The Week In Review: Property firm fears shaky high street

Land Securities, Europe's largest quoted property company, - it even owns the lights at Piccadilly Circus - has had a good run since we tipped the stock a year ago. Boosted by recovery in the London office market and strength in its core retail division, the company's net asset value per share has increased by almost 11 per cent. Its shares have not quite kept pace with its peers, but they have nonetheless risen by almost 50 per cent since last November.

The concern for investors, however, is what might happen next, given the much less stable outlook for the commercial property sector. Retail, which accounts for more than half of Land Securities' portfolio, is the biggest worry. With consumer confidence already fragile, and interest rates having risen again, the high street is likely to come under additional strain in the New Year.

Still, Land Securities' outsourcing business, Trillium, which accounts for 17 per cent of group profits, is enjoying rapid growth, and has built up an impressive pipeline of future business. Meanwhile, its conversion into a real estate investment trust in January will make it a much more tax-efficient vehicle for investors. Buy.

INMARSAT

Inmarsat offers phone services through its network of satellites, which cover 85 per cent of the earth's landmass, and third quarter results showed it could prove a very profitable niche. While revenue in the period grew 8 per cent to $129m (£68m), net profit tripled to $11.1m. Hold.

GAMING VC

Gaming VC Holdings boasts that its online casino does not do any business with Americans. But most of its clientele are German, where the authorities are also less than keen on foreign gambling websites. Still, the business is in good health, with rising revenues and customer numbers. The company also has the support of the EU, which has been moving against gambling monopolies. Even so, avoid the shares until the regulatory situation becomes more clear.

BURBERRY

For a British luxury goods group, Burberry sure is fond of installing American bosses. Angela Ahrendts has made it clear where her heart lies by putting the US at the centre of her expansion plans. In the half year to 30 September, pre-tax profits were £73.4m, down from £78.1m. But there is a momentum at all three of its profit streams: retail, wholesale and licensing. Don't lose faith. Buy.

COFFEE HEAVEN

The chances of anyone in London getting their morning latte from Coffee Heaven are slim because the group only operates in eastern Europe. But that's no reason to steer clear. An update this week confirmed trading is ahead of expectations. First-half revenue is up by 61 per cent and it expects a pre-tax profit of £400,000. Buy.

INVENSYS

When BTR and Siebe formed Invensys in 1999, the former was in pretty bad shape while the latter was struggling. The combination of the two has been little short of a disaster. However, investors greeted last week's interim results enthusiastically, and the chief executive, Ulf Henriksson, seems to think the turnaround is complete. Investors have to decide whether they believe that - despite the surge in the share price, the results were only slightly ahead of market forecasts. Hold.

ROBERT WISEMAN

After the turmoil of recent years, life has settled down for Britain's biggest dairies. Robert Wiseman wound up with Tesco and J Sainsbury as its biggest customers, and reckons it's got "the two best horses in the race". Analysts at Panmure Gordon have lifted their full-year profits estimates by 7 per cent to £31m. Hold.

MECOM

This year, Mecom emerged as a major owner of newspapers in Europe. While most London investors want to get as far away from newspapers as possible, Mecom has shown that conditions are more promising on the Continent. A trading update this week said that advertising revenues were growing in all its major markets - Denmark, Norway, Poland and Holland. Buy.

LADBROKES

Gambling shares are, well, a gamble. When punters have a good run, the bookies take a hit. Such is the story at Ladbroke, which has warned investors that it had a string of bad results last month. Of 19 Champions League matches, 18 were won by the favourites, while five out of seven favourite horses won at Newmarket on Champions Day. Trading at 15 times next year's earnings, the company is fairly valued. But with the possibility of a private equity approach and potential for expansion in Europe, the shares have further to run. Buy.

INVESTEC

South African financial services group Investec has been firing on all cylinders over the past year, with each part of its business growing at a pace. Publishing its interim results this week, the group posted an overall 34 per cent rise in operating profits, driven by a 68 per cent increase in its private client arm, and a near doubling of profits in its specialised finance division. Buy.

MOTHERCARE

Sales growth at Mothercare is not proving sufficient to offset its rising costs. To tackle this, the group is taking the axe to its own estate, cutting back stores that are too big. In five outlets it has reduced its space by 40 per cent, its rent bill by 30 per cent but its sales by just 7 per cent. It is counting on the internet to make up any difference. All very sensible, but this newest Mothercare baby will take time to grow up. Take profits.

The above recommendations are taken from the daily Investment Column

Oh, bring us a figgy pudding - but avoid tasting the shares

In the next five weeks, Northern Foods will sell 26 million Christmas puddings. Which means a lot is riding on how well the food group performs over the festive season.

Investors are all too aware of the company's propensity for welcoming in the new year with a profit warning, so this week they were busy scouring its interim results for signs of something rotten. The alarm bells are already ringing over the firm's chances of getting £200m proceeds from a disposal programme that will see it shed 40 per cent of its business by a self-imposed target of next May. Profits from the businesses to be sold collapsed to almost nothing - but Pat O'Driscoll, the company's head chef, insisted this was only what it had flagged six months ago.

Following the divestments, Northern will comprise three divisions: chilled, bakery and frozen, making pizzas, ready meals, biscuits, sandwiches, salads and those figgy puddings. The interim numbers suggested its chilled business was on the road to recovery, with a 9 per cent rise in sales and a 2 percentage-point gain in margins to 3.8 per cent.

But the 38 per cent fall in interim profits before tax to £16m showed the rest of the company has some way to go. Avoid.

j.daley@independent.co.uk

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