DFS appears out of the top drawer

CITY TALK

MUCH hoopla surrounded the decision by Graham Kirkham, chairman of furniture retailer DFS, to add pounds 60m to his personal fortune from the sale of a 17 per cent stake in the company, floated on the stock market two years ago. Less attention was focused on the merits of the business itself.

But NatWest Markets continues to believe the shares offer good value. In a note this week, it said: "Retailers like DFS are a rarity. It has an established proven successful concept (26 years of growth) and more than adequate finance to realise its potential (90 to 100 stores) and sustain at least 15 per cent per annum compound growth simply by adding five or six stores each year." On a yield of 3.1 per cent at 343p, there is little downside. Buy.

GIVEN the number of companies trying to jump on the multi-media bandwagon, investors should show caution. Omni-Media is one arriviste eager to cash in on the coming boom, but has little so far to offer investors except hope.

Like similar fledgling businesses, it has recently listed its shares on the Alternative Investment Market. This week, it produced interim figures to the end of June 1995. Losses fell to pounds 279,137 from pounds 412,354 in the previous half year to 31 December 1994; sales climbed to pounds 199,962 from pounds 124,594.

But don't write it off just because of the losses. It has two attractions - pop and children's video CDs - and proprietary software to create such products. In both cases, revenues depend on volume sales, and a massive increase is in prospect. There is a case to be made for pre-tax profits hitting pounds 1m in 1996.

That is some haul, but joint managing director Tim Rosen is confident that with a raft of new products now ready to launch, the target can be achieved. If so that leaves the shares, at 65p, on an undemanding forward multiple of around 11 times earnings. Attractive, for a gamble of this order.

WHETHER hi-tech or biotech, hope springs eternal for start-up companies. ML Laboratories is still at this stage despite a share quotation since 1987 and, more recently, inclusion in the FT-SE 250 index, on a market capitalisation of pounds 430m.

Despite these achievements, the company is still scrabbling for sales and profits. Of course, if investors thought this were to continue, the shares would be nowhere near the 312p they closed at on Friday.

The latest excitement has been the possible application of its glucose polymer compounds - originally developed for kidney dialysis - as an Aids treatment. More imminent is the prospect of an announcement of a tie-up with a large drugs concern to license a new-generation asthma inhaler the company is developing. Even so, the shares remain expensive, and should not be chased.

NEW management often heralds a turnaround. That may be so at furniture- to-fabrics concern Cornwell Parker (85p), where the arrival of James Moore as chief executive has already lifted the shares.

After an impressive stint at Glen Dimplex, where he oversaw domestic appliance businesses Morphy Richards and Belling, he could be the right choice to implement the changes needed for the business to prosper.

However, Ruth Keattch, at merchant bank Granville Davies, says the shares warrant a cautious stance, with stock levels still an issue in the fabrics division. Wait for proof of Mr Moore's impact before buying again, she recommends.

SMITHS Industries announces full-year figures on Wednesday. City forecasts range from pounds 135m to pounds 139m, up from last year's pounds 117m.

Most of the advances are expected to come in medical technology, with earnings in the aerospace division flat. But with little expected in the way of unpleasant surprises, and the shares (559p) having performed well over the past few years, now is not the time to sell.

PREMIER Oil (27.25p) is favoured by stockbroker Charles Stanley as an oil company with a bright future. After the announcement in August that the Fife field in the North Sea was coming on stream, its shares leapt to 26.5p from 22.75p. That was followed by impressive interims, with pre- tax profits a shade over pounds 10m. Expect an even better second half. But the most significant news will be an announcement by the year end that it has signed a gas contract for the Yetagun field offshore Burma. Reserves are thought to amount to 2 trillion cubic feet. If the deal goes through, it will give Premier a stable source of long-term cash flow. Buy.

SHARES in Tring International are to be avoided, given their recent collapse to 52p, less than half the 108p price tag at which the company was floated in February. Although Tring concentrates on the low-price end of compact disc and audio cassette publishing, it has failed to establish much market presence.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Property
pets
Arts and Entertainment
tvGame of Thrones season 5 ep 4, review - WARNING: contains major spoiliers!
Arts and Entertainment
tvThe C-Word, TV review
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Sport
Danny Jones was in the Wales squad for the 2013 World Cup
rugby leagueKeighley Cougars half-back was taken off after just four minutes
Life and Style
The original ZX Spectrum was simple to plug into your TV and get playing on
techThirty years on, the ZX Spectrum is back, after a fashion
News
Tiger Woods and Lindsey Vonn are breaking up after nearly three years together
peopleFormer couple announce separation in posts on their websites
Sport
football
Life and Style
Google celebrates Bartolomeo Cristofori's 360th birthday
techGoogle Doodle to the rescue
Arts and Entertainment
Haunted looks: Matthew Macfadyen and Timothy Spall star in ‘The Enfield Haunting’
tvThe Enfield Haunting, TV review
News
news
News
The Mattehorn stands reflected in Leisee lake near Sunnegga station on June 30, 2013 near Zermatt, Switzerland
news
ebooks
ebooksA celebration of British elections
  • 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

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Recruitment Genius: Online Customer Service Administrator

£16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

Recruitment Genius: Digital Marketing Executive

£18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living