Hammerson developing into a solid bet
Sunday 14 April 1996
AAF INDUSTRIES last week reported more losses - pounds 953,000 pre-tax for 1995 - but the group seems to have turned the corner at the operating level. Sales almost halved to pounds 23.5m after further disposals, to leave the group focused on system building and scaffolding. The shares fell out of bed in 1993, plummeting to 20p from 217p after the group ran into massive problems. Chairman Alex Brown promises a return to the dividend list, although this will require a capital reconstruction. The shares, now 25p, have perked up recently, and are worth a closer look as an interesting speculative situation.
HUNTING, the defence-to-oil distributor, has suffered much over the years. In the latest results for 1995, it has had to write off pounds 2m owed it by the collapsed Fokker. Otherwise, a pounds 3m loss on a contract to furnish small jets further depressed the figures. The dividend seems to be stuck at 10p, and little prospect of it going much higher. Understandably, the shares, at 215p, reflect this, and have done little over the last three years. Unless and until management can inject some flare, they will remain in that mode. Avoid.
MANAGEMENT at MY Holdings is on the prowl for acquisitions to bolster its packaging businesses - so shareholders can stand to expect a rights issue in the near future. The company has, however, tied up a contract with drug major Pharmacia & Upjohn, for a packaging kit for the pharmaceutical industry. The deal will confirm MY's presence in this niche area, where profits should continue to grow strongly, especially with the trend towards sole-sourcing. Shareholders have been rewarded handsomely over the last year. At 95p, the shares have outperformed the FT-SE 100 by some 40 per cent, and there is further to go. Although subject to cyclical restraints, MY is undervalued by the stock market against its peers. API, for example, trades on a PE of 20 times 1996's forecast earnings, against 14.5 at MY. MY is also entrenched in another lucrative niche: supermarket own-label items. Continued strong growth in con- venience food will continue to support growth in this area. Buy.
FULL-YEAR 1995 figures on Thursday from Bloomsbury Publishing (94p) are likely to show profits of pounds 1m. The shares, however, have taken a pasting in recent months following the collapse of the Net Book Agreement. But Bloomsbury seems to be capable of adjusting to a more vulgar future. It remains in touch with upmarket readers: alongside Emma Thompson's script of Sense and Sensibility, and best-seller Snow Falling on Cedars by David Guterson - too late to have much impact on these figures - there is the much derided Princess in Love, an account of Jamie Hewitt's affair with Diana as told to Anna Pasternak. The fall in the shares is arguably overdone, and assuming there are no howlers, buyers could well be tempted out of the woodwork.
THE PRU has had a remarkable run since the start of last year, and the shares (439p) can now only be described as toppy. The market made much of the news at the last results of talks with the DTI to distribute 'orphan assets' to shareholders. Figures as high as pounds 5bn have been mentioned. But the precise size remains a mystery, and may be far less than some shareholders seem to be anticipating. By contrast, the dividend looks set to grow at no more than eight per cent a year - low for the sector. Sell.
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