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
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Jeremy Clarkson 'sees no problem' with his racist language on Top Gear, says BBC
- 2 'Alien thigh bone' on Mars: Excitement from alien hunters at 'evidence' of extraterrestrial life
- 3 Richard Dawkins on babies with Down Syndrome: 'Abort it and try again – it would be immoral to bring it into the world'
- 4 London restaurant 34 creates champagne glass modelled on Kate Moss’ left breast
- 5 ALS ice bucket challenge co-founder Corey Griffin drowns, aged 27
Richard Dawkins on babies with Down Syndrome: 'Abort it and try again – it would be immoral to bring it into the world'
Scottish independence: English people overwhelmingly want Scotland to stay in the UK
Isis threat: Cameron wants an alliance with Iran
Michael Brown shooting: Chaos erupts on the streets of Ferguson after autopsy shows teenager was shot six times – twice in the head
Bin bag full of cats' heads discovered near Manchester's Curry Mile
Disgusting, frustrating, but intriguing: how the country really feels about its politicians
iJobs Money & Business
£30000 - £40000 per annum + benefits+bonus+package: Harrington Starr: C#.NET ...
£20000 - £30000 per annum + benefits+bonus+package: Harrington Starr: Junior D...
£550 - £650 per day: Orgtel: Business Analyst - Traded Credit Risk - Investmen...
£55000 per annum: Harrington Starr: A financial software vendor at the forefro...
Day In a Page
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
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