Bottom Line: Salvesen blown off course again

EXPECT a slight bounce in Christian Salvesen's share price following the savaging it received after yesterday's trading statement.

Looked at closely, the news was not as dire as it first seemed. Salvesen is a solid, conservative company - not one where a black hole is liable to appear.

That said, the market was justifiably aggrieved by the news: Salvesen has been a coming force for some time. It generates high expectations but always seems to disappoint. The strategy implemented by Chris Masters since he took over in October 1989 has been widely applauded but the results are still wanting.

The strategy is to operate as a market leader in complex technical businesses - such as distribution and power supply. The logistics side is progressing well: Dr Masters said Swift Distribution, acquired in October, is outperforming his expectations.

Aggreko, although the source of some of yesterday's problems, has grown strongly over the past two years and a period of consolidation was inevitable.

But it is difficult to see where the food processing business - buffeted by the bad weather - fits into the strategy.

The combination of small factors that blew Salvesen off course suggests that the company is still not tightly focused enough. Dr Masters has work to do to convince the City that the group has what it takes to justify a more exciting rating.