Odds still in William Hill's favour

Kidde can be locked away for the long term; Lack of clarity makes Mowlem one to steer clear of

Punters who had a flutter on William Hill's shares at flotation should be smiling all the way to the cashier. The going for Hill has been very good over the past year and its shares have been gaining ground.

The company yesterday said turnover was up 77 per cent and profits up 43 per cent. Growth was driven by a relaxation of betting rules that has allowed bookies to put fixed-odds betting terminals in their shops. These FOBTs are high-tech slot machines, allowing punters to play roulette while waiting for the next horse race to start. Hill's roll-out of FOBT has been fast and furious, but the growth prospects are nearing the line and it is unlikely that much more can be flogged out of them past 2005.

The entire market for gambling in the UK is about to expand, however, as arcane rules designed to protect the public from emptying its wallet are swept away. Bookmakers will be able to open more shops, which will threaten Hill, but it does have a strong brand on the high street to carry it through. Casinos are the big winners in gaming deregulation, as they will be able to open doors to all. This is an avenue Hill is considering.

The brand's strength has also helped draw in customers for online betting. Profits here were up 80 per cent last year. This is an area of high growth and Hill has already secured a slice of the market.

Shareholders are starting to reap the company's strong cash flow, as Hill increased its dividend by 44 per cent and promised more. It has also said it wants to buy back up to 10 per cent of its share capital. This could boost earnings per share by 5 per cent in 2004.

Longer term, Hill may lose out to increased competition from deregulation. But it is still odds on to generate plenty of cash and good growth for some time. We have been positive on the shares since flotation and even at last night's close of 484p, which puts the stock on a forward multiple of about 15 times earnings, there is still time to pile on for the final furlong of growth.

Kidde can be locked away for the long term

As celebrity product endorsements go, it's not up there with Britney doing Pepsi or Pele pushing Viagra. But Kidde was clearly chuffed yesterday that it has bagged Rudy Giuliani to advertise its fire alarms on US television. New York's former mayor is fronting the fire safety's group's latest campaign to educate people about protecting their homes with smoke detectors, carbon monoxide monitors and other Kidde products. Which makes it ironic that consumer sales were the only minor disappointment in the company's better-than-hoped 2003 results, published yesterday.

Sales have snapped back in the early months of this year, though, and the outlook for the group as a whole is rosier than it has been since Kidde was demerged from the old Williams conglomerate in 2000.

Spares for fire safety systems in civil aircraft should pick up this year after the post-11 September tumble in air travel. A buoyant US economy should also start to encourage business to invest in new factories, where alarms, sprinklers etcetera are required by law.

This outweighs the negatives, such as the weak dollar (in which Kidde conducts more than half its business) and the worry that we have passed the peak in demand from the military, to which Kidde sells temporary bridges for getting vehicles across ravines, as well as safety systems for aircraft.

Strong cashflow and recent debt reduction means Kidde can pick up the pace of acquisitions, particularly in central Europe. The shares, at 104.25p, offer good long-term growth and a 3 per cent dividend. Hold.

Lack of clarity makes Mowlem one to steer clear of

Sir John Gains, chief executive of the construction group Mowlem, rubbed some people in the City up the wrong way yesterday. His company's results came in a little shy of forecasts, barely two months after a trading update that failed to signal a restructuring. Mowlem is combining its infrastructure business (which works on railway projects, for example) with its core construction division, and taking the opportunity to write off bad debts on old projects. Sir John was vague on the costs involved, on the savings that might be achieved, and what all this might do to 2004's results. Analysts left a meeting with a bad taste in their mouths but, to be fair, they are still positive on the company's shares.

Mowlem has won plaudits for its work through the Private Finance Initiative, in which private companies jointly fund public sector building work. Last year's £45.2m profit contained a one-off £15.6m from the sale of Mowlem's stake in the PFI that extended London's Docklands Light Railway. The company is also expanding in support services, through building maintenance contracts and one of the UK's biggest cleaning firms.

This is all low margin work, of course, and the uncertainty created means Mowlem shares (down 10 per cent to 200.25p) will not soon narrow the valuation gap with their peers. Avoid.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Life and Style
life
Arts and Entertainment
Cold case: Aaron McCusker and Christopher Eccleston in ‘Fortitude’
tvReview: Sky Atlantic's ambitious new series Fortitude has begun with a feature-length special
Voices
Three people wearing masks depicting Ed Miliband, David Cameron and Nick Clegg
voicesPolitics is in the gutter – but there is an alternative, says Nigel Farage
Voices
The veterans Mark Hayward, Hugh Thompson and Sean Staines (back) with Grayson Perry (front left) and Evgeny Lebedev
charity appealMaverick artist Grayson Perry backs our campaign
News
i100
News
people
ebooks
ebooksA special investigation by Andy McSmith
Sport
Chelsea manager Jose Mourinho
footballThe more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Life and Style
Vote green: Benoit Berenger at The Duke of Cambridge in London's Islington
food + drinkBanishes thoughts of soggy school dinners and turn over a new leaf
News
Joel Grey (left) poses next to a poster featuring his character in the film
peopleActor Joel Grey comes out at 82
News
i100
News
business
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

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee