Bottom Line: H&C is good value despite banana skins

SELLING its Indonesian plantations last week has put Harrisons & Crosfield in an enviably liquid position to bolster its two core businesses in building materials and chemicals. With a war chest of up to pounds 200m, the new chief executive, Bill Turcan, has ample ammunition to prove that the company has learnt how to make decent acquisitions and create a worthwhile return.

He needs to do so. The record over the past five years since the sale of the Malaysian plantations has been nothing to write home about, with neither the builders' merchant Crossley nor BOCM high on the list of great purchases.

That said, Mr Turcan has moved swiftly to create a more focused business with real recovery potential as the economy recovers, even if the house market is doing building materials no favours. Whether margins near the previous peak can be achieved is debatable, with all the main businesses producing unimpressive returns.

The attraction of diversified businesses is that while one side languishes another is buoyant, but the theory cuts both ways. These interims were spoiled by a collection of banana skins, in the US at the builders' merchant Moore's, in the still problematic pigs operation and at the American chrome business, which took the shine off good performances from Harcros and British Chrome.

The shares do have their attractions, however. Mr Turcan can be relied on not to rush into a hasty acquisition. The dividend also looks as safe as it has at any time during the past five years while it has sat at 9p.

At that level the yield is a well above average 6.2 per cent, which more than compensates for the fact that with minimal cover it is unlikely to grow much for a while. Good, if unexciting, value.