City File: British Polythene has it wrapped up

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The Independent Online
THE stockbrokers at Panmure Gordon, the bulls of British Polythene Industries, had their faith underlined on a visit to the company last week.

The group stands to be a hefty gainer from the steady recovery in consumer spending, as it wraps everything from cigarette packets to pre-packed supermarket meat.

Last year's acquisitions should add pounds 30m to sales, and it has bought another five companies so far this year. Panmure is forecasting a profits increase from pounds 14.3m to pounds 17.7m for this year, which would take the earnings multiple down to below 15 at the current price of 454p.

FRESH management and fresh ideas are combining to turn round the fortunes of Booker, the cash-and-carry food distributor.

Tighter controls and lower gearing should take profits up from pounds 86.9m to more than pounds 91m, leading to earnings of 29p and a dividend increase.

The shares are technically strong, enhanced, according to Investment Research of Cambridge, by the recent break in their downtrend. The firm believes that Booker shares, currently 434p, could be poised to challenge 500p.

INVESTORS should not neglect makers of unconsidered trifles: they can be highly profitable.

Such is Porvair, maker of microporous synthetics, used in shoes, rainwear, air fresheners and ceramics. It exports nearly four-fifths of output, plugging it directly into the sterling exchange rate.

Despite that, profits have moved from pounds 758,000 to pounds 2.5m since 1989 and should breast pounds 3.2m this year. At 313p the shares are on a demanding prospective multiple of 18 - but then the best never comes cheap. The price is likely to be much higher a year from now.

JUST two weeks after dumping its long-serving chairman, Roland Shaw, Premier Consolidates Oilfields, the UK explorer, has entered into a joint venture in Albania.

It will own an equal share in a new company with Albania's state oil company to boost production at an existing onshore oil field where output has fallen from 20,000 to 3,000 barrels per day due to lack of investment.

In addition, Premier will help complete drilling in an exploration block that could hold significant oil reserves.

The beauty of the deal is that Premier gains access to producing assets and the chance to share in a large oil discovery later.

With the group's daily production set to rise from 14,000 barrels to about 20,000 barrels in 1996, the shares look attractive at 28p.

AMERICAN investors, who pay far more attention to cash flow than 'headline' results, are taking a shine to British Gas. The shares have substantially underperformed the market because of regulatory pressures from Ofgas, the consumer watchdog. A pounds 2bn net loss last year has also led to fears that it may cut its dividend in the face of a huge restructuring programme triggered by growing competition in the UK gas market.

Some analysts believe the company's cash flow is strong enough to preserve the dividend, while earnings should grow substantially over the next three years. At 302p, up 7p, on Friday, the shares are offering 6 per cent yield, among the highest in the utility or energy sectors. So it is not surprising that there is talk of transatlantic buying. British investors should follow suit and tuck away some shares for the long term.

THE remarkable turnaround looks almost complete at Wace, the specialist printer which almost came to grief about two years ago. Tomorrow it should report interim pre-tax profits of about pounds 10m, up from pounds 7m.

The results should be accompanied by a further fall in borrowings and improved trading conditions in the advertising market on which Wace's prospects depend. That should put it on target for taxable profits of about pounds 23m this year. However, much of the expected improvement is already reflected in its shares, which, at 250p, are trading on a prospective earnings multiple of nearly 19. Sell into strength.

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