The Week In Review: Swell prospects at Forth Ports
Saturday 25 March 2006
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 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
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, 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 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.
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.
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.
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, 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.
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.
The above recommendations are taken from the daily Investment Column.
Bargain Hunter: Comparethemarket.com launches two-for-one cinema tickets offer
Help to Buy Isa Q&A: Are they real help for first-time buyers or simply a vote-winner for the 2020 election?
You'll need £220,000 for a minimum wage in your retirement
Pension freedom: Steve Webb answers your questions on the big shake-up
Bank-beating exchange rates on your international payments
- 1 Germanwings crash: Police make 'significant discovery' at home of co-pilot Andreas Lubitz
- 2 Zayn Malik already working on solo material, just days after quitting One Direction
- 3 The West has it totally wrong on Lee Kuan Yew
- 4 #FreeTheNipple: Women in Iceland bare breasts in solidarity with trolled student
- 5 Jeremy Clarkson calls on trolls to leave producer Oisin Tymon alone: 'None of this is his fault'
Nigel Farage brands LGBT activists 'filth' and 'scum' and accuses them of scaring away his children after they invade his local pub
Ukip supporters are 55 or older, white and socially conservative, finds British Social Attitudes Report
JK Rowling responds to fan tweeting she 'can't see' Dumbledore being gay
Russia threatens Denmark with nuclear weapons if it tries to join Nato defence shield
Jeremy Clarkson sacked live: Alan Yentob 'wouldn't rule out' ex Top Gear host's BBC return
Germanwings plane crash live: Andreas Guenter Lubitz intentionally crashed flight 9525 into the Alps in act of mass murder and suicide – latest
iJobs Money & Business
Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...
Negotiable: Recruitment Genius: You will be the first point of contact for all...
£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...
£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...
Day In a Page
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
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.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
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.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
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
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool
A minimnalist four-bedroom home designed to the highest spec, featuring glass walls and a kitchen space lit by a glass roof
Hibernate during winter and make your living during the summer at this busy guesthouse with panoramic sea views, in the village of Lynton
A four-bedroom penthouse next to the Tate with direct views of St Paul's from two floors of luxurious living space
A four-bedroom detached home surrounded by spacious gardens and woodland, close to New Pudsey
An 18th-century, three-bedroom home near Langstone Harbour built from ships beams with vaulted ceilings and wood burning stoves
A five-bedroom semi-detached home with a mix of period and modern features in a popular and convenient location
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station