Ebookers has edge on lastminute

Risks too great to take a bite of Greencore; Moss Bros fails to suit while retail looks so risky

Not even the latest war talk can dampen the spirits of Martha Lane Fox. The vivacious managing director of lastminute.com reckons the online retailer could benefit from an Iraqi skirmish, as nervous travellers choose the group's late offers on airline tickets and hotels over traditional offerings.

Lastminute has booked a ticket into the black for 2003 and is forecast to post a maiden annual profit (before tax and goodwill) of £11.5m. But the money is not in the bag. It will need more than just enthusiasm if it is to cruise through the turbulence of war at anything like maximum altitude.

For a start, news from yesterday's first-quarter trading figures was not unequivocally good. There was a rise in the money flowing out of the business and delays to achieving cost-cutting targets from the acquisitions it made last year. Sceptics fear lastminute still carries a flame for the cash-burning days of the dot.com era. Operating cash outflow (before exceptional items) in the three months to 31 December was £7.4m, up from £3.8m a year earlier. Its pledges on cost savings now need close monitoring.

More happily, the group converted more "lookers to bookers": 26 per cent of visitors to the site bought something, up from 16 per cent a year ago. The October-December quarter is usually weak, with fewer people holidaying, and the number of items sold fell to 570,000 from 634,000 in the previous month but the total value of goods and services sold, £87m, beat the market's expectations.

Investors have lapped up Ms Lane Fox and co's hard work of the past 12 months, and lastminute's shares enjoyed the sharpest ascent in the FTSE All Share index in 2002, rising almost 250 per cent. But in terms of reputation, the bods at its arch rival ebookers still have the edge, thanks to an obsession with keeping administrative costs low. Lastminute shares, down 4.75p to 92p, deserve their growth rating and the group will undoubtedly prosper, but ebookers (up 11.5p to 316.5p) is cheaper relative to earnings and looks the better pick.

Risks too great to take a bite of Greencore

The buttering, filling and packing doesn't stop. Night and day, outside Worksop, Nottinghamshire, some 2,000 people are at work making sandwiches that will turn up in the supermarkets, corner stores and petrol station forecourts of Britain. Behind the activity, an Irish company, Greencore.

As well as being the UK's largest sandwich maker, Greencore produces sauces, readymeals, cakes, pizza toppings, sugar and bread. Perhaps the only thing it has not become expert at making is consistent earnings growth on behalf of its shareholders.

We wrote on Greencore last May and advised waiting for evidence of profit growth before jumping in. The prospect for the year to September is one of flat earnings only and 2004 is still too early to call, so the shares have drifted from 205p in May to 168.5p yesterday. Now the risks to the share price are, if anything, greater. The food sector has suffered a derating in recent months that Greencore, because it is less well covered in the City, has largely escaped. Its shares could be vulnerable to perceived disappointments.

Yesterday's trading update did not change the picture much. The chilled convenience foods business – including sandwiches – has started the financial year well; the bread business is still cut-throat and suffering overcapacity. On eight times earnings and with a 5 per cent dividend yield, the shares are not the most attractive in the food sector. Avoid.

Moss Bros fails to suit while retail looks so risky

Is a viable long-term business emerging from the chaos at Moss Bros? The formalwear retailer, still controlled by the Moss and Gee families, has struggled to come to terms with the modern world and its obsession with dressing down. It has also suffered from operational incompetence: it ran 150 stores as 16 different chains with names ranging from Savoy Taylors Guild to Blazer and, for an ill-fated few months, Code. Under Andrew Knight, chief executive since last March, it is focusing on just three, including Cecil Gee for label-conscious twentysomethings and the UK's Hugo Boss franchise.

A trading update yesterday showed sales have recovered a little from their depressed levels, with like-for-like growth of 4 per cent in the 26 weeks to 25 January. Best of all, excess stocks are being whittled away and the debt-free group was "strongly cash positive".

Perhaps, though, this is the high water mark. It is not clear who the main chain, Moss (in a last twist, it has dropped the Bros), is aimed at. Mr Wright's answer – the "style-conscious but not fashion-conscious" gentleman – sounds clever, but what does it mean? After years of neglect, many stores need a major refit that isn't going to come cheap. And with the UK consumer looking shaky, the retail sector as a whole is risky.

The shares, up a penny to 40p, already take recovery for granted and should be avoided.

Start your day with The Independent, sign up for daily news emails
News
peoplePair enliven the Emirates bore-draw
Arts and Entertainment
tvPoldark episode 8, review
News
Britain's opposition Labour Party leader Ed Miliband (R) and Boris Johnson, mayor of London, talk on the Andrew Marr show in London April 26
General electionAndrew Marr forced to intervene as Boris and Miliband clash on TV
Arts and Entertainment
Ramsay Bolton in Game of Thrones
tvSeries 5, Episode 3 review
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence