Pilkington makes breakthrough

A WEIGHTY piece of research from stockbroker Societe Generale Strauss Turnbull states that Pilkington, the glass manufacturer, has changed dramatically over the past year, and the shares are undervalued. A sleeping giant, it says, is finally awakening.

One of the significant changes it highlights is Pilkington's move into developing markets. It is constructing or acquiring plants in Brazil, Argentina, Chile, Poland and China, which will leave it with over a quarter of its production coming from emerging markets.

Analyst Howard Proctor also highlights the retirement of chairman Sir Anthony Pilkington, bringing to an end five generations of family involvement. His replacement, Nigel Rudd, will bring a further dynamism to play. The shares, at 193p, are attractive for long-term investors, while there is scope for continuing dividend growth.

INVESTORS lucky enough to buy into Zotefoams when it floated at 145p in March have had an extraordinary ride. The former BP subsidiary, bought out from its parent three years ago, now stands at 263p.

With that sort of gain, the results announced by the company last week are probably not enough to ensure continuing institutional support. The foam-maker made pre-tax profits of pounds 3.5m, up from pounds 2.39m. Despite this healthy growth, a current price/earnings ratio of 26 suggests the shares are ripe for profit-taking. Sell now, while good profits are still to be had.

RESULTS from Royal Insurance (348p) shone in comparison with mixed figures from its peers, after it announced record interim profits - pre-tax up 26 per cent to pounds 241m - suggesting every chance of a swollen final dividend. According to calculations by broker BZW, a projected net asset value of 388p by the year-end means the shares are still cheap on this basis alone. On a strong US earnings bounce, it says, they look even cheaper. Buy.

BESPAK, a maker of medical devices such as drug inhalers and tools for keyhole surgery, has attracted positive notices for its new dry-powder inhaler, developed especially for Glaxo. The gizmo allows a more accurate dosage of particular drugs to be delivered to the patient, in a less wasteful fashion than with previous inhalers.

While the company has been busy gearing up on this product, it should also be helped by an improvement in the US healthcare market, as it comes to terms with President Clinton's reforms, and stocks are wound down.

Disappointing results from the US business should be behind management by now, and the shares, at 333p, have good recovery potential. Buy.

NEXT WEEK it is the turn of the ageing lion Hanson to report its third- quarter figures. They will give the markets important clues as to whether the company is back on song, or if it remains less than the sum of its parts. The remedy for companies like this in the old days was to bid for them and break them up, selling off overvalued assets, and keeping those with strong cashflows.

NatWest Securities forecasts pre-tax profits of pounds 325m for the third quarter, against pounds 282m last year. The market expects little to change the shares' underperformance over the past year or so, however. The bid for Eastern makes sound financial sense, especially for the tax breaks, but is otherwise only more of the same: safe earnings, with some potential of reasonable growth. There is little resemblance to the classic Hanson break-up play of old. Buy for the safe income.

PROFITS warnings are nearly always gruesome affairs, for shareholders and management. Rexam's announcement last week that it was suffering from customer destocking was no exception. Management credibility took a further knock, and although Rexam has issued unduly pessimistic forecasts in the past, this is no consolation for investors, who saw the value of their holdings plummet by almost 20 per cent.

The company meanwhile is taking some long-overdue action to improve customer liaison, and will have to run down its own stocks in turn. The question is, do the shares have scope for some recovery, or do they remain a sell? There will almost certainly be a speculative bounce in the next few weeks, but there is little to suggest the risks have been fully accounted for at 425p. Avoid.

News
The surrealist comedian at the Q Awards in 2010
people
News
Russell Brand arriving for the book launch in East London
peopleRussell Brand cancels his book launch debate due to concerns about the make-up of the panel
Sport
Christiano Ronaldo enjoys his opening goal
champions leagueLiverpool 0 Real Madrid 3: Ronaldo and Benzema run Reds ragged to avenge thrashing from their last visit to Anfield
Arts and Entertainment
Awesome foursome: Sam Smith shows off his awards
music22-year-old confirms he is 2014’s breakout British music success
PROMOTED VIDEO
Life and Style
Six of the 76 Goats' cheese samples contained a significant amount of sheep's cheese
food + drink
Arts and Entertainment
Contestants during this summer's Celebrity Big Brother grand finale
tvBroadcaster attempts to change its image following sale to American media group
Extras
indybest
Arts and Entertainment
Sir Nicholas Serota has been a feature in the Power 100 top ten since its 2002 launch
art
Arts and Entertainment
Sarah Dales attempts to sell British Breeze in the luxury scent task
tvReview: 'Apprentice' candidate on the verge of tears as they were ejected from the boardroom
News
Call me Superman: one of many unusual names chosen by Chinese students
newsChinese state TV offers advice for citizens picking a Western moniker
News
ebooksAn unforgettable anthology of contemporary reportage
News
Wilko Johnson is currently on his farewell tour
people
Voices
New look: Zellweger at Elle's Women in Hollywood awards on Monday
voicesRenée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity, says Amanda Hess
News
Let’s pretend: KidZania in Tokyo
educationKidZania lets children try their hands at being a firefighter, doctor or factory worker for the day
Life and Style
CHARGE BOOSTER: Aeroplane mode doesn't sound very exciting, but it can be a (phone) hacker's friend. Turning on the option while charging your mobile will increase the speed at which your phone battery charges
techNew book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone
Arts and Entertainment
Julianne Moore and Ellen Page are starring together in civil rights drama Freeheld
film
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

IT Systems Business Analyst - Watford - £28k + bonus + benefits

£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...

Day In a Page

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?