City File: High hopes
BICC could be in for a revaluation. Once technical checks have been completed, its main development, at the Angel in north London, is due to be taken by Customs & Excise. The market could then heave a further sigh of relief over a company unfairly tarred with the 'construction' label. The slur has dragged the company down from 347p, just after its rights issue in May, to 247p last week. But, significantly, the shares recovered 14p on Friday ahead of next Tuesday's interims. Even at this level, according to Douglas Hawkins of Smith New Court, 'the price is discounting a 30 per cent cut in the dividend next year' - even though the present 19.2p should be covered 1.3 times.
BICC's exposure to property is limited, for it remains dominated by its cable business, the second-biggest in the world. Moreover, Balfour Beatty, its contracting arm, is an international specialist, less dependent on rapidly shrinking domestic business than most of its rivals. An announcement on the Angel development would reduce the uncertainty over one of Britain's most solidly respected manufacturing businesses.
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