The Investment Column: NFC is over the worst
Thursday 04 June 1998
Still, it looks as if NFC is over the worst. It has sold off all its peripheral businesses in order to concentrate purely on distribution and moving services. The cost-cutting that still needs to be done in the UK and continental Europe has been fully provided for, and should be more or less over this year.
Mr Murphy's priority now is on expanding the business in continental Europe and the Americas. Since the cash distribution will take gearing to about 80 per cent by September, there is not too much scope for deals. The company claims that it would be happy to ask shareholders for the money back if the right deal came along, but admits nothing is imminent. So any growth is likely to come from winning new contracts, and further improving efficiency.
In that respect, NFC has a lot to do. Operating margins in the Americas are just 3 per cent while the European business, despite a drastic improvement, is still loss-making and is only scheduled to break even next year. NFC needs more scale so it can spread its overheads, and building that up will take time.
Meanwhile the UK, where profits were up just 4 per cent on flat sales, is unlikely to provide much excitement. Unnervingly, NFC also made cautious noises about tough competition in distribution and weakness in the house moving market.
Analysts are looking for full-year profit figures, before exceptionals, of about pounds 125m. That puts NFC shares on a forward earnings multiple of 16. Mr Murphy is to be congratulated on what he has achieved. But those hoping that the shares will make up the ground they have lost in recent years will be disappointed. Hold.
- 1 Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
- 2 Disney heiress Abigail disowns her share of family profits in West Bank company
- 3 The secret report that helps Israel hide facts
- 4 Israel's propaganda machine is finally starting to misfire
- 5 Zayn Malik on Israel-Gaza: One Direction singer bombarded with Twitter death threats after posting #FreePalestine
Sally Farmiloe dead: Howards' Way actress, and former mistress of Jeffrey Archer, dies aged 60
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Disney heiress Abigail disowns her share of family profits in West Bank company
Australian model Robyn Lawley stages naked protest against huge coal mine seven times the size of Sydney Harbour
Drew Barrymore’s sister Jessica found dead in her car surrounded by 'dozens of white pills'
The secret report that helps Israel hide facts
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
- < Previous
- Next >
iJobs Money & Business
£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...
£450 - £650 per day + competitive: Orgtel: My client, a leading bank, is curre...
£350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...