The Week In Review: Smarter investors stay away
Saturday 04 March 2006
Will someone please take Alliance & Leicester over, if only to put an end to speculation that has become almost as predictable as the group's results.
The UK's seventh biggest bank has unveiled a tidy profit of £548m, up from £540m a year ago, and managed to increase the dividend a creditable 7 per cent, to 51.5p. But as far as the shares go, there seems little there to attract the smarter investor.
The bid gossip surrounding Alliance & Leicester has been around for ever. Management pretends to find it an irritation, but in reality it keeps the shares higher than they otherwise would be.
The City is getting tired of waiting for the takeover bid that never comes, and the shares look overpriced at almost 14 times forecast earnings. Sell.
The Chinguetti field off the shores of Mauritania has started to produce oil for the first time. This takes the group from being one of more than 100 resource explorers listed on the junior market to membership of the select club that actually produces oil. For any investor keen on exposure to oil exploration and production, Hardman should be a core holding.
This looks set to be another great year for recruitment group Robert Walters. The full-year figures saw the company register a 57 per cent rise in pre-tax profits to £12.7m and a 12 per cent rise in the dividend, to 3.4p per share. By the end of the current year, analysts expect Robert Walters' profits to hit £15m. Buy.
The deregulation of Continental Europe's jobs arena is a great opportunity for recruiters and Hays is taking advantage. It has delivered a 40 per cent jump in the fees it earns from overseas operations. Last year it bought back £312m worth of its own shares. At 16 times forecast earnings for 2006, the stock is at a slight premium to the UK market but in line with peers. Hold.
Having disposed of both its closed life insurance book and UK financial advisory arm last year, Henderson's transformation into an uncomplicated fund manager is done. But what's next? A bid for rival Gartmore is fraught with problems, and medium-sized firms that have tried to be all things to all people in the past have not got far. Take profits.
If it was not for the performance of its US house building division the latest annual results from Taylor Woodrow would have been dire. Britain's third-biggest house builder managed a 2 per cent rise in pre-tax profits to £411m thanks to a whopping 56 per cent jump in profits at its US operations. But now clouds are gathering for the company across the Atlantic, avoid.
Full-year profits from the food-casings maker Devro came in slightly below expectations. To blame was the fact the company had one fewer trading week in December. Still pre-tax profits rose to £25m from £18m previously. The shares trade at 14 times forecast earnings and are fairly priced.
Standard Chartered, makes over three-quarters of its earnings from Asia, has unveiled bumper profits for 2005 and a stiff hike in its dividend. At almost $2.7bn (£1.5bn), pre-tax profits rose 19 per cent last year after the £3.3bn purchase of Korea's SC First Bank began to pay off. Buy.
Alizyme shares are up nearly 50 per cent and were up again this week following positive trial data from the biotech's ATL104 treatment for Mucositis. ATL104 is not even Alizyme's most exciting product. Cetilistat, an anti-obesity formula, is widely talked of as a likely blockbuster. It also has a further two products on the way. While there is no guarantee that any of these drugs will actually make it, Alizyme should be a core holding for biotech bulls.
SHL Group is a world leader in psychometric testing. These are increasing used in the recruitment process of large companies so it is no surprise that SHL has unveiled solid results. Buy the shares.
Having spent many years disappointing the City, Arena Leisure has finally started to deliver for shareholders. Annual results from the racecourse owner revealed a 30 per cent jump in operating profits to £6.7m and a 10 per cent rise in sales. This is not a stock that is going to double overnight but should prove a good bet for long-term investors.
Logica is in the right place to cash in on global outsourcing
LogicaCMG has unveiled a 66 per cent rise in annual profits, thanks to the continued recovery in the IT services market last year.
The group, which provides IT services to business customers, has a great opportunity to outperform. Over the past year it has rapidly grown its ability to provide services from low-cost offshore centres such as its facility in Bangalore.
This should help it cash in on the growing trend among corporates to outsource their IT needs.
At 18 times forward earnings the shares are not expensive, but risk factors make Logica just a hold for now.
The above are recommendations taken from the daily Investment Column.
Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk
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Day In a Page
With four bedrooms, this spacious maisonette in a mid-terrace period-style house in Holland Road is well-maintained and offers high ceilings and period features.
The terraces of this two-bedroom penthouse apartment offer panoramic views that stretch over fifty miles from the cliffs of Beachy Head.
In the heart of the coastal village of Mumbles and moments from the pier, this five-bedroom Victorian terrace is set over three floors and retains many original features.
In a sandbanks location, moments from the beach, this three-bedroom apartment has a large open-plan living area and a south-west facing balcony.
This four-bedroom home has an annexe accessed from the side of the house, with potential for improvement and conversion subject to the necessary permissions.
In the heart of the hamlet of Wardley, this five-bedroom period home offers countryside views and a stylish interior, with original features and open fireplaces.
Offering countryside views and landscaped gardens, this three-bedroom Grade II-listed lodge has a spacious conservatory and a large cellar that could serve as a workshop.
Set in approximately 1.5 acres, this four-bedroom home comes with a second, detached property that's currently used as an annexe.
In the hamlet of Newchurch, this former parish church is now a four-bedroom home complete with clock tower and eyrie.
Offering scenic views from a large balcony and sun terrace, this four-bedroom home has a wraparound garden and a heated swimming pool.
Offering views across the Humber and East Yorkshire Wolds from a glass panelled balcony, this four-bedroom barn-style home befits a life of leisure.
This four-bedroom home offers versatile accommodation with annexe potential; features include a hot tub, sauna and Norwegian BBQ hut.
Well-located for schools, colleges and the town centre, this contemporary thatched cottage offers flexible living space with six bedrooms.
Built in 1907, this four-bedroom Edwardian period home has been refurbished by the current owners, retaining many original period features.
Surrounded by landscaped gardens, this five-bedroom home offers living space across three floors.
This lovely country home in Burnham Market is currently run as a popular holiday cottage, with five en suite bedrooms and colourful gardens.
This three-bedroom 17th-century former village bakery is just a few miles from the East Sussex coast.
Set on a landscaped plot, this light and airy four-bedroom home comes with a log burner in the lounge, a fitted kitchen and an open-plan ground-floor layout.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Built on a former chapel site, this impressive four-bedroom home boasts balconies, stunning views and contemporary modern living.
This three-bedroom house is situated in a quiet mews and set over three floors. Features include glazed staircases and high ceilings.
A period townhouse set over four floors, this five-bedroom home was built in the 18th Century and retains many original features.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.