City File: Thames overflows

NOVEMBER will be a busy month for Thames Water. Interim results this Thursday should show a rise in pre-tax profits from pounds 137m to pounds 150m. A fortnight later, the Queen opens the London Ring Main, the 50-mile tunnel under London to provide enough water for generations to come.

Yet, even though Thames is the biggest and arguably most efficient of the water companies, at 514p the shares yield more than any other in the sector apart from South West Water. A quality long-term buy.

BUY Tomorrows Leisure, the troubled theme park and sports centre operator, and the housebuilder Wiggins Group on the back of the deal the pair are hatching.

TL's chairman, John Sanderson, is set to announce a pounds 10m rights issue and the pounds 2m acquisition of a Lincolnshire property from Wiggins, in which the inveterate investor Jim Slater has emerged with a small stake.

This will give TL a fourth profit centre, after Pleasure Island, in Liverpool, a golfing and sports centre in Ilford, Essex, and a four-star Darlington hotel. TL will convert the Lincoln property into leisure use, possibly including a hotel at a later stage.

The cash element in that transaction is also good news for Wiggins, which will reduce its gearing to only 20 per cent of the equity. And it is taking enough TL shares to give it almost a 30 per cent stake.

'I only have a trivial holding in Wiggins,' said Mr Slater, 'but I have met the management and it seems to offer good value.' Both companies are worth following.

CITY FILE'S spies hear that Wilshaw, the international metal basher, is on the verge of a trio of exciting international deals, including a closer relationship with the much bigger T&N engineering group. These could take the shares over 100p. If Wilshaw's earnings per share rise from 2.4p to 3.4p this year, as brokers James Capel and Greig Middleton expect, then at 59p the p/e drops to a more reasonable 16 - even before those deals start rolling in.

IN THE midst of the spate of recent new issue flops, the broker Credit Lyonnais Laing has persuaded Beacon Investment Trust and a clutch of other institutions to back the highly speculative Voss Net on to the Stock Exchange's Rule 4.2 market. Voss Net does not yet have a single sale, let alone a profit, so its placing price of 119p is a leap in the dark. But its product - an electronic system to swap commercial information, apparently ideal for fast- changing markets such as airline seats and fresh food - is being tried out by two potential buyers in live tests with customers.

The operation is so highly geared that a huge chunk of sales will flow through to the bottom line. Worth a punt - but only for the brave.

ANOTHER new issue that could break the trend is TLG, the Thorn Lighting Group hived off from Thorn EMI last year. Richard Dyett of Henderson Crosthwaite is bullish because the company has not yet obtained full benefit from the reorganisation and factory concentration begun in 1991. Also, market share is increasing, especially in fast-growing product areas such as emergency and architectural lighting. He reckons that the prospective p/e in 1995 on the issue price of 115p could be a mere 12.5.

THIS may be the time to call the turn on Iceland Group, the freezer food retailer that has expanded into a wider range of supermarket trolley-fillers. The end of inflation and a step- jump in consumer tastes sent Iceland shares nosediving from March last year to a low of 132p this June.

The company is still freezer-based but has adroitly broadened its appeal, positioning itself above Kwik Save but below the likes of Tesco and J Sainsbury. Although the shares are 30p off the bottom they still yield a tasty 3 per cent and give good value up to 200p.

BM GROUP, the engineering conglomerate mess, has acquired a fan club since it revealed a final kitchen sink set of accounts last week, leaving a net loss of pounds 63.4m. As Sandy Morris at NatWest Securities said: 'The current management has proved its credentials by delivering on the commitments made 12 months ago,' - albeit through disposals at fire-sale prices. Mr Morris estimates that profits from continuing businesses in what will be renamed Brunel Group could deliver earnings of 6.5p per share in the current year, an undemanding p/e of less than seven. Could be a bargain.

(Graph omitted)

PROMOTED VIDEO
Arts and Entertainment
Joel Edgerton, John Turturro and Christian Bale in Exodus: Gods and Kings
film Ridley Scott reveals truth behind casting decisions of Exodus
News
Andy Murray with his girlfriend of nine years, Kim Sears who he has got engaged to
peopleWimbledon champion announces engagement to girlfriend Kim Sears
Arts and Entertainment
Jake Quickenden and Edwina Currie are joining the I'm A Celebrity...Get Me Out Of Here! camp
tv
Arts and Entertainment
Roisin, James and Sanjay in the boardroom
tvReview: This week's failing project manager had to go
Life and Style
Fright night: the board game dates back to at least 1890
life
Life and Style
fashion
News
ebooksNow available in paperback
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

Langley James : IT Support; Helpdesk, VMware; Manchester, £18k

£16000 - £18000 per annum: Langley James : IT Support; Helpdesk, VMware; Manch...

h2 Recruit Ltd: Business Development Manager - HRO - £70k+ ote

£35000 - £450000 per annum + £3k car, £70k ote: h2 Recruit Ltd: Do you want to...

Citifocus Ltd: Newly Qualified Accountants - Risk Mgmt

£Attractive Package: Citifocus Ltd: Prestigious financial institution seeks to...

Citifocus Ltd: Operational Risk Analyst

£Negotiable: Citifocus Ltd: Experienced operational risk professional with ban...

Day In a Page

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
There's a Good Girl exhibition: How female creatives are changing the way women are portrayed in advertising

In pictures: There's a Good Girl exhibition

The new exhibition reveals how female creatives are changing the way women are portrayed in advertising
UK firm Biscuiteers is giving cookies a makeover - from advent calendars to doll's houses

UK firm Biscuiteers is giving cookies a makeover

It worked with cupcakes, doughnuts and macarons so no wonder someone decided to revamp the humble biscuit
Can SkySaga capture the Minecraft magic?

Can SkySaga capture the Minecraft magic?

It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner
The King's School is way ahead of the pack when it comes to using the latest classroom technology

Staying connected: The King's School

The school in Cambridgeshire is ahead of the pack when it comes to using the latest classroom technology. Richard Garner discovers how teachers and pupils stay connected
Christmas 2014: 23 best women's perfumes

Festively fragrant: the best women's perfumes

Give a loved one a luxe fragrance this year or treat yourself to a sensual pick-me-up
Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?
Nightclubbing with Richard Young: The story behind his latest book of celebrity photographs

24-Hour party person

Photographer Richard Young has been snapping celebrities at play for 40 years. As his latest book is released, he reveals that it wasn’t all fun and games
Michelle Obama's school dinners: America’s children have a message for the First Lady

A taste for rebellion

US children have started an online protest against Michelle Obama’s drive for healthy school meals by posting photos of their lunches