The Week In Review: Swell prospects at Forth Ports

Bid hopes have swollen valuations of port operators and there is good reason for all the talk of consolidation. In the past six months, P&O and PD Ports have been swallowed by foreign buyers. Many in the City believe Forth Ports could be next. But even without a bid the company looks a good bet.

Its annual results were sparkling. Forth, which operates seven commercial ports in the UK, boasted of an 8 per cent rise in operating profits to £63m and an 8 per cent jump in its dividend to 43p per share thanks to a particularly strong performance by its Scottish sites.

The fact that Forth has so little debt on its balance sheet makes it an attractive prospect for private equity and trade players. Analysts suggest a bid would have to be pitched at more than 2,000p if it is to be successful. But with or without a bid, the shares are a buy.

WOLSELEY

Wolseley is keen to play down concerns about a slowing US housing market yesterday. Given North America accounts for 65 per cent of total sales at the plumbing supplies and building materials group, and has been largely behind the profit growth in recent years, this is no surprise. Interim results revealed a 40 per cent jump in turnover at the division to £4.3bn and a 39 per cent increase in profits to£270m. Hold

HMV

Now Permira has walked away from a bid for HMV there seems little reason for holding the shares. The music retailer is without doubt in decline and a fresh offer is highly unlikely. It is expected to post a £100m profit this year, falling to about £90m in 2007, but there is a serious danger these forecasts will have to be downgraded. Sell.

RAB CAPITAL

RAB Capital, the London-based hedge fund, seems to be going from strength to strength. It has reported a 46 per cent rise in annual pre-tax profits to £25.6m and analysts expect this to increase to £37m by the end of 2006. Funds under management rose by 50 per cent to $2.6bn (£1.5bn) for the year to December 2005 and have since risen further. Buy.

CERES POWER

Ceres Power shares have already shot up over the past few months. Key to the company's future is its combined heat and power (CHP) fuel cell. If it becomes a mass market product, Ceres should turn into a billion pound-plus business. The fuel cell, to be fitted into consumers' homes, turns natural gas into heat and electricity. Hold.

IQE

Back in August this column highlighted the turnaround under way at IQE, the Cardiff-based maker of silicon wafers that microchips are made of. Annual results from the company showed that the recovery is on track. Sooner or later the market will come to appreciate the radical reforms at the company and its stock will motor. Buy.

F&C ASSET MGT

F&C Asset Management has had a rough couple of years, struggling to keep its head above water ever since its reverse takeover by Isis in the summer of 2004. Having lost a number of mandates in the wake of the merger, things went from bad to worse last year when it lost the contract to manage £25bn of Resolution Life's assets. The next year will be crucial. Wait.

EVOLUTION GROUP

2005 was not an easy year for Evolution Group. The stockbroker was hit by a deluge of bad publicity surrounding cash it raised for a number of companies. But going by the group's results, it has come through well. Evolution posted a 30 per cent rise in pre-tax profits to £30m. Take profits.

PREMIER OIL

2006 is shaping up to be one of the most exciting years in Premier Oil's history. The drilling programme the group has in place, in far away places like Pakistan, Vietnam and Guinea Bissau, has the potential to double the value of the company if successful. Last year profits soared to $126m from $59m and Premier bought back large amounts of its shares. Buy.

UNIQ

Uniq, the maker of convenience foods for supermarkets, has issued its third profit warning in just over a year. Uniq is sandwiched between powerful supermarkets and rising energy costs. A weak balance sheet does not help matters. The company has a pension fund deficit of £103m, debt of around £50m, and too high a rating at over 30 times forecast earnings for 2006. Sell.

AUGEAN

Handling hazardous waste may not be the most pleasant business in the world but it is certainly a very profitable one. Results from Augean, the UK's largest operator in the field, highlighted this. The company revealed a full year profit of £3.7m on sales of £26m. Brokers forecast this to rise to £5.1m by the end of the current financial year. Buy.

Safe as houses? Budget boost for investors in property

Shares in the property sector were set alight on Wednesday as Gordon Brown revised his plans for the introduction of Real Estate Investment Trusts (Reits). Slough Estates, which posted solid full-year results, saw its stock register one of the biggest gains in the sector, up 13 per cent.

So why all the excitement? Quite simply, if a property company turns itself into a Reit it no longer has to pay corporation tax. This means more profit for shareholders. The Chancellor says his plans to introduce Reits in 2007 are on track. He got applause from investors by setting the conversion charge companies have to pay to qualify for the new status at 2 per cent of their assets - in line with industry expectations.

As for Slough's results, they beat expectations, reflecting a better than expected performance from the group's UK and US portfolio. The shares have underperformed the sector recently so it was no surprise to see them do so well on the back of the Chancellor's news. In the short term they are likely to come under pressure. On a longer-term view they will go higher. Buy.

m.jivkov@independent.co.uk

The above recommendations are 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

PROMOTED VIDEO
Life and Style
life
Arts and Entertainment
Cold case: Aaron McCusker and Christopher Eccleston in ‘Fortitude’
tvReview: Sky Atlantic's ambitious new series Fortitude has begun with a feature-length special
Voices
Three people wearing masks depicting Ed Miliband, David Cameron and Nick Clegg
voicesPolitics is in the gutter – but there is an alternative, says Nigel Farage
Voices
The veterans Mark Hayward, Hugh Thompson and Sean Staines (back) with Grayson Perry (front left) and Evgeny Lebedev
charity appealMaverick artist Grayson Perry backs our campaign
News
i100
News
people
Sport
Chelsea manager Jose Mourinho
footballThe more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Life and Style
Vote green: Benoit Berenger at The Duke of Cambridge in London's Islington
food + drinkBanishes thoughts of soggy school dinners and turn over a new leaf
News
Joel Grey (left) poses next to a poster featuring his character in the film
peopleActor Joel Grey comes out at 82
News
i100
News
business
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Compliance Assistant

    £13000 per annum: Recruitment Genius: This Pension Specialist was established ...

    Ashdown Group: Market Research Executive

    £23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

    Recruitment Genius: Technical Report Writer

    £25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

    MBDA UK Ltd: Indirect Procurement Category Manager

    Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

    Day In a Page

    Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

    Isis hostage crisis

    The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
    Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

    The runaway buccaneers and the ship full of gold

    Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
    Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

    Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

    Maverick artist Grayson Perry backs our campaign
    Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

    Assisted Dying Bill: 'I want control of my life'

    This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
    Move over, kale - cabbage is the new rising star

    Cabbage is king again

    Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
    11 best winter skin treats

    Give your moisturiser a helping hand: 11 best winter skin treats

    Get an extra boost of nourishment from one of these hard-working products
    Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

    Paul Scholes column

    The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
    Frank Warren column: No cigar, but pots of money: here come the Cubans

    Frank Warren's Ringside

    No cigar, but pots of money: here come the Cubans
    Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

    Isis stands strong as its numerous enemies fail to find a common plan to defeat it

    The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

    Virtual reality: Seeing is believing

    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
    Homeless Veterans appeal: MP says Coalition ‘not doing enough’

    Homeless Veterans appeal

    MP says Coalition ‘not doing enough’ to help
    Larry David, Steve Coogan and other comedians share stories of depression in new documentary

    Comedians share stories of depression

    The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
    Has The Archers lost the plot with it's spicy storylines?

    Has The Archers lost the plot?

    A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
    English Heritage adds 14 post-war office buildings to its protected lists

    14 office buildings added to protected lists

    Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Scientists unearthed the cranial fragments from Manot Cave in West Galilee