City File: The news may not be that good at Midland

SO far, so good for Midland Independent Newspapers, the Birmingham-based newspaper group that floated on the stock market last month. The shares, priced at 140p each, immediately went to a premium after a finely tuned marketing campaign, and have since settled above 160p.

However, beware. According to those close to the battle to buy the company from its previous owners, the two sides involved - Chris Oakley's winning management team and James Plugh - told investors that they could predict operating profits of more than pounds 20m by the end of 1993.

In the event, Mr Oakley's team turned in nearly pounds 16m. Creditable enough, but well short of those projections. With the benefit of the public's money, the group's performance should continue to move forward. But the management's achievements so far may be less of a success story than they appear to be. Perhaps the shares have gone far enough for the time being.

WITH profits predicted to fall by some 26 per cent, excluding a probable provision for mis- sold pensions, shareholders in United Friendly, the life assurance company, may be feeling less than affectionate. In fact, this year's results could hold a number of nasty surprises, including a hefty increase in losses at the underwriting arm and a decline in investment income on the back of falling interest rates.

Nevertheless, money talks. United Friendly may yet win the undying loyalty of its shareholders if it secures permission to return some of the estimated pounds 550m surplus on its investment funds. In March 1993, it asked the Department of Trade and Industry to decide whether that money belongs to the policyholders or the shareholders. Should the shareholders win, they can expect to see dividends boosted considerably.

This might just compensate for a share price that fell from a high of 723p last summer to a low of 545p at Christmas, before climbing back to 600p. Hold, but don't hold your breath.

THE Stock Exchange unusually presented Dick Richardson, chairman of fledgling engineers, Graystone, with a clock after the company underwent no fewer than three re-listings last year.

That is a measure of how fast Mr Richardson, who cut his teeth on Jock Mackenzie's Goring Kerr, is transforming the former hotels-to-flowers group.

Now it is focusing on the sort of engineering that often gets overlooked but can turn a useful penny - such as motorway lighting and electronic controls for car park barriers. Mr Richardson moved in on the former Ptarmigan Holdings in June 1992, and results for the half-year to last December show that the revamp is paying off.

Pre-tax profits were pounds 1.1m, against a comparable pounds 56,000 loss, enabling the group to return to dividends with a nominal 0.1p. Mr Richardson's plans have far to go, so the shares are worth tucking away at 14p.

BUY GOLD Greenlees Trott, the advertising agency that, at 171p, is at its low point for this year.

The agency's shares lost nearly a quarter of their market value two weeks ago, after the company announced its second profits warning in six months and plans to cut its dividend from 8.3p to 5.3p.

But the profits are merely postponed, mainly because a big US client put off a national launch until later in the year. With the economy strengthening, the agency's profits should benefit from its operational gearing.

ACCEPT the GKN cash bid and put the money into GKN shares. That is the advice of stockbrokers Albert E Sharp to Westland shareholders now that the helicopter group's board has conceded defeat.

'Our analysis shows that if the helicopter orders materialise and shareholders support Westland, a 32 per cent increase on investment may be seen,' say Del and Paddy Barrett, Sharp's motors analysts. 'But as part of GKN, the uplife in GKN's earnings would be such that shareholders could enjoy a return of 78 per cent.'

Even if the helicopter orders do not materialise, GKN should still give a return of perhaps 64 per cent.

'An exciting opportunity,' say the Sharp duo. Good advice.