The Investment Column: Allen

PROFITS WARNINGS from larger construction and hire services rivals like Ashtead have of late prompted the market to mark Allen shares down from last year's high of 477.5p. But the shares closed up 17p at 293.5p yesterday on the back of full-year numbers containing not a profits warning but a profits record, after a strong showing by Allen's hire services division. Allen says it is continuing to enjoy sales growth.

The company admitted that building contracting performance was below its expectations. Margins here are around 1 per cent - measly, but no worse than its sector peers.

CSFB expects full-year profits of pounds 19.7m and earnings of 33p per share, putting Allen on a multiple of 9. That is in line with construction companies. However, the valuation fails to take account of the strength of the hire services division. The group also stands to benefit from the increased affordability of housing. Good value.