Airtours flies too close to the sun

Airtours cheered the travel industry - and analysts - by hiking the prices of its late-season 1996 holidays while heavily pushing its 1997 brochures even as most people were still enjoying this summer's break. But the strategy, which appears to be an attempt to smooth out the travel industry's notoriously uneven cash flows, is a big gamble. While there will always be holidaymakers interested in an all-in week in Benidorm, the British are growing more sophisticated in their holiday plans and are more inclined to create their own break. The heavy marketing push by Airtours and the other integrated package holiday firms could backfire, with few punters willing (or able) to part with their cash for next year's holiday while the credit-card bill for this year's remains unpaid. The Airtours share price, lurking just below its all-time high at 588p, has not taken this risk into account. Sell.

BAT (465p) took a knock earlier this week courtesy of Grady Carter, the smoker who blamed the company's Brown and Williamson subsidiary for getting him addicted to cigarettes 40 years ago and giving him lung cancer. He was awarded $400,000 (pounds 260,000) by a Florida court for his efforts. This hacked pounds 1.4bn off the company's share price, which on reflection seems like an overreaction. If BAT does spin off its insurance businesses, its cash-generative tobacco operations will lie at a heavy discount to the market. Buy.

ANOTHER source of investor jitters at the moment is Boots (622p), which is only just returning to favour after taking full control of Do-It-All, the troubled home improvement retailer. The fall from grace also reflected a dip in profits, almost entirely to do with problems at the aforesaid DIY operations. However, the management is confident that it can solve the problems, and the core Boots the Chemists business is still going great guns, with aggressive expansion plans for the next two years. Also, if the artificial price cartel (Resale Price Maintenance) is removed from over-the-counter medicines, Boots is likely to benefit most as the market leader. Buy up to 640p.

THE insistence by the government (now enacted in legislation) that all London taxis have adequate wheelchair access could prove a goldmine for Manganese Bronze, manufacturer of the majority of black cabs. Only half of London's 18,000 cabs currently meet the standard, and the rest will have to be up to scratch by the year 2000 to keep their licences. The company currently builds around 2,700 vehicles a year, which retail at pounds 25,000 a pop. Its shares, now at 339p, are looking good for the millenium.

BAKING cakes has not been a great business in recent years, with margins for all food manufacturers flattened by the supermarkets' aggressive buying policies. No surprise then that Northumbrian Fine Foods (12.5p), suppliers of own-label cakes, flapjacks and biscuits to Asda, Boots and Tesco, has struggled along on net margins of three per cent in the last two years. But at the same time the company has managed to maintain a fairly solid financial position, which has allowed it to expand sales volume and pay a steadily increasing dividend. A research note from Wise Speke (which also acts as official broker to the company) out this week talks up the company, but acknowledges that the inhospitable market will never allow it to deliver spectacular returns. An opportunistic buy, but not for the faint of heart.

WHILE the hoopla leading to the demerger of Thorn EMI has concentrated on the glamorous EMI music business, the Thorn electrical rentals business looks the more attractive bet for long-term value. Its shares will start trading tomorrow at 400p, valuing the company at pounds 1.77bn and displacing Cookson from the FTSE-100 index. Even at this level, the shares look cheap.

Start your day with The Independent, sign up for daily news emails
Sport
England's women celebrate after their 3rd place play-off win against Germany
Women's World CupFara Williams converts penalty to secure victory and bronze medals
Arts and Entertainment
Ricardo by Edward Sutcliffe, 2014
artPortraits of LA cricketers from notorious suburb go on display
News
newsHillary Clinton comments on viral Humans of New York photo of gay teenager
Arts and Entertainment
The gang rape scene in the Royal Opera’s production of Gioachino Rossini’s Guillaume Tell has caused huge controversy
music
ebooks
ebooksAn introduction to the ground rules of British democracy
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.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'