Good news at last from Fisher

THE INVESTMENT COLUMN

Albert Fisher has brought few good tidings in recent years but yesterday's results finally had the look of better news about them. Stripping out exceptionals of pounds 8m relating to losses on three disposals, pre-tax profits for the year to August, up 15 per cent to pounds 39.5m, gave some cause for optimism.

Management, led by chief executive Stephen Walls, is now sounding pretty bullish and investors must hope that three years of restructuring and under-performance is about to turn into a phase of sustained growth.

Albert Fisher certainly needs one after a period of drift during which the shares have fallen a long way from their most recent peak of 130p in 1991. Yesterday they finished 1.5p lower at 53p.

Like most food groups, Fisher has been subjected to the twin squeeze of the powerful supermarkets and rising raw material costs. It has responded by moving away from commodity products towards added-value ranges in an attempt to protect itself from the worst of the pinch.

Commodity products now account for 35 per cent of group sales compared with 65 per cent three years ago and Mr Walls expects that figure to fall steadily. The hope is that Albert Fisher will become less prone to natural disasters such as the hurricanes and floods that have regularly pulled the rug from underneath the company.

Added-value items such as prepared meals and sauces represent 20 per cent of the American division, though it is a moot point whether washing and chopping lettuce before putting it in a bag really qualifies. Certainly the US was the star performer last year, with profits jumping from pounds 6.4m to pounds 16.9m. But this was flattered by strong lettuce prices, which added around $2m to the profit figures.

The seafood sector was more disappointing but the division is now under new management and a recovery is expected this year. There should also be further growth in the sauces and dressings business, where a new factory is being built to cope with additional demand from customers like McDonalds, Sainsbury and Waitrose.

Mr Walls says Fisher is now down to its core businesses and no further disposals are expected. In-fill acquisitions are, however, on the agenda.

Management must now fulfil the upbeat promises it has made and although the shares offer a good yield, the company is still relatively exposed to commodity areas. BZW is forecasting profits of pounds 42m for the current year, putting the shares on a forward rating of 12. About right.

Mowlem move

shrugged off

The market has become so blase about the travails of the construction sector, and especially of J Mowlem, one of its more troubled constituents, that it pretty much shrugged off the departure yesterday of the company's chief executive, John Marshall. The shares lost just 3p to 58p, although that puts them within a whisker of their recent low, hit in August 1992, and means they have lost almost 90 per cent of their value since they peaked in 1989.

After the announcement a month ago that the company had plunged into a pounds 31.8m loss, mainly thanks to the heavy costs of refocusing itself on a profitable core, it was perhaps no surprise that senior heads would roll. Ken Minton, chairman since the summer, has clear views about where he should take Mowlem and his ideas plainly did not chime with Mr Marshall's. His replacement is the group's construction head, who will have an intimate knowledge of one of the four areas the company has decided to focus on.

Whether the shares, after their recent dismal performance, are worth looking at again is hard to say. On the positive side, Mr Minton's strategy seems to make sense - stripping out the businesses, such as London City Airport, which cannot pay their way, reducing overheads to match the low level of business available and focusing on activities where a decent return is achievable.

But following the worse-than-expected red ink in September, analysts have become a great deal more circumspect about their forecasts and, even after the recent fall, the shares do not appear unduly cheap on earnings grounds.

Smith New Court has pencilled in profits of pounds 4.5m for the current year to December, disregarding the exceptional restructuring write-off that smashed a hole in first-half figures and will do so again at the full- year stage. Next year, pounds 8.5m could be achievable, implying earnings per share of 4.1p and a prospective price/earnings ratio of 14.

That is hardly compelling, especially as the shares, on the basis of a promised 2p final dividend, yield only 4.3 per cent, close to the market average. Given all the uncertainty, the shares are unlikely to reverse recent weakness.

New radio group

tunes in to AIM

Independent Radio is giving a shot in the arm to the fledgling Alternative Investment Market by raising pounds 9.7m in a mainly institutional placing. It is a large sum for a start-up, representing almost double the next biggest cash raising on AIM and nearly a quarter of the pounds 40.3m total garnered in new cash by the market to date. But Independent's executive management, led by Michael Connolly, has a strong track record in the business, having successfully turned round the Preston-based Trans World Communications radio group before selling it last year to EMAP for pounds 71m.

The money now being raised by Independent represents seed-corn finance for a predatory venture hoping to scoop up small radio stations which have won licences to operate in the north of England. The group has identified 30 such outfits which may be willing to sell out, particularly where initial investors backed start-ups to take advantage of the Business Expansion Scheme tax breaks and are now looking for a way out.

Prices vary, but for a typical outlay of pounds 1m, Mr Connolly thinks they can secure an audience of up to 800,000 a time. The second strand of the strategy is to attempt to win the licences for Yorkshire and East Midlands, the two largest franchises to be allocated by the Radio Authority next year. Success would involve expenditure on studios and other infrastructure and the intention would be to return to shareholders for the cash.

The potential is undoubtedly there, given the rapid growth in commercial radio advertising. The strength of Independent's management gives it a decent chance to exploit that potential, as yesterday's 17p closing premium to the 100p placing price recognises. But given the risks with any start- up, the shares should not be chased.

News
peopleActress speaks out against historic sexual assault claims, saying things have 'gone quite far now'

Arts & Entertainment
A stranger calls: Martin Freeman in ‘Fargo’
tvReview: New 10-part series brims with characters and stories

Arts & Entertainment
Shaun Evans as Endeavour interviews a prisoner as he tries to get to the bottom of a police cover up
tvReview: Second series comes to close with startling tale of police corruption and child abuse
Sport
Raheem Sterling and Luis Suarez celebrate during Liverpool's game with Norwich
football Another hurdle is out of the way for Brendan Rodgers' side
VIDEO
Life & Style
Guests enjoy food and cocktail parings by Chefs Jimmy Bannos, Jimmy Bannos Jr, Daniel Rose and Mindy Segal with mixologists Josh King and Alex Gara at Bounty & Barrel: A Jack Daniel's Single Barrel Dinner Series at Heaven on Seven on April 9, 2014 in Chicago, Illinois.
news Sprinkle Palcohol 'on almost any dish' for 'an extra kick' firm says...
Arts & Entertainment
Charlotte Brontë, the English novelist, poet and the eldest of the three Bronte sisters who lived into adulthood, has been celebrated with a Google Doodle depicting her most famous novel, Jane Eyre.
arts + ents "Reader, they doodled her".

Arts & Entertainment
Schwarzenegger winning Mr. Universe 1969
arts + entsCan you guess the celebrity from these British Pathe News clips?
News
Portrait of Queen Elizabeth-II by David Bailey which has been released to mark her 88th birthday
peoplePortrait released to mark monarch's 88th birthday
Arts & Entertainment
The star of the sitcom ‘Miranda’ is hugely popular with mainstream audiences
TVMiranda Hart lined up for ‘Generation Game’ revival
Life & Style
The writer, Gerda Saunders, with her mother, who also suffered with dementia before her death
healthGerda Saunders on the most formidable effect of her dementia
Arts & Entertainment
Oxegen in Ireland has been axed as promoters decide it is 'no longer viable'
arts + ents Promoters have axed the event as it is 'no longer viable in current form'
News
The troubled star is set to give fans the biggest insight into her life away from the headlines
people Star made the announcement during the final episode of the programme, entitled Lindsay
News
YouTube clocks up more than a billion users a month
mediaEuropean rival Dailymotion certainly thinks so
Arts & Entertainment
The original design with Charles' face clearly visible, which is on display around the capital
arts + ents
Arts & Entertainment
‘Self-Portrait Worshipping Christ’ (c943-57) by St Dunstan
books How British artists perfected the art of the self-portrait
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Database Team Lead ( Leadership, Sybase, Computer Science)

Negotiable: Harrington Starr: Database Team Lead ( Leadership, Sybase, Compute...

C#.NET Delphi SQL Developer (C#,DELPHI,SQL)

£40000 - £50000 per annum + Bonus+Benefits+Package: Harrington Starr: C#.NET D...

VB.NET SQL Junior-Mid Level Developer (VB.NET,SQL,Excellent com

£25000 - £35000 per annum + Bonus+Benefits+Package: Harrington Starr: VB.NET S...

Trade Support, Application Support, Operations Analyst, CRM MS

£45000 - £55000 per annum + Bonus and Benefits: Harrington Starr: Trade Suppor...

Day In a Page

Rubin ‘Hurricane’ Carter: The man who could have been champion of the world - and the Bob Dylan song that immortalised him

The man who could have been champion of the world

Rubin ‘Hurricane’ Carter and the Bob Dylan song that immortalised him
Didn’t she do well?

Didn’t she do well?

Miranda Hart lined up for ‘Generation Game’ revival
The Middle East we must confront in the future will be a Mafiastan ruled by money

The Middle East we must confront in the future will be a Mafiastan ruled by money

In Iraq, mafiosi already run almost the entire oil output of the south of the country
Before they were famous

Before they were famous

Can you guess the celebrity from these British Pathe News clips?
Martin Freeman’s casting in Fargo is genius

Martin Freeman’s casting in Fargo is a stroke of genius

Series is brimming with characters and stories all its own
How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players