The Investment Column: BICC

BICC, WHICH issued a trading statement yesterday, is a changed animal. It has sold its loss-making cables business and from January will emerge as a pure construction and engineering group. It will take on the name of its construction arm, Balfour Beatty, to reflect the new concentration of the company.

Yesterday's statement was pretty unexciting stuff, concluding that "trading conditions for the on-going businesses remain generally healthy". Full- year results are expected to be in line with market expectations, which points to pre-tax profits of pounds 56m.

On the down side, rail maintenance margins remain under pressure and there is a shortage of major project work in most areas. Also, the pounds 50m that BICC was expecting from the cable disposals will not now be received until the next financial year.

Even so, the market likes BICC's new focus and the shares have nearly doubled over the last year.

At 98.5p, down 1.5p yesterday, this leaves the company trading at a chunky rating of 14-times full- year earnings, which is starting to look well up with events.

Analysts point to the many cheaper stocks in a largely bombed out sector. The rise in interest rates has left many housebuilders on absurdly low ratings, for example.

It has to be remembered that BICC's 1999 figures are distorted by the disposals. Looking ahead to the year 2000, when the results will not be dragged down by old businesses, Seymour Pierce, the broker, is forecasting pre-tax profit of pounds 90m. That leaves the shares a lot more attractively priced. Hold.