City File: Royal Jelly looks wobbly

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The Independent Online
PAUL GEOGHEGAN looks set to walk the plank tomorrow at Regina, the Royal Jelly firm, only a month after he became chairman.

He said: 'If our opponents have 46 per cent of the shares behind them, as they say, my position looks pretty near impossible.'

He is being threatened by his predecessor, Abdul Malik- Noor, and two associates, Guy Neely and Cecil Phillips. Mr Malik-Noor has a 25 per cent stake in Regina, and friends of the trio have another 15 per cent. Mr Geoghegan claims 30 per cent support.

As Mr Geoghegan is also the sales and marketing director, and one of his allies is the finance director, Regina will face a management hiccup if they are ousted. And rows of this size inevitably frighten suppliers and trade customers.

At 3p the shares are only gambling counters.

HI-TEC Sports, the footwear company, looks ready for a sprint thanks to booming US sales.

Two years ago the company was on the verge of collapse because of severe price cutting by shoes giants such as Nike and Reebok. But in the nick of time, Hi-Tec spotted a new fad for outdoor shoes.

Since then the company has established itself as one of the leading rugged footwear suppliers in the US, and booming sales should help it return to the black later this week with taxable profits of about pounds 2.5m.

The City expects profits to double this year. At 86p they are already showing a 23p gain, but that should not prevent a further re-rating.

EUROPE Energy Group, the shell-turned-car-dealership, is thought to be planning a rights issue that will more than double its pounds 6m market value within the next six months.

Gerald Davison, chairman and chief executive, will not comment but says he is aiming to build the group's sole dealership into about 25 dealerships in the next few years.

A rights cache could give the group the muscle to fulfil that aim. At 13p, the shares are an act of faith in Mr Davison - but their cause will be helped once they move from the oil exploration sector to distributors.

LONDON International Group, the maker of Durex condoms and surgeons' gloves, expects to sell its troubled photo-processing arm, ColourCare, within the next few weeks, paving the way for a rights issue to replenish a badly savaged balance sheet.

First, though, the company needs to convince its bankers to extend banking facilities to see it through its next financial year. In spite of recent grim news, they will almost certainly do so.

The banks would probably prefer to watch shareholders put up new funds rather than play an even more central role themselves in a more radical financial restructuring.

Shareholders may wonder whether it is worth pouring good money after bad, but There is something to be said for giving the new management a chance to run the core businesses free from the worries of ColourCare, if it is indeed sold.

If the rights shares are priced at a big enough discount they might be worth taking, despite all the bad news of the past year. LIG shares closed the week at 104p, down 26p on the week after news of its balance sheet write-downs.

IT COULD be exactly the wrong time to quit, but stock market patience is running out on Paul Van Zuydam, chairman and majority shareholder of Le Creuset, the upmarket French pots and pans maker.

On Friday, rather late for such a small business, Mr Van Zuydam reported calender 1993 pre-tax profits of pounds 3m. It was bad enough that that was pounds 500,000 down on 1992. Even worse, it followed a succession of slashed brokers' forecasts which began as high as pounds 5m last year.

Worst of all, there was no clue at the half-way stage to the latest problems that have dogged the group.

Sell the shares until Mr Van Zuydam relinquishes control.

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