Investment: Consider those that are down but not out

THE STOCK market is littered with walking wounded - companies which have inevitably seen better days and seemingly linger on, merely waiting for their turn to be shovelled unceremoniously into the corporate graveyard.

But a hunt through the disadvantaged can sometimes be rewarding, provided the risk is appreciated and there is an abundance of patience.

I suggest investors take a look at three long-term casualties. Each has had a disastrous run and is still a long way from salvation. But new managements are striving to return the companies to prosperity.

Coburg, as Langdons Foods, arrived on the stock market only five years ago. Its shares came at the equivalent of 17.33p, but have been in near continuous retreat since; they are now 2.37p. The company was split from Plantation & General Holdings which, until the latest cash call, retained a significant interest. It made a modest profit in its first year on the market but has been in the red since.

Konrad Legg, a well-known commodities expert and a former chief of P&G, is the man who is hoping to produce a new brew at Coburg.

In his first report to shareholders he complains about a "long succession of management changes'' contributing "to an ever worsening financial position".

A pounds 1.35m cash call has eased the squeeze and Mr Legg has put through a number of structural changes. But in the first five months of the current year Coburg lost pounds 250,000; it is going to be a long, hard slog for the Legg team.

Ronson is now headed by Victor Kiam, the veteran businessman who liked the product so much he bought the company - not Ronson, the razor business, Remington.

He has been at Ronson, once a brewery called Hoskins, for 15 months, moving in after a dash for growth by former funeral director Howard Hodgson went badly wrong.

Again it's a tale of dismal losses. But the Kiam treatment seems to be working. Losses at the interim stage had been cut from pounds 3.35m to pounds 223,000 allowing Mr Kiam to issue an upbeat trading statement.

He raised fresh capital, offering shares at 1p. They are now 1.125p, still a far cry from the 70p of earlier reigns.

Upton & Southern has a long history of going nowhere. The Southern part of its title stems from the 1970s when it built a property arm in the south; it failed. Upton is the north-eastern department store chain.

The company, which made a disastrous acquisition of the Reject Shops, has managed to get into profits twice in the past five years but it has been in the red for the past two. Its shares bump along at a forgotten 2p.

Unlike Coburg and Ronson, Upton is not relying on its traditional operations for a brighter future. It has been on the takeover trail. The seeds of possible revitalisation were sown in June last year when it acquired control of head-hunters, Garner International.

As the retail side has suffered from the high street downturn the executive search operation has prospered, achieving profits of pounds 179,000 in the past financial year. Andrew Garner is now chairman of the group.

There are plans to sell off the department stores, allowing Garner to stand alone as a quoted operation.

I suspect the company acquired Garner merely as the vehicle for providing the head-hunters with a share quote.

The retail sale is not being conducted from a position of strength; there could well be a case for merely splitting the company into two quoted bits.

As a stand-alone consultancy, Upton, or Garner as it will probably become, could have a fascinating future.

It is doubtful if all three battered shares will throw off their crutches and become more active members of the stock market ... but who knows? No doubt the three chairmen involved think they have the ability and power to make nonsense of the present share price.