Investment Column: Still worth sticking with Cookson

Only the brave should hunt out Whitehead; Civica stands out in tech sector and is worth buying

Bob Beeston, chairman of the engineering group Cookson, was effusive in his praise of his new chief executive yesterday. Nick Salmon is an international player, a strategic thinker, a details man and "an excellent leader of people".

Bob Beeston, chairman of the engineering group Cookson, was effusive in his praise of his new chief executive yesterday. Nick Salmon is an international player, a strategic thinker, a details man and "an excellent leader of people".

It is the latter that will matter most internally at a company bruised by the savage cost-cutting brought on by the economic downturn, but made much worse than for many rivals because of the debt-fuelled acquisition binge of Mr Salmon's predecessor. At least the departing Stephen Howard has fixed his mistakes, clinching a rescue rights issue to shore up the balance sheet, renegotiating the remaining debt and restructuring the group - halving group debt to £359m at the last count. With the sale of the precious metals division also in train (and analysts expecting a price tag of £90m), the group's risk profile should complete its move from red previously, to amber now, to green.

The precious metals disposal will also make Cookson a more coherent play on the global economy: no bad thing at this point in the cycle. The company's electronics division has turned the corner after its post-Millennium collapse. It makes parts used in the manufacture of printed circuit boards and has been expanding strongly in Asia, where Mr Salmon has extensive business experience. Sales in the division were up 10 per cent year-on-year in the first quarter and the trend is likely to have continued. The ceramics division, which is dependent on the steel market, has also been improving thanks to economic growth in the Far East.

This column tipped Cookson shares as a recovery play back in October, when they were 33.75p. They are also one of The Independent's tips for 2004, but have performed less well since the start of the year, up just a quarter of a penny at yesterday's 40.25p. However, with its markets strengthening decisively and a price-earnings ratio for the current financial year of about 15, it continues to look compelling value.

Buy.

Only the brave should hunt out Whitehead

Without Anna Mann, the most powerful headhunter in the City, many have asked whether Whitehead Mann, the recruitment company she helped to found, will survive. She left in March to run her own consultancy and the company itself, announcing annual results yesterday, calls her the "doyenne" of the recruitment industry.

But the doyenne has had a few blunders recently, notably the disastrous choice of Sir Ian Prosser as chairman of J Sainsbury, whose appointment was immediately rejected by shareholders. Bad news for Whitehead's reputation. Perhaps it is better off without her after all.

The company yesterday said aggressive cost cutting had helped it through a downturn in the economy, which put the brakes on recruitment activity. Companies have been laying off staff, not hiring, and Whitehead itself took hefty redundancy costs from sacking 25 per cent of its workforce. Sales were flat, but it is now in profit after a £20m loss in 2003, and has increased its market share.

Whitehead's fortunes are inextricably tied to the wider economy and business confidence, and its recovery lags their turnaround. That time may be about to come, and the company is seeing a pick-up in some areas, such as financial services. But confidence is fragile and still flagging in many parts of the economy. Until a more secure recovery takes hold, revenues will be scarce. At 264p, it is trading at around 10 times forward earnings - pretty cheap given its streamlined costs and sound positioning for an upswing. Lots of potential, but it is a risky one.

Civica stands out in tech sector and is worth buying

Civica, the software business supplying local authorities and police forces, beat expectations with maiden interims yesterday and looks decent value for intrepid technology investors.

Although it focuses on the public sector, it is not dependent on the public spending cycle for its turnover. Its software drives various initiatives for efficiency improvements in the public sector; a theme dear to the heart of Gordon Brown.

It announced a new contract win yesterday with the Kent police force to supply car number plate recognition systems - a good example of the type of business it is involved in.

It came to the market in March at 175p and the shares yesterday were 193p. For the six months to the end of March sales were up 19 per cent at £52.5m and profit before tax was up 12 per cent at £3.8m. Turnover rose across all three main areas of its operations. Software systems were ahead from £33.9m to £41.2m. Managed services, such as processingroad traffic penalty notices in the London borough of Southwark, was up from £5.3m to £5.6m, and Civica's consultancy business sales rose from £4.8m to £5.5m.

Civica shares are on a price earnings ratio for the current year of about 14. In a technology sector where many valuations are looking stretched, this stands out for its fairness. Buy.

Life and Style
A teenager boy wakes up.
life
Life and Style
It is believed that historically rising rates of alcohol consumption have contributed to the increase
food + drink
Voices
The erotic novel Fifty Shades of Grey has already been blamed for a rise in the number of callouts to the fire brigade for people trapped in handcuffs
voicesJustine Elyot: Since Fifty Shades there's no need to be secretive about it — everyone's at it
Arts and Entertainment
Critics say Kipling showed loathing for India's primitive villagers in The Jungle Book
filmChristopher Walken, Bill Murray, Scarlett Johanssen Idris Elba, Andy Serkis, Benedict Cumberbatch, Cate Blanchett and Christian Bale
PROMOTED VIDEO
Life and Style
Playing to win: for Tanith Carey, pictured with Lily, right, and Clio, even simple games had to have an educational purpose
lifeTanith Carey explains what made her take her foot off the gas
Arts and Entertainment
The White Sails Hospital and Spa is to be built in the new Tunisia Economic City.
architectureRussian billionaire designs boat-shaped hospital for new Dubai-style Tunisia Economic City
Arts and Entertainment
You could be in the Glastonbury crowd next summer if you follow our tips for bagging tickets this week
music
Sport
Husain Abdullah returns an interception off Tom Brady for a touchdown
nflLeague has rules against 'sliding to ground on knees'
Life and Style
tech
Extras
indybest
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
food + drink
News
i100
News
i100
Arts and Entertainment
Kylie performs during her Kiss Me Once tour
musicReview: 26 years on from her first single, the pop princess tries just a bit too hard at London's O2
Arts and Entertainment
film
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

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

SQL Developer (Stored Procedures) - Hertfordshire/Middlesex

£300 - £330 per day: Ashdown Group: SQL Developer (Stored Procedures) Watford...

Day In a Page

Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?
Royal Ballet star dubbed 'Charlize Theron in pointe shoes' takes on Manon

Homegrown ballerina is on the rise

Royal Ballet star Melissa Hamilton is about to tackle the role of Manon
Education, eduction, education? Our growing fascination with what really goes on in school

Education, education, education

TV documentaries filmed in classrooms are now a genre in their own right
It’s reasonable to negotiate with the likes of Isis, so why don’t we do it and save lives?

It’s perfectly reasonable to negotiate with villains like Isis

So why don’t we do it and save some lives?
This man just ran a marathon in under 2 hours 3 minutes. Is a 2-hour race in sight?

Is a sub-2-hour race now within sight?

Dennis Kimetto breaks marathon record
We shall not be moved, say Stratford's single parents fighting eviction

Inside the E15 'occupation'

We shall not be moved, say Stratford single parents
Air strikes alone will fail to stop Isis

Air strikes alone will fail to stop Isis

Talks between all touched by the crisis in Syria and Iraq can achieve as much as the Tornadoes, says Patrick Cockburn
Nadhim Zahawi: From a refugee on welfare to the heart of No 10

Nadhim Zahawi: From a refugee on welfare to the heart of No 10

The Tory MP speaks for the first time about the devastating effect of his father's bankruptcy
Witches: A history of misogyny

Witches: A history of misogyny

The sexist abuse that haunts modern life is nothing new: women have been 'trolled' in art for 500 years
Shona Rhimes interview: Meet the most powerful woman in US television

Meet the most powerful woman in US television

Writer and producer of shows like Grey's Anatomy, Shonda Rhimes now has her own evening of primetime TV – but she’s taking it in her stride
'Before They Pass Away': Endangered communities photographed 'like Kate Moss'

Endangered communities photographed 'like Kate Moss'

Jimmy Nelson travelled the world to photograph 35 threatened tribes in an unashamedly glamorous style