Good news at last from Fisher - Business - News - The Independent

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
John Travolta is a qualified airline captain and employed the pilot with his company, Alto
people'That was the lowest I’d ever felt'
Life and Style
healthIt isn’t greasy. It doesn’t smell. And moreover, it costs nothing
News
peopleThe report and photo dedicated to the actress’s decolletage has, unsurprisingly, provoked anger
Property
Home body: Badger stays safe indoors
property
PROMOTED VIDEO
News
The programme sees four specialists creating what they believe are three perfect couples, based on scientific matchmaking. The couples will not meet until they walk down the aisle together
tvUK wedding show jilted
Arts and Entertainment
US pop diva Jennifer Lopez sang “Happy Birthday” to Gurbanguly Berdimuhamedow, president of Turkmenistan
musicCorporate gigs become key source of musicians' income
Arts and Entertainment
You've been framed: Henri Matisse's colourful cut-outs at Tate Modern
artWhat makes a smash-hit art show
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
filmsDaniel Craig believed to be donning skis as 007 for first time
Sport
Mikel Arteta pictured during Borussia Dortmund vs Arsenal
champions league
Voices
Yes supporters gather outside the Usher Hall, which is hosting a Night for Scotland in Edinburgh
voicesBen Judah: Is there a third option for England and Scotland that keeps everyone happy?
Arts and Entertainment
Pulp-fiction lover: Jarvis Cocker
booksJarvis Cocker on Richard Brautigan
Arts and Entertainment
Robin Thicke and Pharell Williams in the video of the song, which has been accused of justifying rape
music...and he had 'almost no part' in writing it
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

Sales Executive

£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

Payroll & Accounts Assistant

£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...

SQL Developer - Watford/NW London - £280 - £320 p/d - 6 months

£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Senior BA - Insurance **URGENT**

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week