Coal is digging deep to keep face

THEN there were three. The demise of Coal Investments has left three quoted miners in the British coal industry, all of whose prospects have been enhanced by the exit of one of the two majors. The remarkable success of the other big player, RJB Mining, has been well highlighted, and most of the good news is probably already on the price.

However, two other companies, NSM and Rackwood, should not be overlooked. NSM (40p), valued at pounds 18m by the Stock Market, has many positive qualities to its name. But a more interesting investment, and a purer play on the UK coal scene is its smaller colleague, Rackwood Minerals. An opencast miner, at 55p, the company is worth pounds 8m. Good 1994 figures were capped by excellent interim results. These were probably something of a one-off, but even so, the company is on-course to up output from current levels of 350,000 tonnes a year, to 475,000 tonnes by the end of this year. Management have set a target of one million tonnes, and judging by their track record in recent times, there is no real reason to question this aim. Buy.

BRITISH Steel's success has earned it a place in any management textbook, and the achievement has been reflected in its share price over the last few years.

However, the good times look as if they may be over. For a start, steel prices have been on the wane, with 3-5 per cent cuts in construction steel already announced. Curiously, the shares have responded in the opposite direction, with a sudden and unexpected surge in the last week, to 197.5p.

NatWest Securities now sees this as a chance to take profits. Even a 10 per cent fall in steel prices would see operating profits from carbon steel completely wiped out. The company remains a cyclical play, and is now approaching the end of its current cycle.

PROBLEMS continue at Babcock International (129p), the engineering-to- materials handling group. Despite sales of pounds 755m in 1995, pre-tax profits amounted to a miserly pounds 7.8m, and are set to head south this year, on other problems.

Redundancies in Germany have had be postponed in order to comply with local employment laws, while the process division failed to win the anticipated orders from Saudi Arabia. It now looks as if the company will fail to break even this year. Avoid.

WE highlighted Peptide Therapeutics ahead of its flotation in November, since when the shares, after initial flurries took them to a high of 250p, have slid back to 199p. Nevertheless, there are promising signs that the company's strategy can pay off. With pounds 26m in the kitty, it has four years to work towards developing its products.

Its strategy is to buy in compounds, mainly peptides, which are sequences of amino acids, and the building blocks of proteins. Two allergy vaccines are already in Phase II trials, while it has a promising compound, for rheumatoid arthritis, in its Phase I trials. It also has a potential meningitis B vaccine which is still at the research stage. Peptide will continue to burn up cash over the next three years or so, but nevertheless the shares are a buy at current levels.

THE City seems to have decided that results from Williams Holdings a fortnight ago are a sell, judging by the shares. From 342p at the start of March, they have been on the slide ever since, and now stand at 319p.

But brokers UBS and Kleinwort Benson both view this as a buying opportunity. The fire protection, security and building products group saw sales up 14.7 per cent to pounds 1,598.5m, with pre-tax profit up the same to pounds 228.3m.

Disappointingly, earnings per share could rise only 2.8 per cent to 22.3p. But gearing, at 18.7 per cent, is low, and the business continues to spin off cash. Dividend growth looks assured, and the shares trade at a mere 13.4 times Kleinwort's forecast earnings of pounds 250m for 1996. That leaves the shares on a gross yield of 5.5 per cent. Buy for the income, and future growth.

WATCH shares in Gowrings (88p), which is barely changed since September, after the most recent outbreak of mad cow media frenzy. The car dealer has been expanding rapidly into the fast-food market, with a growing number of Burger King franchises on its books. The latest concerns can't be good for business. Sell.

Suggested Topics
Travel
travel
Arts and Entertainment
The cast of The Big Bang Theory in a still from the show
tvBig Bang Theory filming delayed by contract dispute over actors' pay
Sport
England celebrate a wicket for Moeen Ali
sportMoeen Ali stars with five wickets as Cook's men level India series
News
Morrissey pictured in 2013
people
PROMOTED VIDEO
Voices
A family sit and enjoy a quiet train journey
voicesForcing us to overhear dull phone conversations is an offensive act, says Simon Kelner
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Travel
travel
News
Robyn Lawley
people
News
people
News
i100  ... he was into holy war way before it was on trend
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmThe film is surprisingly witty, but could do with taking itself more seriously, says Geoffrey Macnab
News
people
Life and Style
food + drinkVegetarians enjoy food as much as anyone else, writes Susan Elkin
Life and Style
lifeDon't get caught up on climaxing
Life and Style
tech
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

1st Line Support Technician / Application Support

£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

Team Secretary - (Client Development/Sales Team) - Wimbledon

£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

Accountant / Assistant Management Accountant

Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

Day In a Page

Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end
UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

UCI Mountain Bike World Cup

Downhill all the way to the top for the Atherton siblings
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star