Investment Column: Laird's Thermagon deal looks cool

A punt in ukbetting may deliver a winnner; Ideal time to buy into Wyndeham Press
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The Independent Online

New business opportunities can come from unexpected places, as Laird Group has shown. The engineering company's whizzy technology division was created as a spin-off from its business which makes seals for windows.

New business opportunities can come from unexpected places, as Laird Group has shown. The engineering company's whizzy technology division was created as a spin-off from its business which makes seals for windows.

The company has been through various incarnations. Yesterday an acquisition bolstered one of its most promising new businesses. The group announced the purchase of Thermagon, a player in the thermal interface materials market, for an initial £15.5m.

Computer chips get more powerful all the time. That creates two problems: they generate more heat and produce more and more powerful electromagnetic waves. Laird's materials, produced in its technology division, tackle these problems by providing shields or ways to conduct heat away rapidly.

Laird already has an established business with a leading position in the electro-magnetic interference market. Yesterday's deal gives it critical mass in the thermal interference market for the first time. It is easy to agree with Laird that this is a logical strategic move, to add to the two small acquisitions in the sector made last year.

As the speed of computer processors increase, the heat generated rises very significantly. That makes for a solid basis of demand for a product that can take that heat away efficiently.

Sophisticated electronic systems are increasingly used in a whole range of goods beyond computers. That opens up new products all the time, such as the braking system in a car, which may require the sort of protection that Laird's products can provide.

Laird has two other divisions. Its security systems business makes locks for windows; here too the company sees growth opportunities. The third division distributes plastics in the US. The unrelated nature of the three divisions makes the group an obvious candidate for corporate restructuring, though there appear to be no plans for it at the moment.

The shares have been rallying for well over a year. At yesterday's 329p close, the stock trades on a forward multiple of 16, which is still attractive given the growth prospects.

A punt in ukbetting may deliver a winnner

As online gambling in Britain begins to gather pace, ukbetting has been busy trying to position itself in the field.

Its strategy has involved buying up sports content websites, such as planetrugby.com and football365.com, and now, after a year of acquisitions, it looks like it will make some money. The company yesterday said it was likely to make its maiden profit, albeit on an ebitda basis, in 2004.

The idea is that the type of customer that will read news and information on a football/golf/rugby website will then follow through with a bet on one of its gaming sites - Goldbet, Totalbet, and ukbetting. A particular punters' favourite in its stable is Oddschecker, bought for £4.75m last year, which compares odds from a plethora of bookies. This is a must for more than 100,000 punters searching for the best edge against the bookies.

Ukbetting shares had been doing well over the past few months as the business model begins to take shape and more content sites are added. It now has some 180,000 gambling customers, and 5.5m users of its websites. And revenues are not just reliant on gaming turnover. It is reaping in advertising revenue from its content sites, it sells content to other sites, and it provides sports commentary over the telephone.

But ukbetting now has to prove it can deliver some real results and investors will want to see underlying profitability in the two sides of its business. There are no profit forecasts in the market for the company, so there is little way of help on the form guide. While that may put off some investors, the odds are in ukbetting's favour. Buy.

Ideal time to buy into Wyndeham Press

Bryan Bedson, the chairman of Wyndeham Press, was yesterday feeling his most cheerful for at least two years. Just as well, after the printing company surprised markets in the autumn with a profits warning.

Wyndeham specialises in publishing magazines and the message, in a trading update, ahead of full-year results, was that conditions have picked up and the company will come in at the top end of revised profit expectations - that is, deliver £4.3m pre-tax profit for the year to March 2004. That is still well down on the £6.4m made in the previous year.

The basic problem is over-capacity and the reason for the optimism is the success of a cost-cutting drive, combined with new contract wins, which have helped margins given the pricing pressure in the industry.

In the second half of the financial year, Wyndeham was successful in winning several contracts, including five titles for Reed Business Information, and a flagship IPC title, Ideal Home.

The company is benefiting from the upturn in the advertising market. Furthermore, publishers are being pretty aggressive with new launches right now, as has been seen with two men's weekly magazines recently launched.

Profits are expected to bounce back in the new financial year, to around £7.4m, which makes the shares, at 114.5p, a buy.

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