Market Report: Hard-pressed TI in upbeat mood

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The Independent Online
TI, ONE of the nation's leading but hard-pressed engineers, produced an upbeat trading statement just as Lehman Brothers, the investment house, made cautious noises about the engineering sector in general and TI in particular.

The shares were the best performing in the mid-cap index, gaining nearly 8.5 per cent to 254.75p. They have been much higher, touching 690p last year; their low point this year was 325p.

The group told analysts trading was "ahead of last year and in line with consensus forecasts". The market is looking for year's profits around pounds 241m, which would compare with pounds 220.6m last time.

Lehman's Colin Crook cut his TI estimate from pounds 239m to pounds 212m. The 11 per cent reduction is in line with downgradings he made for most leading engineering groups.

Lehman also downgraded Fairey, by 6 per cent to pounds 31.9m and by 22 per cent to pounds 30.9m; FKI's year's figure (interim results are due tomorrow) from pounds 155,2m to pounds 147.6m and IMI from pounds 180m to pounds 153m.

GKN was lowered by 9 per cent to pounds 482m; LucasVarity 15 per cent to pounds 349m and Siebe nudged marginally down to pounds 531m. British Steel's expected gloomy statement added to the engineering unease. The steel giant's shares fell 7.5p to 101p. BTR, once a conglomerate now an engineer, hardened 1p to 106p ahead of an analysts' meeting tomorrow.

In thin trading Footsie, inspired by hopes of yet lower US interest rates, rose 47.3 points to 5,510.5p; at one time it was up 77.5. Supporting shares made modest headway; Government stocks were also firm.

Vodafone was the best performing Footsie constituent, jumping 41.5p to 851.5p. Interim results are due today. The market is looking for more than pounds 400m against pounds 298m. A sharp increase in the flotation price of its Greek off-shoot, where it has 55 per cent, also filtered through.

Cable & Wireless was active, up 22.5p to 687.5p, on its European expansion drive, which aims at doubling income from corporate customers each year for the next five.

British American Tobacco puffed another 14.5p higher to 530p on growing confidence US litigation will be less damaging than at one time seemed likely.

National Power fell 8p to 541p as its decision to delay its interim results, due tomorrow, generated confusion. Most suspect the week's postponement is to allow NP to put the final touches to a deal. It could be selling coal-fired generators or mounting a take over bid for an electricity distributor; London Electricity could be its target.

Asda, the superstores chain, fell 5.75p to 157p, in part reflecting stories its chief executive, Allan Leighton, could join Marks & Spencer, unchanged at 448p as its search for a new chief executive continued. But the supermarket chains were also ruffled by stories of a beer price war. Tesco fell 7p to 171.5p and J Sainsbury 20p to 510p. The beerage was also flat with Bass off 21.5p to 760.5p.

Marston Thompson & Evershed, the Pedigree brewer, ended 17p weaker at 226.5p after touching 210.5p. It rolled out flat interim figures and is pressing ahead with securitising most of its tenanted pubs. It said the Wolverhampton & Dudley Breweries, which last week expressed an interest in merging, has yet to make an approach.

Elsewhere on the bid front Abacus Recruitment, recently the subject of an aborted US bid, jumped 42.5p to 177.5p; it is the first take over target for Michael Ashcroft's new vehicle, Carlisle.

Barbican Heathcare rose 20.5p to 80.5p as a bidder hovered and Dagenham Motors accelerated 18.5p to 143.5p on the prospect of a bid from the newly created Ford/Jardine Matheson joint venture.

Unigate's disappointing performance lowered the shares 21.5p to 502p and took the edge off of other groups such as Northern Foods, down 7.5p to 167.5p.

Tomkins, the buns to guns conglomerate, fell 5.5p to 273p; a presentation is due tomorrow, but the prospect of arms litigation in the US is unsettling sentiment. Unilever, taking analysts to see its Brazilian operations, hardened 9p to 639p.

Phytopharm, raising pounds 2.2m through a placing at 145p, shaded to 149.5p. Bensons Crisps was cut 1p to 33.5p. As the market closed it said it had arranged a sale and leaseback of its factory at Kirkham, Lancashire, for pounds 6.2m. The cash will be used to pay off the mortgage on the property, developing the business and continuing share buy backs.

GR jumped 17.5p to 60p. The group runs a health farm and sells sheepskin shoes; it is valued at pounds 5.6m and the last trade in its shares was in July.

Cranswick, the food group, put on 8p to 262.5p; HSBC reckons the price should be 360p.

SEAQ VOLUME: 672 million

SEAQ TRADES: 63,865

GILTS INDEX: 112.01 + 0.10

BEAUFORT, with interests spreading from management to sports sponsorship and marketing consultancies, produced interim profits of pounds 218,000 against pounds 68,000 for the whole of last year. Profits for this year could emerge at around pounds 500,000. With pounds 1.3m in the bank, the group is back on the acquisition trail and a Continental takeover could be completed soon. The shares rose 0.5p to 2p; they have been 4.5p.

ACTIVITY IN Tate & Lyle suggests corporate action could be near. The shares jumped 28.75p (after 37p) to 378.75p in admittedly moderate trading. T&L has suddenly become a highly volatile share, with price gyrations much more significant than in the past. The shares are well below their 580p peak and if a takeover marauder is hovering he is unlikely to wait much longer. The price was 288p last month.

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