SHARES: Fallen wonder stock to bounce back

CITY TALK

FORMER wonder-stock Blenheim Group may be on the mend. Despite a further fall in pre-tax profits at the half-way stage, by 32 per cent to pounds 13.1m, the exhibition organiser may have reached the bottom of the downward spiral it has found itself in over the past few years.

New finance director John Hunt joins from stockbroker BZW, where he was vice-chairman of corporate finance. Losses in the French arm seem to be under control, while a cost-cutting programme is almost finished.

The upshot is a company that could be in reasonable shape to claw back some of the lost ground of the past two years, following a dismal series of profits warnings and missed forecasts.

The shares, at 238p, are well off their peak of pounds 5.93 reached in 1993. But recovery is in the wings. Buy.

WHEN it was relaunched in 1993, St James's Place Capital was one of those quiet but classy acts that attracted a strong fan club. But it has since slipped out of favour.

Jointly chaired by insurance grandee Sir Mark Weinberg and Lord Rothschild, the company specialises in life assurance and specialised fund man- agement. But stockbroker BZW reckons the good times could be back again and tips the shares as a buy. It says the fee the group earns for managing the quoted investment trust, RIT Capital Partners, looks set for strong growth this year. And despite good market conditions and an 8 per cent rise in the insurance sector, the shares have made little progress.

SHARES in mini-merchant bank Close Brothers have been a steady, if unspectacular, investment in the past. Friday is the closing date for its one-for-five rights issue to raise pounds 53.4m. Most of the funds are earmarked for the bank's rapidly growing loans book, currently worth pounds 492m, which represents a trebling in value over five years.

Some shareholders may have been put off by stories of all four executive directors not taking up their rights, despite cashing in options that netted them several million pounds in profits. But the shares were sold to Caledonia Investments, Close's largest shareholder.

After taking up its rights, its stake will rise to 25.1 per cent from 22.3 per cent. Given that vote of confidence, and a decent profits record, shareholders should take up their rights.

AT 100p, Clinton Cards is at its high for the year, after dropping as low as 70p in May. Nevertheless, that is still a long way off the 170p it stood at 18 months ago. But the group is aggressively developing new avenues of growth; the recent perkiness in the shares reflects improving confidence about its prospects.

In September, it bought 112 shops from Carlton Cards for pounds 3.25m, and Clinton chief executive Don Lewin is confident he can turn around the new acquisition's pounds 700,000 losses.

Last year, it bought the Hall of Cards chain, and it now has an 11 per cent market share - and almost all the specialist retail market.

There are fears Lewin may have bitten off more than he can chew, but the two chains fit well. Buy.

FLOATED at 108p last year, UPF has been a highly successful investment, with the shares now at 165p. The company claims to be Europe's leading producer of four-wheel-drive chassis frames and has just made its first foreign acquisition.

It will pay pounds 8.4m in cash for Bellino, a German metal pressings and fabrications company for the automotive industry. Bellino arose as an opportunity after its parent went into receivership in 1993. But the part UPF is buying makes a profit, with pounds 134,000 on sales of pounds 9.95m for the year to the end of 1994. Some pounds 2.8m of the purchase price will be goodwill.

Chief executive Keith Evans said the acquisition would provide the group with direct access to the big German automotive manufacturers, and the wider European marketplace. The shares still offer good value.

SHARES in Derwent Valley Holdings, a specialist investor in central London commercial property, were on the move after it announced an pounds 18.2m acquisition of 15 properties from the Co-operative Insurance Society. The deal was accompanied by a pounds 20.6m placing and an open offer at 275p a share. It is Derwent's fifth in two years, for a total of 30 properties, at a cost of pounds 100m. At 301p, expect further gains in the shares in the months ahead.

SELL is the verdict of broker Charles Stanley on blue-chip beerage stock Scottish & Newcastle. Its analyst reckons the deal with Courage is overrated. Although the Monopolies & Mergers Commission required only minimal undertakings, it is debatable if the deal will actually benefit the company. Closing capacity will see restructuring costs, and the company will probably have to lower beer prices to gain market share.

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