Williams starts reconstruction

City Talk

Over the past few years, Williams Holdings (339p) has been stuck in a rut, but the disposal of its UK building products could give its shares a much-needed fillip. So will the move herald a change in fortune for shareholders? The answer is a qualified yes. If the pounds 303m in cash is re-invested wisely, Williams should be able to consolidate further its fire protection and security arms, which offer higher rates of growth.

Meanwhile, the building products arm in North America is well placed to benefit from a pick-up in economic activity. The group can also start to shake off the tag of conglomerate, and be seen as a more focused industrial group. Buy.

COULD Wainhomes (100p) - victim of a stock valuation debacle in January which involved police interest - be one of the cheapest stocks among the housebuilders? That is the view of the research desk at NatWest Securities, which believes the shares represent better than average value.

For those attracted by the prospect of a quick profit, they warn it will take time for the share price to cast off the problems of the past. Evidence of the damage is reflected in NatWest's forecasts, with the dividend stuck at 4.5p. Forthcoming interims from the group, however, are likely to convey an upbeat message. A speculative buy.

THE debate over pay-per-view TV has diverted attention away from results on the pitch, to the likely impact on the bottom line of football clubs. It is clear that clubs stand to pick up a major windfall.

Stockbroker Greig Middleton has analysed the possible effect on two of the quoted clubs, Manchester United (572.5p) and Tottenham Hotspur (579p). Using what it claims are conservative scenarios, it sees at least 250,000 people each pay pounds 9 for the privilege of watching Manchester's dozen top games of the season, with lower charges for the less popular encounters. That would bring in revenue of pounds 16m. With 750,000 punters paying to watch a game on digital TV, revenue leaps to pounds 50m. Greig Middleton says the shares are worth at least 678p - and could be worth as much as 900p.

At Spurs, they see an extra pounds 12m kicker from pay-per-view, to value the shares at pounds 7. Although it is questionable if clubs can expect audiences to consistently come in at 50,000-plus for each game, there is no doubt it will have a major impact on football's finances. Buy.

IN the week when the markets lurched, it seems to make sense to recommend a sell, if only to catch the bearish mood. With sterling still riding high, one loser will be Glaxo Wellcome. The shares, currently at 937.5p, trade on a deserved premium to the rest of the market. However, there seems to have been little recognition of the impact of a higher sterling exchange rate on the bottom line. It seems reasonable that the current strength will lop a few percentage points off this and next year's profits.

The group will also suffer from sharp declines in its sales of Zantac, the ulcer drug, and Zovirax, the shingles and herpes treatment, in the US, as these products come off-patent.

AS the Bank of England announced the biggest shake-up in the money markets for 100 years, and the abolition of the old-style discount house, one of their number, Cater Allen (384p), seems well-insulated. The group has pounds 30m to expand its retail business, which covers a growing offshore banking business on Jersey and the Isle of Man.

The group should also benefit from interest rate uncertainty in its gilts division, and has established itself in the burgeoning gilts repo market. On a 10 per cent yield, the shares are a snip.

MARSTON, THOMPSON (262.5p), the brewer, has underperformed the market by a remarkable 22 per cent since it reported respectable full-year results in July.

With the Pitcher & Piano theme bars now under its roof, having made a first time contribution of pounds 350,000, and plans to double their number to 22 by the end of next year, expansion remains firmly to the fore.

A progressive dividend policy adds to its attractions. Buy.

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