The Week In Review: Page share price tumbles on the back of good news

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Another bullish trading statement from Michael Page, the recruitment consultants, appeared to be one too many for the City. With second quarter revenues reported bang in the middle of analysts' expectations - at £52.3m - investors certainly could have received much worse news. The shares tumbled. It once again highlighted the rather curious and unpredictable nature of Page's share price, which appears increasingly detached from the company's bottom line, and more in sync with the UK economy.

Another bullish trading statement from Michael Page, the recruitment consultants, appeared to be one too many for the City. With second quarter revenues reported bang in the middle of analysts' expectations - at £52.3m - investors certainly could have received much worse news. The shares tumbled. It once again highlighted the rather curious and unpredictable nature of Page's share price, which appears increasingly detached from the company's bottom line, and more in sync with the UK economy.

Acting both as a gauge of health at the top end of the UK employment market, whilst remaining sensitive itself to movements amongst other UK employment indicators, it has been boosted by a string of increasingly positive economic news over the past 15 months.

Whenever it has positive news to announce, however, its shares have a tendency to collapse. But the outlook for Page still looks good. There is more to come from the UK economy, and whilst conditions in Europe remain tough, the company's chief executive, Terry Benson, says the first signs of recovery are emerging. In Asia too, first half revenues were up strongly, with no signs of cooling off.

For those who are looking to buy, there may be better opportunities yet. Hold.

FUTURE NETWORK

Future Network's portfolio of 100 magazines taps into niche interests. The company is best known for gaming and computing titles but also has a huge range of publications that cater to hobbies. The company has recovered from the dot.com fever days that saw it overstretch itself, resulting in a sell-off of assets in 2001, followed by a rights issue. The group has shown double-digit growth more recently and earlier this year paid its first-ever dividend. The shares, trading on a modest forward multiple of 11, are a buy.

AGA FOODSERVICE

The Aga stove has life in it yet. In a trading update, Aga Foodservice said first-half sales were up 10 per cent. Interestingly, cooker models introduced in the last three years now account for 25 per cent of orders. And a fifth of orders came from outside the UK. For a company whose cookers are old-fashioned, large and can cost some £3,000, that is pretty good going. In the other half of the business, which fits out commercial kitchens, the news was more mixed. Buy.

LUMINAR

Luminar said that despite worsening like-for-like sales - down 4 per cent to the end of June - it was still trading in line with expectations. It even said margins had improved. It has been involved in a £100m expansion plan and had planned to build casinos in its venues. But the Government's changes to the gambling laws have not gone in its favour, restricting the number of slot machines it would be allowed to install. This may make its casino plans less viable. There are too many uncertainties ahead. Avoid.

BIOTRACE INTERNATIONAL

Biotrace International's germ-testing equipment is a defence against everything from listeria in food to biological warfare. It issued a stinging profits warning for the first-half results. The problem is that contracts that the microbiology products group had hoped to book for the first half have slipped. However, Biotrace stressed that the business was still expected - it would just be deferred to the second half. It remains to be seen whether the company's confidence about a much better second half is justified. Avoid.

BARRATT DEVELOPMENTS

The country's highest volume housebuilder, Barratt Developments sold about 14,000 homes for the year ended 30 June. Selling prices were up 8 per cent to £165,000. The company said four interest rate rises since November last year have managed to put the market on a "sensible" footing. Over the next 12 months, it expects house price inflation to be more-or-less in line with earnings growth, at 4 or 5 per cent. The company expects to maintain margins, at around 15.5 per cent, this year while seeing volume increases to about 15,000 completions. Hold.

MAN GROUP

Man Group - the world's largest listed hedge fund group has seen its flagship AHL fund - which manages $10.3bn (£5.7bn) - hit hard. Without any discernible trends to follow, AHL has performed well below historic levels. But doom-mongering about Man losing its golden touch is way off mark. In the past four months, it has picked up $6bn of sales, bringing its fund under management to $39.5bn. After a rocky ride, it is time to tuck in for future growth. Buy.

EMAP

Emap, the media group, put out what it must have hoped would be a neutral trading update. A few months into the financial year, the company assured the market that it would meet full-year forecasts. However, it appears the City was looking for something more positive, after the company shocked investors in May with the news that it was having problems in its important French market. The company said the difficulties in France were unchanged. Avoid until it can show progress here.

KENSINGTON GROUP

Kensington is the respectable face of lending to people with poor credit histories. Mortgage customers can only borrow 77 per cent of the value of a property - compared to more than 100 per cent elsewhere in the market - and average loans are 2.5 times the amount of money someone earns, which is again more conservative. Yet the company is sailing into more choppy waters, in which widely expected increases in the cost of borrowing will raise the number of customers falling behind on their repayments. Avoid.

FLOORS-2-GO

The Changing Rooms phenomenon has made carpets deeply uncool, and has Britons ripping up their shag piles in favour of wooden and tiled flooring. Floors-2-Go, the flooring retailer, which listed on Aim in April, yesterday said like-for-like sales were up 28 per cent over the past six months. Including stores opened last year, sales were up 224 per cent. Buy.

The above is a selection from the daily Investment Column

Premier is a tasty buy

Trying to float a food company at the moment seems a foolhardy exercise given the range of distress calls that have been coming out of the sector of late.

Northern Foods has acquired a reputation for issuing multiple profits warn- ings while its rival Geest joined the club as recently as last week. Uniq, formerly Unigate group, has steadied but only after radical surgery involving 700 job cuts and factory closures.

The businesses have had to battle intense price competition brought on by avaricious retailers who are squeezing producers' margins, just as many raw material costs have been rising.

This week's news from Hicks, Muse, Tate & Furst, the Texan private equity fund, that it is pressing ahead with the flotation of Premier Foods, maker of Branston Pickle and Ambrosia rice pudding, seems likely to test the patience of investors to the limit.

Will Premier and its advisers succeed with their story? The answer is probably yes. The company does not seem to have been overly greedy on price. A range of 230p-260p, released yesterday, gives a price/ earnings ratio of 9.25-10.5 times this year's earnings. This compares with Northern Foods at 11 times. Premier will also yield just shy of 6 per cent, so on these benchmarks Premier is a bargain.

The company has achieved steady gains in sales - £93.8m in the three months to April 3 compared with £89m in the same period last year - and operating profits. The big difference with Premier is that it is a branded food group whereas the likes of Northern are ostensibly own-label producers for the supermarkets.

It owns an impressive list of household names including Typhoo Tea and the Loyd Grossman sauces that should provide steady progress for the company. A good defensive play. Buy.

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