City File: Everything in Fison's garden is not so rosy

THE pruning shears were taken to Fisons last December, when former chief executive Cedric Scroggs was turfed out. In his wake came the announcement of a profits warning, major restructuring and a big drop in the final dividend

With pre-tax profits for the year down by at least 30 per cent to anywhere between pounds 50m and pounds 70m, Fisons is paying the price for its former habit of boosting the figures by counting sales to its own wholesale business as profits.

'It's a kitchen sink job,' one industry expert says. ''Fisons is throwing everything at the profits to reduce them.' Last week Fisons also got rid of the European fertilizer business. But not even the best of Growmore bags can shorten the long, hard winter suffered by the shares, currently at 128p.

IT can be hard for management to admit to a mistake, but shareholders in the upholsterer Rexmore have profited handsomely from the Rosenblatt family's decision to ditch its loss-making timber acquisition now that the shares have risen from 24p to their current 83p in the past year. Nevertheless, there is still time to climb aboard.

At the halfway stage in the current year the company bounced from a pounds 143,000 loss to pounds 688,000 profit. House broker Panmure Gordon expects that to turn into a pounds 1.5m profit for the year to March, against a pounds 1.4m loss in 1992-3.

That would translate into earnings per share of 9.6p, helped by the fact that Rexmore will remain untaxed for a couple of years. That puts the shares on a prospective earnings multiple of 8.6 and yield of 3.4 per cent. Good value.

ENTERPRISE Oil is due to reach peak production this year, mostly in the North Sea, just as the oil price threatens to slide below dollars 13 a barrel. Pre-tax profits, due out on Thursday, will fall to about pounds 126m from pounds 145m the previous year, and should stay flat in 1994.

Yet Enterprise will also be generating as much as pounds 200m in uncommitted cash flow, which will be useful for expanding its exploration programme and paying down its debts. It is also by far the most active independent in the North Sea, with excellent acreage.

It is drilling in Italy, has a two-well programme in Cambodia, and is about to start work in Romania. The Black Sea business looks especially promising. So Enterprise is not heading for the dividend cut some analysts are predicting. Whether the shares are a buy is another matter. NatWest Securities says sell; Henderson Crosthwaite says buy at 427p.

THE boom in mobile telephones has proved a bonanza for electronic components suppliers such as Abacus. The company provides cabling for 'base stations' that look like blots on the landscape but are vital for creating a national mobile telephone network.

Exports are also growing steadily as Germany and Middle and Far Eastern countries set up their own mobile phone infrastuctures. Not surprisingly Abacus's cabling factory is working round the clock, necessitating a move to bigger premises in Gloucestershire.

Nex week Abacus is due to take a party of City analysts on a site visit - a move that could lead to a substantial profit upgrading. At present, the company is expected to make pre-tax profits of about pounds 3.8m for the year to 30 September, rating the shares at 193p, on 22 times earnings. But they look set for a flurry.

THE market has still not totally forgiven Hillsdown Holdings for the exuberance of its overexpansion into every type of food in the late 1980s. In the past few months the shares have crept back to 175p, but this is a long way from the glory days four years ago when they peaked at nearly 300p. Next week's results will show that the new management team installed in early 1993 has cleaned up the group so thoroughly that it is in good shape to take advantage of any upturn in the food business. Meanwhile, now that gearing is down below 40 per cent, the dividend is safe, and the yield of over 6 per cent looks extremely tempting.

OLD connections die hard. Robert Earl is about to appoint his old friends at UBS Securities as co-brokers to Pelican Group. The former Hard Rock Cafe boss runs the growing US end of this trendy group of thematic restaurants, while chairman Roger Myers, no mean theme-merchant himself, runs the British end. They now have a dozen branded chains in both Britain and the US, with names ranging from Cafe Rouge and Mama Amalfi to, wait for it, Cafe Tu Tu Tango.

Bringing in UBS is a step aimed at building up institutional support for the fast-expanding chain. The shares have risen to 86p since we recommended them in January. But they're still worth following.

TI Group is still dogged by a depressed aerospace market following its acquisition of Dowty. Nevertheless, it is likely to report 1993 pre-tax profits of at least pounds 125m on Thursday compared with pounds 87.4m in 1992 - a figure struck after pounds 20m of exceptional costs. With luck, there may be news on its planned joint landing gear venture with the French group Messier-Bugatti. The deal is taxiing painfully slowly through the corridors of assorted French ministries. Completion should boost the shares, which closed 13p up at 427p on Friday.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power