The Week in Review: Iceland feels the chill after a bumpy festive season

Most fans of the stock think it can squeeze double this year's profits out of the frozen food retailing business when the new management's programme of refits and product range changes kick in.

Iceland

There is much faith built into the Iceland share price. Most fans of the stock think it can squeeze double this year's profits out of the frozen food retailing business when the new management's programme of refits and product range changes kick in. If that happens, this week's Christmas trading update should have provided signs that the sales decline has at least been halted. It didn't, and with the prospect of a rights issue hanging over the stock, it's a sell.

Pace Micro Technology

The cash-strapped UK cable firms have stopped subsidising set-top boxes, so times are tougher for Pace, the company that makes them. The box prices are being squeezed and Pace's attempt to crack the US market is behind schedule. But the share price gives no credit for the potential uplift from the launch of Pace's cheap set-top boxes for free-to-air digital channels. It also gives no credit for growth of products with whizzy new features such as personal video recording. Long-term buy.

Greggs

Greggs, Britain's biggest retail bakers, is a low-profile company that quietly keeps on delivering the goods. Its target is to increase sales to £1bn by 2010 (they stood at £300m last year) and to build store numbers from 1,140 now to 1,700 by 2008. This will include an expansion of the 240 Bakers Oven units, which offer seated catering for a tea and bun. The shares are not expensive for a quality performer and Greggs remains a good share to lock away in the pantry.

Bespak

Bespak makes the plastic bits and bobs that go into inhalers and other medical devices, and profits are on a slide as its big pharma customers drive down prices. To compensate, it is building a portfolio of technologies for the formulation of drugs to be delivered by nasal sprays, and is working on an insulin inhaler for diabetics. Management talks a good story, but Bespak remains a real gambler's stock.

Photo-Me

Photo-Me International, the photo-booth maker and operator, has a dreadful record for disappointing investors and there was more woe this week. The UK business is threatened by Snap Digital, a venture capital-backed company which is undercutting Photo-Me and has snatched the valuable post office contract. The US market has been hit by lower sales at airports after 11 September. Now is not the time to buy.

SkyePharma

It has always been a case of mañana, mañana at SkyePharma. The biotech firm has an interesting array of drug delivery technologies, but has never seemed able to covert them into profits. Until now. It has passed break-even and is ensuring a healthier proportion of revenues are from recurring product royalties, rather than one-off development fees. There is plenty of scope for disappointments, and investors should be ready to bank any profits early, but the shares are worth the risk.

Jarvis

Jarvis has transformed itself from a mucky old-style construction group to a sexy, support-services player, and that paid off. It operates in rail maintenance and private finance initiatives. The shares had a strong run this year and trade on a forward p/e of 20. Not cheap, but a good long-term bet.

Chorion

Takings at Chorion's late-night bars were up 4 per cent in December. That's good, because the business, which includes Tiger Tiger and other swanky venues, is being fattened for demerger from the Chorion's intellectual property business, which combines the rights to Miss Marple, Poirot, Maigret and Noddy. A ban on new late-night licences in London's West End allows a respite from competition while Tiger Tiger is rolled out across the UK. The demerger in May should prompt a re-rating. Buy.

Reg Vardy

Figures this week confirmed that 2001 was a record year for new car sales in the UK so Reg Vardy, the UK's largest dealership, unsurprisingly posted record profits. But this year is not likely to be as buoyant, and prices are also falling for used cars. A European ruling on competition in the industry is due in weeks. The experienced management have a steady hand on the wheel, but investors should take profits.

Amec

Waiting for a re-rating of Amec's share price has been like Waiting for Godot. The company has moved decisively away from its low-margin past as a construction firm and increasingly deserves a higher support-services rating, but there has been none. Maybe it'll be lucky this year. An economic upturn could help, as could plans to purchase the remaining 54 per cent of Spie, its French networks business. Buy.

Jurys Doyle

The largest hotel chain in Ireland, Jurys Doyle weathered the foot-and-mouth crisis, the US downturn and 11 September with only a 10 per cent decline in earnings. In Jurys Inn, the group has an innovative no-frills concept that keeps rates reasonable for high-quality rooms in downtown areas by not offering room service.

Northgate

Northgate, which owns 38,000 commercial vehicles for hire to businesses that don't want the hassle or the inflexibility of running their own company fleet, is half-way through a five-year plan to double its size. Any downturn from existing customers could be more than compensated by new business from cost-conscious firms driven to outsource vehicle needs. The share is one to tuck away.

The above is a selection of recommendations from this week's daily investment columns

JD Wetherspoon

Investors in the no-frills public house juggernaut that is JD Wetherspoon have been amply rewarded in the past six months. The shares have rocketed by nearly a third, but the rally halted when the stock market took this week's Christmas and New Year's trading statement negatively. Tim Martin, the chairman, disappointed his fans by revealing like-for-like sales in the six weeks to 6 January had increased only 3.7 per cent, compared to 9.4 per cent the previous year. This ran counter to the image of a boozy festive period as depicted by rivals at SFI and Chorion. The 5.4 per cent like-for-like sales gain for the 23 weeks to 6 January showed the group is on a slowing trend.

Wetherspoon, famed for its no-music, no-TV, no-nonsense venues and cheap booze, is expected to face challenges as Luminar, Yates and Six Continents elbow into its niche. Although the Wetherspoon management is feted for its ability to deliver, analysts believe Mr Martin could face hurdles in tripling his estate from 500 units to more than 1,500 in 10 years, given the smaller population centres he must use. A repeat of the dip in sales that marked the 1998 World Cup could also cause problems this summer as beer-swillers opt for TV-friendly boozers. Peel Hunt expects earnings growth to fall from 22 per cent to 16 per cent in 2002.

The early successes of Wetherspoon's youth-oriented Lloyd No 1 sites, picked up 18 months ago from Wolverhampton and Dudley, provide medium-term potential, but the scale of Lloyd is small compared to the rest of the estate. The shares have defensive qualities in uncertain economic times, but these are already factored into the price. The stock trades at a premium to the sector that is no longer fully justified. Sell.

News
Susan Sarandon described David Bowie as
peopleSusan Sarandon reveals more on her David Bowie romance
Sport
sportDidier Drogba returns to Chelsea on one-year deal
Arts and Entertainment
The Secret Cinema performance of Back to the Future has been cancelled again
film
News
people
PROMOTED VIDEO
Arts and Entertainment
Christian Grey cradles Ana in the Fifty Shades of Grey film
filmFifty Shades of Grey trailer provokes moral outrage in US
News
BBC broadcaster and presenter Evan Davis, who will be taking over from Jeremy Paxman on Newsnight
peopleForget Paxman - what will Evan Davis be like on Newsnight?
Sport
Louis van Gaal would have been impressed with Darren Fletcher’s performance against LA Galaxy during Manchester United’s 7-0 victory
football
Voices
The new dawn heralded by George Osborne has yet to rise
voicesJames Moore: As the Tories rub their hands together, the average voter will be asking why they're not getting a piece of the action
Sport
Dejan Lovren celebrates scoring for Southampton although the goal was later credited to Adam Lallana
sport
News
newsComedy club forced to apologise as maggots eating a dead pigeon fall out of air-conditioning
Arts and Entertainment
Jo Brand says she's mellowed a lot
tvJo Brand says shows encourage people to laugh at the vulnerable
Life and Style
People may feel that they're procrastinating by watching TV in the evening
life
Sport
Rhys Williams
commonwealth games
News
Isis fighters travel in a vehicle as they take part in a military parade along the streets of Syria's northern Raqqa province
i100
Arts and Entertainment
Southern charm: Nicolas Cage and Tye Sheridan in ‘Joe’
filmReview: Actor delivers astonishing performance in low budget drama
Life and Style
fashionLatex dresses hit the catwalk to raise awareness for HIV and Aids
Travel
travel
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Senior Risk Manager - Banking - London - £650

    £600 - £650 per day: Orgtel: Conduct Risk Liaison Manager - Banking - London -...

    The benefits of being in Recruitment at SThree...

    £18000 - £23000 per annum + Comission: SThree: SThree, International Recruitme...

    Test Analyst - UAT - Credit Risk

    £280 - £300 per day + competitive: Orgtel: Test Analyst, Edinburgh, Credit Ris...

    Trainee Recruitment Consultants - Banking & Finance

    £20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

    Day In a Page

    Evan Davis: The BBC’s wolf in sheep’s clothing to take over at Newsnight

    The BBC’s wolf in sheep’s clothing

    What will Evan Davis be like on Newsnight?
    Finding the names for America’s shame: What happens to the immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert?

    Finding the names for America’s shame

    The immigrants crossing the US-Mexico border without documents who never make it past the Arizona desert
    Inside a church for Born Again Christians: Speaking to God in a Manchester multiplex

    Inside a church for Born Again Christians

    As Britain's Anglican church struggles to establish its modern identity, one branch of Christianity is booming
    Backhanders, bribery and abuses of power have soared in China as economy surges

    Bribery and abuses of power soar in China

    The bribery is fuelled by the surge in China's economy but the rules of corruption are subtle and unspoken, finds Evan Osnos, as he learns the dark arts from a master
    Commonwealth Games 2014: Highland terriers stole the show at the opening ceremony

    Highland terriers steal the show at opening ceremony

    Gillian Orr explores why a dog loved by film stars and presidents is finally having its day
    German art world rocked as artists use renowned fat sculpture to distil schnapps

    Brewing the fat from artwork angers widow of sculptor

    Part of Joseph Beuys' 1982 sculpture 'Fettecke' used to distil schnapps
    BBC's The Secret History of Our Streets reveals a fascinating window into Britain's past

    BBC takes viewers back down memory lane

    The Secret History of Our Streets, which returns with three films looking at Scottish streets, is the inverse of Benefits Street - delivering warmth instead of cynicism
    Joe, film review: Nicolas Cage delivers an astonishing performance in low budget drama

    Nicolas Cage shines in low-budget drama Joe

    Cage plays an ex-con in David Gordon Green's independent drama, which has been adapted from a novel by Larry Brown
    How to make your own gourmet ice lollies, granitas, slushy cocktails and frozen yoghurt

    Make your own ice lollies and frozen yoghurt

    Think outside the cool box for this summer's tempting frozen treats
    Ford Fiesta is UK's most popular car of all-time, with sales topping 4.1 million since 1976

    Fiesta is UK's most popular car of all-time

    Sales have topped 4.1 million since 1976. To celebrate this milestone, four Independent writers recall their Fiestas with pride
    10 best reed diffusers

    Heaven scent: 10 best reed diffusers

    Keep your rooms smelling summery and fresh with one of these subtle but distinctive home fragrances that’ll last you months
    Commonwealth Games 2014: Female boxers set to compete for first time

    Female boxers set to compete at Commonwealth Games for first time

    There’s no favourites and with no headguards anything could happen
    Five things we’ve learned so far about Manchester United under Louis van Gaal

    Five things we’ve learned so far about United under Van Gaal

    It’s impossible to avoid the impression that the Dutch manager is playing to the gallery a little
    Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

    Screwing your way to the top?

    Good for Lana Del Rey for helping kill that myth, says Grace Dent
    Will the young Britons fighting in Syria be allowed to return home and resume their lives?

    Will Britons fighting in Syria be able to resume their lives?

    Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"