City File: Tiphook delays sell-off further

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The Independent Online
THE CYNICS who doubt whether Tiphook will ever complete the sale of its container division for the hoped-for pounds 830m were given further ammunition on Friday. The company said its half-yearly results would be delayed until the negotiations with Transamerica are resolved.

Many observers doubt that the pounds 830m figure, pounds 200m more than book value, can be achieved, especially after the company's admission that on the trading front it is 'still experiencing pressures in most of its markets'. The shares at 59p could have further to fall.

SOMETIMES the London stock market can be far too insular. Shares in Thorn-EMI bounced up a mere 30p over the week to end at 997p, even after revelations that Paramount had thought of buying the group. This is not surprising: in EMI, Thorn has by far the largest music business not in the hands of a giant conglomerate, with an incomparable stable of artists and historical recordings. And once the battle over such 'software' rights is engaged, the final price is normally unrelated to earnings.

ALVIS has bounced from 23p to 36p since we tipped the shares earlier this year, touching 48p in between times. Behind the swings are Alvis's split personality: as a leading defence contractor it is struggling; as 51 per cent owner of Avimo, a quoted group of Singapore- based electro-optic companies, it is hopelessly undervalued - Alvis as a whole is valued by the market at under pounds 20m, less than the market value of its stake in Avimo. In December it will be able to sell part of its stake - and even the defence business is benefiting from niche purchases of such specialities as the 'Wheelbarrow' bomb-disposal robot. Next week's results will be dreary, reflecting reorganisation costs, but should be ignored. Buy.

EVEN at a chunky pounds 105, shares in the Rothermere Empire, aka Daily Mail & General Trust, could prove to be the media stock of the year. Its provincial newspapers and the London Standard were both badly hit by the slump in classified ads. Nevertheless, NatWest expects next week's profit figures to show a 78 per cent jump to pounds 68.5m pre-tax. But there is more to come, from the recovery in the jobs market and the pounds 20m-plus invested in new supplements for the Standard and its national titles. Although the Daily Mail is having to fight hard against the 30p Times, the paper's longer-term position in the middle market remains impregnable. And Lord Rothermere is too cautious to overspend on buying more papers, despite the temptation to acquire an upmarket broadsheet to provide a balanced newspaper portfolio.

THIS could be the time to get in on Saxon Hawk, the Sheffield-based furniture stores group which is traded on the stock market under rule 535.

Last week the chairman, Denis Cassidy, reported pre-tax profits up from pounds 528,000 to pounds 1m for the year to September; a result that many fully quoted retail groups would have killed for this year. Store closures cut the sales increase to 3 per cent at pounds 45.2m, but shedding loss- makers has boosted margins. Star performer is Kingsbury Interiors, which grew 35 per cent.

The shareholders are mainly institutions that would eventually like to see Saxon listed. Meanwhile, the shares can be bought in small parcels on a matched-bargain basis, where at 130p they are on a fully-taxed 10 times 1992-3 earnings. Worth acquiring a few.

LAST Thursday a shadow passed across the share price of Sidlaw, the packaging group, as a mystery line of stock went through the market.

Fans were heartened to see the shares bounce back on Friday, but nervous investors might like to wait until the jury has pronounced on its recent pounds 79m takeover of Courtaulds's packaging business.

The shares languish around the 275p at which Sidlaw made a four-for-seven rights issue to pay for that deal, suggesting digestion doubts. On broker Cazenove's 1993-4 forecast of pounds 17m the shares are on a modest 12 multiple. However, best avoided until the dust settles.

THE way looks clear for the software house Sanderson Electronics's shares to motor, after falling 48p from their 1993 high on fears over the company's 49 per cent stake in General Automation of the US. That stake has now been cut to below 20 per cent, reducing it to the level of an investment.

The brokers James Capel are predicting an 11th year of growth to September 1994, taking profits up from pounds 3.3m to a record pounds 4m on the back of a wide range of commercial software for local government, airports, solicitors and big bill- issuers such as British Gas. Nevertheless, the yield remains an undemanding 4 per cent.

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