Investment Column: Great Portland builds on London demand

888 Holdings; Howden Joinery


Our view: Buy

Share price: 436.1p (-3.5p)

The last time we looked at Great Portland Estates, we decided to keep backing the property firm.

Our continued confidence was down to what we saw as a robust half yearly update that evidenced rising valuations thanks to the company's strength in the capital's West End.

Fast forward to yesterday, and Great Portland issued its valuations for the quarter to the end of June. And the result, once again, was encouraging, with the portfolio valuation up a healthy 3.8 per cent since the end of March. That works out to an nice uplift of nearly 15 per cent since the end of June last year.

Rental value growth was also strong, and was the growth in net asset values, which, at 375p, were up by 27 per cent in year-on-year terms on the European Public Real Estate Association benchmark.

The figure beat some analyst forecasts, and confirmed Great Portland's strengths.

The gains reflect the appetite for central London commercial property, with chief executive Toby Courtauld saying that investor demand had "continued unabated during the quarter".

Echoing the view among others in the sector, he added that "with limited supply, we expect much of it to remain unsatisfied for some time to come". "A key mainstay behind this demand is investor expectations for further rental growth as the supply of available space to let falls faster than its rate of replenishment," he explained.

All this suggests that, far from running out of steam, Great Portland remains well placed to keep notching up gains. But is the stock now too expensive to keeping buying?

Evolution Securities, for instance, has a net asset value forecast of 400p for March next year, and 432p for 2013. But before the bears start grumbling, we'd point out that Great Portland boasts an enviable portfolio of prime London property, which, along with the prevailing demand trends, more than warrants the premium rating.

Another point to note is the positive sentiment around property companies in general, something that Great Portland, as one of the stronger players, is well placed to draw stream from. This one still has room for upside gains, in our view.

888 Holdings

Our view: Buy

Share price: 34.75p (+1.75p)

The online gaming firm 888 looks set to increase annual profits on the back of strong performances from its casino and poker businesses. Yesterday, it delivered an encouraging second quarter trading performance with revenue climbing 29 per cent year on year to $79m from £61m in the same period last year.

First half revenues look healthy with an 18 per cent rise to $154m, from $130m in the first six months of 2010. The company was confident enough to suggest that full year results will be "marginally ahead of current market expectations".

Significant investment in its poker platform has helped to increase poker revenues 58 per cent over the year to $13m. But the bulk of revenue was once again produced by the firm's casino division, which grew 34 per cent to $36m. Customer numbers are also pleasingly up.

The share price has slipped since April when takeover talks with Ladbrokes collapsed, but analysts are now targeting around 51p compared to last night's closing price of under 35p.

There remain concerns that it could be a big loser from moves to introduce a remote gaming tax in the UK in 2013 but, despite that, its positive prospects make it a buy.

Howden Joinery

Our view: Hold

Share price: 114.4p (+7p)

Ever since it changed its name from Galiform last September, Howden Joinery has been a steady winner.

A major component of the group's success has been the fact that it only supplies kitchens to builders rather than being involved directly in the retail market, something which has helped it through the recession.

Yesterday, it posted a near 10 per cent rise in first-half profits, and the fact that it remains on track to meet expectations is encouraging, given the challenging economic backdrop.

While it true that the weak sentiment around the consumer will continue to weigh on the shares for the near-future, Howden looks well placed for the long term.

So, hold for now, as economy is weak, but we would happily buy on weakness.

Arts and Entertainment
The cast of The Big Bang Theory in a still from the show
tvBig Bang Theory filming delayed by contract dispute over actors' pay
Sport
England celebrate a wicket for Moeen Ali
sportMoeen Ali stars with five wickets as Cook's men level India series
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Travel
travel
PROMOTED VIDEO
News
Robyn Lawley
people
News
people
News
people
News
i100  ... he was into holy war way before it was on trend
Life and Style

Between the 25-27th of July, Earls Courts’ gloomy interior was doused in shades of bubblegum and parma violets as it played host to Hyper Japan, the venue’s annual celebration of anime, art, Kawaii street fashion and everything that encompasses the term J-culture. Bursting with Japanese pop culture and infused with Asian street food Hyper Japan is an invigorating culture shock that brings cosplayers, creatives and gamers like myself from across the globe.

Life and Style
lifeDon't get caught up on climaxing
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Life and Style
food + drinkVegetarians enjoy food as much as anyone else, writes Susan Elkin
Arts and Entertainment
Harry Potter (Daniel Radcliffe), Hermione Granger (Emma Watson) and Ron Weasley (Rupert Grint)
newsBloomsbury unveils new covers for JK Rowling's wizarding series
News
scienceScientists try to explain the moon's funny shape
Sport
Usain Bolt confirms he will run in both the heats and the finals of the men's relay at the Commonwealth Games
commonwealth games
News
peopleHowards' Way actress, and former mistress of Jeffrey Archer, was 60
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

1st Line Support Technician / Application Support

£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

Team Secretary - (Client Development/Sales Team) - Wimbledon

£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

Accountant / Assistant Management Accountant

Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

Senior Investment Accounting Change Manager

£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

Day In a Page

Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

The day America’s love of backyard tigers led to a horrific bloodbath

With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

How Samuel Beckett became a French Resistance spy

As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
We will remember them: relatives still honour those who fought in the Great War

We will remember them

Relatives still honour those who fought in the Great War
Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

Kodak's last-ditch bid to keep celluloid alive

Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

Acting in video games gets a makeover

David Crookes meets two of the genre's most popular voices
Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

Could smartphones soon be diagnosing diseases?

Health Kit and Google Fit have been described as "the beginning of a health revolution"
Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

Can we learn to love Ryanair again?

Four recent travellers give their verdicts on the carrier's improved customer service
Billionaire founder of Spanx launches range of jeans that offers

Spanx launches range of jeans

The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
10 best over-ear headphones

Aural pleasure: 10 best over-ear headphones

Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

Commonwealth Games

David Millar ready to serve up gold for his beloved Scotland in the end
UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

UCI Mountain Bike World Cup

Downhill all the way to the top for the Atherton siblings
Save the tiger: The animals bred for bones on China’s tiger farms

The animals bred for bones on China’s tiger farms

The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

A former custard factory, a Midlands bog and a Leeds cemetery

Introducing the top 50 hidden spots in Britain
Ebola epidemic: Plagued by fear

Ebola epidemic: Plagued by fear

How a disease that has claimed fewer than 2,000 victims in its history has earned a place in the darkest corner of the public's imagination
Chris Pratt: From 'Parks and Recreation' to 'Guardians of the Galaxy'

From 'Parks and Recreation' to 'Guardians of the Galaxy'

He was homeless in Hawaii when he got his big break. Now the comic actor Chris Pratt is Hollywood's new favourite action star