Floating off on paper profits

The flotation of Newsquest, the regional newspaper group, is drawing nearer with the shares being priced on Thursday. Subscriptions close on Wednesday. The shares were valued in a range from 250p to 290p, but indications this weekend suggest the deal will be priced at a little below the mid point of 270p. Demand from institutions has been building strongly, with further interest expressed by retail investors over the last few days.

At 270p, the shares would be trading on 13.6 times expected 1998 earnings, compared to its peer Trinity on 14.4. Newsquest will be valued at around pounds 540m, raising about pounds 100m in new funds. The group seems well set for further growth, with an 8 per cent rise in advertising revenues likely to boost profits.

Allders, the retailer, is now a very different creature from the entity spun out of Hanson several years ago. Last year it sold its duty-free operation to Swiss-air. Some of the proceeds went to shareholders through a special dividend of 47p.

Although some of its 20 stores lack a distinctive identity, most are aimed at the middle to top end of the market. Eight of them were bought from Owen Owen last year.

The shares have performed well since hitting a low of under 200p at the end of last year, now standing at 245p. However, with impressive margins, scope to improve the Owen Owen parts and encouraging like-for-like growth, the shares are at least a strong hold.

Redland, the building materials group, buoyed on Friday by talk of takeover, was up 15p to 255p. Chairman Rudolf Agnew met shareholders and promised moves to build value, but further progress is unlikely for a while. Problems in its German roof tile business are being addressed.

While WH Smith is going through the wringer, one other retailer seems to be picking up steam on the road to recovery. House of Fraser figures last week brought a cautious thumbs up from the market - the first time the company has been able to spread some good news for a while. It still made a first-half loss of pounds 1.8m, but at least that was better than the pounds 13.6m loss posted for the same period last year. The shares, however, are fully bent on recovery. Hold.

RICHARD PHILLIPS

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