THE INVESTMENT COLUMN: Avoid Carter & Carter for a little while longer

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TAKE YOUR car for its service back to your local Audi, Volvo, Citroen or Peugeot dealership, and the mechanic who does the work may well be an employee of Carter & Carter, the car industry training and sales support company that began trading on AIM yesterday.

C&C is paid by the Government and car manufacturers to train car technicians through 42-month apprenticeships. They are popular courses. Some 17,000 applied for its 2,200 places last year. The long-term nature of the programmes give the company a reliable income stream and there is room for more manufacturer- branded training schemes.

C&C also supplies salesmen to car manufacturers who can sell spare parts and accident repair services. These kind of after-sales services are becoming increasingly important in a rather flat new car market.

The company is promising bolt-on acquisitions and an aggressive dividend from its high cash generation. But Philip Carter, founder of the business, sold pounds 7m in the flotation, which never inspires confidence. At 295p, up from the float price of 235p, they appear to be on a forward earnings multiple of around 16 times, which looks expensive for now. Wait for a few more miles on the clock before taking a ride.

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