The Week In Review: Land Securities' rise and rise give shares a solid foundation

Land Securities is one of the UK's biggest landlords. Some 300,000 Britons go to work at Land Securities-owned offices. And we make 300 million visits a year to its shopping centres, which now include Birmingham's new Bullring.

Land Securities is one of the UK's biggest landlords. Some 300,000 Britons go to work at Land Securities-owned offices. And we make 300 million visits a year to its shopping centres, which now include Birmingham's new Bullring.

The company has achieved a neat balance in its portfolio between office accommodation, which has suffered a significant downturn that is only now bottoming out, and retail space, where the UK's voracious consumer spending spree has kept tills ringing, demand for space high and rents rising.

Shopping centres and retail parks account for 55 per cent of Land Securities' asset value, which was the equivalent of 1,331p per share at 31 March. This is better than we expected in November, when we advised avoiding the shares. The out-of-town retail parks are rising fastest in value. In a trend highlighted by Dixons in April, when it closed hundreds of stores, the warehouses are being divided into smaller units and attracting names such as Boots and Next.

Land Securities shares sit at less of a discount to its asset value than many in the sector, but the broader picture is that demand for property investments has continued to rise. So Land Securities assets are being driven up in price and the shares are still in demand. Buy.

MITCHELLS & BUTLERS

Mitchells & Butlers' All Bar One and O'Neil's bars are still pulling in the punters. Its strong brands and focus on residential locations has increased its market share. M&B has also improved its food offering. The next six months will be tough for M&B, as last year's scorching summer had the UK drinking all hours and comparisons may be disappointing. But its shares are still good value and there is potential for higher dividends. Hold.

MICE GROUP

Mice Group, the marketing and conferences company, has made a swift recovery from the hit that many media companies faced in 2001 and 2002. Investors are now anxious to see whether the company can continue to grow at this clip. The unexpected and encouraging revelation of a 33 per cent rise in the company's order book is a good sign for the coming year. Mice may yet become the big cheese it once promised to be. Buy.

WILLIAM HILL

Punters who followed our advice and bet on William Hill's shares when it floated two years ago will be chuffed that their gamble paid off. Since listing, the group's profits have galloped ahead on the back of two step changes to the industry. The first was the switch to taxing gross profits. The second was the advent of fixed-odds betting terminals, souped-up slot machines that allow punters to play roulette while waiting for the next horse race to start. But now the number of machines has been limited to four per shop. Take profits.

CAIRN ENERGY

The oilfields of India are proving to be more like gold to Cairn Energy, which yesterday announced yet more success in its Rajasthan site. While news of further successful drilling is all but guaranteed, there may be less of a gush in the shares on further announcements, as most investors have already priced in expectations of more finds. There is still some upside to go, however, making it a very worthy hold.

ENTERPRISE INNS

Gone are the days when lashings of cheap beer were enough to pull punters into the pub, says Enterprise Inns. Drinkers are now more discerning and want a quality pub with a quality landlord. So Enterprise's model of leasing pubs to independent, tenanted landlords is lapping up business. This is a worthy, highly cash generative company about to be turbocharged by the acquisition of Unique's 4,000-strong pubs estate. Hold on to your place at the bar.

BAGGERIDGE BRICK

The bricks market has made a comeback. What happened in the 1980s boom was that strong demand led to too much capacity being created in the industry, leading to a huge build-up of stocks and poor prices in the 1990s. Baggeridge said prices were now back to late 1980s levels. The demand outlook, longer term, is solid enough now that the Government has recognised that thousands more homes must be built each year. Buy.

INVENSYS

Just when you thought that Invensys had finally turned the corner, the company disappoints the market again. The engineering group makes goods for industry, ranging from factory control systems to railway signalling equipment, and it admitted this week that each of the six remaining divisions has challenges to overcome. But customer relations have improved and more investment will be made to help pull profit margins higher and this will be made. Hold to see what happens.

CAPITAL RADIO

It's because it's a Londoner that Capital Radio is still facing challenges. Capital's problem is that it is market leader, with a huge established station in London, 95.8FM. The London market has been, and remains, fiercely competitive, where advertising has been heaviest hit by the downturn. At least the station has now pulled clear of its nearest competitor and in new breakfast show host, Johnny Vaughan, seems to have found a worthy successor to Chris Tarrant. Hold.

IMAGINATION TECHNOLOGIES

Imagination does two things. It designs the microchip systems that power applications in devices such as digital televisions, mobile phones, car navigation systems and amusement machines. It also owns the Pure digital radio business which is booming as consumers swap their old analogue sets for the new generation of radios. Business has certainly been booming and the shares are still a buy.

CRANSWICK

Cranswick has proved a swine of an investment over the past 18 months. This food group, most famous for its posh sausages and hams, has suffered a couple of trading setbacks, a tough market for animal feed and the loss of part of a big contract for its newly acquired sandwich making business. Investors should wait to check that the company comes unscathed through the next six months, and then consider buying back in.

Compass points upward

People are eating more and living longer, observes Michael Bailey. That's pretty good for Compass, the world's biggest catering company, where Mr Bailey is chief executive.

The company, reporting interim results, was full of confidence this week. While the half-year performance impressed the City, the markets have treated Compass with some scepticism since it was demerged from Granada at the start of 2001.

The company provides food for workplace canteens in the private and public sector, it has motorway service stations, some restaurants, food chains, and concessions in airports and railway stations.

While Compass is already the global market leader, it still only has 5 per cent of a £250bn market. So there is plenty of growth to go for, especially in markets such as China and Japan. Furthermore, there is ample scope for profit improvement as it moves global margins up to levels seen in the UK.

Compass shares have been dogged by the complexity of its demerger from Granada, the airport disruption caused by the 11 September attacks and wider stock market turbulence, all of which has been compounded by the stock's move from the leisure to the support services sector.

The City is much more convinced by the Compass story, as shown in its recent share-price performance. Given the favourable economic environment, they are still a buy.

The above are a selection of recommendations from the daily Investment Column

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