Gardiner finds security after year of alarms

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The Independent Online
Security group Gardiner looks set to share in the spoils of the Government's promise to improve school security in the wake of the Dunblane tragedy and killing of London headmaster Philip Lawrence. Gillian Shephard, Secretary of State for Education, said last week money would be available to upgrade security in due course. Some of this, no doubt, will go on video cameras and systems - a business that now amounts to a fifth of Gardiner's annual turnover after its entry to this market just over a year ago. Stability is returning to the burglar alarms market after intense competition cut prices and margins, and Gardiner's horror story of overstated stocks is now well in the past. Expect pounds 4m this year (to October 1996), rising to pounds 4.5m next. That puts the shares (at 29p and static for the past month) on a prospective p/e of 12, falling to 10 beyond.

There is something about the irrepressible optimism of gold prospectors - and those who invest in their shares - that has to be admired. Gold Mines of Sardinia is the latest to come to London seeking funds to realise its ambitions. The company intends to develop four open pit mines on Sardinia, and is also researching other prospects. Its management hails from Australia and has extensive experience in the industry. Gold Mines wants to raise pounds 5.5m through a placing on AIM. Gold was only discovered in Sardinia in 1988, but the evidence suggests the company's projects have potential.

The appointment of Dick Brown as chief executive of News Cable & Wireless may bring some hope to disappointed investors after merger talks with British Telecom broke down and the shares collapsed. Can Mr Brown's appointment restore some sense of direction? The company continues to have undervalued assets, not least its stake in HongKong Telecom. There is also the likelihood of some deal - possibly a share swap - with Stet of Italy and Veba of Germany. C&W has been a long time reaching the point where it has a clear strategic purpose. But the businesses it owns are among the most attractive of any independent telecoms operator. Final figures this week will be overshadowed by this appointment, but the shares, at 460.5p, should be seen as a speculative buy.

Also with figures this week is Midlands brewery stalwart Wolverhampton & Dudley. Pre-tax profits will inch ahead to pounds 18.3m, up 4 per cent, according to NatWest Securities, and at the bottom end of the range of analysts' forecasts. The problem is that Wolves has too many boozers in declining council-estate areas. Unless there is evidence of growth in other areas of the business, such as theme restaurants and its Taphouse concept, the shares (691p) are a sell, reckons the broker.

Problems returned to Amstrad last week with the news that Dancall, its mobile phone handsets business, would fail to contribute to profits this year. The response from the City was savage, with the shares marked down 45p to 161p by Friday. Some brokers had pencilled in as much as pounds 5m from Dancall this year. But total profits for the former consumer technology wonderstock are now more likely to be of the order of pounds 6m for 1995-96. Nevertheless, investors should hold on for the long term.

Where does the value lie in the banking sector? The banking team at Goldman Sachs concludes that only Barclays and HSBC are likely to outperform the market by any significant measure. Standard Chartered (640p) is overrated on takeover prospects. But Barclays (789p) has demonstrated its ability to return funds to shareholders. Increased consumer lending will also help, given that it is the market leader in credit cards. HSBC (979.5p), with more than half its net profits flowing from the fast-growing Asia Pacific region, can return more than 15 per cent a year through to 1998.

Sparkling results at Perpetual last week saw the shares gain 210p to 2,568p. A 72 per cent rise in the dividend was one reason for the gain. Hold on: there should be more to come.

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