The Week In Review: No score with Manchester United

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The Independent Online

Setting aside for a moment the national tragedy of it all, the raw financials of the sale of David Beckham seem great for Manchester United. The company will score a big chunk of the £25m payout from an asset which is nearing the end of its productive life and which had been valued at zero on the United balance sheet.

The sharpest suits in the City reckon United's shares could soar before a presentation on 4 July about plans to exploit the brand on the internet and overseas. But investors need to take profits quickly if they are to avoid an early bath. Squeezing more from the brand will be the only significant area of financial growth for United, since gate receipts are not likely to outstrip inflation and media and sponsorship rights are coming down in price. Yet the departure of Beckham severely curtails the marketability of the United brand in the Far East.

Manchester United has weak long-term earnings growth up front, the risk of a poor run on the pitch makes the midfield look shaky, and there is not a chunky dividend in defence. Avoid.

Majestic Wine

Like most of the booze it sells, Majestic Wine gets better as it matures. The wine retailer, which sells bottles by the case from 106 sites across the UK, is still poaching customers from the traditional high street operators and supermarket chains. The stock is one to keep in the cellar.

Johnston Press

Shares in the regional newspaper group, whose 243 titles include the Yorkshire Post, are at an all-time high. With less exposure than their national rivals to expensive display advertising, and with a greater weight of classified ads in sectors such as property and cars, regional titles have been able to steer a safer path through the media downturn. Johnston's shares look to be up with events for now, as further cooling in the property and jobs market could dent revenues. Hold.

House of Fraser

House of Fraser is the department store group which saw off a £197m bid approach from Tom Hunter earlier this year and must now prove it was right to turn him down. The high street trading environment has become tougher and the shares do not look particularly cheap given the lacklustre trading performance in-store, but with both Mr Hunter and Baugur, the Icelandic retailer, holding substantial stakes it is worth holding on for a bid.


Touchstone sells accounting software and other IT services to a host of businesses ranging from the London Stock Exchange to JD Wetherspoon. It has several things going for it. Unusually for a small technology company, it pays a dividend and also has some £3.7m of cash in the bank, while nearly 40 per cent of sales come from ongoing, predictable maintenance contracts. Buy.

Domino Printing Services

If you've ever looked at a Coke can closely enough, you'll have noticed that it contains the precise details of when and at what time it was filled, as well the best before date. Domino Printing Sciences designs, makes and sells the printing machines that print that kind of data onto all sorts of packaging used in the food, drink and drugs industries. With the promise of another record year in store, investors should hold the shares.


There was no guidance with the software group's financial update this week on the outlook for the coming year. Investors will have to wait for the results statement in a month's time for that, but there is already a lot of optimism priced into the expensive shares. Misys' US-focused healthcare business is definitely still growing, but the declining dollar and constraints on state budgets could put paid to that. Sell.

Wyndeham Press

This printer of magazines and leaflets has picked itself up from the horrors of last year, when the advertising slump meant magazines shrank in size and Wyndeham's profits shrivelled too. It closed three of its 12 print plants and its confidence in the future - and its strong cashflows - allowed it to raise the dividend payout. The shares look reasonable value, have a yield of 3 per cent, and will be attractive to those investors who believe in a swift economic rebound.

Aggregate Industries

A cold snap across the central US states and rain in the north-east of the country put a depression over Aggregate Industries shares. The sand and cement group said spring sales have been dismal because builders were hampered by the weather. The strength of the group's cashflows mean existing shareholders can hold on, confident in the robust balance sheet and growth through bolt-on acquisitions.

GW Pharmaceuticals

Higher and higher. That's shares in GW Pharmaceuticals, not the patients trialling its painkiller, an under-tongue cannabis spray for multiple sclerosis sufferers. The spray could have sales of £250m a year in Europe, and there is hope for licensing the secure-dosing technology; for sales outside Europe; for use in other conditions and development of other cannabis-based medicines. Worth a gamble.


Dart's air freight service, which flies for Royal Mail, and its distribution arm, which supplies supermarkets with chilled products, have rising costs they are not able to pass on to big customers. Dart may be hoping for extra business after the Royal Mail decided trains are too unreliable, but the outlook is uncertain. Only hold.


After substantial claims such as those on the World Trade Centre, insurers have never been keener to pass on their risk. The reinsurer Benfield does not take on any underwriting risk, simply rakes in a percentage of premiums customers pay. It is a strong business, but the interest in the float - the first major listing this year - pushed shares too high.

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