The Investment column: Virgin Mobile is proving to be a volatile but lucrative investment

But if anyone was going to get hurt among the stock market-listed mobile phone groups, so the theory went, it would be Virgin Mobile.

We urged readers to buy the company's shares when they came to the market in September at 200p. But a successful campaign fought on price by easyMobile and Fresh threatened that recommendation.

With a similar "cheap and cheerful" image, the Virgin brand might well have been dented by another Stelios-inspired no-frills service. Egged on by Mr Dunstone's price-cutting tactics with Fresh, easyMobile cut its tariffs to 6p a minute for calls and 2p per text. These levels certainly appeared low enough to attract bargain-hunting pre-pay customers who might otherwise have been tempted by the Virgin service.

Happily for Virgin Mobile, easyMobile and Fresh have now put up their tariffs, having spent three months slugging it out with special promotions. They are now back at 15p a minute for calls and 5p per text. Still good value but not quite such a screaming buy.

The Virgin Mobile share price, at 262.75p, looks rather more secure as a result and it is proving a lucrative investment for those who followed our advice. It has been up to 280p this year and back down to its float price in May, but we warned in September it would be a volatile stock.

But it's not all about capital appreciation with Virgin Mobile - it also has a healthy dividend policy and announced a 4.88p-a-share payout at its annual results.

Analysts at Cazenove were surprised yesterday easyMobile did not extend its promotional period into July, another plus point for Virgin Mobile which said recently the launch of easyMobile had not had any effect in the market. But easyMobile's chief commercial officer, Sandy Monroe, said yesterday he was happy with the way the launch had gone.

Kier can comfortably overcome the downturn in housebuilding

A mountain of government money for new, large social projects has fuelled Kier Group, the construction company specialising in private finance initiatives for schools and hospitals.

One of the country's most respected construction firms, it reported a record level of new contract wins yesterday for the year to the end of June.

Kier operates as a commercial and residential builder. Its strategy of using cash generated by the commercial side to support the cash-hungry housing operations may raise some eyebrows but it has paid off. But Kier is not immune from the housing market slowdown, which has hit some housebuilders hard.

House sales slowed in the second half of its financial year and reservations are running below last year's levels. But because of a strong first half, houses completed for the year were still up 5 per cent from the previous year, to stand at 1,215. Despite the difficult housing outlook, recent land deals such as the purchases of Tudor Homes and Ashwood Homes stand the group in good stead.

The strength of the commercial and facility management operations should offset the weakness in housing. The group predicts annual profits well ahead of last year and at the top end of analysts' expectations, at £51.5m. Trading at 8.4 times 2006 earnings estimates, the stock remains a buy.

Britannic's back with a vengeance and is a buy

Shares in Britannic Group, the financial services company, made their stock market comeback yesterday after being suspended on 9 June when the company confirmed it intended to merge with Resolution Life.

And what a comeback it was. Analysts at Fox-Pitt Kelton said in an early-morning note they expected Britannic to re-list at a premium to its closing price of 509p before suspension.

The shares did not disappoint, rising 101.5p yesterday and adding 20 per cent to the company's value, reflecting the market's delight with the merger.

When the deal was announced the merged entity was valued at £1.8bn. That rose to £2.2bn yesterday. What makes the deal so attractive is that it brings together two companies involved in the dull-sounding closed life fund business.

The two have been busy taking over life funds that insurers no longer wish to operate and which have been closed to new business. Difficult stock market conditions and more onerous regulation have persuaded a number of sub-scale insurers to give up the ghost.

The likes of Britannic and Resolution can see a good, cash-generative business looking after these orphan policyholders and using the database to sell them other policies. The closed life funds are still receiving premiums from policyholders and an efficient, well-run organisation can make good money looking after them.

The merger, to be put to Britannic shareholders this month, will create the leading closed fund consolidator. It immediately creates £30m-a-year of pre-tax savings but there should be lots more to go for. Buy.

Start your day with The Independent, sign up for daily news emails
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Arts and Entertainment
Under the skin: Sarah Kane in May 1998
theatreThe story behind a new season of Sarah Kane plays
Arts and Entertainment
Preening: Johnny Depp in 'Mortdecai'
filmMortdecai becomes actor's fifth consecutive box office bomb
Bradford City's reward for their memorable win over Chelsea is a trip to face either Sunderland or Fulham (Getty)
Lars Andersen took up archery in his mid thirties
Focus E15 Mothers led a protest to highlight the lack of affordable housing in London
voicesLondon’s housing crisis amounts to an abuse of human rights, says Grace Dent
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Client Services Manager - Relationship Management - London

£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Credit Controller / Customer Service

£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

Guru Careers: In-House / Internal Recruiter

£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

Recruitment Genius: Tax Assistant

Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...

Day In a Page

Woman who was sent to three Nazi death camps describes how she escaped the gas chamber

Auschwitz liberation 70th anniversary

Woman sent to three Nazi death camps describes surviving gas chamber
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore
'I'm gay, and plan to fight military homophobia'

'I'm gay, and plan to fight military homophobia'

Army general planning to come out
Iraq invasion 2003: The bloody warnings six wise men gave to Tony Blair as he prepared to launch poorly planned campaign

What the six wise men told Tony Blair

Months before the invasion of Iraq in 2003, experts sought to warn the PM about his plans. Here, four of them recall that day
25 years of The Independent on Sunday: The stories, the writers and the changes over the last quarter of a century

25 years of The Independent on Sunday

The stories, the writers and the changes over the last quarter of a century
Homeless Veterans appeal: 'Really caring is a dangerous emotion in this kind of work'

Homeless Veterans appeal

As head of The Soldiers' Charity, Martin Rutledge has to temper compassion with realism. He tells Chris Green how his Army career prepared him
Wu-Tang Clan and The Sexual Objects offer fans a chance to own the only copies of their latest albums

Smash hit go under the hammer

It's nice to pick up a new record once in a while, but the purchasers of two latest releases can go a step further - by buying the only copy
Geeks who rocked the world: Documentary looks back at origins of the computer-games industry

The geeks who rocked the world

A new documentary looks back at origins of the computer-games industry
Belle & Sebastian interview: Stuart Murdoch reveals how the band is taking a new direction

Belle & Sebastian is taking a new direction

Twenty years ago, Belle & Sebastian was a fey indie band from Glasgow. It still is – except today, as prime mover Stuart Murdoch admits, it has a global cult following, from Hollywood to South Korea