The Week In Review: Desperate dogs will eat anything
Saturday 19 January 2008
The stock market is starting to behave like an ill-treated dog. Ignore it, then throw it a bone and it will lick you all over – as in its enthusiastic reaction to a by no means exuberant trading statement from Character Group, the toys, gifts and games group.
The shares have been in the doghouse since the company had to withdraw a bead kit coated in a chemical that could act as a sedative. Although Character only distributed the product, the shares were caned.
But suddenly, summer has arrived. Character said that while the year's first half will be tough, it expects "substantial revenue growth" in the second. The finances are in good shape, with scope for buy-backs.
The company says retailers like some of the new products – which will be seen at this month's London Toy Fair – especially a Dr Who range. But with budgets tight, some children may not get what they want.
The firm's broker said it was "back on track", and the shares jumped 18p before settling for a 9p rise. On forecasts of £8m profits the shares sell on six times earnings – not expensive, but a bit early to be celebrating Christmas. Hold.
The leading credit checking agency has been in freefall since the credit crunch hit its major banking customers last summer. There appears little early prospect of a recovery in the share price, which took another knock this week.
As banks cut back on loans, the need for firms such as Experian to run credit checks has slowed.
The shares have fallen 40 per cent since last July, and it is probably still too early to buy for the bounce. Avoid.
ClinPhone, which provides computerised progress on clinical drugs trials, was sedated when problems led to cancelled orders last year. Shares crashed. Having overhauled systems and costs it is winning orders. The firm said third quarter revenue was up 18 per cent and results would be ahead of expectations. Brokers expect £1.2m. Orders remain strong, although shares need longer in the recovery ward. Hold.
Homebuyers are in their bunkers. Grim news for the UK's largest housebuilder, created out of last year's merger of Taylor Woodrow and George Wimpey.
It limped to the finishing line in 2007, making profits in line with expectations, according to a trading update this week, but it was a struggle. It is what happens next that matters. The company admits it would probably need two cuts in interest rates to trigger an early and meaningful recovery. Hold for now.
After wiping 37 per cent off shares over the past year the market has granted the company a reprieve. The price edged up this week over talk that Northern is becoming a recovery play.
It still looks early for such assumptions, but the company said it is on course for profits of around £47m. Christmas sales rose 3.5 per cent. However, this was due to price increases from the soaring cost of ingredients. Supermarkets will resist such price rises. Avoid.
Travelzest is a holiday tiddler with dreams of becoming a big fish. So far, its ambitions have not been recognised on AIM, with the shares well below their 126p issue price of 2005.
But Travelzest has assembled an intriguing holiday portfolio. It is a niche operator insulated from sharp dips at the volume end of the trade. The shares look cheap at 8.7 times expected earnings. Hold.
Fortunately for Balfour, the demise of London Underground contractor Metronet, in which it had a 20 per cent stake, came when signals were set at green for its other operations. A statement this week said 2007 results would be at the top end of expectations.
Brokers expect profits of £195m for 2007, rising to £214m this year, putting the shares on around 11.5 times earnings. This represents an attractive buying opportunity for a group with huge UK and international exposure.
Rising energy prices are bringing misery. But oil companies are delivering buoyant results. Shares in Premier Oil, the exploration and development group, have risen 14 per cent in the past six months, happily tracking the rising price of oil and gas. Premier delivered a solid trading update this week which underpins an optimistic outlook. Buy.
Goals Soccer Centres
The five-a-side organiser is over the moon. Last year's profits followed forecasts and it believes the current year should prove another winner, with a further six centres due to open.
Goals, which floated on AIM in late 2004 at 62p, has exploited demand for organised five-a-side. Profits are set to rise to £9.5m in the current year while the shares trade on 20 times earnings. High enough.
Shares of housebuilders have been decimated in recent months. But perhaps a thaw is underway. A promising trading statement from Barratt sent the shares rallying this week. The firm traded satisfactorily in the six months to December with sale prices holding up. The shares are cheap but buyers should wait until the spring when clearer evidence emerges of housing sales. Hold.
Proposals by Portland Gas to store natural gas on the Dorset coast and then pipe it to the local National Grid have proved controversial. The group, which was spun out of Egdon Resources this week, must now obtain a series of planning approvals, but refusals will hit the share price. However, that is the risk investors must take. Highly speculative.
Car dealer Inchcape is attacking emerging markets such as Russia, where sales are growing at between 30 and 40 per cent a year. This contrasts with the UK where sales grew at 2.5 per cent last year. Brokers soon expect the UK to contribute less than a quarter of group profits. The new international flavour to Inchcape has yet to be reflected in the shares. Now is the time to buy.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
- 2 Christians: The world's most persecuted people
- 3 The secret report that helps Israelis to hide facts
- 4 Danish TV reporter is all business up top, all party down below
- 5 Denmark bans kosher and halal slaughter as minister says ‘animal rights come before religion’
The secret report that helps Israelis to hide facts
A day in the life of Vladimir Putin: The dictator in his labyrinth
A new Russian revolution: The cracks are starting to appear in Putin’s Kremlin power bloc
Were 'Poor Doors' added to mixed developments so wealthy residents don't have to go in alongside social housing tenants?
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
Opponents of Israel's military operation in Gaza are the real enemies of Middle Eastern peace
iJobs Money & Business
Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)
£350 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...
£500 - £560 per day: Orgtel: Java Developer FX - Banking - London - Up to £560...
£350 - £400 per day + competitive: Orgtel: My client, a leading bank, is curre...
£26000 - £30000 per annum + Benefits: Ashdown Group: Account Manager - (Produc...
Day In a Page
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000