The Week In Review
Saturday 15 July 2006
As swansongs go, this week's first-quarter trading figures from GUS were far from bad. Sales at Argos, the bedrock of its ARG retail division, outstripped even the group's expectations, while Experian, its financial-services arm, had yet another stellar performance.
Yet GUS failed to excite the City. Never mind Great Universal Stores, the group's full name as was, what GUS really stands for these days is Great Untold Stories. This is one reason why the management has decided to break up the conglomerate. It is spinning off its two arms into two new companies.
The demerger is set for October. Shareholders will receive shares in each company, leaving it up to them whether they hang on or sell out. Given that most analysts regularly ascribe a £11-plus sum-of-the-parts valuation to GUS stock, the hope is that once the traditional conglomerate discount has been eradicated, the shares will soar.
This column has long been a fan of GUS, and rightly so, on the whole. Figures this week showed there were chinks of light in a black high-street cloud. Namely, the 7 per cent rise in like-for-like sales at Argos. Buy.
While much of the consumer-facing media industry is struggling, much of the business-to-business magazine sector is seeing the good times flow. Centaur is feeling so good that it is to put its full-year dividend up by a whopping 76 per cent. Centaur listed at 100p in March 2004. It has not made much progress since then but, with prospects looking rosy, the shares are trading on 15 times 2007 earnings, which makes this a buy.
Following its exit from the troublesome State of Victoria contract, Anite, the technology company, this week turned in full-year results that beat expectations. At £24.7m, profits before tax comfortably beat City forecasts. That spurred the shares, despite revenues of £170m being a touch disappointing. The company is on track to realise further value across its various businesses but the pay-off may take some time. Hold.
Bespak shareholders were given a welcome shot in the arm this week by annual results from the drug-delivery specialist much improved on last year, and above City expectations. At £13.5m, profits before tax and special items were 24 per cent higher in the year to the end of April. Interesting growth prospects may make Bespak the choice of investors looking for a health-care company with a strong yield. Buy.
INTER LINK FOODS
Even Mr Kipling would be forced to concede that his arch-rival among the country's cake-makers, Inter Link Foods, has delivered exceedingly good annual results. The Blackburn-based baker, which supplies Tesco and J Sainsbury, appears to have put May's shock profits warning behind it, unveiling record annual profits for an eighth successive year. Inter Link a rare exception that proves the rule: investors can have their cake and eat it. Buy.
It has taken some time, but Autonomy, the internet infrastructure software company, has finally started to motor. The acquisition of its key rival, Verity, last year propelled the company into a position of clear market leadership. The results will be reported in full on 26 July, but are comfortably ahead of what was reported in the seasonally strong first quarter, when revenue was $56.1m and adjusted pre-tax profit $10.3m. Buy.
With the online gaming industry still booming, its leading supplier of money transfers would appear an odds-on bet. Neteller has enjoyed a stellar run since its stock-market debut in 2004. But there is no such thing as a sure thing. Bad debts in Canada are on the up. So are costs. Margins are thus being squeezed. With bets still being taken on whether an anti-gambling US administration will crack down on internet gaming, Neteller continues to look a risky punt. Avoid.
InterContinental Hotels Group has been a five star investment since it was cut loose from the old Bass brewing empire. The company has been free to pursue its single-minded strategy of selling-off assets to focus on management contracts - this week another seven hotels disappeared in all but name. Given the strength of the group's stock, this column was perhaps too cautious when it recommended just holding the shares a year ago. Buy.
e2v Technologies comprises two divisions: electronic tubes and sensors. Both are high-margin operations. City analysts reckon the scale, complementary skills and earnings enhancement that this week's $140m acquisition of e2v's French peer Atmel Grenoble brings leaves e2v shares looking attractive. Trading at little more than 12 times expected 2007 earnings of 18.5p, they are a buy.
Surfcontrol, a maker of internet filters, was once highly valued, but has struggled. A series of failures led to Patricia Sueltz taking the helm a year ago. She overhauled sales, marketing and distribution while leaving the company's products as they were. Surfcontrol's software, rather than being sold directly to customers, was distributed through re-sellers. Growth returned and billings picked up.But while the shares are cheap, there are doubts about Sueltz's purchase of an e-mail filtration specialist for £20m. Avoid.
The above recommendations are taken from the daily Investment Column
Man is doing what a hedge fund manager's gotta do
Man Group has come a long way in two centuries. From its origins as a Thames-side sugar trader founded by James Man, it has morphed into the world's biggest listed manager of hedge funds.
These are essentially money-making machines, with Man Investments' managers able to utilise a wider range of strategies and markets than traditional long-only rivals in pursuit of higher returns.
That flexibility means the group, led by chief executive Stanley Fink, is forging ahead. Before its annual meeting for shareholders, Man revealed this week that its funds under management grew by $4bn to $54bn over the three months to the end of June. Sales of $5.3bn in that time far outpaced the $1.3bn in the same period last year. The growth of private investment is easily outpacing institutional demand as millionaires scramble into the once-heavily guarded funds.
The shares are trading at about 13.5 times projected 2007 earnings (allowing for performance fees), against traditional fund managers' shares trading at more than 15 times forecast earnings. Should Man Financial be spun off, Man Investments would be trading on less than 12 times projected 2007 earnings. Buy.
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Day In a Page
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This four-bedroom Edwardian home offers a combination of original features and contemporary design after a renovation by the current owners.
This four-bedroom home offers a vaulted ceiling in a breakfast room that's ideal for summer entertaining with doors that open to the patio and garden.
On the market for the first time in more than 50 years, this six-bedroom home is a project with vast potential - spread over three floors of living space.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Surrounded by rolling countryside, this four-bedroom barn conversion comes with a self-contained, one-bedroom annexe that could serve as an office or a holiday let.
Located near Harrogate town centre, this five-bedroom Victorian terrace is arranged over three storeys while a current study serves as an optional sixth bedroom.
A ground-floor flat in a country house, located a mile from Sway; this two-bedroom home would make an ideal weekend retreat on the edge of the New Forest.
On a popular residential lane in Caterham on the Hill, this four-bedroom family home offers a secluded garden and a convenient location for local schools and public transport.
Just a short walk from Westerham green, this three-bedroom cottage has a light kitchen with exposed brickwork and double doors that lead to a south-facing garden.
In a prime spot opposite the River Thames, this one-bedroom flat has an 18sq ft reception room with glass doors that open out to a private terrace.
Set in the hills above Llanwrda Village, west Wales, this 18th-century three-bedroom farmhouse has holiday-let potential from a separate barn conversion and annexe.
This charming end-of-terrace townhouse is arranged over three floors, with two double bedrooms and a private courtyard garden located at the rear of the property.
Located in the University area, this semi-detached five-bedroom home is arranged over three floors - there's even a rear garden and off-road parking too.
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.
In a row of eight detached Georgian residences, this five-bedroom home offers views of The Sound, Mount Edgcumbe and Cornwall from its impressive veranda and full-length balcony.
If you love cooking for friends this two-bedroom flat - complete with views of the iconic Battersea Power Station and an open-plan kitchen/dining area - will go down a treat.
Located above Grasmere village, this five-bedroom home is arranged over three floors and offers countryside views across Grasmere Lake towards Silver Howe.
Surrounded by the Western fells, this five-bedroom Georgian home retains many original features including panel-plastered ceilings, sash windows and fireplaces.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B, subject to change of use permissions.
A former period coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, office, kennels and an outbuilding that's currently used as a gym.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool