City talk: Investors blow smoke at Gallaher
Sunday 01 June 1997
So it was a poor time for Gallaher, the tobacco company, to come to the market. Its shares opened at 282.5p and slid to 275.5p at the close - well below earlier indications of a starting price of 310p. It looks as if US investors will continue as heavy sellers of the stock, leaving plenty of scope for bargain hunters.
Japanese stockbroker Daiwa has issued a "buy" note for GKN. While the company's shares have come off on sterling's strength, the Meineke case and its growing exposure to the car industry, medium-term prospects still look very positive. Daiwa estimates pre-tax profits of pounds 400.8m this year, rising to pounds 414.6m. At these levels, shares trade at 9.7 times current- year earnings - hardly demanding.
The fact that United News & Media has had to pull out of the Movie World development on the outskirts of west London, with its partner Warner Brothers, may not knock the share price. But it raises questions about the group's grasp of, first, how to extract the maximum from a joint venture; second, of whether it understands how to work alongside foreign partners; and third, whether it has sufficient resources to manage external projects such as this. It shouldn't affect earnings in the long term, but it takes the shine off the company's projection of a bright, multimedia leisure future.
As Chancellor Gordon Brown's mini-Budget draws near - probably some time towards the end of June - machinations over the windfall tax continue. The latest to stick its neck out is Yorkshire Water. The company that drew scorn for having to use a fleet of 700 tankers to bring in water during the drought of 1995 has offered the Treasury a deal. Yorkshire wants a measure in Ken Clarke's last Budget to be dropped. The company says the proposal, which would reduce the value of tax allowances for long-term investment, could cost it pounds 7m a year. In return, it seems it would be prepared to accept a windfall tax of some kind.
The evidence is mounting that a tax aimed at the electricity and water companies would have the most widespread acceptance. Outside those two sectors, there is still plenty of confusion. The sooner the Chancellor decides on what and how companies are to be taxed, the better. Further delay will only send investors the wrong signals.
A belief that the Monopolies Commission will end recommended retail prices in the electrical goods sector has already damaged the share prices of Dixons and Kingfisher. However, there is a contrary view: strong retailers, such as Dixons, will benefit from any further price pressure on smaller independents and weaker chains, with further consolidation likely in the sector.
Still on the retail front, one of the weaker performers, Laura Ashley, further annoyed the market with a cautious trading statement.
Rumbling down the runway is Debonair, a new no-frills airline, which expects to float its shares on Easdaq - the European stock market for start-up companies. Debonair, based in Luton, has entered the European airline fray at a good time: Brussels has shaken up the market, with deregulation and liberalisation allowing smaller companies to capture a slice of the business.
Like EasyJet and Ryanair, whose shares were recently floated on Nasdaq and soared to a 40 per cent premium, low-cost carriers could have a glowing future. Debonair expects to float before the summer break; watch out for further details.
Finally, Amersham International shot up 92.5 pence to 1,392.5p in response to reports in Sweden that the company may merge with Pharmacia Biotech to create a pounds 1.25bn company.
Amersham confirmed it is in talks with Pharmacia & Upjohn over a possible merger of the two companies' life science businesses. A link-up has been widely mooted for some time, with analysts describing the synergies as extensive.
Malaysia Airlines plane crash exposes alarming flaw in airline security: over one billion flights made last year without stolen-passport check
International Women's Day 2014: The shocking statistics that show why it is still so important
Teacher shows sex tape featuring herself to pupils during class by mistake
Swarm of killer bees sting woman 1,000 times
Dead woman's body lay decomposing in garage for six years before she was found
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
If you're horrified by a flame-roasted dog, you should be shocked at a hog roast
Poor 'live like animals' says Boris's privately educated sister after going on 'poverty safari'
Exclusive: Impact of immigrants on British workers ‘negligible’
Vince Cable: Teachers 'know absolutely nothing' about the world of work
Ukraine crisis: Russia pledges to 'retaliate against sanctions' as Ukrainian president says Crimea vote will not be recognised
- 1 International Women's Day 2014: The shocking statistics that show why it is still so important
- 2 Australian man Rod Sommerville reacts to bite from deadly snake by reaching for cold beer
- 3 Teacher shows sex tape featuring herself to pupils during class by mistake
- 4 Singapore sting: Sky-high prices are pushing locals to the edge of affordability
- 5 Exclusive: UK banks in row over Yulia Tymoshenko 'millions'
iJobs Money & Business
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£55000 - £70000 per annum + benefits: Pro-Recruitment Group: In-House Corporat...
£80000 - £100000 per annum + benefits: Pro-Recruitment Group: In-House Opportu...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...