The Week In Review: Aegis rides out slump in advertising

Aegis, the media buying and market research group, ticked all the right boxes when it announced annual results for 2004. It was another good performance from the company, adding to a five-year track record of revenue and dividend growth, despite the worst advertising recession in memory. That slump is over and 2005 looks like being another strong year, adding to 2004's 15.1 per cent increase in revenue to £747m and a pre-tax profit figure of £63.9m compared with 2003's £48m. The dividend has been raised to 1.45p a share, and like-for-like revenue growth was up 8.4 per cent. However, Doug Flynn is leaving as chief executive and is being replaced by Robert Lerwill.

Although he doesn't like people mentioning it, Lerwill was previously a senior member of the management team that saw Cable & Wireless brought to its knees. The fundamental strengths of Aegis have not changed, so investors should hold their shares. It is probably worth waiting to see how Lerwill performs before adding to shareholdings.

GLISTEN

If you've got a sweet tooth, shares in Glisten, the confectioner, should have given you a sugar buzz over the past six months. Growth has come predominantly from small, bolt-on acquisitions. With obesity and eating healthily a growing pressure in daily life, cereal and energy snacks are becoming a popular alternative to chocolate bars. It also has a Fair Trade range. Buy.

CLOSE BROTHERS

Even though regulatory costs in banking have risen and markets have yet to recover fully from a downturn, Close Brothers, the banking group, demonstrated that it can still deliver solid results. Asset management was the star performer in its first half, driving 17 per cent profit growth in investment banking while the mainstream banking division struggled. Worth buying for the group's broad exposure to financial markets.

McCARTHY & STONE

McCarthy & Stone's formula, of building blocks of retirement flats complete with all mod cons, has been a licence to print money over the past decade. The company is confident of another decent year. Its shares have soared one-fifth since this column advised hanging on to them a year ago. But with a real risk that transaction volumes will slow, investors should lock in gains.

GOSHAWK

A spate of natural disasters made 2004 a bad year for insurers. Goshawk, the Lloyd's of London insurer, paid out $40m (related to the four hurricanes and 10 typhoons that hit Florida, the Caribbean, the Gulf of Mexico and Japan last year. That led to a $13m second-half loss that completely wiped out first-half profits and resulted in an annual deficit of $3m. Goshawk will not be paying a dividend and its strategy remains unproven. Avoid.

CARILLION

The construction company Carillion is enjoying good times. That is hardly surprising as it specialises in the Private Finance Initiative, through which this government has pumped billions of pounds. The company's order book stands at £5.0bn, with further "probable orders" of £2bn. Carillion reported an 8 per cent rise in annual underlying profits to £54.7m. The shares have done well but are still worth buying.

IP2IPO

Investors with a taste for risk and who want to tap into the latest money-making opportunities in new technology need look no further than an investment fund that seeks to commercialise business ideas from British universities. The company's share price has soared since its float last year but it should be able to go on in the coming years and achieve further successes. Buy.

HEMSCOTT

Hemscott. the financial information group has gone for broke in the US, where it bought two financial data groups in a complex deal that handed control of the company to the private equity firm Veronis Suhler Stevenson. The shares have yet to top the 55p that VSS paid for its majority stake and until Hemscott can assure investors it hasn't bit off more than it can chew, look unlikely to do so. Avoid for the next 12 months.

GOURMET HOLDINGS

On top of a handful of Richoux restaurants Gourmet Holdings now has six pub-restaurants that go by the name of Bel and the Dragon. It will spend the next six months sprucing up all of its sites. The group has pledged to double the number of its Bel and the Dragon sites and should have enough cash to do so. A risky buy.

ROYAL & SUNALLIANCE

The reshaped Royal & Sun-Alliance insurance group has bounced back with better-than-expected profits, a general stabilisation of premium rates and plans to further scale down its troubled US business. After a rough few years for shareholders, things are starting to look up for the pure general insurer. RSA is delivering better results but some major risks remain. Hold.

Profit up and debt down for TNS

Not content with bombarding Western consumers with ever more varieties of "new improved" shampoo, chocolate, cigarettes and soft drinks, consumer goods companies have moved deeper into the new markets of the developing world. This is good news for Taylor Nelson Sofres (TNS), which provides the sort of market research that companies rely upon when entering new markets or trying to come up with new products.

The market research sector enjoyed phenomenal growth in the 1990s, as its services were snapped up in the booming corporate spending of that decade. Even in our more restrained times, growth in this sector of the media industry looked considerably more healthy than prospects elsewhere. Underlying revenue growth was 4.1 per cent higher or 17.4 per cent in absolute terms after TNS enjoyed the first full year as owner of NFO. Operating profit was up 28 per cent, operating margins increased and debt was down. It reckons that the market will grow at between 4 and 6 per cent in the medium term, driven by expansion in emerging markets.

As a specialist in this sector, TNS does not suffer the distractions and conflicts of interest of some of its rivals that are part of bigger media groups. An attractive business, but at 236.5p, the shares already trade on a forward multiple of 17 times, which means that further upside is limited. Hold.

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

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

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Experienced Recruitment Consultant

    £20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

    Recruitment Genius: Collections Agent

    £14000 - £16000 per annum: Recruitment Genius: This company was established in...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

    Day In a Page

    Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

    Cameron lowered the flag for the dead king of Saudi Arabia...

    But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

    Humanity must be at the heart of politics, says Jeremy Corbyn
    Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

    Joe Biden's 'tease tour'

    Could the US Vice-President be testing the water for a presidential run?
    Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

    Britain's 24-hour culture

    With the 'leisured society' a distant dream we're working longer and less regular hours than ever
    Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

    The addictive nature of Diplomacy

    Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
    Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

    Fashion: Ooh, Lady Chatterley!

    Take inspiration from DH Lawrence's racy tome with equally racy underwear
    8 best children's clocks

    Tick-tock: 8 best children's clocks

    Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
    Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

    Charlie Austin: ‘If the move is not right, I’m not going’

    After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
    Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

    How Isis profits from destruction of antiquities

    Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
    Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

    'If we lose touch we’ll end up with two decades of the Tories'

    In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
    Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

    The Arab Spring reversed

    Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
    King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

    Academic claims King Arthur was real - and reveals where he lived

    Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
    Who is Oliver Bonas and how has he captured middle-class hearts?

    Who is Oliver Bonas?

    It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
    Earth has 'lost more than half its trees' since humans first started cutting them down

    Axe-wielding Man fells half the world’s trees – leaving us just 422 each

    However, the number of trees may be eight times higher than previously thought
    60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

    60 years of Scalextric

    Model cars are now stuffed with as much tech as real ones