The pack 'em in concept provides visitors with a range of experiences, from coffee in the morning, through to dancing in the evening. As well as a public bar, there can be a library, and there is a strong emphasis on food.
Surrey Free Inns is in the middle of rolling out its superpub brand, the Litten Tree, around the Home Counties, with 11 sites in the planning and licensing stages. Stockbroker Teather & Greenwood estimates that each new venue will add pounds 120,000 a year to Surrey Free Inns' pre-tax profit. With pounds 1.1m pre-tax pencilled in for 1996, and pounds 1.8m in 1997, the shares, at 170p, trade on a prospective price-earnings ratio of 13.3 times for this year.
That is a significant discount to its nearest rivals, Wetherspoon, Regent and Tom Cobleigh. As usual with businesses like this, there is the built- in protection offered by a property portfolio. Buy, for long-term growth.
A bid from one of the bigger groups in the future could add spice.
A RISING star of the British Shoot 'Em Up Hall of Fame, the computer games and multimedia specialist Eidos, has enjoyed a powerful surge in its shares. Sales have grown rapidly over the past few years, but the real promise lies in two multimedia developments.
The one with the most potential looks to be a low-cost video conferencing product. Currently, such equipment for personal computer based systems needs lots of hardware and sells for more than pounds 2,000. But the software Eidos has developed should sell for around pounds 300, giving it the ability to achieve mass penetration of the PC-owning fraternity - itself expanding exponentially.
Although the City does not look for profits much before 1997, this is a company well ensconced in one of the fastest growing businesses in the world. Alas, at 720p, the shares have now outpaced reality. Time to take profits.
JOHNSON Matthey is best known for its interests in precious metals, and especially the high-tech applications for platinum. In this area it has benefited enormously from the growth in catalytic converters for cars, and it is now building another arm - its electronics materials division.
Growth in the sector could be at a compound rate of 15 to 20 per cent a year through to the millennium.
Its purchase of the printed circuit board facilities of Cray Inc in the US last week looks to be a smart move.
For $40m (pounds 26m), it is obtaining a state-of-the-art facility which cost $50m to build just two years ago. Expect pre-tax profits to breach the pounds 100m level this year, and be nearer pounds 130m in 1997. The shares (563p) are a buy.
AIRPORTS operator BAA, at 488p, could be set to return to favour with investors. Evidence that management are not asleep at the control tower came this week with a cleverly timed convertible bond, to raise money on extremely attractive terms. However, obtaining cheap money is one thing, lifting profits another.
But here too things may be looking up. Although there is a Monopolies and Mergers Commission investigation into landing charges, and delays dog the planned Terminal Five at Heathrow, there is plenty of upside. Passenger growth seems buoyant, while the company is adding retail space at a rapid rate.
Some 262,100 sq ft of shops will be opened between now and 1998 - almost 30 per cent more. Pre-tax profits of pounds 362m last year should top pounds 400m this year and hit pounds 450m by 1997. Buy for continued long-term growth.
SO, farewell then, Hanson. It has served its purpose, but the failure of its strategy over the long-term is clear.
However, shareholders who were in at the ground floor benefited handsomely. For that reason, do not despair of the conglomerates. Tomkins (271p) is one clear buy.
Tomkins' purchase of Gates Rubber in the US underlines the effectiveness of the deal-making strategy. Strong cash generation - a weakness of Hanson in recent years - and the upside for boosting returns suggest that the party isn't yet over.Reuse content