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; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Bill Gates, founder of Microsoft and co-chair of the Bill and Melinda Gates Foundation
businessUber, Snapchat and Facebook founders among those on the 2015 Forbes Billionaire List
news... and what your reaction to the creatures above says about you
Homer’s equation, in an episode in 1998, comes close to the truth, as revealed 14 years later
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

    Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

    £25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

    Recruitment Genius: Customer Service Advisor

    £15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

    Ashdown Group: Trainee Consultant - Surrey / South West London

    £22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

    SThree: HR Benefits Manager

    £40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

    Day In a Page

    The difference between America and Israel? There isn’t one

    The difference between America and Israel? There isn’t one

    Netanyahu knows he can get away with anything in America, says Robert Fisk
    Families clubbing together to build their own affordable accommodation

    Do It Yourself approach to securing a new house

    Community land trusts marking a new trend for taking the initiative away from developers
    Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

    David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

    The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
    With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

    Money, corruption and drugs

    The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
    America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

    150 years after it was outlawed...

    ... America's first slavery museum is established in Louisiana
    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
    Tony Oursler on exploring our uneasy relationship with technology with his new show

    You won't believe your eyes

    Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
    Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

    Moores must go. He should never have been brought back to fail again

    The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
    War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

    The battle for Mosul will unleash 'a million refugees'

    Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
    Yvette Cooper: We can't lose the election. There's too much on the line

    Yvette Cooper: We can't lose the election. There's too much on the line

    The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
    A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

    It's not easy being Green

    After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
    Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

    Gorillas nearly missed

    BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
    Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

    The Downton Abbey effect

    Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
    China's wild panda numbers have increased by 17% since 2003, new census reveals

    China's wild panda numbers on the up

    New census reveals 17% since 2003