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)

Start your day with The Independent, sign up for daily news emails
News
ebookA unique anthology of reporting and analysis of a crucial period of history
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

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?