BSkyB weakens on Murdoch's hazy vision

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The Independent Online

It might seem a bit unfair to judge a chief executive and make an investment decision on the basis of one performance at one conference, but there is a harsh spotlight on James Murdoch at the moment.

It might seem a bit unfair to judge a chief executive and make an investment decision on the basis of one performance at one conference, but there is a harsh spotlight on James Murdoch at the moment.

His appointment as operational head of British Sky Broadcasting caused ructions within the City last year with investors accusing Rupert Murdoch, his father and chairman, of nepotism. Although he has squared his top 10 shareholders in private meetings, he is now "on tour" and appeared on Wednesday before clients of the BSkyB house broker, CSFB, where attendees came away less than impressed at his ability to project a strategic vision for the company.

One of the grumbles was that he gave vague answers on what happens when BSkyB meets its target of eight million subscribers by the end of next year. Does he push for more volume or concetrate on harvesting as much cash as possible from existing customers? The cruellest observers thought that he was possibly still awaiting instructions from his dad. BSkyB argues that the strategy will evolve nearer the time.

BSkyB shares were one of the weaker performers in the FTSE 100 yesterday, down 7.5p to 671p, as the whispering reopened last year's wounds. But there were also fears that trading in thee first quarter of 2004 has proved disappointing, with fewer than 100,000 new customers coming on board, almost a third down on last year.

Broadcasting rival ITV, whose shares have been one of the stronger performers of late, succumbed to profit taking and was also down 3.25p to 130p, but it was a mixed day for the media sector's main players, as it was for the market as a whole. Reuters, which sold off a small French division yesterday, was exciting brokers ahead of an unusual trading update today. The notion is that Reuters must have good news to impart on its share of the competitive market for financial information. If not, it would have buried the news in its next financial results, right? Reuters shares were up 13p to 400p, a level they haven't beaten since mid-2002. WPP, the advertising agency, was another strong performer, up 18p to 568.5p after a bullish presentation to a Goldman Sachs media sector conference.

The FTSE 100 closed up 25 at 4,410.7, given a late boost by strong US manufacturing figures which raised hopes for today's vital employment data.

Shares in GUS, the retail and financial information group, were a good market again, on speculation that its Experian credit checking business will be spun out next year. There is a growing feeling that Experian is ready to "stand on its own two feet" after being built up inside the conglomerate. That was the strong impression yesterday of analysts at Dresdner Kleinwort Wasserstein, which met Experian management. The broker also said that Experian's credit and market research businesses are taking up any slack from slower sales to remortgaging companies. GUS shares were up 9p to 758p.

J Sainsbury recovered 2.5p to 263.25p as investors called a halt to the blood-letting from Friday's profit warning. There were still rumours of an imminent profit warning at Marks & Spencer ("another Sainsbury's", according to one gossip) and it is certainly true that the high street giant is conducting a big sale at the moment. But wiser heads were prevailing yesterday and the stock rose 4.75p to 283.25p.

Among the mid-caps there was an extraordinary 5.75p, or 10 per cent, rise to 64.5p after SkyePharma delayed its results to give it more time to agree the often-promised, still-undelivered technology licensing deals it hopes to announce at the same time. Alizyme, one of the UK's most advanced biotechnology companies, with three drugs readying final trials, was a penny higher at 185.5p on narrowed full-year losses and the hope that one of its drugs could be licensed to a richer partner later this year.

Uniq, the food group, was up 3p at 169p after selling its disappointing poultry business. Wincanton, the haulage group demerged from Uniq in 2001, was 7p lower at 210.5p on worries that it is being affected by the same price pressures that prompted a profit warning yesterday from Christian Salvesen (down 8.5p at 54p).

There was speculation that might face a rival bidder for Online Travel now that the value of its all-share bid has tumbled from 31p per Online share to 26p. Lastminute was off 0.25p to 196.75p yesterday; Online was unmoved at 25.25p.

Telecoms equipment manufacturers were in favour after Ericsson, the Swedish phone maker, reported an improved profit outlook for the year. Marconi was 25.5p stronger at 675.5p; Spirent was up 3.75p to 79.25p; and TTP Communications jumped 2.5p to 79p.

Well-informed investors were said to be buying shares in Just Car Clinics, the former cash shell which is considering suing the vendors of the car repair business it bought after having discovering an accounting scandal. Its shares were up 1.25p to 22.75p. And Biocompatibles International was 0.5p higher at 206.5p as bulletin boards crackled with rumours the company is close to a settlement to long-running trade secrets litigation.