SSL International shares were among the worst performers in the FTSE 250 yesterday amid investor disappointment at the group's inability to secure the sale of its medical division. The health products group had promised to announce the disposal of the businesses by the end of the year but given that 2004 is now hours away, this looks virtually impossible.
Investors fear that the process has hit a snag and that it could delay it for some time. SSL is selling its medical division, which makes Regent Biogel surgical gloves and Hibi antiseptics, to focus on its consumer brands, which include Durex condoms and Scholl footwear products. At the end of last month a sale looking to be imminent with 3i said to be leading a pack of private equity companies interested in the division. Others reported to be interested include Morgan Stanley Capital Partners and Apax Partners. SSL is forecast to raise about £250m from the disposal and the group is tipped to use the cash to reduce its debt pile. As investors moved to exit SSL shares yesterday they left the stock 8.75p lower at 321.25p.
Meanwhile, Randgold rose 21p to 1,577p as the price of gold continued its march higher. Gold now stands at a near eight-year high and traders expect its price to challenge the $418 per ounce level, a 13-year high, in the early part of the new year. Over the past 12 months, the value of gold has appreciated 19 per cent, a rise fuelled by the nervousness surrounding the US dollar and geopolitical instability. This trend has been great news for the likes of Randgold and smaller gold mining players such as Peter Hambro Mining and Golden Prospect, which have seen their shares soar.
Diversified miners had a good day rounding off a great year for a sector that has appreciated in value by over 30 per cent. Rio Tinto gained 9p to 1,538p, Xstrata put on 6p to 630p and BHP Billiton ticked 1p higher to 488p. The sector has outperformed the wider market for the past four years in a row and is tipped to do so again in 2004. Although the mining sector has never before outperformed the market for five consecutive years, there is a strong belief among analysts that demand from China will help it achieve this in 2004.
Technology stocks were in demand after the Nasdaq Composite held on to previous day gains, which had taken the index above the psychologically important 2,000 level. Xansa gained 4.5p to 84p, Spirent rose 2p to 57.75p and LogicaCMG put on 4.5p to 357p. ARM Holdings, the chip designer, was 1.75p better off at 129p as Citigroup Smith Barney raised its 2004 forecast for global semiconductor sales growth. Elsewhere in the sector, Wolfson Microelectronics put on 1p to 320p and Bede added 1p to 25p.
Lower down the pecking order Parkwood rose 4p to 43p following the purchase of 25,000 shares at 38.5p by Charles Bithell, the finance director of the support services group. Dealers also pointed to director share buying at oil services group Expro International, unchanged at 267.5p. Chris Fay, Expro's chairman, picked up 5,000 shares at 273p. London Scottish Bank put on 5p to 124p on talk that next month's results will not disappoint.
Penny share punters were heard to be piling into Fortune Oil, up 0.75p to 5p, as 12.7 million shares changed hands. Dealers said the company's main attraction is its China focus, a part of the world that is forecast to experience another year of stellar growth in 2004. Fayrewood was unchanged at 73.75p despite news that Stephan Link, an executive director at the IT hardware company, had sold 20,000 shares at 73p. One can't blame Mr Link for locking in some cash. Fayrewood shares have more than doubled this year.
Acquisitor Holdings, the AIM-listed investment company, continued to add to its stake in Baltimore Technologies, 1p lower at 38.25p. Acquisitor's holding in the former stock market darling now stands at 9 per cent. The investment group boasts some big names on its board. Its chief executive, Duncan Soukup, is a former managing director at US banking giant Bear Stearns while Luke Johnson, the former PizzaExpress boss and serial investor, is a non-executive director.
Acquisitor says it specialises in taking substantial holdings in public companies it views as undervalued and then prompting corporate action as a way of realising the company's true value.
So what is Acquisitor up to at Baltimore, a company which is in the processes of selling off its various software businesses and either going into voluntary liquidation or becoming a cash shell? Well from a distance, Baltimore looks undervalued. If the exit from all its various businesses goes to plan, the group should boast net assets of £26m, which compares with a stock market value of just £21m at yesterday's close. And that excludes the massive tax losses the company must have accumulated over the years. One thing that Baltimore's various software businesses were very good at was losing money. In 2001 the group posted a pre-tax loss of £659m while in 2002 it lost £65m. The resulting tax losses would certainly be very attractive to a private company looking for a stock market listing. Maybe that is exactly what Acquisitor has in mind.Reuse content