The Week In Review: Hard to work up an appetite for RHM
Saturday 29 April 2006
Trading at RHM, the owner of the Mr Kipling, Sharwood's, Bisto and Hovis brands, has improved in the second half after a poor start to life as a listed company. There are still few reasons to buy the shares despite Monday's upbeat trading statement.
For income seekers, a prospective 5.7 per cent dividend yield is attractive, but in a tough operating market it's hard to see sufficient growth to tempt anyone looking for more than a decent dividend.
Mr Kipling may bake exceedingly good cakes, but today's health-conscious consumers need a little persuading to buy them. With the bread market shrinking, maintaining top-line growth will be hard work.
However, this is a highly cash-generative business and the dividend is well covered. With other food producers, especially Northern Foods, struggling, there may be industry consolidation opportunities. Hold.
The biotech firm, which made headlines with its weight-loss extract from the African hoodia cactus, got another boost on Monday when it launched its skin rash treatment for dogs in the UK. Of Britain's six million dogs, 900,000 get eczema every year; Phytopharm reckons 10 per cent will be treated, providing a healthy revenue stream. The shares have suffered since November, when the company's Alzheimer's drug failed to show benefits in tests, but given its other prospects, it is a buy.
PETER HAMBRO MINING
Peter Hambro Mining, the Russian gold group, is having a great time on the back of record gold prices. On Monday, the company announced very encouraging exploration results. There are inflationary pressures, but these are outweighed by this positive news. To buy the shares, however (up 15 times over the past couple of years), you'd have to take the view that gold prices will continue to shoot up. For the less optimistic, the shares are a hold.
On a 12-month view, Panmure shares have more than doubled. In recent months, they have been held back by worries that Lazard will soon want to sell its 30 per cent stake. A disposal would certainly dent Panmure's stock price. However, these fears seem misplaced. The sector looks ripe for further consolidation. Hold
Nine months ago, this column urged investors to have a punt on Petra Diamonds. Since then, the shares have risen by more than a third, and are up again this week after a positive update from its Alto Cuilo project in Angola. As with most commodities, the price of diamonds has been driven up by demand from Asia. The shares look like they can go higher, but hold for the moment.
At one point in recent years, it looked as if the Reuters business was in free fall. This week's trading update showed just how far the company has come since its share price hit lows of below £1 in 2003. The existing business is doing well, and new initiatives have added to revenue streams. These should deliver an extra 3 percentage points of growth by 2008. Hold.
Rank's market value must be getting close to the point where private equity firms would be interested in making a bid. Analysts believe a private equity firm could easily afford to pay 275p a share - a valuation in line with that paid by Permira for Gala Bingo. The very real possibility of a bid for Rank makes its shares a buy at current levels.
Wednesday's trading statement from Tribal confirmed its recovery is complete. Not only was management "increasingly confident" about the future, but there were signs of Tribal's renaissance. The stock trades at 13 times forward earnings, while the wider support services sector trades at 18 times. Given the difficulties the company has had in recent years this is probably justified. At 222p, the shares are just a hold.
Game reported an 80 per cent slump in annual profits this week. Margins continued to fall, while like-for-like sales in the 12 weeks of the new financial year rose just 2.2 per cent. A takeover is possible and would be welcomed by long-suffering shareholders, but this scenario is already reflected in the shares. Avoid.
A decade since its duel listing in London and New York, the major problem facing Colt Telecom is the ferociously competitive market. These conditions are unlikely to improve. In fact, they will probably become more challenging. At 72p - the stock trades at a 20 per cent premium to the wider sector - should be sold.
Cambrian Mining, the AIM group, plans to buy the rest of AGD Mining it does not already own. The deal turns Cambrian from being a pure mining group into a company with direct operational control over various projects. Since coming to market in 2002, Cambrian has raised around £35m from investors. This is now worth £178m or 228p per share. Buy.
Character's decision to ditch the digital photography arm of its business looks to have been a shrewd move, allowing it to focus on its core games and toys licensing division. The refocused firm is now cleverly vulnerable to takeover but even without a bid its shares are worth buying.
These recommendations are taken from the daily Investment Column
10 tips for taking out a personal loan
Simon Read: Frozen in time - the expat British pensioners who deserve a better deal
Donald MacInnes: My wasted hours in the retail deserts of Dixons-Carphone
Pension firms must ask consumers more questions, says City Watchdog
How to start your own internet business
- 1 The BBC has just done more to eradicate ‘terrorism’ than all our wars since 9/11
- 2 Dog thinks owner is drowning in lake, dives in and tries to pull him out
- 4 Chilling drone footage captures Auschwitz ahead of 70th anniversary of liberation
- 5 Phil Neville backtracks on Tomas Rosicky 'I'd smash him' comments from Match of the Day 2
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
Islamic history is full of free thinkers - but recent attempts to suppress critical thought are verging on the absurd
Leaked documents show Ukip leaders approve NHS privatisation once it becomes more 'acceptable to the electorate'
iJobs Money & Business
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...
Day In a Page
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
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