The Week In review: Straight call on mobile phone giant

Carphone Warehouse likes to ring the changes. Britain's biggest mobile phone retailer is trying to shift towards becoming more of a telecoms services provider where an increasing proportion of its revenues come from ongoing support services rather than a one-off transaction.

Hence the acquisition of the German business of Hutchison Telecom for a net cost of £32.4m. This doubles Carphone's market share in Germany, increases the proportion of higher-value subscription customers and adds other services such as billing.

The next battleground is in fixed line, the talktalk service. So far, Carphone's service has signed up 62,000 new customers, well on the way to the 12-month target of 300,000.

The maiden dividend is welcome and Carphone looks like a business that is starting to win over its critics. But at 88p, up 5p, the stock looks fairly valued.

Quintain Estates and Development

Quintain Estates and Development used be a dull old commercial property company but now it is on the brink of a new beginning. It is part of a consortium that has taken on the Millennium Dome and surrounding land, totalling 190 acres on the Greenwich peninsular. The plan is to develop 14 million square feet of mixed- use scheme (a partner will assume the headache of the Dome). It has also taken on 55 acres of land and facilities next to Wembley stadium, including the conference centre, the arena and exhibition business. The shares are at a big discount to net asset value. Buy.

Matalan

Matalan seems to be doing its utmost to upset investors. Only a few months ago it rocked confidence by ousting chief executive Paul Mason. This week's trading update showed falling sales and news of buying mistakes. Matalan's buyers got it wrong when ordering the spring-summer ranges, paying little attention to Matalan's core, classic, customer segment. The punters voted with their feet and in the 13 weeks to 31 May, like-for-like sales were down by 7.5 per cent on last year. The good news is that margins are slightly up and new chief executive John King has already changed members of the buying team. An interesting recovery play.

Christian Salvesen

It has been a dramatic few months at Christian Salvesen, the distribution group. In February the company issued a profits warning saying intense margin pressure in its UK food and consumer division had damaged trading. Last month the company said takeover talks had ended with an unnamed financial buyer. The dividend has been slashed, though the loss-making German business has been sold to its management. But the outlook statement hardly inspired confidence with the UK industrial business remaining under pressure. Avoid.

NHP

NHP is an owner and operator of nursing homes which has been nursing itself back to health. Formerly a property group, it now runs 158 of its 370 homes. This owner-managed Highfield Homes division is loss-making but should improve after a big refurbishment programme. A return to the dividend gives some confidence. A decent hold.

Volex

Volex, which makes copper cable and components for fibre optic networks, has been cutting costs to cope with a slump in orders in the post tech-boom world. This has helped it back into profit at the operating level and its ability to generate cash despite tough trading conditions in the US, Asia and Europe has impressed the City. Volex's chief executive, John Corcoran, who has had his hand on the rudder for more than a year, also appears to have stabilised Volex's margins. But the outlook is still too uncertain to risk a punt.

Dawson Holdings

Dawson Holdings is responsible for getting this newspaper and the others to your local newsagent. It also distributes magazines and other non-perishable goods using its network of depots and white vans. Delivery of papers and magazines is carved up between three players, who do not encroach on each other's turf: Dawson, WH Smith and Menzies. So the challenge is not competitive pressure of rivals pinching your customers, but of keeping your costs down, as the margins are wafer-thin. But Dawson is on top of the situation with a big jump in profits reported this week. Attractive.

Victrex

During the internet boom, the chemicals company Victrex had investors foaming at the mouth with excitement after it set up a fuel-cell technology joint venture. That hype overshadowed its core business, manufacture of Peek, a high-performance, hard-wearing polymer or plastic which is performing well. This business is starting to produce good returns. A decent hold.

Acal

Life might not be getting any easier for Acal but neither does it seem to be getting any tougher. Around a third of the company's sales come from distributing electronic components while the bulk of the balance comes from supplying IT parts. Although the company does not have much visibility on future orders, it reckons trading has stabilised and is, perhaps, starting to show early signs of picking up. Hold.

Courts

If ever a company needed to court goodwill from its investors it is Courts, the sofas-to-electricals group with shops in 21 countries from the UK to Jamaica. Its key UK business sank £4.8m into the red last year against a £7.6m profit the previous year. This prompted Courts to abandon its foray into electrical retailing and focus on home furnishings. Although Courts says underlying sales across its UK stores have leapt "significantly" in its new financial year, a backlog in fulfilling orders of its swanky new Italian leather sofas could put punters off. Avoid.

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