The Investment Column: Aggreko is a winner amid devastation of Katrina

New licensing laws will only add to Luminar's hangover; ProStrakan should be long-term investment

Within hours of it becoming clear that Hurricane Katrina had caused unprecedented devastation, shares in Aggreko had leapt to their highest level in three years. The group is one of the world's biggest suppliers of portable generators and air conditioning units, and its equipment is often in demand in this storm-ravaged region. Dealers reasoned that it would win bigger than ever this year as the authorities and businesses in Louisiana and Mississippi struggle to return to normal.

That proved a lucrative speculation, and the company's assessment of the impact of the hurricane on its operations sent the shares up a further 12 per cent yesterday. Yes, some $3m (£1.7m) of its equipment might have been damaged - particularly that lent for use on oil rigs in the Gulf of Mexico - and the company will have to forego some sales until that equipment is replaced by its insurers. However, this is more than outweighed by the extra demand for its services. "It is likely that Aggreko North America's storm-related revenue in 2005 will be towards the upper end of the historic levels of $6m-$13m," the company said.

Aggreko is already firing on most cylinders. Eighteen months ago, it unveiled a reorganisation that split the group into two: a local, traditional business renting the full range of equipment to customers from a high density of depots; and an international power projects division that aimed to provide large-scale temporary power plants to customers beyond this business's traditional heartlands of Sri Lanka and the Middle East.

It is working. The international projects division has won new military and power company business, and there is strong profit growth in the American local businesses. Only trading in sclerotic economies in Northern Europe continues to disappoint. We tipped the stock in November, and we reckon there is more to come. Buy.

New licensing laws will only add to Luminar's hangover

Luminar, the nightclub owner, delighted shareholders yesterday with news that trading over the six months to the end of August had been flat. Not much to toast, you might think, but shares in the company have been in freefall since the start of the year (when we said avoid) amid fears that clubber numbers and the amounts they are spending are also falling sharply. The high street bars and pubs sector has also been fiercely competitive, and dogged by rising wage and utility bills.

But if Luminar is facing competition now, things are likely to get worse. Many bars are starting to take advantage of changes to the licensing laws that will allow them to open past 11pm. Luminar's venues will lose their prime advantage of being among the few late-licensed joints in town.

There is no sign of improvement at Luminar's ailing Entertainment division, which it failed to sell earlier this year. It has some 100 Jumpin' Jaks and Chicago Rock live music venues, making up about one-third of its entire estate. These will be a drag on the group indefinitely. A refurbishment plan to rename all its venues under its Oceana, Lava, Life and Liquid brands is delivering, but is still some way from completion.

Luminar's healthy cash generation is one bright spot, and the company has been able to reduce debts so that a return of capital might be a possibility. But not enough progress has been made and the risks are still high. Steer clear.

ProStrakan should be long-term investment

ProStrakan doesn't want to be described as Shire II but with Harry Stratford, the founder of Shire Pharmaceuticals, as chairman, and Wilson Totten, Shire's former research head, in the chief executive post, the comparison is inevitable. Shire made it to the FTSE 100 through a string of acquisitions - and ProStrakan intends to do the same. The only difference is that this newly floated venture is also investing heavily in drug research, where there are bigger risks and rewards.

ProStrakan's maiden results yesterday were reassuringly irrelevant. It is buying and building a European marketing infrastructure and so far has only a handful of modest-selling products to roll out in Europe, but there are deals to come.

Shire, of course, enjoyed a stroke of luck in that one of its acquisitions contained a drug that was to turn into one of the US's most important treatments for hyperactive children. ProStrakan has a management that will vet future acquisitions to make sure they are not too risky, and then be able to fully exploit any luck that comes its way.

Worth tucking away for the long term.