used to a limited extent in the US and, with the BBC, BSkyB and NTL declaring interest, should soon gather momentum in this country.

HDTV could be the biggest TV switch-on since the introduction of colour, and there could be 4.5 million sets in use here by 2008. Coverage of sports events, already a major Avesco activity, will require the HDTV equipment the group has acquired. Martin hopes his cameras will be used to beam pictures around the world. Next year offers such delights as the football World Cup, the Winter Olympics, the Ryder Cup and the Asian Games, so he should have no shortage of opportunities.

But only the Olympics will contribute to this year's profits; the rest come into next year. Analyst Dominic Convey of KBC Peel Hunt expects profits for that year, ending in March 2007, to come out at £3m.

The presentation side should prosper. For example, its US business has already put together a record order book for January, its key month, helped by the Detroit Motor Show.

At around 90p, capitalising the company at £20m, the shares are not on a particularly demanding rating. There might not be much to go for in the short term, but if the group does score from HDTV, its rewards could be quite considerable. Indeed, it is now engaged in an investment road-show aimed at institutions and private-client stockbrokers. It clearly thinks it has an encouraging message for the investment community.

Martin does not strike me as a man prone to exaggeration. So when he said: "At no other time since I became involved with Avesco have I seen as much opportunity for the group as I can see today," I, for one, am prepared to go along with him.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown


Actress sees off speculation about her appearance in an amazing way

Arts and Entertainment
Serge Pizzorno of Kasabian and Noel Fielding backstage at the Teenage Cancer Trust concerts
musicKasabian and Noel Fielding attack 'boring' musicians
peopleLynda Bellingham's tragic final Loose Women appearance moves audience to tears
Arts and Entertainment
'Right Here' singer Jess Glynne is nominated for Best Newcomer at the MOBO Awards 2014
musicExclusive: Jess Glynne hits out at 'ridiculous' criticism of white artists nominated for Mobo Awards
Arts and Entertainment
Separated at birth? Frank Sivero (left) claims The Simpsons based Mafia character Louie on his Goodfellas character
arts + entsFrank Sivero sues Simpsons studio over allegedly basing mobster character on Frank Carbone
Carl Bernstein (left) and Bob Woodward (right) with former 'Washington Post' executive editor Ben Bradlee

The Washington Post editor helped Bob Woodward and Carl Bernstein bring down President Nixon


Stephanie first after her public appearance as a woman at Rad Fest 2014

Arts and Entertainment
Laura Wood, winner of the Montegrappa Scholastic Prize for New Children’s Writing

Children's bookseller wins The Independent's new author search

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Trainee Recruitment Consultant - Birmingham - Real Staffing

    £18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

    Trainee Recruitment Consultant Birmingham

    £18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

    Trainee Recruitment Consultants

    £20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

    Helpdesk Analyst

    £23000 per annum + pension and 22 days holiday: Ashdown Group: An established ...

    Day In a Page

    Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

    A new American serial killer?

    Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
    Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

    Sting to trap paedophiles may not carry weight in UK courts

    Computer image of ‘Sweetie’ represented entrapment, experts say
    Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

    Return to Fukushima – a land they will never call home again

    Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
    Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

    Wildlife Photographer of the Year

    Intimate image of resting lions claims top prize
    Online petitions: Sign here to change the world

    Want to change the world? Just sign here

    The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?
    Ed Sheeran hits back after being labelled too boring to headline festivals

    'You need me, I don’t need you'

    Ed Sheeran hits back after being labelled too boring to headline festivals
    How to Get Away with Murder: Shonda Rhimes reinvents the legal drama

    How to Get Away with Murder

    Shonda Rhimes reinvents the legal drama
    A cup of tea is every worker's right

    Hard to swallow

    Three hospitals in Leicester have banned their staff from drinking tea and coffee in public areas. Christopher Hirst explains why he thinks that a cuppa is every worker's right
    Which animals are nearly extinct?

    Which animals are nearly extinct?

    Conservationists in Kenya are in mourning after the death of a white northern rhino, which has left the species with a single male. These are the other species on the brink
    12 best children's shoes

    Perfect for leaf-kicking: 12 best children's shoes

    Find footwear perfect to keep kids' feet protected this autumn
    Anderlecht vs Arsenal: Gunners' ray of light Aaron Ramsey shines again

    Arsenal’s ray of light ready to shine again

    Aaron Ramsey’s injury record has prompted a club investigation. For now, the midfielder is just happy to be fit to face Anderlecht in the Champions League
    Comment: David Moyes' show of sensitivity thrown back in his face by former Manchester United manager Sir Alex Ferguson

    Moyes’ show of sensitivity thrown back in his face... by Ferguson

    Manchester United legend tramples on successor who resisted criticising his inheritance
    Two super-sized ships have cruised into British waters, but how big can these behemoths get?

    Super-sized ships: How big can they get?

    Two of the largest vessels in the world cruised into UK waters last week
    British doctors on brink of 'cure' for paralysis with spinal cord treatment

    British doctors on brink of cure for paralysis

    Sufferers can now be offered the possibility of cure thanks to a revolutionary implant of regenerative cells
    Ranked seventh in world’s best tourist cities - not London, or Edinburgh, but Salisbury

    Lonely Planet’s Best in Travel 2015

    UK city beats Vienna, Paris and New York to be ranked seventh in world’s best tourist destinations - but it's not London