Bottom Line: Lloyds ties the knot

DICK STEELE, finance director of the healthcare retailer Lloyds Chemists, did his bit yesterday in the company's campaign to win respectability. He broke with a long-standing personal tradition and did not wear a bow-tie to present financial results.

Lloyds is dogged by detractors who doubt the sustainability of its profits record. Investors have been caught out too often by aggressively acquisitive, high-growth companies and are ill at ease with Lloyds, which shows the hallmarks of a superstar heading for a fall.

At face value, however, Lloyds' record is good and it continued yesterday. Interim profits increased 16 per cent, turnover rose 17 per cent and earnings per share climbed 13 per cent.

The company stresses its adherence to best practice in accounting policies and corporate governance, the fact that the most recent acquisition is two years old, and that no large acquisitions are contemplated while dividends are set for generous expansion.

Yet the stock market treats the shares with caution. At less than 12 times current year earnings, they are trading at a significant discount to both the market and the sector average.