Market Report: Great Universal stirs up stock market intrigue

ONCE again Great Universal Stores is intriguing the stock market. On Thursday, the cash- rich mail order group is due to produce its year's profits. Some suspect they will be accompanied by another share-enhancing deal.

Last year, GUS equalised its share structure, giving votes to all. This time there are thoughts that it may hand cash to shareholders through a special dividend, announce a share buy-back programme or float off its property side.

There is even speculation of a bid, perhaps for the Next retailing chain.

GUS, with a pounds 1.6bn cash mountain, is thought to have a break- up value of 700p.

The profits are expected to emerge at pounds 510m, up from pounds 471.4m. For this year pounds 545m is forecast. The shares rose 14p to 567p.

The rest of the market started the last leg of the last trading account in confident form, although best levels were not held as the US dollar failed to retain early firmness. The FT-SE 100 index rose 21.4 points to 2,983.8; just after lunch it was more than 30 points higher.

Government stocks, encouraged by June's producer price figures and steadier Continental bond markets, scored gains of more than one point.

SmithKline Beecham was briskly traded, with Smith New Court said to have moved to place 9 million shares at 398p. The shares fell 5p to 400p.

Royal Bank of Scotland, the subject of a Smith placing last week, remained in the doldrums, falling another 9p to 401p.

It is now widely believed that, after initial difficulty, the Smith shares, thought to have come from Morgan Grenfell, have been placed.

Glaxo was also weak, down 8p to 563p as Eli Lilly, the US group, splashed out dollars 4bn for McKesson's drugs management business. The British group needs to barge into the US managed prescriptions market and was thought to be in talks with McKesson.

There was speculation it might be forced to mount a counter-bid, although its policy has, at least until recently, been aimed at partnership deals.

Inchcape, the international trader, moved ahead 15p to 443p as Panmure Gordon pushed the shares, drawing attention to the possible profit bounce when the dollar recovers against the yen. The sharp advance in British car sales also helped sentiment.

Thorn EMI continued to benefit from demerger rumours, improving a further 14p to 1,053p.

RMC was firm on confident stockbroker comments and what is regarded as the more encouraging outlook for the German economy. The shares rose 12p to 609p, helping to pull Redland 6p higher to 518p.

George Wimpey, the builder, held at 173p; the Abu Dhabi Investment Authority picked up a million shares, lifting its stake to 4.07 per cent.

Mirror Group Newspapers added 4p to 150p, with UBS making positive noises. Pearson and United Newspapers also made headway.

Water shares, with the latest regulatory dictates due later this month, had little difficulty absorbing the attack from the National Consumer Council.

British Airways rose 2p to 421p on recent passenger figures, dragging BAA 14p better to 935p.

GKN, the car components and helicopter group, rose 15p to 603p with NatWest Securities offering much of the support.

A profit warning sent MR Data Management, a computer group, tumbling 33p to 144p and Casket, the clothing and cycle group that produced a profit warning at the start of the month, fell a further 2p to 31p.

Bakyrchik Gold, developing a mine in Kazakhstan, fell 23p to 278p with SG Warburg said to be cool towards the venture. The shares were floated at 120p in August.

Wilshaw, a building products and metals group, slipped 1.5p to 52.5p. Turnover was put at 3.3 million shares, helping to fuel stories of big stake changes.

Northumbrian Fine Foods edged ahead 1p to 13p, responding to director buying.

On the 535 market London Fiduciary Trust was quoted by market maker JP Jenkins at 0.5p.

It has acquired 60.48 per cent of Luxemburg Estates, a mining group, and is offering to buy the rest. For the deal a 1p price has been put on the LFT shares, valuing Luxemburg at pounds 5.67m. LFT is also planning to raise up to pounds 650,000 through a share issue at 1p.

Luxemburg's main asset is the Masara Gold project in the Philippines.

A line of Unit Group shares went through the market. Close Brothers, the merchant bank listed as holding 13 per cent, is believed to have been the seller. Some of the shares went to J Wilton and Harry Sproule, property men, who topped up their stakes to just under 30 per cent. Unit, a pallet maker, is likely to get more involved in property. The shares held at 39p.

Princedale, formerly Craton Lodge & Knight, held at 24p. The marketing group, which last year created an industrial division, is thought to be trading well. It is seen as the new vehicle for Sir Harry Solomon, former chairman of Hillsdown Holdings. Last week Lady Gabrielle Greenbury, wife of Marks & Spencer chairman Sir Richard Greenbury, joined the board.

The FT-SE 100 index rose 21.4 points to 2,983.8 and the supporting FT-SE 250 index 19.3 to 3,473.9. Turnover was 542.5 million shares from 23,211 bargains. The account ends on Friday with settlement on 25 July.

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