Investment: Alpha is only for the brave

REDEEMING hostages to fortune is never cheap and rarely inspires confidence. Yesterday Alpha Airports, the airport catering and support group where Harrods is the leading shareholder with a 27.8 per cent stake, paid the penalty after chief executive Kevin Abbott said he had not received a single decent offer for the chain of airport shops he put up for sale in February.

Mr Abbott blamed the deepening impact of the Asian economic crisis on the fortunes of potential buyers. Nevertheless, the planned disposal has now been formally withdrawn, leaving the company in the middle of a credibility crisis.

Mr Abbott originally put the division up for sale in order to raise cash. He argued that Alpha lacked the resources to develop airport retailing as well as its flight catering and ground services divisions. The sale of the one would help finance the expansion of the others.

Alpha now plans to finance the development of all three divisions with the help of a new pounds 100m long-term facility from its major bankers. But after such a dramatic U-turn, shareholders must be asking whether existing management is up to the job. Retailing was the largest single division last year, accounting for 52 per cent of turnover and generating 44 per cent of profits.

The outlook is further clouded by the impending loss of duty-free sales on flights between EU member states. The shares, which shed 8p to 70p yesterday, now trade on barely six times this year's prospective earnings rising to seven in 1999. But given the current uncertainties, the shares are only for the brave.

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