Taking stock of the ups and downs: A mini-conglomerate repeated a success of the Seventies; a jeans maker fell down badly. Derek Pain ranks winners and losers in the 1992 share race - Business - News - The Independent

Taking stock of the ups and downs: A mini-conglomerate repeated a success of the Seventies; a jeans maker fell down badly. Derek Pain ranks winners and losers in the 1992 share race

BROWN & Jackson, this year's best performing share, has the distinction of being a past master at topping the yearly winners' table - back in the late 1970s.

In 1978 it enjoyed a gain of 645 per cent, following up with 366 per cent the next year. In the perhaps more subdued climate of 1992, it has emerged top of a mixed pile of second-liners with a 380 per cent improvement that tends to overstate a gain to just 12p.

B&J's success will be little, if any, consolation to any longstanding shareholder who failed to snatch profits in the glamour years following Jim Slater's fall from grace.

The Slater touch eluded B&J. But it came under the influence of two whizzkid accountants who had clearly felt the influence of the master. Christopher Bailey and Brian Duffy transformed B&J from a dull civil engineering group into a mini-conglomerate, spreading from footwear importing to used car warranties.

But what goes up . . . By 1980 the Bailey/Duffy experience was associated with the stench of burnt fingers. The group plunged into the red, its shares slumped and it had to find the cash to complete many of its early, seemingly enticing acquisitions.

B&J was back in the doldrums. It changed its shape, buying and selling businesses, and with Mr Duffy at the helm achieved in 1989 an astonishing transformation, splashing out pounds 72.2m mostly in shares for Poundstretcher, the retailing chain that formed part of the oft-rescued but in the end spectacular failure, the Lowndes Queensway furniture group.

The Poundstretcher acquisition did not remove B&J's apparently insatiable desire for change. The long-serving Mr Duffy departed, buying - with Mr Bailey and Stephen Boler, another entrepreneur of the 1980s - a security alarms business they had sold to B&J only three years earlier.

Losses hit almost pounds 15m, and to stay afloat B&J had to undergo the inevitable capital restructuring. Another loss is expected but, quite clearly, B&J's share performance indicates its recovery attractions.

TVS Entertainment, about to give up its commercial TV franchise, is in second spot, courtesy of a US takeover bid.

In third position and for a time looking a surefire winner, is one of the most bizarre shares to force its way into the top 10 - Tanjong, once a tin miner, now more like the Ladbroke Group of the Far East. Tanjong maintains the yearly ups-and-downs reputation for promoting the strange, the obscure, even the fascinating.

It does embrace the advantages of being a tiddler among tiddlers - its capitalisation is less than pounds 1m - and having only a token share presence, with London mirroring its Kuala Lumpur share home.

It claims its place on the back of the Far Eastern fascination with gambling.

In the past year or so, it has emerged as Malaysia's favourite legal bookie, running a betting shops chain and promoting a handheld computer gadget that allows punters to tap in their bets without bothering to enter the shops. The Malaysian Tote is also the property of Tanjong; so is the country's National Stud Farm.

Tanjong's world is, however, dominated by illegal, under-the-counter betting. No doubt attempting to obtain its share of the loot through taxes, the Malaysian government appears to be offering more than a little encouragement for the old tin miner to expand.

Illegal betting is estimated to generate more than twice the revenue of the legalised version; hence Tanjong's home- grown potential. But it is spreading to the states of Sabah and Sarawak, and the word on the local grapevine is that it is near to clinching a deal to open up in China, where the addiction to gambling is even more intense than under the palms of Malaysia.

Stockbroker Asia Equity rates the shares a long-term buy.

Bluebird Toys is another that has known past success. Like so many high flyers, it was devastated by the crash of 1987. Before Black Monday, the shares were riding above 500p.

A long decline took them down to 26p last year before hopes of a French takeover bid and a return to profits on the back of such toys as the Big Red Fun Bus and Polly Pocket encouraged the recovery.

Two other stars of yesteryear, Acorn Computer, now controlled by the Italian Olivetti group, and ASTEC (BSR), the old record changer group, are among others to outperform.

There are two common features of the year's top 10. Fallen and forgotten stars have proved the roller-coaster attractions of the stock market, particularly among the second-liners. And in a year when the expected economic upturn failed to materialise, it is recovery plays that have attracted many investors.

So even in a year when the market in smaller shares has shown signs of drying up as many big investment houses cut back, it is still possible to make (and lose) money in the stock market margin.

Just to underline the potential of the tiddlers, Tanjong has the disadvantage of being traded on the new-fangled, much despised and unpopular (with companies and investors) alternative trading market.

Recovery shares lifted from the penny stock basement have dominated the top 10. Huntleigh Technology, a health care group traded on the doomed Unlisted Securities Market, is the best performer, based on trading achievement as opposed to mere, unfulfilled expectations. Yet a 210 per cent gain leaves it in only 12th place.

It is the third company to be developed by Rolf Schild and Peter Epstein. Last year, profits were pounds 2.3m, and pounds 4.6m is expected this year, with a mattress preventing bed sores providing much of the impetus.

The losers, not surprisingly, are small fry - although before they slipped and slithered on the slope of decline and despair, many were powerful companies.

Pepe, the jeans maker down 96 per cent and now the subject of a rescue operation that will take the group out of the quoted domain, has the dubious distinction of leading the ragged remnants of once high-flying successes.

Chemical group MTM, which has performed only marginally less poorly, is in second spot.

However, in a year when a record number of companies went belly-up, it could be argued that the bottom 10 should be regarded as being among the great survivors rather than outright losers.

MTM, hit by a multitude of problems, is in dire straits. Its shares rest uneasily at 15p.

Lightship, once the country's leading pawnbroker, now engaged in US commercial paper broking, and Greycoat, once one of our leading property groups, have also fared very badly.

A bottom 10 appearance must round off a rotten Christmas for Merivale Moore, another property group. On Christmas Eve it was the victim of a hoaxer who faxed a release to the City saying it had gone into receivership.

A 'total fabrication' said the company, which still has the support of its bankers. Merivale Moore is investigating the fake release, but there is little doubt the message ruffled its already nervous shares, pushing them a few pence lower to 12p.

----------------------------------------------------------------- Best and worst shares of 1992 ----------------------------------------------------------------- The winners . . . ----------------------------------------------------------------- Company Price* Percentage rise Brown & Jackson 12.00p 380 TVS Entertainment 30.50p 321 Tanjong 405.00p 305 Chemex International 4.00p 300 Bluebird Toys 138.00p 294 Acorn Computer 38.50p 285 ASTEC (BTR) 35.50p 223 Sleepy Kids 27.50p 223 Gresham Tele 29.00p 222 First Technology 105.00p 218 ----------------------------------------------------------------- The survivors . . . ----------------------------------------------------------------- Pepe Gro 4.00p 96 MTM 14.00p 96 Lightship 11.00p 92 Greycoat 9.00p 92 DG Durham 1.00p 91 Merivale Moore 12.00p 91 High-Point 32.00p 89 Bimec Ind 8.50p 87 Expedier 1.25p 84 Power Corp 16.00p 82 ----------------------------------------------------------------- *Share price at close of trading yesterday -----------------------------------------------------------------

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