The Week In Review: William Hill still worth a flutter

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The Independent Online

Punters who followed this column's advice and gambled on the stock market flotation of William Hill in June 2002 are in the money. Shares in the betting group have soared by 40 per cent.

Unusually for the oft-shady world of betting, the secret to William Hill's strength is no mystery. The company has simply given the gambling public more ways to empty its wallet. It has added virtual greyhound racing in its shops and an online poker site to its internet casino.

The roll-out of controversial fixed odds betting terminals - machines that let punters place real time bets on sporting events around the world - also continues apace. Although the legality of these machines is being challenged by the casino industry, William Hill's share price is already discounting an unfavourable court ruling.

The company is sitting on vast wads of spare cash in case the impending gaming deregulation opens up new investment opportunities. If it doesn't, substantial share buybacks would be ample consolation. The shares are cheap and still worth a flutter.


Dixons is proceeding cautiously in Europe, but is yet to really prove itself overseas. The profitability boost boasted this week may be a one-off, the result of the overhaul prompted by January's profit warning. And overhanging everything, the Competition Commission's plans to reduce profits from the sale of extended warranties, due before Christmas. The shares' rally has again taken them to levels which do not take account of the risks. Avoid.

Sygen International

Sygen International used to be called the Pig Improvement Company because, er, it improves pigs. It uses its 40 years' experience in pig breeding to sell sows and boars which have been bred to resist disease, to produce bigger litters, to produce more and better quality meat, etc. With the company moving into new species, it looks as if this stock will bring home the bacon. Buy.


The Tesco own-brand washing powder, Asda toothpaste or Sainsbury's bleach in the cupboard at home may well have been made by McBride. Because supermarkets demand lower and lower prices from their suppliers, wafer-thin margins can only get thinner unless a constant round of efficiencies are introduced. McBride has a difficult balancing act to perform, expanding in a slow-moving European market while defending its leading position in the UK. Only a hold.

Galliford Try

Galliford Try was formed in 2000 from the merger of Galliford, principally a construction company, and Try, principally a housebuilder. But it seems that mixing G and T has left the new organisation nursing something of a hangover. A series of cost overruns on construction projects left that division - about 75 per cent of the group - in the red, and the small housebuilding outfit has also been a disappointment. There are more ambitious companies which offer better value for money at the moment.


SMG, the former Scottish Media Group, has some great assets. Trouble is that it acquired several of them just before the recession hit the media industry three years ago. We cannot bank on an imminent advertising recovery, and debt is still high, so the stock is not worth chasing at this level.

Jurys Doyle Hotels

Anyone would think the management of Jurys Doyle, the Irish hotels group, had spent the past six months in Cork kissing the Blarney Stone, from a glance at the company's share price. A smooch with the rock is said to endow the kisser with the gift of winning persuasiveness, which, it seems reasonable to assume, might explain the 60 per cent rise in the company's shares in a year besieged by war, deadly viruses and global recession. The market has chased this one high enough for now.

Yule Catto

Yule Catto, an otherwise healthy-looking group producing the chemicals used in surgical gloves and developing photos, has just enjoyed a high from a drug called omeprazole. But two new versions of omeprazole have come unexpectedly on to the market and it is anyone's guess at what level Yule Catto's sales will stabilise. There could be no significant earnings growth next year.


Aegis is Europe's largest independent media buyer, purchasing advertising slots on behalf of clients including BMW, Disney and Coca-Cola. The market is already betting that profits will outstrip anything the company has felt able to predict. The share price can only be justified if the consensus of forecasts is well beaten. The ad industry may well be stepping out of the bath, but there is still the risk it will slip on the soap. Avoid.

TT Electronics

TT Electronics enjoyed the telecoms and IT investment boom, and is muddling through the bust. The company makes computer circuit boards, resistors and other gizmos, but it has spent the last few years cutting back its operations as markets fell away beneath it. The stock is too expensive.

Forth Ports

Forth Ports runs seven ports - six in Scotland and Tilbury, on the Thames. There is such a buzz over the group's surplus property interests in Edinburgh, whose waterfront is enjoying a renaissance akin to that of London's Docklands, that Forth seems more a property company than a ports group. But there are two sides to the Forth Ports story, and both are positive. One to tuck away.

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