City File: GEC light under a bushel

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WILL GEC disappoint again on Wednesday? That is when the electricals giant is due to report results for the year to March, and the market is expecting another set of dull profits from the former go-go stock.

However, at 281p the yield on the shares will come close to 5 per cent if analysts' hopes of a near-11p dividend are fulfilled. That itself is a buy signal.

The suspicion lingers that Lord Weinstock, 70 this month, is restraining the group's real potential, which will be unlocked only when he finally steps down.

Nevertheless, that only serves to make the shares a relatively low-risk tuckaway.

SHARES in Ivory & Sime, one of Edinburgh's leading investment managers, yield a useful 4.2 per cent at 229p - a comforting cushion on which to rely while some of Scotland's most aggressive fund managers set about gingering the I&S management into action.

Cause of the activity was Ensign Trust's sale of its 16 per cent stake last December, after it took two management contracts away from I&S. Those shares have been bought by Scottish Value Trust, Abtrust and Edinburgh Fund Managers, all known for their ability to extract performance.

I&S has started cutting costs, to forestall more savage measures. But just in case the incumbents slacken, the Cayzer family's Caledonia Investments is believed to be hovering. Worth joining the party.

SELL Inchcape and Gestetner. That sums up analysts' views after Inchcape, international car distributor and insurance broker, decided not to take up its option to add a 10 per cent stake in Gestetner, the office equipment group, to its 15 per cent holding.

The consensus seems to be that Inchcape, whose share price has fallen from 609p to below 450p this year, was too stretched to mount a full-scale bid for Gestetner and has its hands full with the impact of the rising yen on its huge Toyota car and other Pacific business.

On that basis, Inchcape should be carefully avoided until the currency typhoon blows itself out - and, if a bid is off, Gestetner shares are under the threat that Inchcape's existing 15 per cent block may soon land on the market. The 2.1 per cent yield is not enough to support the 144p price.

INVESTORS who heeded our advice to sell PizzaExpress shares at 136p in February are now 26p better off, and it could well be time to start nibbling again.

Buoyant half-year results in March encouraged brokers Greig Middleton and Credit Lyonnais Laing to upgrade to around pounds 5.4m their forecasts for the year that ended last Thursday. That implies earnings of 6p, putting the shares on a p/e of 18 at 110p. Surely a fair price for an expanding business.

DOYEN of the retail analysts John Richards, of NatWest Securities, expects MFI Furniture Group to buck the dull housing market when it reports full-year results tomorrow.

But in predicting a rise in profits from pounds 42.4m to pounds 67.4m, he admits he is at the lower end of a range which goes up to Warburg Securities' pounds 87.6m.

As the figures will cover the year ending two months ago, watch out for chairman Derek Hunt's hints on current trading. If he is positive, the shares, at 139p on a likely p/e of 17, are worth assembling.

AS EATING on the hoof becomes more widespread, so Compass Group, the ex-Grand Metropolitan catering unit, goes from strength to strength.

It recently went nap on the US by splashing pounds 300m on Canteen, that country's third largest food-service business.

The deal put a damper on the shares, taking them back towards 300p. But now they have perked up to 321p, and the market is going for a profits fillip from pounds 41.5m to pounds 56m in the year to September. That implies earnings per share of 20p, putting the shares on a multiple of 16. Good value.

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