The Week in Review: SCS is still sitting nice and pretty

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The Independent Online

It was a case of sofa, so good at SCS Upholstery. The settee seller has emerged unscathed from the high street slowdown that has knocked its rivals. Interim profits, up 37 per cent to £9.5m, beat expectations, helped by some speedy sofa deliveries from key suppliers. Sales rose much faster than expected because its suppliers managed to turn around sofa orders in record time.

Since the bumper January sale, which helped like-for-like new sofa orders soar by double digits, some of the spring has come out of SCS's numbers. For the first 33 weeks of its year, underlying order intake has slowed to 6 per cent. Yet this in one of the trickiest areas of the market, so it is no mean feat.

Despite delivering more sofas, the group managed to squash its distribution costs. SCS spends about £250,000 on opening a site, and is planning to open seven in its second half, which means that its profits progression won't be quite so rapid. That, combined with the uncertain outlook for retailers means the shares, which yield 5 per cent, are only a hold.


New chief executive David Levin is likely to keep most of United Business Media's businesses with the possible exception of UAP, a UK consumer publisher, reckoned to be worth £65m. Add to that the other assets already identified as non-core, worth some £270m, you could have significant further disposals over the next 12 months. Hold.


The phenomenal growth in internet gambling is akin to the boom all over again. Except this time it appears to be more profitable. Gaming Corporation, whose site,, acts like a Yahoo! or Google for internet gambling sites, says it has had a "monumental" first six months of the year. There is plenty of growth yet to come. Buy.


Cardpoint, one of the major operators of fee-paying cash machines in the UK, has suffered severe delays in converting the free cash dispensers it acquired from HBOS last year to fee chargers. Consequently, earnings will suffer greatly this financial year but it achieved respectable like-for-like revenue growth of 9 per cent in the first half. A risky buy.


Although the recent global backlash against fast food was once feared as a force to derail Enodis - which makes the equipment for burger bars' kitchens - it now seems to be working in its favour. With pressure on fast-food joints, on both sides of the Atlantic, to provide healthier and more diverse menus, Enodis has been cashing in. Buy.


Companies such as Amec are waiting on the sidelines ready to pick up billion-pound contracts to restore Britain's nuclear generators if they get the green light from the Government. The company is already hoping to win lucrative contracts to clear up existing nuclear waste. These could be worth as much as £20bn and will go out to tender next year. Hold.


LogicaCMG has delivered an upbeat trading statement. This is a relief for shareholders after a consistent flow of disappointing corporate news. However, LogicaCMG has made 'jam tomorrow' statements before only to disappoint with profit warnings. Investors should wait for more concrete results later this year before spending money on the company's shares.


Holidaybreak warns demand for camping holidays has dropped in the face of equally cheap breaks abroad. Families can now afford to fly to their destination and stay in hotels. The company is downsizing its camping business in favour of short hotel breaks and adventure holidays. But the shares are relatively inexpensive. Hold.


Since it became involved in the takeover of Rensburg at the end of last year, beefing up its UK presence, Investec shares have been on the rise. And since this column last advised investors to buy the stock in November, it has risen more than 17 per cent. The latest results are impressive. Keep buying.


"Lacklustre" is how Scottish Radio Holdings describes current trading but it has done better than quoted rivals. Emap, the number two radio player, last year took a 27 per cent stake in SRH. A full bid may follow soon. Hold.


Babies are back in fashion and so is Mothercare. Over the past two years, the mother-and-baby retailer has transformed its fortunes under the able leadership of Ben Gordon. It has invested in price, product and its estate, while managing to increase profits. It has also started opening new stores. A solid hold.

The above are recommendations taken from the daily investment column.

Property speculator looks good for a tax-efficient future

Land Securities is often described as a "boring" company. But there is nothing boring about the latest numbers the group has reported.

The valuation of its property portfolio was up 10.3 per cent to £9.4bn for the year ended 31 March. Rental income rose 30 per cent, while the dividend climbed nearly 17 per cent. Underlying pre-tax profits, before exceptionals, rose 41 per cent to £526m, though after taking a refinancing charge of £682m, the bottom line was £156m in the red.

The company said the performance and the scale of the dividend increase would not necessarily be repeated. It had benefited this time from profits on the sale of properties and winning a number of contracts during the period.

Looking forward, Land Securities ought to be one of the principal gainers from the Government's plans to introduce a tax-efficient vehicle for property investment.

Land Securities' relatively high return on capital employed makes the Real Estate Investment Trusts structure particularly suitable.

All in all, the shares are a solid hold.

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