Smaller Companies: Profit potential in Spanish petrol stations

RECOVERY stock fans should take a close look at DC Cook, the motor dealer that also owns a Spanish petrol station development company, Norfolk Espana.

After incurring significant start-up costs last year, the business is beginning to live up to its potential. Norfolk is believed to be close to selling two new petrol station sites.

The sites are likely to command a price of between pounds 400,000 and pounds 600,000 each and should generate a big profit for Cook.

Their disposal will take the number of sites sold by the Spanish business in the last 12 months to five. It is thought to be in talks with buyers for the sale of another seven sites.

Norfolk Espana specialises in identifying promising greenfield sites. It then secures a right to buy and seeks planning permission to develop them into petrol stations. Once permisson is granted, the sites are sold on to big multinationals.

The business is lucrative because Spain's petrol retailing industry has, until recently, been controlled by a state monopoly. At present there are just 4,000 stations serving the entire country, compared with 19,000 in the UK.

Shell, for example, has just 25 petrol stations in Spain at present. Not surprisingly, many oil companies are keen to expand in Spain, but obtaining planning consents is cumbersome and time-consuming.

Last year, Norfolk sold two sites for about pounds 1.7m to an unnamed buyer. The price tag provides some indication of the company's potential, although an average site with planning permission is worth about pounds 400,000.

That said, Cook is well placed to benefit from the deregulation. It has identified about 150 sites for development and has bought the rights to about 27. It has planning permission for a dozen of these locations.

Next month Cook is likely to report a strong recovery in full-year results to 30 April. Albert E Sharp, the Birmingham stockbroker, is predicting taxable profits of pounds 1.25m against a pounds 1.5m loss in 1991. Profits this year are forecast to double to pounds 2.5m, rating the shares - at 38p - on an earnings multiple of 10 times.

Moreover, Cook's net assets per share are estimated at 35p but do not take the potential of the Spanish sites fully into account. A speculative buy.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there