Bottom Line: Higgs, the survivor

YESTERDAY'S 8p drop in Higgs & Hill's share price to 106p suggests that the stock market is getting tired of waiting for a bidder to ride to the company's rescue. Written-down assets of 153p, including 16p of cash, will continue to underpin the shares - trading certainly will not.

Pre-tax profits of pounds 525,000 ( pounds 673,000) from sales of pounds 126m confirm that contracting margins are non-existent. The returns from property and housebuilding, while improving, are unlikely to make up the shortfall for a couple of years at least.

Contracting is making an undisclosed loss, so it will take more than Michael Howard's prison building programme to force analysts to upgrade their gloomy expectations of a pounds 2.5m loss from the division this year and next.

That will eat up a similar profit from the property side, which is benefiting from a sale to Waitrose in Southend. Housebuilding, which plans to sell about 400 houses this year, is too small to make any real difference.

Having been run for cash, the balance sheet is in perky shape, with pounds 7m in the bank. That means Higgs is happy to pay an uncovered dividend of 1p (out of earnings of 0.7p) and can start buying land again.

With pounds 1m forecast for the full year, pounds 2.5m in 1994 and pounds 5m the following year, the shares do not fall to a manageable price/earnings ratio of 14 for another two years. In the meantime a sub- market yield offers even less support than fading bid prospects. A survivor, but an unexciting one.