City Talk: The fever pitch has passed for football investors

AS THE football season builds to a climax - the FA Cup, Coca-Cola Cup and the run-up to the championship - excitement off the pitch seems to be dwindling.

Take Chelsea. After beating Arsenal to secure its second appearance in a cup final in two years, the shares have barely budged. On Friday, they languished at 97p - a far cry from the 160p they stood at a year ago.

Further good news from an investment point of view may be the departure of Ruud Gullit, if only because of the reduction in the wage bill. But the response off the terraces has been muted.

Meanwhile, Manchester United's share price has trundled along for the past year and is currently an uninspiring 147.5p.

Tottenham Hotspur, hovering perilously over the drop zone, has fallen from 120p in the past year to 69p. Whatever the fans may think of Christian Gross as coach, it is clear he has yet to win much support from investors. Which is a roundabout way of saying that football has taken on an entirely different investment perspective over the past year. Over-ambitious valuations look to be a thing of the past - which is no bad thing, in the longer run.

Shareholders in GoshawK Insurance Holdings will receive pleasant news tomorrow when the group releases results for its non-marine syndicate 2021, set up last June. Syndicate 2021 underwrites reinsurance for orphan syndicates at Lloyd's - those syndicates which are in run-off. With a capacity of pounds 29m, it has already secured eight contracts for a total premium income of pounds 17.8m. It has generated pounds 20.1m in premiums since it began taking business. The broad-based marine syndicate 102, in which GoshawK has a 27 per cent interest, will report premium income of pounds 64.2m for the past year.

Tomorrow also sees the annual general meeting of Deltron Electronics, where chairman Paul Gourmand will disclose excellent progress in the first four months of the year. The specialist electronics components supplier will show that trading in the first four months "continues to perform ahead of our expectations" and is more than 50 per cent ahead in January on the previous year. That suggests brokers' forecasts of pounds 3.3m in pre- tax profits for the year to September 1998 already look in need of upward tweaking. The shares were at 132p on Friday.

Clearly, the news that Bass is lining up a $2.8bn (pounds 1.7bn) deal to buy the Inter-Continental Hotels & Resorts chain from the Seibu Saison Group of Japan has alarmed the markets. Shares in the brewing to hotels group fell 26.5p to 960p on Friday. Financing is understood to have been lined up with a consortium of half-a-dozen banks. The chief concern is that Bass is overpaying for the privilege. A source at a rival bidder said it was a surprised that Marriott International had failed to pull off the deal. "Marriott had prepared carefully. It's a surprise if they have been scooped."

While $2.8bn is seen as a reasonable ball-park figure, it also raises other doubts about the strategy adopted by the group. Granada's purchase of Forte is widely seen as having called the cycle as close to perfection as possible. Bass's move, by contrast, comes when the international hotel cycle is widely seen as having peaked. Asset valuations have more than caught up with the upswing in economic cycles - Inter-Continental, a global brand, will suffer from the fall-out in Asia, while there is a general consensus that worldwide growth is set to slow.

Finally, Bass has been exiting from businesses where it cannot see the prospect of annual earnings growth of more than 10 per cent. Yet purchasers of Bass assets have been pleasantly surprised by the return on capital the purchase price represents. And as assets where investment has been limited, the earnings upside is considerable. One interpretation, perhaps unjustly negative, is that chairman Sir Ian Prosser has been caught in a trap of seeking exciting new growth prospects, while overlooking the potential closer to home.

Flocking round: Beyoncé, Madame Tussauds' latest waxwork, looking fierce in the park
travelIn a digital age when we have more access than ever to the stars, why are waxworks still pulling in crowds?
Arts and Entertainment
Arts and Entertainment
Judi Dench appeared at the Hay Festival to perform excerpts from Shakespearean plays
tvJudi Dench and Hugh Bonneville join Benedict Cumberbatch in BBC Shakespeare adaptations
Is this how Mario Balotelli will cruise into Liverpool?
Ronahi Serhat, a PKK fighter, in the Qandil Mountains in Iraqi Kurdistan
ebooksAn evocation of the conflict through the eyes of those who lived through it
Arts and Entertainment
Poet’s corner: Philip Larkin at the venetian window of his home in 1958
booksOr caring, playful man who lived for others? A new book has the answer
Arts and Entertainment
Exhibition at the Centre Pompidou in Metz - 23 May 2012
Matthew McConaughey and his son Levi at the game between the Boston Red Sox and the Houston Astros at Fenway Park on August 17, 2014 in Boston, Massachusetts.
advertisingOscar-winner’s Lincoln deal is latest in a lucrative ad production line
Life and Style
Pick of the bunch: Sudi Pigott puts together roasted tomatoes with peppers, aubergines and Labneh cheese for a tomato-inspired vegetarian main dish
food + drink
Arts and Entertainment
Alfred Molina, left, and John Lithgow in a scene from 'Love Is Strange'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Junior Quant Analyst - C++, Boost, Data Mining

£25000 - £35000 per annum: Harrington Starr: Junior Quant Analyst - C++, Boost...

Service Desk Analyst- (Desktop Support, Help desk)

£25000 - £35000 per annum: Harrington Starr: Service Desk Analyst- (Desktop Su...

Junior Quant Analyst (Machine Learning, SQL, Brokerage)

£30000 - £50000 per annum: Harrington Starr: Junior Quant Analyst (Machine Lea...

UNIX Application Support Analyst- Support, UNIX, London

£45000 - £55000 per annum: Harrington Starr: UNIX Application Support Analyst-...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape