170604 p01 Cover 6/14/04 3:41 PM Page 1

CHEAP AT THE PRICE

Spotting bargain assets
LEAN, MEAN & GREEN
Why ethical makes sense
ANALYST WATCH
Who's getting it right?
3.20 WEEKLY | VOL 6 ISSUE 25 | 17 - 23 JUNE 2004

25

9 771468 110051
170604 p03 Contents&Eds 6/15/04 5:09 PM
17.06.2004
20 ANALYSIS
Lean, mean & green
Ethical or socially responsible investment
isnt just for tree-hugging sandal wearers.
Its about picking stocks which are going
to perform. Piper Terrett reports on the
good, the bad and the many shades in-
between.
23 LONG-TERM INVESTOR
Cheap at the price
Keeping an eye out for a bargain makes
good sense for anyone interested un
buying shares. Peter Webb explains how
he goes about it and the signals he looks
for which suggest a stock is too cheap.
Companies, regular features: more contents on page 4
Daily news updates from the Shares editorial team appear on our website moneyam.com
Page 3
16 COVER STORY
Smart sector
selection is the
secret!
Do what the professionals do: by
diversifying intelligently across
market sectors your portfolio
performs well in the good times
and rides out the bad times. Chris
Bourke explains and offers a
Master Portfolio
22 INTERVIEW
Sector secrets
Tony Sarin ran away from Bollywood
to become an accountant. Some
investors in Numerica, the AIM-listed
company he founded, might wish he
had stayed. Now Sarin is starting up
again with a new venture.
38 ANALYST WATCH
After the Shell-shock
Who are the canny analysts who
tipped Shell when it was down and
struggling following the first wave of
the proved reserves scandal? Jeremy
Lacey checks whos getting it right at
the brokers.
CONTENTS
...from
the editors desk
T
here were two
heavyweight
statements
delivered this
week which look closely
connected. Coincidence? I
think not.
Mervyn King, Governor
of the Bank of England, came over dour about
house prices and interest rates, warning that
if you buy now you could lose money. Sir
Richard Sykes, the GlaxoSmithKline ex-
chairman advising the government, set out
on a campaign to get investors back to the
stock market and stem the perceived savings
crisis. Leave aside the guvnor's not-terribly-
successful record at calling house price
trends. But what of Richard Sykes's point that
the property boom has been partly to blame
for the public's lack of enthusiasm for equity
investment?
I find it patronising when these people
pontificate about where we should be
putting our money. As intelligent adults we
are entitled to look at the different asset
classes and decide for ourselves where to
invest. If we get it wrong, nobody is going to
bail us out, after all.
If people choose to invest more in
property, could it be because they have taken
a rational look at returns from the stock
market, the performance of the life insurance
industry and the thievery of the government
and worked out where they are better off?
The solution is simple: the government
should start by abolishing stamp duty on
share transactions; then restore and improve
the tax credits on ISAs and investment by
company pension schemes; then think up
some new incentives to get institutions and
individuals back into the market. Finally,
guarantee the regime won't be tampered with
for at least 100 years.
But if house prices do fall sharply, the first
concern of Shares readers may well be what
happens to the share prices of building
companies. Logically their margins would
come under pressure, but I suspect the niftier
among the builders will be able to make up
for this by increasing sales at the newly
affordable lower end of the market. More on
this subject in next week's issue.
17 June 2004 3
170604 p4 Contents 6/15/04 5:54 PM Page 4

CONTENTS

COMPANIES REGULARS
e-mail: editorial@shares.msm.co.uk
tel: 020 7378 7131
fax: 020 7378 6605
10 Price cuts and the rest 06 Plays of the Week
Delivery enquiries: Things aint quite so lovely-jubbly for
shareholders in Sainsbury, who could face a Best investment ideas from the
delivery@shares.msm.co.uk Shares team
Subscription/back issues cut in the dividends on top of all those
tel: 01444 475 661 management changes. Looks as though Sir
www.moneyam.com Peter Davis swansong at the AGM next 10 Shares Uncovered
moneyam helpline: 0870 770 8300 month will be more like a death rattle. Latest stock opportunities and news
EDITORIAL 14 News Focus
Editor Our views on the big stories
Jeremy Lacey
Deputy Editor
Polly Fergusson
14 Knock knock 24 Small Shares
Investment Editor
Criticism of the 'bully boy' tactics of door-to- News, views and profiles
Timon Day door credit lenders could be a stab in the
Growth Companies Editor back for Provident Financial, Cattles and 30 Upcoming floats
Tim Freeborn London Scottish Bank, although it is unlikely Focus on the IPOs
Companies Editor to ruin them. Jonas Crosland reports.
Steven Frazer
Small Companies Editor 32 Special Situations
James Quinn Takeovers & rights issues
Features Editor
Emma-Lou Montgomery
Senior Reporters
33 The Chartist
Jonas Crosland John Marshall 25 Island paradise David Jones spots the key signals
Reporters A brand new commercial radio station based
Piper Terrett Emily Parkinson in the Isle of Man has attracted a more than 36 Brokers Tips
Chris Bourke its fair A-side of attention, with rivals Capital Shares tracks the analysts ideas
Technical Analyst Radio and the Wireless Group wanting a look-
David Jones
Head of Production in and joining rock star Gene Pitney and Yes! 38 Analyst Watch
John Perkins Frontman Rick Wakeman. Tracking who gets it right
Chief Sub Editor
Danile Vautrat 39 Directors Dealings
Designers Inside track on board buys and sells
Quentin Radburn Jeff Duncan
Sub-Editor 41 Stalking the 40 On the Horizon
Nick Eisen shareholders Plan ahead for upcoming events
COMMERCIAL Certain shareholders in Hunting will have to
Publisher give up their shares for a paltry par value. Is 41 Investors Champion
Mark Van de Weyer this fair or should they have read the fine Into bat for the private shareholder
Marketing Manager detail before buying? Emily Parkinson weighs
Michael Shannon
Group Advertising Manager
up the options for investors. 46 Strategies
Paul Jacobs Digging the data for share ideas
Advertising Representatives
Liam Williams 47 Tables & Results
Advertising Director 52 Freight fever
David Motum
Consolidation is set to hit the logistics sector 64 Derivatives
with Tibbett & Britten first to attract a takeover Spread betting, CFDs, options
bid from a mystery foreign raider. The shares
Managing Director have received a boost but watch out for rivals 73 Next Week
Mike Boydell Christian Salvesen, TDG and Wincanton Meetings, ex-dividend information
Business Development Manager
they could be next to fall.
Angela Lopez
Developers 74 Letters
Felix Dilke Geoff Drummond
City Editor
Kam Patel
Customer Support Manager Subscription/Back issue enquiries/Delivery enquiries
Ian Taylor
Systems Administrator Quadrant Subscription Services UK Subscription rates (1st Class Mail): Back issues: 3.95 (UK), 4.95 (overseas).
Jonathan Tullett Rockwood House, 118 one year; 225 two years;
Perrymount Road 26.99 quarterly by direct debit. QUARTERLY INDEX
Printed by St. Ives (Andover) Ltd, Haywards Heath, Overseas subscription rates (priority mail) Available on
Distributed by Marketforce (UK) Ltd, West Sussex RH16 3DH per year: 189 Europe/North America,
Shares Magazine section
Fifth Floor Low Rise, Kings Reach Tower, Telephone: 01444 475 661 209 Rest of World.
Stamford Street, London SE1 9LS.
Telephone: 020 7633 3300 Guidelines for share ownership
Shares magazine (ISSN: 1468-1102) is 1 In keeping with the existing write about the interest, it 2 Reporters will inform the should be confirmed by e-mail. positions for one month before
published weekly every Thursday (51 practice, reporters who intend should be disclosed to readers editor on any occasion that 3 Reporters are required to the publication of an article that
times per year) by MSM Magazines Ltd, to write about any securities, at the end of the story. Holdings they transact shares, derivatives hold a full personal interest mentions such interest.
Thames House, 18 Park Street, London derivatives or positions with by third parties including or spread betting positions. register. The whereabouts of Reporters who have an interest
SE1 9ER. Company Registration No: spread betting organisations families, trusts, self-select This will overcome situations this register should be revealed in a company they have written
that they have an interest in pension funds, self select ISAs when the interests they are to the editor. about should not transact the
3733852. ISDN: 020 740 3423. Member, should first clear their writing and PEPs and nominee considering might conflict with 4 A reporter should not have shares within one month after
Audit Bureau of Circulations Ltd. with the editor. If the editor accounts are included in such reports by other writers in the made a transaction of shares, the on-sale date of the
All Shares material is copyright. agrees that the reporter can interests. magazine. This notification derivatives or spead betting magazine.
Reproduction in whole or part is not
permitted without written permission Disclaimer
from the editor. Shares staff may hold shares in some of the securities written about in this magazine. All shareholdings will be disclosed where it may represent a potential conflict of
12,386 Jul 02-Jun 03 Average interest. Information and tips included in Shares magazine are general information only and are not intended to be relied upon by individual readers in making (or not
Net Circulation making) specific investment decisions. Appropriate independent advice should be obtained before making any such decision. Shares magazine, its staff and MSM
Magazines Ltd do not accept any liability for any loss suffered by any reader as a result of any such decision.

4 Shares
170604 p05 Cos Index 6/15/04 5:34 PM Page 5

COMPANIES INDEX

125 COMPANIES
IN THIS ISSUE
+ Positive \ Neutral - Negative
Number given indicates the page on
which the company is mentioned
The Shares index shows you whether the reporters comments on companies are broadly positive, neutral or
negative. They do not necessarily correspond with opinion that the companys shares are good value or poor
value. In some cases companies may appear more than once in the magazine with apparently conflicting opinion,
Take
which can be the result of reporters writing about the same company from different standpoints.
Abbey National
AIT
ANL
AGP
/
+
11
6
Gallaher Group
Geest
GLH
GET
/
+
34
12
Peter Hambro
Planestation
POG
PTG
+
+
37
13
control
Alliance & Leic.
Applied Optical
Arla
AL.
ALT
ARU
+
-
+
16
59
47
Genus
GMA Resources
H.R. Owen
GNS
GMA
HRO
+
-
+
60
8
24
Provident Fin.
pSivida
Punch
PFG
Ofex
PUB
/
/
+
14
30
36
of your
Barclays
Belhaven
Bellway
BARC +
BHG
BWY
+
+
34
29, 57
33
Hampson Ind.
Hardy & Hansons
Hartford Group
HAMP /
HDYS +
HAR /
55
36
39
Rank Group
RBoS
Reckitt Benckiser
RNK
RBS
RB.
-
+
/
12
16
40
trading...
Ben Bailey BBC + 24 Healthcare Ent HCEG / 56 Regent Inns REG - 36
BG BG. + 40 Helical Bar HLCL / 13, 57 RPC RPC / 55
Black Rock Oil BLR / 10 Hornby HRN + 56 Sainsbury SBRY - 10
British Land BLND + 16 House of Fraser HOF) / 15 Severn Trent SVT / 13
British Telecom BT. - 11 HSBC HSBA + 16 Severn Trent SVT - 49
BSkyB BSY + 8, 16 Hunting HTG / 41 Shire Pharma. SHP + 16
BT BT. / 10, 34 Hyder Cons. HYC + 60 Stagecoach SGC / 11
Burren Energy BUR + 16 IFX IXF + 59 Stanley Leisure SLY - 12
Cambridge Ant. CAT / 13 Intechnology ITO + 58 Tate & Lyle TATE / 49
Cambridge Min. CMR / 57 Intelek ITK / 57 Telecom Plus TEP + 1160
Capital & Reg. CAL + 16 Inv. Mgt Holdings AIMH / 10 Tesco TSCO + 1116
Capital Radio CAP / 25 Itrain IRN + 8 Texas Oil & Gas TXO / 10
Wireless Group TWG / 25 J Smart SMJ + 24 Tibbett & Britten TBG / 32
Carphone Ware. CPW + 16, 48 JD Wetherspoon JDW - 36 Torex Retail TRX / 37
Charles Stanley CAY / 59 JPMF Jpn Sm Cos JFJ + 16 Tribal TRB / 12
Christian Sal. SVC + 60 Kelda KEL / 13 Trinity Mirror TNI + 39
Clapham House CPH + 57 Kewill Systems KWL / 59 Ultimate Leisure ULG + 36
CML Micro CML / 58 Landround LDR + 26 UMECO UMC / 55
Compass Finance CAF + 59 Legal & General LGEN - 37 Victrex VCT / 56
ComProp CPP / 57 Liberty Intl LII + 12 Vodafone VOD + 34
Courts CRTO - 13 London M. Secs LMSO / 48 Volex VLX / 55
DA Group DAG / 58 London Scot. Bk LSB + 59 Wagon WAGN / 55
Dana Petroleum DNX + 16 Luminar LMR + 39 Warner Estate WNER + 58
DATA + MJW + WLN +
Datacash
Dee Valley DVW +
25
61
Majestic
Marconi MONI +
15
10
Wellington U.
Widney WDNY +
16, 33
7 with
Ensor Holdings ESR + 56 Micap MIC / 56 William Hill WMH - 39
Enterprise Inns ETI + 36 Mitie MTO + 49 Wincanton WIN / 61 TD Waterhouse
Erinaceous ERG / 60 mm02 OOM + 33 Wireless Group TWG + 8
European Colour EUC - 55 Montpellier MPL + 56 Wolves WOLV / 15
Fibernet FIB + 16 Northumbrian W. NWG / 49 Workspace WKP / 14
First Choice
First Derivs
FCD
FDP
/
/
48
58
Numerica
Patientline
NUG
PTL
/
+
22
16, 60
Xaar
Xenova
XAR
XEN
+
/
24
12
Trade from
First Group
FKI
FGP
FKI
+
-
14
47
Peacocks
Pearson
PEA
PSON /
+ 28
40
Yates YTE + 32 as little
Focus Solutions FSG / 58 Persimmon PSN + 47
as 11.95
Call us today

0800 328 3837

Please quote code AM051
Lines are open Mon-Fri 7.30am-9pm and Sat 9am-3pm
Brokerage services provided by TD Waterhouse Investor Services
Or go to www.tdwaterhouse.co.uk (Europe) Limited (a subsidiary of The Toronto-Dominion Bank).
Authorised and regulated by the Financial Services Authority (FSA
Or call into our Investor Centre at 71 High Holborn, London registered number 141282), member of the London Stock
Exchange and OFEX. Incorporated in England and Wales under
(opening hours Mon-Fri 8am-5pm) registration number 2101863.
Registered Office: Exchange Court, Duncombe Street, Leeds LS1 4AX.

xx xxxxxxxx 2004 5
170604 p06-07 Plays 6/15/04 5:25 PM Page 6

PLAYS OF THE WEEK

AIT (AGP) 66.5p BUY

by: Tim Freeborn

Shares Summary
1 An astonishing recovery from
near death There really is life after death Nick Randall arrived, he found Building Society. Others are
2 Growth in licence fees is driving at least for companies. AIT is 200 people working in starting to follow.
fast growth proof that recovery to rude professional services at AIT. Financial services accounts for
3 Extending its market beyond health is possible even for the They were handling installation about 60% of expected licence
financial services most seemingly hopeless cases. and integration work which fees this year. Other emerging
AIT GROUP Four years ago the shares topped could easily have been done by markets are government
share price
100 the equivalent of 400. They AITs partners. Now there are just services, such as police, and
90 held up pretty well during the 50 people in this function and medical companies. A big recent
80
early tech slump but then they concentrate on harder work. win was from US healthcare
70
60
collapsed in 2002 after a series of The emphasis on partners is group Humana.
50 missed profit forecasts. absolutely right because AIT is Humana wants to cut the time
HIGH 94.00 11/8/03
40 LOW 27.00 20/6/03 The previous management still a tiny company. It needs to it takes to arrange underwriting
LAST 66.50
30 had been exceedingly liberal in concentrate on product of a policy from eight to two
20
J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream
their revenue recognition development and leave plenty of weeks. Bringing all the data
policies to the point of fantasy. integration work to keep its together is an important tool
BUSINESS: Designing The shares reached a low of 9p in partners happy. here. It reckons Portrait will repay
customer interactive software early last year. But the day was Portrait is a versatile product. its cost in just six months.
for banks, insurers, healthcare saved by the return of founder It brings together access to House broker Arbuthnot
companies and the police. Richard Hicks. He arranged a several different databases forecasts 5.2p for March 2005 and
VITAL STATS: rescue fundraising and ensured without and this is the 8.5p in 2006. The companys
Market value: 33 million that work continued on Portrait, important point generating a emphasis on growing licence
Historic PE to Mar 04: 20 AITs new more powerful further database. An operator in revenues rather than professional
Prospective PE to Mar 05: 13 product range. a call centre can have all the fees means gross margins will be
Prospective PE to Mar 06: 8 The IT market has been awful, relevant facts about customers higher. In turn that allows faster
No dividend as everyone knows, but AIT on screen. This is a great tool for growth in EPS. The company had
NMS: 3000 compounded its woes by in some selling the customers other 803,000 net cash at 31 March and
Spread: 2.9% ways trying to compete with its services. The first customer for seems really to be back on the
partners. When chief executive Portrait was Nationwide road again. Amazing.

6 Shares
170604 p06-07 Plays 6/15/04
WIDNEY (AIM:WDNY) 58p
by: Timon Day
House broker Williams de Broe
refers to Widneys purchase last
month of Airflow Streamlines
factory for 5.3 million from the
receiver as a steel of a deal.
This is because the assets are
worth around 8 million and
more importantly Widney
promptly won a long-term
contract to use the factory to
make cabs for agricultural and
construction equipment worth
over 40 million a year.
This new activity meshes well
with Widneys division that
makes window systems for off-
road vehicles. This little
engineering company is also
profiting from making telescopic
slides for use in cash machines.
The Belcot tool and die press
tools arm is also going well.
The new management team,
led by chairman Joe Grimond
and finance director Graham
Errington, has successfully
reshaped Widney from a run-of-
the mill tiddly engineering
company to a fast-growth
operation specialising in
log on to for our daily news updates
5:25 PM Page 7
higher-margin activities.
The Airflow purchase now
renamed Widney Cabs has
already enjoyed drastic surgery
slashing employees and selling
off surplus property for an
expected 1 million. Trading to
date has been very much better
than expected says Grimond and
current and medium-term
demand is better still.
Admittedly debt has soared
to 7 million and will peak at
10 million, around 170% of
shareholders funds, this
year before falling back a tad in
2005. This rise is due to
reorganisation costs, a big
increase in working capital to
fund the cab orders and
substantial investment in new
plant and machinery.
Higher debt and interest rates
will see interest payments rise to
over 500,000 next year.
Hopefully other adverse factors
that restrained recent interim
profits will prove one-offs.
These interim profits rose 17%
to 472,000.
PLAYS OF THE WEEK
BUY
Shares Summary
The shrewd Airflow purchase
Widney was forced to deduct has catapulted Widney into a
98,000 from profits for money higher division and further
owed by Mayflower which went deals are expected. The share
bust but could recoup a big price has doubled this year but
chunk of this if it gets its goods the recent setback provides a
back. Sterlings strength clipped buying opportunity with maybe
60,000 off profits and the sharp 30% upside over the next year.
rise in steel and oil prices a WIDNEY
similar amount. share price
70
But all this looks chicken feed 65
to the profit bonanza coming 60 HIGH 68.50 7/5/04
55 LOW 21.25 8/7/03
from Widney Cabs which should 50 LAST 58.00
boost second-half profits by 1 45
40
million and next years profits 35
by 2.5 million. 30
25
This means current-year 20
J J A S O N D J F M A MJ
profits should more than double Source: Thomson Financial/Datastream
to 2 million and double again
BUSINESS: Vehicle cab
to 4 million to September 2005.
construction and window
Now looks a good time to get
systems plus press tools
aboard as the shares have fallen
manufacture
a fifth from their peak of 69p on
VITAL STATS:
profit-taking and the recent sale
Market value: 11 million
of one million shares by non-
Historic PE to Sep 03: 12.5
executive director Michael Frye
Prospective PE to Sep 04: 8.2
who still holds a 10.6% stake.
Prospective PE to Sep 05: 4.5
On a PE of eight falling to just
Dividend yield: 2.2%
over four and a dividend yield
NMS: 500
expected to more than double to
Spread: 6.9%
6% the shares look dirt cheap.
17 June 2004 7
170604 p08 Plays 6/15/04 5:13 PM
PLAYS OF THE WEEK
BRITISH SKY BROADCASTING (BSY) 624.5p
by: James Quinn
If digital television were ever to
take off in a major way, it was
always going to have to be
propelled by an element of free
services.
It is for that very reason that the
multibroadcaster-led Freeview has
been so successful, with the service
now available for as little as a one-
off 40, and also why BSkyB is
following its lead with its own
free rival.
But there are differences, on a
major scale. For 40, Freeview
customers can get around 40
digital channels based on
entertainment, news, music and
home shopping. But for 150,
prospective Sky free-to-air viewers
can obtain almost 200 digital and
interactive channels and not have
to pay a monthly fee either.
The difference, other than that
free Sky users will need to have a
satellite dish fitted to their home,
is that one is backed by the
marketing prowess of arguably the
UKs leading media company and
so can afford to offer more. But
drilling down into the detail, Skys
recent announcement will not
actually cost the company a bean,
other than in initial marketing
costs, but has the potential to up
revenues significantly.
Once the free-to-air system is
installed, users will have the
option to pay for interactive
services and also to upgrade to
premium Sky services or pay-per-
view events such as key football
Shares Summary
1 Move to offer free-to-air TV sensible in competing against Freeview.
2 Incremental revenue increases from both new extra services will be at
no extra cost.
3 Will speed the race to reach ten million paying subscribers.
BUSINESS: Satellite television
provider
VITAL STATS:
Market value: 12.16 billion
Historic PE: 59.5
Prospective PE for 2004: 33.5
Prospective PE for 2005: 19.5
Dividend yield: 0.96%
Spread: 0.16%
NMS: 200,000
8 Shares
Page 8
BUY
matches or boxing bouts.
Any such income will be
cost-free, given that consumers
will pay for all the installation
and equipment costs through
the initial 150 fee.
It will particularly appeal to
the 27% of the population who
cannot receive Freeview due to
weak transmission.
Sky has been clever in
attempting to steal a march on
Freeview, although it was a bit
slow off the blocks given that
Freeview is now in 3.5 million
homes. It looks like it might
just work, despite the fact that
the majority of analysts have
yet to include any incremental
increases in their forecasts even
though the service is due to
launch later this year.
In addition to the free service, it is Plays Updates
also to launch a high-definition
television service for its paying NORTHUMBRIAN WATER (NWG) 136p HOLD
customers in 2006, allowing greater The shares have surged by just over 20% since they were tipped here
picture quality, and again at little just under a year ago. They now look fair value compared to Bristol Water
extra cost to Sky. and South Staffordshire which are on similar PEs around 8, and yield
Analyst Kingsley Wilson at ratings about 6%.
Investec Securities says that Sky Northumbrian has sorted out its finances by securitising the Kelder
will continue to focus on offering reservoir for just over 200 million and persuading industry regulator
top packages to pay-TV OFWAT to grant higher water prices this year.
subscribers, but that it has If OFWAT grants the applied-for 28%-plus-inflation water price increase
stepped in to target the bottom to 2010 the shares will look good value again as profits should then rise
end of the market in order to shore from 65 million, proforma last year, to almost 90 million in 2010.
up its drive towards a subscriber
base of ten million. PRINTING.COM BUY
Wilson says that on a current PE Printing.com reported 9.3 million sales, up 21%, in the year to April and
of 16.2, the shares remain 940,000 pre-tax profits, up 84%. It has decided to sell all its stores to
significantly oversold, suggesting franchisees. Profits from these deals are not disclosed, causing some
a price target of 930p. suspicion, probably unfairly. Sponsored researcher Hardman & Co
forecasts 2.8p EPS this year and 4.8p in April 2006. At 28.5p the valuation
is miserly, even for an Ofex share.
STOP LOSS WARNINGS
20% PRICE FALL CURRENT
TRIGGER PRICE VERDICT
GMA RESOURCES (GMA) 23.2p 23.25p SELL
BRITISH SKY BCAST.
share price
780
WIRELESS GROUP (TWG) 91p 90.5p HOLD
760
740
HIGH 776.00 11/2/04
LOW 584.50 3/6/04 ITRAIN (IRN) 8.6p 8.5p HOLD
720
LAST 624.50
We have to say goodbye to GMA Resources, which has flirted with its
700
stop loss and looks too vulnerable in the current climate. On the other
680
660 hand we reckon it is worth sticking with Itrain, where house broker
640
Corporate Synergy forecasts 0.75p EPS this year and 1.2p in 2005. A
620
600 tiny company but good value. We are also sticking with The Wireless
580
J J A S O N D J F M A MJ Group because it remains a quality company. The current PE is 32,
Source: Thomson Financial/Datastream
falling to 24 next year.
log on to for our daily news updates
170604 p10 Uncovered 6/15/04 4:52 PM Page 10

SHARES UNCOVERED

SECTOR
WATCH
Two new AIM biotechs
by: Piper Terrett
The biotech sector is being
boosted by two AIM floats.
Evolutec uses the saliva of ticks
to develop products that will reat
a range of autoimmune
diseases.
Vectura focuses on
developing drugs for lung
disease but also has an inhaled
therapy for the treatment of
erectile dysfunction, with a
quicker onset than Viagra.
Sainsbury dividend cut likely
by: John Marshall
Texas Oil price static

by: Steven Frazer
Shares in Aim-listed oil explorer
Texas Oil & Gas (AIM:TXO)
remain pegged at 16.5p with the
company believed to have
secured extra funds via a share
placing at 15p a share. The
company plans to use the new
cash to fund additional wells in
Texas.
Aim-list Black Rock Oil &
Gas(BLR) begins drilling its first
well in the Myponga 1 prospect
in Australia this week. The
company expects to expand its
Australian drilling programme
later this year, also starting work
on sites in England
S
ainsbury (SBRY) shareholders are facing
further misery with a cut to the dividend
increasingly likely. Analysts have grown
more sceptical that the supermarket chain cant
afford to keep up the payout at current levels.
When Sir Peter Davis announced the sale of US
business Shaws for $2107 million it was claimed that
this would not dilute earnings. But earnings are now
forecast to fall this year.
Apart from the impact of lower earnings the group
faces further disruption from a new chairman and a
relatively new chief executive Justin King.
Both are expected to recognise that the easiest
time to cut the dividend is next year. This will mean
that the dividend is re-based at the beginning of
Seymour Pierce management deny sale rumours
by: Polly Fergusson
their tenure rather than allowing the uncertainty to
dog the share price.
John Coleman, chief executuve at House of Fraser
(HOF), admitted as much some time after taking
over at the department store chain in 1996.
Current Sainsbury chief executive Sir Peter Davis
may attempt to apply a positive spin to his four year
reign when he stands before shareholders at his final
AGM next month, but most investors are believed to
be glad to see the back of him. The company remains
committed to plans to pay shareholders a 35p a share
special dividend, the windfall from Sainsburys sale
of Shaws, its US chain.
Shares says: Shareholders should expect
the worst.

All smiles at Marconi
by: Chris Bourke
Fortune has finally begun to
smile upon former stock market
dog, Marconi (MONI). The IT
groups share price is set to
double after being selected as a
vendor for BTs voice over
internet protocol (VoIP) trial. BT
(BT.A) intends to switch its entire
national phone network to VoIP
within five years.
Nick Hyslop, telecoms
analyst at Oriel Securities, says:
Given the reticence of investors
to believe that Marconi had
credible product for next
generation networks, this
announcement continues to
build on the growing confidence
in Marconi.
Rumours that small cap
stockbroker Seymour Pierce is
up for sale have been hotly
denied by the management.
The investment bank is
supposedly sounding out other
brokers for offers to make
the most of the benign
conditions in the stockbroking
market.
We are not in discussions. We
are not even in preliminiary
discussions, Richard Feigen,
head of investment banking,
told Shares magazine.
Seymour Pierce has been
widely touted as a takeover
target ever since it split from its
parent company a year ago. The
company was bought out by
chairman Dr Keith Harris in July,
2003 and is now privately held.
The remaining stub has been
renamed Investment
Management Holdings (AIM:
IMH) and over the past year has
been selling assets. It is now left
with Rowan, a private client
advistory business.
The competitive small cap
broking arena includes Charles
Stanley, Brewin Dolphin,
Collins Stewart and Numis. All
have performed well recently
thanks to increasing private
capital returning to the equity
markets.
Its not surprising Harris is
looking to sell theres lots of
competition out there and he
could get a better price for it
now than a year ago,
commented one analyst.
We have heard a lot more
whispers about Evolution Beeson
Gregory (EVG) being bought out.
A lot of the boys there are
hanging onto their shares in the
hope they will be bought out,
added another analyst.
Commerzbank recently upped
its stake in EVBG to 8.48%.
Seymour is trying to shake off
its past assocation with dot.com
companies and is building
clients across a range of
industries. It currently has 115
clients, flat on last year.
Shares says: This serves
to highlight the attraction of
the small cap investment
management sector. Expect
more consolidation.

10 Shares
170604 p11 Uncovered 6/15/04 3:16 PM Page 11

SHARES UNCOVERED

Retail set to score with Euro 2004

by: John Marshall
Lloyds back in the loop
by: Steven Frazer
Growth could be finally back on
the agenda at Lloyds TSB

U
K pub groups and retailers (LLOY), sparking a takeover bid
are set to score from a for the beleaguered banking
likely booze bonanza group. A trading statement due
during the European football out next week is expected to
championships in Portugal. show progress on mortgages
Ahead of the tournament the and savings accounts, together
Centre for Economics and Business with improved sales of long-term
Research (CEBR) estimated that assurance policies.
the competition could give a 1 Abbey National (ANL), a
billion boost to the overall UK failed takeover target of Lloyds
economy, based on the heroic TSB three years ago, has seen
PHOTO: PA PHOTOS

assumption that England reach the its share price rise almost 15%
quarter-final stage and play four over the past couple of months,
games in the competition. but analysts at Dresdner
The CEBR estimates that a semi- Kleinwort Wasserstein (DKW)
final spot would mean an think Lloyds is more attractive.
additional 116 million flowing through Britains Replica shirt sales should also boost business DKW currently has a 520p price
pubs, clubs and off-licences, while the final would good news for recently floated Umbro (UMB), which target on the shares which at the
generate a similar boost to business. Obviously, makes England replica shirts, while Tom Knight, moment change hands for
those operators that specialise in showing sporting chief executive of Britains biggest replica shirt seller 435.5p.
events stand to gain the most, with the likes of JJB Sports, recently forecast that the company would Shares says: Good
Walkabout-owner Regent Inns (REG), AIM-listed sell an additional 10 million worth of kit this year. recovery by Lloyds as long
Coliseum Group (AIM:CSM), which owns the Sports Elsewhere, bookies stand to do roaring trade as as dividend is maintained.
Cafe, and ONeills-owner Mitchells & Butler (MAB) punters try to cash-in on Englands sporting success,
chief among them. or failure. A record 25 million was placed on Chartists view
It will be a different story for JD Wetherspoon Englands first group stage match against France by: David Jones
(JDW), however. It refuses to play up to the football alone, according to Ladbrokes.
fanatics, with TVs in no more than a handful of its THE WRITER HOLDS SHARES IN JJB, MITCHELLS & BUTLER Stagecoach ups gear
outlets. Majestic Wine (MJW) believes a warm spell AND MAJESTIC WINE. Transport business Stagecoach
would produce a greater spike in sales than the Shares says: The further England Group (SGC) is expected to
footie festivities, while supermarkets all-round progresses the better for shares in alcohol announce full year results on
should see brisk beer sales. and shirts. Wednesday 23 June. In a
trading update released recently,
the company said that trading in
OFCOM refuses to let BT off the hook as industry waits all key divisions was in line with
by: Timon Day market expectations, except for
Rail, which has performed better
British Telecom (BT.) will be Carphone Warehouse (CPW) along and maintain the local loop and than expected.
forced to swallow a very bitter with Tesco (TSCO) and Centrica no doubt continue to make a The recovery that started last
pill. Industry regulator OFCOM (CAN). good profit out of it year is still just about intact,
is expected to make the former Admittedly the OFCOM particularly if it cuts its although no progress has been
government monopoly decision is not expected for overheads by 20-30% over the made this year. The big
relinquish control of the last bit around six months and next five years to bring it into resistance area for the shares is
of the phone line that runs into consumers will not experience line with more efficient 90p/100p a level that has
your home or office from the an immediate drop in their bills. overseas competitors. capped the price for four years.
local exchange. Alternative carriers like BT wont enjoy any more It would take a move through
The local loop, as this is Telecom Plus will benefit by excess profits as the local loop is here to signal there was a lot
called, has been the subject of offering its 180,000 customers a not costing them anything,said more upside left longer-term.
rancorous debate for years as BT complete billing package Wigoder. TEP, on the other STAGECOACH GP.
share price
has used it to repel boarders. including call charges and line hand, will enjoy increased 250
Rival telecom companies are rental. Chief executive Charles profits and more control over its 200
licking their lips at the prospect Wigoder expects OFCOM to cut customers with hopefully a
150
of BT losing a vital weapon in its wholesale prices to around 80- sharp decline in churning.
battle to retain defecting 90 a year per line against the Shares says: The OFCOM 100

customers. 116 (including VAT) currently ruling is good news for 50

Companies that will benefit charged by BT. alternative telecom 0

1999 2000 2001 2002 2003 2004
include Telecom Plus (TEP) and BT would continue to own companies. Source: Thomson Financial/Datastream

17 June 2004 11
170604 p12 Uncovered 6/15/04
SHARES UNCOVERED
Signs of bid for Geest
by: John Marshall
Bakkavor has increased its stake
in Geest (GET) to 16.2%. The
putative Icelandic raider has
engaged in a flurry of activity
over the past three weeks
suggesting that it has hostile
intentions.
THE WRITER HOLDS SHARES IN GEEST.
Shares says:
Shareholders should sit
tight and await the
inevitable bid.
Retail regeneration
by: Chris Bourke
Some of the biggest names from
the property and retail sectors
were summoned to 11 Downing
Street last week. Gordon Brown
is urging the industries to
transform some of the UKs most
neglected areas through retail-
led regeneration schemes. The
project has identified 88 areas
with deteriorating town centres.
Among the guests was David
Fischel, chief executive of
Liberty International (LII), the
UKs leading regional shopping
centre landlord. The penny has
dropped for the government.
They are now clearly seeing the
property industry as a powerful
player in urban regeneration,
he says.
Shares says: Expect
good news.
Scent of success
by: Piper Terrett
Xenova (XEN) received a shot in
the arm after the company
announced positive phase II
data for its anti-cocaine addiction
vaccine TA-CD.
The studies demonstrated
TA-CD was well tolerated and
75% of the relapse prevention
study group kept off cocaine
during the 12-week study period.
The vaccine works by
inducing an antibody response
in patients, preventing them from
experiencing a high from the
drug.
Shares rose 8% to 9.45p.
Shares says: One to
watch.
12 Shares
3:42 PM Page 12
AGM file: BAA
by: Piper Terrett
Baa... Hark, is that the sound of
new-born lambs gamboling in
peaceful English fields?
Er...no. More like jet engines over
Hounslow. BAA is the operator of
Heathrow, Gatwick and Stansted
airports, not famed for their
promotion of countryside, wildlife
or freeing passengers from stress.
Any blots on the horizon?
Not half. Essex man is mobilising.
The pithily named Stop Stansted
Expansion (SSE) campaign is
attacking BAA on the grounds
that it refuses to recognise its
policy of offering freebie car
parking to MPs, MEPs and
members of the House of Lords
as a political donation.
A minor episode of turbulence?
Not quite. Rebel shareholders, led
by Brian Ross, economics advisor
to SSE, are forcing BAA to
Caution over casino reforms set to hit operators
by: Emily Parkinson
The profitability of casino
operators Rank Group (RNK) and
Stanley Leisure (SLY) could be
dented by a government
proposal limiting slot machines
in small casinos.
The latest guidelines from
the Department for Culture,
Media and Sport suggest
reducing the number of slot
machines at smaller casinos.
For Stanley, the countrys
largest casino operator, the
guidelines are a blow to
potential earnings. The group
Chartists view
TRIBAL GROUP
share price
360
340
320
300
280
260
240
220
200
180
DEC JAN FEB MAR APR
Source: Thomson Financial/Datastream
recognise that it makes sizeable
political donations. They claim
that the policy, which incidentally
is not documented in the annual
report, amounts to toadying to the
very members of government that
ensure BAAs monopoly and its
expansion plans for Stansted.
Whats more the shareholders
have God and celebrities on their
side. Former Church of England
envoy and Lebanese hostage
Terry Waite is a supporter, along
with ber-mockney and celebrity
chef Jamie Oliver.
What is BAAs defence? Fog
over Westminster?
Kindhearted BAA claims it is not
pandering to politicians but
providing a valued altruistic
public service to foot-sore MPs
whose parliamentary duties
involve heavy air travel - 847 of
the 1412 politicians who qualify
sources 40% of revenue to
smaller casinos and has been
acquiring new sites on the
expectation that gambling
deregulation will provide a
significant boost to revenue.
Stanley posted its largest
single-day price drop in a year
on the back of the announce-
ment. Shares in rival operator
Rank, which sources 12% of
revenue to regional casinos,
also plunged.
Practically all of Stanleys
upside was predicated on small
Tribal shares ready to rise as results approach
Next Tuesday 22 June sees the
release of full-year results from
Tribal Group (TRB). The
support services company said
in April that results are expected
to be in line with expectations
and turnover for the year should
MAY
exceed 180 million a
PHOTO: PA PHOTOS
Stansted stirrer
Jamie Oliver
currently hold passes. Insiders
think Rosss campaign is worthy
but unlikely to be successful.
Time & place: Tuesday 27 July,
11.15am Queen Elizabeth II
Conference Centre, London,
SW1P 3EE
Potential for fireworks:
casinos which it has been busy
buying for the past three years.
It certainly underlines Stanleys
unattractiveness as a takeover
target, says Paul Leyland,
analyst at Seymour Pierce, who
also thinks tax increases for
small casinos are likely.
Shares says: A more
cautious approach to
gambling reform has
stripped out much of the
upside for small operators.
Larger operators still carry
takeover potential.
by: David Jones
70% increase on last year.
The share price is 30% lower
than at the end of 2003 and
recently there have been signs
of strength creeping back in.
A break through 240p would
add more momentum to the
recent bounce.
170604 p13 Uncovered 6/15/04 5:18 PM Page 13

SHARES UNCOVERED

Helical Bar results suggest upturn

by: Chris Bourke
Water investors face
uncertain future
by: Steven Frazer

E
ncouraging results from real estate group Merrill Lynch analysts are optimistic: Helical Water company investors are
Helical Bar (HLCL) have prompted has underperformed slightly against the sector for facing uncertainly as the general
speculation that the proprety development the last four years, but we sense that the election expected in 2005 puts
cycle is now on the upturn. development cycle has now bottomed. We think pressure on regulator Ofwat to
While property investors enjoyed a slow recovery the shares will return to a premium rating to their place consumer interests above
over the last year, their development peers net asset value. those of shareholders.
continued to have a sluggish time of it. The office Juliana Weiss Dalton at Seymour Pierce is The industry is going through
downturn which commenced post 9/11 saw many similarly confident: We believe the company has its latest periodic review covering
property developers exit the office sector, positioned itself well for the next development cycle. the next five years, and many
particularly in the City, where occupancy levels took Some investors may want to start building a utilities are seeking authority to
a swift dive. Since then, profits have declined in a position on share price weakness. pass on hefty price rises to
sector that only reaps rewards once a project is Mike Slade, Helical Bars founder and managing customers in order to fund
completed and let. director, told Shares: The property development cycle massive infrastructure works.
However, after focusing on its investment is akin to a wave. You ride it for a few years, but you We believe that the market is
portfolio for the last three years, Helical Bar is now must know when to get off. Now is the time to be already factoring in a fair
ready to return to small scale developments. There getting back on. outcome from the price review,
are around 30 developments in the pipeline, mainly Shares says: Back to the office means say analysts at JP Morgan. The
retail or industrial. back to the good times for Helical Bar. risk lies on the downside, they
add. The investment bank
believes investors should be
Planestation finds favour with new strategy looking for defensive plays in
by: Polly Fergusson the sector, with safe dividends,
growth opportunities and
Planestation (PTG) has finally the past fortnight, while the September. Planestation exposure to the consolidating
found favour in the markets Prudential has upped its recently raised 5.6 million waste market. JP Morgan
after revealing its new strategy holdings to 15.04% and La from a placing at 5.4p to fund favours FTSE 100 company
and attracted major new Granja to 3.5%. expansion at Manston and for Severn Trent (SVT), and
insitutional investment. The news comes just weeks working capital. Yorkshire water operator Kelda
Artemis and LR Global after new chairman Martin May Planestation shares have (KEL) among the Midcaps.
Partners have both taken told investors that passenger now risen to their highest level
significant stakes in the flights would start flying from for six months and are now
company for the first time over Manston for the first time in trading at 6.7p. Ragged results
for Courts
by: John Marshall
Courtss (CRTO) results this
WAKE-UP CALL by: Jeremy Lacey
week were so bad that they had
to be released immediately to
Analysts crowing over Cambridge Antibody the market and coincided with a
rumour that Steven Cohen,
An enthusiasm bug appears to be doing the More importantly, a November date has been former head of the UK division,
rounds of analysts covering loss-making biotech fixed by the High Court to hear its dispute with had, together with venture
Cambridge Antibody (CAT). Among those tracked Abbott over royalty payments for its capital firms, tabled a 50 million
by research firm StarMine, the earnings estimate rheumatoid arthritis treatment Humira. Broker bid for the division a cheeky
has increased to 5.7% above the consensus of Lehman Brothers has said the companys value offer as the group has sales of
-100.57p for the September 2005 year. could double if the court case goes in its favour. 285 million in the UK. It is
One of the top analysts with a five-star rating unlikely as a Courts VAT case
for accuracy has made a big move, upgrading Cambridge Antibody EPS estimates involving 40 million still needs
his 2005 forecast from eps of -103.20p to This year Next year to be settled later this year.
-93.68p. Unfortunately, the analyst is with a FY to Sep 04 FY to Sep 05 It has succeesful overseas
firm that has ticked the no publicity box so (P) (P) businesses and is taking action
StarMine is unable to reveal his identity. The SmartEstimate -99.97 -98.94 to ensure that they are funded
same analyst has changed his forecast from Consensus -102.96 -100.71 locally rather than from the UK.
-104.53p to -94.12p for 2004. Predicted surprise 2.98 1.77 Decent management should be
In mid-May, Cambridge Antibody revealed a Predicted surprise % +2.9% +1.8% able to earn good profits from
pre-tax loss for the first half down to 17.97 Low:High -140.17:-77.28 -129.47:-83.74 sales of 686 million. If Courts
million from 18.84 million the previous year. SOURCE: STARMINE does not succeed, others will try.

17 June 2004 13
170604 p14-15 News Focus 6/15/04 5:21 PM Page 16

NEWS FOCUS
SPOTLIGHT

OFT enquiry chance

bad news for City
by: Jonas Crosland ROUND UP

F
or some, weekly collected credit (WCC) is a
triumvirate of dirty words. For others it is the only
way to borrow money. Either way, confirmation that
a formal complaint has been lodged by the National
Consumer Council (NCC) to the Office of Fair Trading will be
seen as both unwelcome and unnecessary.
It could also be damaging for the major finance
companies that currently provide this service. Provident
Financial (PFG), Cattles (CTT) and London Scottish
Bank (LSB) are the
PROVIDENT FINL.
share price three companies that
780
760 HIGH 762.50 8/3/04 are most likely to be
740
LOW 603.00 8/12/03
LAST 621.50
affected by sentiment
720 if nothing else.
700
680
However, London
660 Scottish has already
640
been reducing its
620
600 exposure to this
J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream sector as more and
more people pay
through a bank account and weekly collected credit
accounts for just 17% of profits. Cattles has only 13% of total
lending taking the form of WCC. Provident Financial has the
biggest exposure with around 40% of the market and 1.6
million customers.
That said, there are around 600 doorstep credit card
companies. Most of these are probably best avoided and
are really damaging what even the NCC believes is a
valuable service for people on low income and few, if any,
credit worthy credentials. No amount of legislation will
prevent usury or bully boy collection tactics. The fact that
the larger lenders are innocent of both of these practices is
a sad indictment of the blanket approach adopted by the
NCC.
The chances of an OFT enquiry have to be weighed
against the fact that the Department of Trade and Industry
has already extensively investigated the consumer credit
industry and issued a White Paper to reform the 1974
Consumer Credit Act. It would be strange indeed if the OFT,
another government department, then started its own
investigation on the same subject. Nevertheless, the
uncertainty is likely to be reflected in the share prices of
these companies. The OFT would have 90 days to decide
whether or not to proceed. No enquiry could lead to a nice
bounce back in the shares.
Shares says: The only thing that will restrict
the lending market is high unemployment.
FirstGroup snaps up lucrative franchise
by: Piper Terrett
Train operator FirstGroup (FGP) surprised its critics last week by
scooping the Scotrail franchise. Rumours had been circulating that
rival Arriva (ARI) would win, given its bid was the most competitive
on price, but it was not to be.
Victory must be satisfying given the incumbent is National
Express (NEX), who snatched the Greater Anglia franchise from
FirstGroups grasp in a battle that saw it initially barred from bidding
and then taking over GB Railways in a last ditch attempt to keep its
hand in the race.
The lucrative Scotrail franchise starts in October and the franchise
agreement will be hammered out during the summer. Gerald Khoo,
analyst at Oriel Securities, estimates the franchise is worth 55 million
or 14p a share to FirstGroup. Khoos fair value for the shares is now
341p and he plans to revise his earnings forecasts.
Local Scottish politicians are thought to be unhappy about the
decision, which, along with its existing bus operations, effectively
hands FirstGroup 70% of Scotlands public transport revenues.
However, given the Competition Commission allowed its bid to go
ahead there are likely to be few problems.
Shares says: Shares look attractive on a price
earnings ratio of 10.5.
Workspace performs and defies the trend
by: Steven Frazer
The explosion of internet design and other trendy business
industries has created huge demand for alternative-type offices and
studios. So while more traditional office space providers have suffered
a hellish few years, nobody has bothered to tell Workspace (WKP).
It specialises in supplying small and medium-sized businesses
with flexible, low cost accommodation in the South East, and demand
has remained strong.
Occupancy is currently running at 84%, but the company believes
it should get up to 90% this year as economic confidence builds
across the UK. The average Workspace client spends just 10,000 a
year on rent, while leases are pliable enough not to scare off would-
be tenants.
Five years of solid growth mean profits have all but doubled since
posting 8.3 million in 2000, while dividends have ballooned by
almost 50%. This does, however, leave the shares on a chunky-
looking rating at 1,735p they trade on a discount of just 6% to net
assets, compared to a sector average in the mid-teens.
The 2% prospective yield also implies little short-term upside for
the shares.
Shares says: The shares are due a breather after rising
from 943p in a year, but are worth holding longer-term.

14 Shares
170604 p14-15 News Focus 6/15/04 5:21 PM Page 17
Shareholders in line for a wizard time
by: Emily Parkinson
Pub operator Wolves (WOLV) has not ruled out share buybacks,
despite acqusition of Wizard Inns this week for 89.9 million.
The deal is expected to enhance earnings by around 3.3% in the
first full-year. In the year to December 2003, Wizard generated
turnover of 43.3 million and pre-tax profit of 12.1 million.
Wolves chief executive Ralph Findlay says share buybacks
continue to be an option in the future. I remain convinced that
returning cash to shareholders can generate value so well continue to
consider that an option. I dont think I want to speculate on what
amounts might be used but we would look at it on an opportunistic
basis.
While acquisitions are one way of enhancing earnings, its
interesting to ponder the alternatives. For instance, if Wolves had
ploughed the 89.9 million it spent on Wizard into a share buyback,
based on Fridays closing price of 814p the group could have bought
back 11 million shares a 15% earnings enhancement as opposed to
3.3%.
You'd be forgiven for thinking the only strategy driving returns in
the UK pub sector at the moment is the urge to build empires. In
recent years, the sector has been shaped by scale-building deals like
Enterprises (ETI) takeout of Unique, Punch (PUB) swallowed up
Pubmaster, not to mention the myriad of smaller deals along the way.
The acquisition of Wizard Inns by Wolverhampton & Dudley falls into
the latter category but is still significant as it gives the group a
stronger presence in the South, where new housing developments
should underscore good returns for pub operators. Shares says:
Shares says: Outlook for EPS is healthy thanks to a
combination of acquisitions and possible buybacks.
NEWS FOCUS
House of Fraser enjoys consumer zeal
by: Stephen Frazer
If the pressure is set to intensify on British consumers you wouldnt
have guessed as much by listening to House of Fraser (HOF).
The upmarket department store chain appears to be riding the
crest of the consumer spending wave. Gross margins are up 0.4%,
average transaction value is increasing and like-for-like sales are on
the rise (2.5% in the first 19 weeks of the year). Little wonder that the
company once again appears to be attracting wistful glances from
potential suitors, if recent speculation is to be believed.
Scottish entrepreneur Tom Hunter tried and failed in 2002,
although the shares near-trebling since may not appeal to his north-of-
the-border instincts.
A new executive share option scheme has riled some investors
lately, but the real issue is the potential damage the bank of Englands
back-to-back interest rate hikes may inflict on consumers willingness
to spend.
In the meantime, the company remains upbeat, while analysts
expect mid-to-high single-digit growth in earnings for the foreseeable
future.
Shares says: Uncertainty over consumer spending
should be offset by the 4.7% prospective yield.
Alcohol group enjoying a Majestic time
by: John Marshall
Shareholders in Majestic (MJW) have every reason to let the
champagne corks pop. Full-year profits jumped 24% and the dividend
rose 50%. A four-for-one share split was also unveiled, subject to
approval, in the hope of making the shares easier to trade, having
become victim of their own success.
Majestic already has an enviable growth record and prospects are
still very encouraging. There are currently 115 Majestic outlets in the
UK but the eventual aim is 175 to 200. Apart from entering new areas
the company will continue to re-locate some of the smaller stores.
The group is continuing to increase its share of the wine market
which is itself growing at 6% a year. So far this year Majestic has
enjoyed 8% like-for-like growth and David Stoddart of house broker
Teather & Greenwood is forecasting earnings of 51.4p and a dividend
of 20.5p.
By the end of this year the group should have 7 million of net
cash with which to fund a progressive dividend policy. The aim is to
have cover of 2.5 times.
Shares says: A long-standing favourite of Shares,
holders should stick with the stock.
17 June 2004 15
170604 p16-17 Cover Story pt1 6/15/04 1:17 PM Page 16
Diversifying your portfolio across key sectors will help you ride the good times and
protect your investments against bad times. By Chris Bourke
P
sssst! Want a hot tip? Then read on. We are about to reveal
the investment strategy that is quietly turning thousands
of British investors into master-class traders. In 2004, in a
thunderstorm of conflicting signals, investors everywhere
are searching furiously for the next Microsoft. Bull or bear
market? Short term or long term? Small caps or blue chips? Tobacco or
telecoms? The noise is deafening.
Take a pause for breath and relax. The good news is that the City is
about as clued up as you are. For all of the expertise and analysis, for
every chart that predicts an uptrend, nobody really knows if a share is
heading for momentum or meltdown. It is vital, therefore, to construct
a portfolio that will benefit from economic growth but will also be
guarded from potential shocks.
The solution is a strategy that every investor, whether novice or
sophisticate, should be practising. If you were to ask any fund manager
or stockbroker for the secret to investment success, the reply would be
instant and unequivocal: sector diversification.
By diversifying across sectors, your total portfolio is at least partly
protected when one element suffers. More importantly, it benefits even
if just one element is enjoying favourable conditions.
Building an effective diverse portfolio requires good research and
informed analysis. Sounds like hard work? Not to worry, as we have
done it for you, constructing an example ideally suited to trading
conditions in June 2004 the Shares Master Portfolio.
Diversifying involves more than a dart and a copy of the FT pinned to
the wall. An investor needs to be selective and switched on. Chris Ring,
managing director of stockbrokers Shore Capital, says: It is far better to
own a small portfolio of shares you know a lot about than a large
portfolio of shares you know nothing about. In the
latters case, you may as well be betting on the 2.30 at While a growth
Doncaster. The shares may be good individually, but
hopeless as a portfolio. portfolio may be
When constructing a portfolio, the first thing you
need to ask yourself is what is your objective? Growth slightly higher-
or income? adds Ring. The next determining factor
will be what level of risk you are prepared to accept. risk, good sector
A more risk-averse investor may opt for an income-
producing portfolio. Typically, this will comprise a diversification will
mixture of gilts and high-yielding equities. However,
a company should not be bought based solely on its limit this risk to
high dividend yield. The ideal combination for a share
in an income portfolio is a high and well-covered an extent
yield, a modest PE ratio, positive five-year growth,
average future growth and low gearing.
While a growth portfolio may be slightly higher-risk, good sector
diversification will limit this risk to an extent. The portfolio should be
structured according to the best possible forecast you possess about the
future environment. After all, a shares price reacts to future
expectations, not historic events.
The Shares Master Portfolio, therefore, is largely based on the
economic outlook for the next 12 to 18 months. While there has recently
been much scepticism about the health of the stock market, investors
should know that 2004 is expected to be the strongest year for global
economic growth since 2000.
Lets take a quick snapshot of the worlds economy. David Kern, chief
16 Shares
economic adviser to auditors RSM Robson Rhodes, summarises the
state of play in May 2004: The US-led global recovery should continue,
but there are fears over early interest rate rises. The US, China, India and
Japan remain the key global growth drivers, while Eurozone forecasts
have been lowered. Terrorism, Iraq and huge economic imbalances are
causing concern. Growth, while remaining satisfactory, is likely to slow
in 2005. Crucially, Kern estimates that GDP growth is expected to
continue at 3.1% in 2004 and 2.7% in 2005.
Why does sector diversification work in a stock portfolio? On the
surface, it appears to be investment common sense but there is actually
a more technical explanation. Its all about sector correlation.
Portfolio diversification is most effective when shares have low
correlation, ie a weak relationship exists between them. A collection of
closely-related shares in one or two sectors will more often than not be
a recipe for disaster. You need to ensure that if something negative
happens in one sector, you have another sector that will hold the
portfolio up. Look to the future and take a top-down approach, says
Ring.
However, you might want to be cautious before assuming that low
correlation is more important than smart share selection. Building
complex portfolios based around correlation coefficients, in the pursuit
of low volatility, often leads to mediocre results.
Its also important to set targets and stick to them, especially when
there is market gyration, says Ring. Dont be afraid to use your own
judgement. But, more importantly, if you get it wrong, cut it.
To determine the appropriate weighting of each sector in the
portfolio, you need to consider your benchmark, or which index you are
aiming to outperform. For instance, a portfolio of small-cap companies
would be hoping to outperform the FTSE Small Caps
Index. The Shares Master Portfolio is an example of sector
diversification and we have therefore used the FTSE All-
Share Index as our benchmark.
If you want the portion of your portfolio that is
invested in stocks to perform similarly to the general
market, your sector weightings should be similar to
those of your benchmark.
When a sectors weighting deviates from that of the
index by more than one percentage point, it is said to be
either overweight or underweight. Because certain
sectors contain slower or faster growing companies, and
safer or more risky stocks, weighting variations could see
your portfolio perform quite differently. For example, the
utilities sector is usually considered a relatively safe area
in which to invest. Technology and health care, on the other hand, are
very fast-paced sectors in which it is easier to lose money over the short
term. So if you have an overweighting relative to the All-Share in the
technology and health care sectors and an underweighting in the utilities
sector, your portfolio is likely to see more ups and downs than the
general stock market.
In June 2004, therefore, what exactly does it take to create a model
portfolio? Which sectors should you be focusing on for high potential
growth at low risk?
First, every portfolio should have its key fundamental building
blocks, says Tim Whitehead, portfolio services manager at stockbrokers
Redmayne Bentley. Banking, oils, telecoms, media and
170604 p16-17 Cover Story pt1 6/15/04 1:17 PM Page 17
pharmaceuticals. These sectors make up 50% of the UK index and
consistently outperform or underperform the market.
Although a sector may not be in favour at the time, efficient top-
down stock selection will uncover those companies with real growth
potential. Keeping these core sectors in your portfolio is essential for
effective diversification, as you are pooling the collective risk and,
conversely, the profit potential of each sector.
The following five sectors make up over 50% of the FTSE All-Share Index,
and should be in any diverse portfolio that is using the index as a
benchmark. We spoke to City analysts with expertise in each of these
sectors to determine whether our weightings should be overweight,
underweight or equal to those of the All-Share (see table over page).
Banking: overweight Not forgetting the recent myriad of worries
hitting global markets (including Iraq, India, concerns of overheating in
China and the emerging markets fallout), the prospect of rising interest
rates is the key factor affecting growth in the European banking sector.
Banking analysts at JP Morgan are currently favouring UK banks,
taking the view that the UK is likely to be closest to the peak of its rate
cycle. They also appear cheap both on the basis of relative performance
and historic PE.
Oils: underweight The rocketing price of oil is a primary catalyst in
the current wave of nervousness sweeping the stock market but
investors should not be shying away just yet. The time when people are
being scared off is also a time to find some bargains, especially among
the smaller oil companies.
Although there is a risk in the near term from a possible correction in
oil prices, analysts at JP Morgan remain positive on this sector for the
long-term. However, investors may have to wait until the second half of
2004 to see a clear reason to become more bullish, as there is concern
over the current lack of news regarding contract awards.
Media: market weight At the beginning of 2004, everyone was piling
into cyclical stocks (those that do well when the economy is
performing), media being one of the more exciting sectors. On a 12-
month basis, however, the media index has only risen by 1%. In the past
six weeks, we have been seeing an exodus from cyclical to defensive
stocks, in which media has suffered.
The recent upturn in advertising has not been followed by share
prices, and people are slightly more edgy. However, there are some good
top-down opportunities to be had from a sector that may be many
things but is never boring.
Pharmaceuticals: market weight Analysts at Teather & Greenwood
believe the outlook for major pharmaceutical stocks in 2004 is broadly
negative and that buyers should go for growth. The Americans take the
blame, as their bearish view is driven by concerns over US legislation.
Healthcare is also a hot topic on the US election agenda and Americans
prefer their pills on the cheap side.
In order to find outperforming stocks, investors should go for those
with high earnings growth prospects or the potential for positive
newsflow.
Telecoms: market weight The arrival of new entrants has resulted in
COVER STORY
some fierce competition in this sector. The financial impact, however,
has been less severe than analysts were predicting at the start of the
year. This is expected to change in the second half of 2004.
Heavyweights BT, Vodafone and mmo2 have reported their full-year
results to mixed reactions, and all the signs indicate an increasingly
tough environment. Analysts at Seymour Pierce think the most
significant potential growth in this sector will be found where there is
any hint of consolidation.
The fundamental sectors above should have a home in every investors
portfolio. As we enter the second half of 2004, however, there are five
further sectors that both Ring and Whitehead recommend as essential
components of a diverse portfolio.
Real estate: overweight The UK real estate sector is evolving rapidly.
The substantial weight of cash targeting direct property investment is
being accompanied by legislative changes towards tax-efficient property
investment funds. Economic growth is seeing a recovery in West End
real estate, while the City office market is also picking up and on track for
real recovery in 2005/06.
Although real estate enjoyed a healthy rally in 2003 in expectation of
REITs (real estate investment trusts), there is still great value to be had
from a sector that is currently releasing a barrage of positive news.
Food retail: market weight The key issue in this sector over the next
12 months is the industrys reaction to the Morrison and Safeway
merger. Intense competition is expected, as Morrison is slashing
thousands of product prices and Asda and Tesco look set to follow suit.
Sainsbury may well be a victim here. There is also an increased emphasis
on acquisitions of convenience stores by major supermarkets.
Somerfield and Tesco have made significant progress in this area.
Insurance: market weight Insurance has always been seen as a bit
boring or too complex by private investors, and perhaps rightly so.
Insurance analysts at Arbuthnot recommend this sector less for its
growth prospects than for its income prospects. Lloyds vehicles have
enjoyed healthy times since 2002, and a significant proportion of the
resulting profits is expected to be paid out over the next 12 months.
Every diverse portfolio should contain two or three small-cap stocks,
says Shores Chris Ring. Small caps symbolise growth and there will
always be opportunities in this sector.
In 2003, the small cap index rose by 39.6% against the FTSE 100s 16.7%.
We are not expecting that kind of outperformance in 2004, but small
caps do tend to shine when markets get a bit frothy. For now, the sector
is a top-down hunting ground, and there are plenty of lucrative catches.
It may not be a sector in itself, but our experts agree for real
diversification, you need to expand your geographical horizons.
Overseas exposure is highly recommended, says Whitehead. If you are
concerned about currency fluctuations going against you, then go for a
globally themed investment trust, with holdings in several different
countries. Collective vehicles are currently the best way to access foreign
markets.
When it comes to overseas investment Ring is unequivocal about
where he would put his money. It has to be Japan, he says. No other
country has greater potential at this point. If we are right about Japan,
the results will be tremendous.
17 June 2004 17
170604 p18-19 Cover Story pt2 6/15/04 1:36 PM Page 18

FTSE All-Share Sector Allocation

(as at 1 June 2004)
Sector Weight (%) Number of
constituents
Banks 19.2 11
Oil & Gas 12.4 14
market, Tescos ambitions in this area are far
Pharmaceuticals 9.1 16
Telecommunications Services 9 12
from fulfilled with further deals likely. Its
Media & Photography 4 37 competitive prices should see market share
ROYAL BK.OF SCTL. continue to rise and investment in physical
General Retailers 3.8 43 share price
Mining 3.7 9 1800
HIGH 1780.00 24/7/03
expansion should see further growth over
Beverages 2.9 5 LOW 1530.00 4/9/03 the next two to three years.
1750
Support Services 2.8 65 LAST 1661.00
Life Assurance 2.6 7 1700 TESCO
share price
Utilities Other 2.6 10 1650
270
Construction & Building Materials 2.5 41 260
Investment Companies 2.5 121 1600
250
Food Producers & Processors 2.4 14 1550
240
Leisure Entertainment & Hotels 2.4 31
1500 230
Food & Drug Retailers 2.4 7 J J A S O N D J F M A MJ HIGH 262.00 7/1/04
Source: Thomson Financial/Datastream LOW 205.00 12/6/03
Tobacco 2 3 220
LAST 258.75
Transport 1.8 28 210
Real Estate 1.7 32
Royal Bank of Scotland (RBS) 16.61
200
Speciality & Other Finance 1.6 28 RBOS recently acquired Ohio-based bank, J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream
Aerospace & Defence 1.3 10 Charter One Financial, a 616-branch
Electricity 1.2 4 network. The deal creates a major
Personal Care & Household Products 0.9 4 opportunity to sell more existing products,
Chemicals 0.8 11 with revenue benefits calculated at $222
Engineering & Machinery 0.8 23
million a year once integration is complete. WELLINGTON HDG.
Software & Computer Services 0.8 30 share price
Health 0.7 14 HSBC HDG. (ORD $0.50)
140
SOURCE: FTSE GROUP

share price
Insurance 0.5 17 950
130 HIGH 133.00 27/5/04
Information Technology Hardware 0.3 12 900 LOW 82.00 11/6/03
Automobiles and Parts 0.3 8 120 LAST 127.50
850
Electronic & Electrical Equipment 0.3 12 110
Steel & Other Metals 0.1 1 800
100
Household Goods & Textiles 0.1 6 750
HIGH 913.50 3/11/03
Forestry & Paper 0 1 LOW 700.00 1/7/03 90
700 LAST 826.50
80
J J A S O N D J F M A MJ
650 Source: Thomson Financial/Datastream
J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream

Wellington Underwriting (WLN) 127.5p

HSBC (HSBA) 826.5p Wellingtons business is made up of three
HSBC has an exposure on every continent distinct parts: its Lloyds business,
and in virtually every aspect of commercial Wellington Underwriting, and its
The Shares Master Portfolio is an example of and retail banking. A moderately shareholding in Aspen Insurance. Each of
sector diversification using the FTSE All-Share as disappointing set of full-year figures took these businesses is high quality in nature,
its benchmark. The stocks have been some gloss off the stock's premium with strong track records. The group will
recommended by Chris Ring, Tim Whitehead valuation, but while not the strongest start underwriting property reinsurance this
and City analysts covering the specific sectors. performing bank it is one of the safest. year.
Selection has been based on the shares ALLIANCE & LEICESTER
medium to long-term growth potential, or for share price
920
their reputation as solid, reliable companies. We
900
have narrowed our selection down to 15 stocks BRITISH SKY BCAST.
880
not a random number but a rational selection share price
780
based on expert research and opinion. 860 760
740
In his book The Warren Buffett Portfolio, 840 720
HIGH 909.00 12/8/03
Robert Hagstrom conducted research into the 820 LOW 808.00 3/7/03 700
benefits of diversification. He examined 3,000 15- LAST 847.00 680
800 660
stock portfolios, 3,000 50-stock portfolios, 3,000 J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream 640
100-stock portfolios and 3,000 250-stock 620 HIGH 776.00 11/2/04
600 LOW 584.50 3/6/04
portfolios. Of the 15-stock portfolios, 808 beat Alliance & Leicester (AL.) 847p 580 LAST 625.50
the market, while only 63 of the 250-stock Analysts see Alliance & Leicester as being J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream

portfolios did the same. on course to achieve double-digit EPS

Hagstrom concluded, therefore, that the
probability of beating the market increases as
the number of stocks decreases. He also noted
that his study did not factor in transaction costs,
which with a 250-stock portfolio would be far
higher than those for 15 stocks. Spending
ridiculous amounts on commissions and fees
will ultimately counteract the benefits obtained
from effective portfolio diversification.
growth via only 2.5 times revenue growth,
flat costs and the benefit of its existing 185
million share buyback programme.
Tesco (TSCO) 258.75p
Despite having made two recent
acquisitions in the convenience store
BSkyB (BSY) 625.5p
Morgan Stanley estimates that Sky will be
sitting on 680 million of cash by 2006, with
annual net cash flow nearing 800 million
and rising. The group is expected to hone its
growth strategy around its basic
subscribers, while increasing revenue from
existing subscribers through new products.

18 Shares
170604 p18-19 Cover Story pt2 6/15/04 1:36 PM Page 19

COVER STORY

BRITISH LAND PATIENTLINE

share price share price
700 180

650 160
140 HIGH 164.00 16/2/04
600 LOW 51.50 11/6/03
DANA PETROLEUM 120 LAST 124.50
share price
290 550 100
280 HIGH 691.50 7/6/04 80
270 500 LOW 473.00 1/7/03
60
260 LAST 685.00
450 40
250 J J A S O N D J F M A MJ J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream
240
230
220
210 LOW 202.50 11/6/03 British Land (BLND) 685p Patientline (PTL) 124.5p
200
LAST 288.50 British Land is still trading at a 30% discount to Patientline provides hospital patients with in-
J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream its net asset value. Analysts believe there is still bed entertainment, by way of terminals with
some near-term upside to be had from the televisions, radio and internet access. Analysts
Dana Petroleum (DNX) 288.5p anticipation of Property Investment Funds. An estimate the group is not forecast to turn
In its recent results, Dana outlined its innovative company with a strong profitable until 2007, thereafter turning highly
exploration plans for the year, which analysts development portfolio. profitable and cash generative. This months
believe could add an additional 100p to its full-year results saw revenues increase by
CAPITAL & REGIONAL
current price. The 2004 drilling programme is share price 69%,
550
expected to result in reserves being added to FIBERNET GROUP
Danas portfolio. 500 share price
180
450
160
BURREN ENERGY
share price 400
140
300
280 350 120
HIGH 541.50 5/4/04
260 300 LOW 288.50 11/6/03 100
240 LAST 495.00
250 80
220 J J A S O N D J F M A MJ HIGH 164.50 20/2/04
200 Source: Thomson Financial/Datastream 60 LOW 47.00 24/6/03
LAST 125.00
180 40
J J A S O N D J F M A MJ
160 LOW 130.00 23/12/03 Source: Thomson Financial/Datastream
140 LAST 286.50
Capital & Regional (CAL) 495p
120 Capital & Regional has a unique business
DEC JAN FEB MAR APR MAY
Source: Thomson Financial/Datastream
model, and one that is paying off. It is a Fibernet (FIB) 125p
property investor and manager, specialising in Fibernet operates fiber-optic networks in the
Burren Energy (BUR) 286.5p the retail and leisure sectors. With an UK and Frankfurt, used primarily for data
Production volumes are forecast to accelerate impressive 3 billion worth of assets under transmission. Analysts rate the group as an
throughout 2004 as Burrens development management in three specialist funds, the attractive investment, based on growth
plan on its Congolese and Turkmenistan group could be a major benefactor from PIF prospects and forecasted profitability in 2006.
concessions begins to bear fruit. Although legislation. Interims to February 2004 showed solid
management has not upgraded reserve growth in long-term contracted revenues.
estimates, its partner, M&P, believes that
reserves could increase by 25%.
CARPHONE WHSE.GP. JPMF JAPANESE SMCOS.
share price share price
160 300
150 280
SHIRE PHARMACEUTICALS 140 260
share price
580 130 240
560 120 220
540 110 HIGH 155.00 14/1/04
520 LOW 87.25 11/7/03 200
100 HIGH 280.00 13/4/04
500 LAST 142.00 180
LOW 141.50 24/6/03
480 90 160 LAST 227.00
460
80 140
440 J J A S O N D J F M A MJ J J A S O N D J F M A MJ
HIGH 571.00 9/3/04 Source: Thomson Financial/Datastream
420 Source: Thomson Financial/Datastream
LOW 376.00 4/7/03
400
LAST 497.00
380
360
J J A S O N D J F M A MJ
Carphone Warehouse (CPW) 142p JPMorgan Fleming Japanese Smaller
Source: Thomson Financial/Datastream
Junes results saw pre-tax profits up 33.8% Companies (JFJ)
and dividend payments by 30%. The rapid 227p
Shire Pharmaceuticals (SHP) 497p increase in the volume of its 3G connections This investment trust aims for long-term capital
The UKs third largest pharmaceuticals player (around 20%) gives some indication of future growth through investing in small and
has caused some excitement in the City demand. The mobile retailer expects to open a medium-sized Japanese companies. In May,
recently. Its leading product, Fosrenol, is further 200 stores this year. positive industrial and jobs figures reinforced
reportedly due to receive US approval in July. hopes of a sustained recovery in Japan.
The drug assists kidney patients and has Industrial output was up by a record 8.5% on
already been approved in Europe. the same period a year earlier.

17 June 2004 19
170604 p20-21 Analysis/Ethical 6/15/04 1:08 PM Page 20

ANALYSIS

The ethical approach to making money

Socially responsible investment teams are busy lobbying
cant get them, thats a threat to your business
companies to clean up their act, whether in and its a threat that originates in bio-
environmental issues or corporate governance. Piper diversity, explains Karina Litvack , who heads
Terrett learns how this is affecting the City the ISIS SRI team. Companies can be
threatened by a loss of bio-diversity and can
damage it.

T
o outside observers the Square Mile On particularly pressing issues, groups of While private investors rarely have the
may be considered a place where institutional investors will often join forces power to engage companies in dialogue in the
avarice, greed and questionable and work together to lobby companies. In the same way that the big institutional investors
ethics sometimes hold sway. case of drug giant GlaxoSmithKline (GSK), a can, there is no reason why they cannot
However, with the rise of large socially large number of institutional shareholders piggyback on the work of SRI teams by
responsible investment teams in major fund successfully mobilised to force the company to keeping aware of the issues involved and
management groups such as Jupiter, back down and slash the price of AIDS drugs using the information to inform their
Henderson and ISIS, the worm appears to be being sold to sufferers in South Africa. investment decisions.
turning from within. Make no mistake. This is not some altruistic A number of fund managers, including
Forget lobby groups, public demonstrations exercise undertaken by bleeding-hearted Jupiter and ISIS, produce a quarterly
and unwashed activists such as tree-loving liberals looking to save the planet. This is engagement report explaining which
hero Swampie; across the City, suited SRI strictly about business. Questionable companies they have recently met and on
teams are quietly mobilising to change corporate governance standards and business which issues.
companies less salubrious practices, such as practices, a lack of consideration of In the early days of ethical investment,
environmental pollution or dubious corporate environmental issues and a devil-may-care environmental issues were the mainstay. To
governance, by using their persuasive powers attitude toward climate change not only some extent this has remained a constant
as shareholders as a catalyst for change. produce bad publicity for companies but in the but SRI teams have broadened their focus
These people are not sandal-sporting long term are bad for making money. into other areas such as corporate
hippies but often highly trained individuals Across our holdings we have a responsible governance, bribery and corruption, bio-
who are specialists in areas such as human investment policy, says Nick Robins, head of diversity, human rights and labour
rights, environmental issues and corporate SRI at Henderson Global Investors. Well-run standards. Obesity and access to water have
governance. companies are important to us as investors. It also become important concerns.
They work by writing to and meeting with gives robustness and quality to the stock. Jupiters summer report details meetings
companies in which the fund management Maintaining bio-diversity and protecting the with utility companies Severn Trent (SVT) and
group has a big stake and discreetly engaging environment are not just moral and ethical AWG (AWG) to discuss the impact of climate
them in discussions to change their attitudes matters if neglected, they can threaten a change on infrastructure and environmental
and practices. This process can sometimes take companys livelihood and the return on technology developments.
years to achieve but in many cases parts of the investment for shareholders. ISISs extensive report reveals that during
company are already pushing for change and If youre a food processor and your fish the first quarter of 2004 SRI teams met with a
welcome support from investors. stocks rely on fish from the North Sea and you total of 254 companies on a variety of issues,
from corporate transparency to
climate change. For example,
The FTSE4Good index was BAD GUYS: GOOD GUYS: ISIS met with AstraZeneca
launched in July 2001 by the Companies axed from Companies that already met new (AZN) to discuss human rights,
Stock Exchange with help from FTSE4Good index in 2004 for FTSE4Good human rights criteria Compass Group (CPG) and
the Ethical Investment failing to meet requirements (including guidelines on respect Capital Radio (CAP) on corporate
Research Service (EIRIS) to during engagement process: of indigenous peoplesrights and governance, Rio Tinto (RIO) on
respond to the focus on social use of armed security guards) or bribery and corruption and
responsibility by investors. The Cairn Energy Human Rights improved to meet them: Wal-mart (NYSE:WMT) on
principle behind the index is Elan Corporation Environmental labour standards.
that companies will continually Allied Irish Banks Environmental BP; BHP Billiton; Shell; Lonmin The report also outlines a
be encouraged by FTSE4Good Goldshield Group Environmental sample of shareholder votes
to improve their performance Royal Blue Group Environmental FTSE4GOOD UK ()
share price
where ISIS did not support the
on environmental issues, Spirent Environmental 5500
HIGH 5262.14 8/6/01
management and explains why.
5000
human rights and corporate St Ives Environmental LOW 3064.24 7/3/03
LAST 3992.76 The group voted against
4500
responsibility. Sygen Environmental approving the remuneration
4000
Carphone Warehouse 3500
policy at Capital Radio, arguing
Environmental 3000
that the level of awards
2001 2002 2003 2004
Malcolm Group Environmental was incompatible with the
Source: Thomson Financial/Datastream

Rank Group Environmental disappointing performance of

SOURCE: FTSE4GOOD the company. ISIS also voted

20 Shares
170604 p20-21 Analysis/Ethical 6/15/04
against Allied Domecqs (ALLD) remuneration
policy, expressing concern at bonus plans that
were not linked to performance.
While change can take years to achieve,
institutional investors broadly believe that in
the long term companies with better corporate
governance standards will outperform.
Companies with better corporate
governance should do better, says Ted Scott,
fund manager of the pioneering ISIS
Stewardship fund, celebrating its 20th
anniversary this month.
The secret to the success of institutional SRI
teams in changing companies attitudes is
often that management will listen to them
more readily because as major shareholders
they depend on the companys financial
success and are ultimately on the same side .
If you own 10% of the company they are
more likely to listen to you, says Scott.
However, companies were unsurprisingly
resistant at first to what they saw as outside
interference.
Initially the result was they were
nonplussed, admits Litvack. But theres been
a tremendous evolution in many parts of
Europe and its spreading. Theres resistance
but theres also real appetite because often
shareholders bring a dimension to it thats
more in tune.
If you have a pressure group its not
concerned about the companys financial
stability. We are. Given that were in the same
boat as these companies, were in the business
of raising these questions in a reasonably
discreet way. Initially it used to be quite private
but now theres so much out in the open.
For the most part, SRI teams hesitate to take
the credit for any change, preferring the
company to feel that it owns it. We will only
ever be one factor among other investors and
employees, says Robins. We dont like
naming and claiming. Its difficult to see
causality and when people change we want to
see the company feel its changed itself.
In most cases discussions take place on a
discreet basis. We try to be fairly discreet, says
Robins. Sometimes it has to happen behind
closed doors. When it does become formal and
public it is with the AGMs and remuneration
reports. If we decide to vote against, we feel our
investors have a right to know.
However, the fact ISIS and Jupiter publish
reports for their investors demonstrates how
matters have become more open.
For maximum effect, SRI groups actually
join forces with other institutional investors in
order to lobby companies. For example, the
Pharmaceutical Shareowners Group is an
investor group focusing on best practice that
meets with companies such as Roche
1:08 PM Page 21
ANALYSIS
Ethical companies what to look for
Decide which ethical looking at is a member. impact on the environment.
issues are of concern to you Get hold of the annual If its a mining company or in
as an investor and select report and find out if the the oil and gas sector, do a
your companies on those company produces a quick Google search to find
criteria. corporate responsibility out what its record on
Contact EIRIS, which brochure detailing its good human rights is like. Banks
provides ethical investment works and attitude towards may also have a record of
services to private investors. environment and staff. lending money to
EIRIS can provide Remember that certain companies that pollute the
acceptable lists based on sectors are potentially environment or destroy rain
individual investors criteria. problematic. For example, forest land.
See www.eiris.co.uk companies in the chemical, If in doubt buy into an
Check out the pharmaceutical, air ethical fund that has a highly
FTSE4Good index to see transport, oil & gas and experienced SRI team to do
whether the company youre water sectors have a high the screening for you.
(Frankfurt), Pfizer (PFE) and Novartis in the last year. Although this is largely due to
(Frankfurt) to discuss issues such as lowering the impact of generic competition on its lead
drug prices a baton that pharmaceutical products, the furore surrounding chief
companies are regularly hit with during executive Jean Pierre Garniers pay packet and
Presidential election year. his humiliation at last years AGM defeat are
The Carbon Disclosure Project is a similar undoubtedly contributory factors.
initiative calling for the 500 biggest global In the same way, as global warming
companies to publish information on continues apace companies that fail
greenhouse gas emissions. Behind the project to respond and adapt to the risks involved
are 92 investor signatories representing assets could find themselves out of business and
worth $10 trillion. So far, 17 out of the top 20 their shareholders facing poor returns on
companies have responded to the survey sent their investment.
to them by the CDP and around 59% of the total
companies contacted. Pros...
Jupiter is now part of the Institutional
Investors Group on climate change, which The satisfaction of knowing that your
engages with companies to find out how money is not backing companies that pollute
they are preparing for the risks of global the environment, have a poor human rights
warming to their business. The group is record or dubious corporate governance
focusing on the construction, chemicals and standards
mining sectors. Over time some fund managers claim
On corporate governance and director ethical companies are more likely to
remuneration, institutional shareholders outperform unethical companies
mobilise through the Association of British In the long term companies that have better
Insurers (ABI). corporate governance standards and protect
The reason why were working together is the environment are less likely to experience
that there are economies involved in focusing bad PR and the subsequent share price
rather than holding a dozen meetings with swing
fund management groups, explains Emma Ethical companies are a safer investment
Howard Boyd, head of SRI at Jupiter. With the because they are protecting their future and
issue of emissions were also getting a the future returns of shareholders.
commitment from governments that will very
much draw attention to climate change. ... and cons
While it may be difficult to link share price
performance directly to improvements made Less choice in terms of a smaller
by companies in corporate governance investment universe
standards or environmental policy, the It may be impossible to take advantage of
detrimental effect that failing to address these particular stock market trends if the
issues can have is clear. Shell (SHEL) shares companies experiencing a boom have
collapsed 10% in January when the company dubious ethical records
admitted it had overstated its oil reserves. Over the short term an ethical investment
Shares in GlaxoSmithKline have similarly approach may not be as profitable as as
underperformed, falling 19% to 11.32 from 14 more sinful approach.
17 June 2004 21
170604 p22 interview 6/15/04 9:14 AM
INTERVIEW
Trading places
He ran away from Bollywood
to become an accountant, and
his financial ventures could
inspire a film. Polly Fergusson
talks to Tony Sarin
T
he pugilistic Philip Green, whose
family put up 1.05 billion of
equity to help fund his bid for
M&S, has been scathing about
directors of public companies with little of
their own money at stake in the businesses
they run.
Enter Tony Sarin, one director putting his
money where his mouth is.
Sarin is well-known to AIM investors,
having already founded and floated two
companies within four years. He is famous
for having floated Softtechnet.com, an
Indian market-based dot.com fund, for 23
million the day before the markets collapsed
in March 2000.
The company was bought just two months
later by NewMedia Spark (AIM:NMS) for 33
million. Sarin remained as a non-executive
director and went on to found AIM-listed
Numerica (AIM:NUG), an accounting and
financial services network.
But here things dont look quite so healthy.
Sarins board has taken pay cuts, the company
has moved back into the red and just before
Christmas, talks to sell the company failed.
Since listing in October 2001, the stock has lost
more than two-thirds of its value. Tough
markets, increasing competition and a
changing business model have all taken their
toll. So how much of this was Sarins fault?
He stepped down as chief executive in
March, a move that has been welcomed by
analysts. If you put your best salesman at the
helm, he is just going to go around selling.
You need someone who is going to pay
attention to the nitty-gritty, explains one
source close to the company.
Sarins latest venture is Hamilton
Bradshaw, a private equity company which
will be investing in early-stage companies
across all sectors but not start-ups and not
manufacturing companies. We are very keen
on turnaround situations and where we know
the team of people in charge. There can be no
substitute for experience, says Sarin.
Unlike most new funds, Sarins will not be
asking institutions to invest for the first few
years. Instead, he will be investing his own
22 Shares
Page 22
Sarin is a rare breed a company director with a
really interesting background, forthright views,
film-star good looks and a charming manner
cash and reckons that this way investors will
take him more seriously. The fund currently
stands at 30 million.
It has to be very smart money when it is
your own you are putting in but we need to
convince potential investors that we are
serious, he explains. Hamilton Bradshaw has
already made its first investment in
Resource Partners, a company that enables
public sector suppliers to receive immediate
payment of an invoices value without
recourse to borrowing or factoring.
Sarin is a rare breed a company director
with a really interesting background,
forthright views, film-star good looks and a
NUMERICA GROUP
share price
80
75
HIGH 76.50 9/6/03
70
LOW 31.50 3/3/04
65
LAST 36.50
60
55
50
45
40
35
30
J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream
charming manner. Perhaps it was this
beguiling approach that convinced the
Bollywood maestros that he was a star in the
making. He refused because he wanted to
become an accountant instead, but no matter
he still takes centre stage when he fronts the
Bank of England Small Business panel and is
chairman of the Asian Business Association.
He is also a council member of the London
Chamber of Commerce & Industry.
Sarin lives in Hampstead with his wife and
two daughters, and says his main hobby is
golf. But does he have time to relax?
There was a period when I didnt really see
my family for two years everything was so
hectic. But now everything is quieter. My wife
would describe me as a workaholic but I
dont look on it as work. I enjoy it.
The energetic Sarin also feels strongly about
promoting Asian businesses in the UK and
feels that things are changing. He points out
that Asians are now heading two of the largest
telecoms companies Orange and Vodafone
and adds that the glass ceilings are slowly
coming down.
Back to Bollywood: Sarins family is one of
the main Indian movie industry clans and his
cousin is no less than award-winning Shekhar
Kapur, who directed Elizabeth, the
blockbuster film starring Kate Blanchett. Now
a household name in India, Kapur is currently
working with Andrew Lloyd Webber on a film
version of The Phantom of the Opera.
While Sarin has probably broken his
daughters hearts by ruling out a career as a
Bollywood star, he is determined that his third
business will be a success. Business partner and
old pal James Caan, who set up top recruitment
company Alexander Mann, has no doubt Sarin
will have a success on his hands. So much so
that he has also made a major personal
investment in Hamilton Bradshaw.
To be a true entrepreneur, you need to have
a creative and commercially astute mind, says
Caan. You need to be passionate and not very
conventional. But its very rare to find people
with all these skills. Tony is one of the few
people I know who does have them. What a
nice friend!
170604 p23 LTI 6/15/04 12:32 PM Page 23

LONG-TERM INVESTOR

Opportunity I bought at 2.14: today the share is just

under 5.00, and that excludes 87.5p in
dividends paid out since the purchase date.

knocks Peter Webb

Josef Lakonishok, Robert W. Vishny and
Andrei Shleifer examined the effect of price as a
percentage of net asset value (often called book
value) on investment returns in a paper called
Contrarian Investment, Extrapolation and Risk.
You can download this from the internet just
go into the search engine and type its title.
One of the many studies that the professors
did was to rank all companies according to
Long-term investing calls for a different approach from stock price as a percentage of book value. They
short-term trading. Over the next two weeks Peter Webb then sorted the companies into deciles ranked
one to ten.
outlines two strategies for spotting the opportunities. Portfolios were initially formed on 30 April,
This week: assets bought cheap 1968, and new portfolios were formed on each
subsequent 30 April. The study period ended
on 30 April, 1990.

W
hen you think about long-term Net asset value is calculated by taking all the The summary of the study was that
investing you need to view the assets a company owns and deducting all the companies selling at a low price-to-book value
market differently from the liabilities. When companies sell under net asset are much more likely to give a good return than
majority of participants. Most short- value, you are basically saying that if you those selling at a high price. The top decile
term traders are interested in price only. If the bought the company at the current market returned nearly 20% per annum over the five-
price falls, a trader is likely to sell but for price and sold all its assets such as stock, cash, year period and the lowest just over 9%.
long-term investors a falling price is often buildings, plant and equipment, you would Another study revealed that the low price-to-
an opportunity. make money. book value stocks outperformed the high value
In searching for potential opportunities, you The problem with this approach is the stocks in 16 of the 22 years, or 73% of the time.
are generally looking for two specific strategies: quality of assets. If the assets are made up from For three-year holding periods, the low price-to-
assets bought cheap or earnings bought cheap. badly valued items or they have not been book companies beat the high ones in 18 out of
Lets look this week at assets bought cheaply. depreciated enough, you may find they are of a the 20 three-year periods. For five-year holding
Ben Graham, the college tutor of Warren poor quality. Also, your assets may include periods, the low value companies were a better
Buffett, liked to buy companies that sat at a intangibles such as goodwill or capitalised choice than the high value companies every
discount to net assets. In other words, those expenses. That fact aside, if you are trying to sell time.
whose market capitalisation sat at a discount to those assets in a fire sale, the value is very likely So, whether your approach is broad and
cash! It is pretty obvious that if you buy a to be lower. captures a basket of low price-to-book value
company for less than the cash on its balance However, by reading the annual report of companies or more narrow and looking in
sheet you are likely to do well. Hardys & Hansons I noticed that the company detail at the aspects of specific companies,
These types of buys dont occur that often in had not revalued its freehold property for price-to-book value is a reasonable guide to
normal markets but after the Dot Com boom some time. So not only was it sitting at a companies that are undervalued and likely to
and bust there were plenty around. From discount to book value but the real values of outperform the market.
significant overvaluation, these companies those assets were much higher. It looked like a Next week we shall be looking at earnings
plummeted to significant undervaluation. bargain to me. bought cheaply.
They had raised significant amounts of funds
during the boom by tapping into speculators LAKONISHOK, VISHNY AND SHLEIFER STUDY
ON PRICE TO BOOK / NET ASSET VALUE
euphoria but had then been unable to use the Best decile (10%)
Worst decile (10%) of price to book valuation
cash they had raised as it became obvious their of price to book valuation
1 2 3 4 5 6 7 8 9 10
business plans were a figment of imagination. 1st Year 11.00% 11.70% 13.50% 12.30% 13.10% 15.40% 15.40% 17.00% 18.30% 17.30%
A recent example of somebody trying to 2nd Year 7.90% 10.70% 14.00% 14.50% 15.30% 15.60% 16.90% 16.40% 18.20% 18.80%
3rd Year 10.70% 13.20% 15.50% 16.70% 16.50% 17.20% 19.10% 20.70% 19.60% 20.40%
liberate cash from this situation is the Year X
of trial
4th Year 8.10% 13.30% 13.60% 16.00% 17.00% 16.90% 18.80% 20.40% 21.30% 20.70%
5th Year 8.80% 13.70% 16.30% 17.50% 17.10% 17.60% 21.50% 20.10% 20.60% 21.50%
specialist vehicle Acquisitor (ACQ), which has Average 9.30% 12.52% 14.58% 15.40% 15.80% 16.54% 18.34% 18.92% 19.60% 19.74%
been circling vulture-like over Baltimore (BLM). Average annual return
Some assets bought cheap are not Hardys & Hanson PLC specifics
immediately obvious. In late 1997 I bought Year 96 97 98 99 00 01 02 03
Hardys & Hansons (HDYS) because I felt it was Net asset value per share 4.10 4.25 4.34 4.50 4.64 4.74 5.18 5.65
undervalued. The stock had popped up in a
filter I had performed on the market: I was 2004 Current Figures
looking for companies with a good dividend Assets m
Liabilities m
131.00
17.35
yield, strong balance sheet and selling under Book value / Net asset value 113.65
Net asset value = Assets - Liabilities
net asset value. Hardys & Hansons qualified on Market capitalisation 97.80

all those criteria. Price to book / net asset value 0.86 You can currently buy 1 worth of net assets for 86p

17 June 2004 23
170604 p24 sscomment jj 6/15/04 12:33 PM Page 24

edited by: James Quinn

James Quinn

Its just not good enough

COMMENT Researcher of the Year

I
t is clear from the number of new floats now not making the
grade that the quality of companies trying to access the public
markets is in question.
Investors, be they institutions or the general public, are not foolish
enough to be hoodwinked into investing in a company that looks over-
valued, and thankfully are turning their backs on those situations
where this appears to be the case.
This may well be leaving companies strewn in the roads of the Square
Mile but if they are not up to scratch they should be shown the door.
The problem would appear to be stemming from advisers desires to
list as many companies as possible and companies desires to list now
rather than later, even though they might not be ready all in order to
not risk another costly round of private equity financing.
Recently, Shares received no fewer than nine intention to float
documents in one day relating to would-be AIM companies, although
some just shouldnt be making such a step to the junior market.
For every successful firm that floats, theres at least one more that has
to delay to regroup and restructure or, worse, to pull its float altogether.
One fund manager told Shares recently that the current rack of would-
be IPOs meant he could pick and choose which to see and which not to,
a luxury not possible since the dot.com boom.
The lesson here is that advisers should consider raising money
through some of the other smaller markets such as Ofex and
ShareMark and not think that AIM is always the only option, as some
of these companies are inappropriately small to list upon it.
Such forward thinking coupled with more attractive valuations
might lead to lesser floatations having to be cancelled and restructured.
After all, the majority of companies wanting to float have perfectly
sensible business plans, but some of them just appear to have over-
inflated perceptions of what they are worth.

Joness judgement SHARES' CHARTIST DAVID JONES PASSES SENTENCE ON THE PICK OF THE SMALL CAPS

This week we are delving even BEN BAILEY

share price
The long-term chart of HR OWEN
share price
further down the small shares list 500
electronics equipment business 220
450 210
than usual all of the companies 400 Xaar (XAR) is not pretty. Like 200
below have a market cap of 350 many in this sector the share price 190
300 180
around 50 million or less. 250 slid heavily from the market top in 170
160
200 2000 Xaars price dropped by 150
J Smart Contractors (SMJ) 150
100
more than 95% by October 2002. 140
130
has delivered the goods for 50 However, the recovery that started 120
2002 2003 2004 2002 2003 2004
longer-term holders. This year Source: Thomson Financial/Datastream
last year is still intact and the Source: Thomson Financial/Datastream

has seen the real estate groups share price is trading just below
share price set new all-time highs House builder Ben Bailey two-year highs. In the short term, The recovery in the share price
once more. Any weakness from (BBC) has had a great four years any dips back towards the of luxury car dealer H.R. Owen
current levels looks to be a with the price constantly rising and 75p/80p area should bring the (HRO) started just over a year
buying opportunity and it would this trend accelerating over the buyers back in and it would take a ago and at the moment the
take a slide below the 360p mark past 12 months. The share price break below 55p to signal the current bout of weakness is
to break the four-year uptrend. has eased off over the past few recovery was in real trouble. viewed as a buying opportunity.
months but the major long-term Strength is expected to resume
SMART (J) XAAR
share price uptrends are still intact. The area share price
90
ahead of the 190p/200p area,
550
500
to watch for a bounce is just 80
setting up a return to the highs for
450
ahead of 400p strength through 70 the year around 215p and
400 here would set up a return to the 60 beyond.
350 480p/500p highs seen earlier in 50

300 the year. Only a break below here 40

30
250 suggests the trend is coming
20
200
1999 2000 2001 2002 2003 2004 under pressure and it is time to J F MA MJ J A S O N D J F M A M
Source: Thomson Financial/Datastream
Source: Thomson Financial/Datastream
stand aside till the dust settles.

24 Shares
170604 p25 Smal Shares Play 6/15/04
DATACASH (AIM:DATA) 101.75P
Payment processing may sound slightly on the
dull side but its not when it comes to Datacash.
The firm, formerly known as Auxinet, is one
of the market leaders in this country when it
comes to online payment processing known
as cardholder not present (CNP) but is on the
verge of making in-roads into the cardholder
present (CHP) market, which accounts for 98%
of all retail sales.
Datacashs core business has grown largely
as the online gambling sector has grown, with
customers benefiting from its robust systems
that can cope with surges before large sporting
events.
In addition, in the run-up to Christmas 2003,
Datacash worked with a number of High Street
retailers to process payments on their websites.
The company made a pre-tax loss of 671,000
in the year to December 2003, due to the release
of a provision against two potential legal claims
against a former subsidiary as well as a full
provision against an old Auxinet investment.
But its future is looking significantly brighter
thanks to its move into CHP processing, which
will be boosted by legislative changes relating
to chip and pin technology.
Essentially, from January 2005, fraud liability
on plastic cards be they debit or credit will
move from the card issuer to the retailer in
Capital and Wireless circle Isle of Man radio firm
Two of the countrys leading commercial
radio broadcasters are circling around the
UKs first national commercial radio
station launch this decade.
The pair understood to be Capital Radio
(CAP) and The Wireless Group (TWG) are
understood to have made contact with Isle
of Man International Broadcasting (IMIB)
with a view to taking a stake in the
planned 13 million fund-raising.
IMIB is the holder of the only Isle of Man
long-wave licence that will allow
transmission across the UK and Ireland,
with test broadcasts for its Radio 2-style
station due to start later this year.
Shares understands that both Capital
boss David Mansfield and Wireless chief
Kelvin McKenzie have made personal
contact with IMIB in order to extend their
own geographical reach, an extension that
would not fall foul of UK competition
regulations because the Isle of Man has its
own jurisdiction.
But IMIB chief executive Paul Rusling
told Shares that he thought a takeover prior
to the money-raising would be highly
12:38 PM Page 25
question unless the retailer can prove that it
has done all that it can to ensure the transaction
is not fraudulent.
Government has, therefore, set out a series of
guidelines, stating that a chip and pin device
attached to a till verifying a payment with a
PIN number rather than a signature is the best
way to crack card crime.
This has obviously sent the major High
Street banks into a flurry, as they rush to ensure
all customers have chip-embedded cards by the
end of the year.
But at the same time, there is scope for the
payment processors to benefit, and Datacash
plans to do just that.
It announced earlier this year that it has
teamed up with IBM to offer a comprehensive
yet inexpensive fraud protection service to mid-
tier retailers.
For the 2004 numbers, there will be little
revenue upside and a fair bit of cost, but sales
should start to come through rapidly in 2005, all
being well, which will change the nature of the
business.
One of the benefits of the systems in place is
that it can cope with significantly higher
volumes with very little extra cost, once the
initial systems are in place.
Analyst Paul Jones at broker Numis
unlikely. Its nice to have existing media
operators as a safety net, but we want to
realise the value for all our existing
shareholders, as well as those private
investors who want to get involved, he
says.
SMALL SHARES
BUY
Securities says that due to the lack of
preparedness among retailers, there could also
be chip and pin uplift in 2006, saying that
Shares Summary
1 Increasing profitability from core operations
2 Will benefit from Chip and PIN explosion
3 Possibility of future predator
BUSINESS:
Payment processor
VITAL STATS:
Market Capitalisation: 44.9 million
Historic PE: loss-making
Prospective PE for 2004: 67.8
Prospective PE for 2005: 39
Dividend Yield: Nil
Datacash could be a viable bid target, especially
as its deal with IBM on chip and pin involves a
multiple of the annual payment revenues back
to Datacash.
Jones has left his forecasts unchanged until
significant deals are signed in this area, but the
current rating is set to fall based on its
potential. Buy ahead of an update at interim
results due in August.
Sixties singing sensation Gene Pitney
and former Yes! frontman Rick Wakeman
are to lend their ears to the launch of the
station, provisionally entitled
MusicMann279.
Pitney is to be one of the stations DJs,
with Wakeman providing commercial
assistance, with the board led by non-
executive chairman Bob Riding, a former
Royal Bank of Scotland divisional chief
executive.
The stations progress was delayed for
five years by a single islander who
protested against the location of the
stations transmitter because he claimed it
would keep him awake at night, but final
clearance was granted by the Manx courts
in February.
The money is to be raised through a pre-
initial public offer (IPO) fund-raising,
which is being held as an offer for
subscription, although IMIB plans to float
on AIM in 2005.
Would-be investors can obtain a copy of the
prospectus by calling accountants Baker Tillys
Leeds office on 0113 285 5000.
17 June 2004 25
170604 p26 SShares News 6/15/04
SMALL SHARES
edited by: James Quinn
Customers take
Landround for a
plane ride
by: Emily Parkinson
In the newspaper business
theres an adage that says no-
one ever lost money from
underestimating their audience.
As the shock recent profit
warning from travel promotions
group Landround (AIM:LDR)
proves, this certainly doesnt
apply to the world of voucher
promotion.
Underestimate its audience it
certainly did and, for that, it paid
a high price.
When the company ran a free
flight promotion earlier this year
it severely misjudged its
popularity.
The result was an additional
454,000 in flight costs, leading
to a loss before tax of 26,000
against pre-tax profit of 896,000
last year.
Although the company
refused to confirm details of
which offer it related to, Shares
understands the promotion in
question was a free-flight offer
featured in the Daily Mail.
We made a mistake and its
hands-up for this one, chief
executive David Lyne told
Shares. We had a short
redemption window and we
thought if we make it short, few
people will use it.
In fact, that vastly increased
the number of people who took
up the offer. We made a mistake,
it cost us a lot of money and we
wont make the same mistake
again.
Making up the ground in the
second half will be near-
impossible, with house broker
Evolution Beeson Gregory
shaving its full-year profit
forecast by 300,000 to
2.1 million.
Shares says: A huge
blunder but not one that
will have long-term
ramifications.
26 Shares
12:46 PM Page 26
Cubus Luxs AIM gamble
by: James Quinn
A
second gaming group is to open itself to
possible failure after announcing that it
wants to raise money from private investors
ahead of a float on AIM.
Croatian casino operator Cubus Lux hopes to raise
1.3 million to open new casinos in its home
country, and is going cap in hand to the general
public to fund it rather than doing the usual rounds
of institutional investors.
But Cubus Luxs intention to float comes just a
week after Shares exclusively revealed that British
online gaming site The Gaming Bourse had failed to
raise the necessary money it needed to float.
It had been looking to raise 5 million through a
purely open offer, but is understood to have failed to He also sold iBetcha.com to NASDAQ-listed
meet the minimum 2.5 million required to allow Uproar in August 2000, but the firm, which was later
the float to go ahead, despite a high-profile City sold to Vivendi Universals Flipside, shut the site
advertising campaign. down within six months.
The Gaming Bourse is now believed to be looking The board is headed up by senior non-executive
at alternative ways of funding the business. director David Gray, a former director of Crockfords,
Cubus Lux hopes to use the money to open three which listed in 1993 and was sold to Stanley Leisure
new seasonal casinos on Croatias Istrian Peninsula (SLY) in 1999.
where it already owns the year-round Histria He has also held board positions with London
Casino by the end of 2005. Clubs International (LCI) and Mecca Sportsman
It is trying to benefit from the current focus on before it was sold to Grand Met, since renamed
gambling tourism, as typified by Las Vegas, and as Diageo (DGE).
also being attempted by property tycoon Trevor Analyst Anne McIvor at Equity Growth Research is
Hemmings in Blackpool. forecasting a net profit of 260,000 for 2005, which
The firm has been bankrolled to date by 62% would really seem to back up the likely market
shareholder Moshe Har Adir, who has been involved valuation.
in casinos for 25 years and made his money devising Broker Charles Street Securities is offering up to
the computer programme behind the Israeli Lottery, 5.77 million shares in Cubus, at an offer price of 22.5p,
of which he owned four branches at periods between giving a market capitalisation of 5.3 million.
1982 and 1997. Dealings are expected by mid-July.
Adventis chief steers lucrative path to AIM
by: James Quinn
Charles Phillpot, chief executive
of AIM wannabe Adventis Group,
is to net a 500,000 fortune later
this month when the advertising
and multi-media agency moves
on to the junior market.
Phillpot, who has been the
boss of the firm which is 72%
owned by property services group Charles Phillpot
FPD Savills since its inception in to 9 million last year, making a Peter Mitchell, and FPD Savills
1998, will make 425,000 on float, profit before tax of 419,000 from managing director Rupert Sebag-
although he will not be able to clients including Bryant Homes, Montefiore.
sell his shares for a year. BAA, McArthur Glen, Jones Lang The firm is raising 3.6 million
The property-focused business La Salle and Schroders. ahead of its admission to AIM to
evolved from the marketing Phillpot, a former J Walter fund future acquisitions, and is
department of Savills, and then Thompson and Ogilvy & Mather expected to have a market
marketing director Phillpot has staffer, is joined on the board by capitalisation of 9 million on
headed it ever since, taking sales Capital Radios deputy chairman listing.
170604 p28-29 ss profiles 6/15/04 9:44 AM
SMALL SHARES
edited by: James Quinn
Peacock of the walk
by targeting niches
P
eacocks (PEA) has been transformed
over the past three years by two
acquisitions and a deliberate attempt
to move the main chain away from the very
competitive world of basic clothing, such as
tops and jeans, into more fashion-conscious
areas.
Its most recent results demonstrated the
effectiveness of this strategy, which is as yet
not fully understood by some City analysts.
The latest acquisition of the Fragrance Shop
(FS) demonstrates the companys ability to
spot useful opportunities in the value
segment of the market. FS is similar to The
Perfume Shop, which has been the inspiration
behind the dynamic growth in Merchant
Retail (MRT).
Although FS has only 29 stores there is
potential to roll out the concept very quickly.
The group believes it could open 20 stores a
year and eventually grow to a chain of 150
shops. Stores are usually 300 sq ft to 400 sq ft
and the group is willing to target secondary
and primary shopping centres.
As part of a larger group, FS should obtain
better property deals and as the company
grows it should receive better prices from the
main fragrance houses.
Meanwhile the companys expansion
should lead to dramatically higher profits as
each of its existing stores, mirroring the
experience of The Perfume Shop, which
became profitable very quickly.
The vendors have been incentivised by an
earn-out, with 5 million of the purchase price
dependent on certain targets being met. For
28 Shares
Page 28
A canny strategy on
womenswear fits well and
has put a few extra
feathers in the tail of this
bird. John Marshall tries
its prospects for size
the final tranche profits of 15 million must be
achieved.
Peacocks has good form when it comes to
expansion, as its acquisition of Bon Marche
(BM) has been an unqualified success. This
chain serves women over 45. Peacocks
improved its buying and merchandising team,
which had historically been rather weak.
Physical expansion has continued apace.
Last year, 49 new stores were opened and 50
will be opened this year. By the end of the year,
Bon Marche should have 364 outlets. The
eventual plan is to have 500. The new stores
have a very quick payback period of some 18
months.
When BM was purchased by Peacocks two
years ago it had a loyalty database of 900,000.
This is now 1.5 million and the hope is that it
will be 2 million by the end of 2004/05.
The value clothing and footwear market is
growing by some 8% a year.
Peacocks has succeeded in growing with the
market both by physical expansion, by like-
for-like growth and through the benefits from
modernising its stores.
Last year the Peacocks chain increased sales
by 11% helped by 5.8% like-for-like growth.
PHOTO: VISMEDIA
(L-R) Richard Kirk, chief
executive and Keith Bryant,
finance director with models
wearing the latest Bon
Marche (L) and Peacocks (R)
summer collections
The emphasis has been on improving the
range, making it more fashionable and
reducing lead times by relocating production
from the Far East to Eastern Europe. The range
has been widened from the core footwear and
clothing products to include accessories,
handbags and even jewellery.
Three years ago the group started a
modernisation programme in its Peacocks-
branded stores. Last year there were 101 refits.
Another 60 stores will be refitted this year and
by the end of 2004/05 some 70% of the chain
will carry the new branding.
In addition to the store modernisation
programme the group opened 32 new stores
last year, including seven that involved taking
space in a Kwik Save or Somerfield store. More
than 20 new shops are planned for this year
and the eventual target is 700 Peacocks stores.
The group did not update the market on
current trading when it produced its results
earlier this month as it has moved to quarterly
reporting.
The next update will be at its annual general
meeting on 14 July, and it is likely that the
company will remain in good spirits.
The long-term potential for Peacocks is still
huge, and in the short term Richard Ratner of
Seymour Pierce is forecasting profits of 42
million for 2004/05 and 47 million for 2005/06,
giving earnings of 25.1p and 28.1p
respectively.
Shares says: At 233.5p, Peacocks
shares are on an undemanding rating
and are as inexpensive as some of the
groups products.
170604 p28-29 ss profiles 6/15/04 9:44 AM
Three cheers for Belhaven
B
elhaven Group (BHG) has had a
chequered history but has been a
major success since it floated for the
second time in 1996.
Then the group had 69 pubs and earned an
operating profit of 1.99 million. In 2003/04 it
generated an operating profit of 5 million and
at the year end had 226 pubs.
The group has three main profit streams;
the brewery at Dunbar, the drinks division
that sells into the free trade and the groups
own public houses.
The Scottish pub industry is quite different
from the industry in England. Historically it
was dominated by two companies Bass and
Scottish and Newcastle (SCTN).
However, there was always a much stronger
free-trade presence in Scotland with most of
the houses being owned by independents
rather than the brewers, as in Eire. Of the
current 5,500 licensees north of the border,
4,000 are independents.
This difference provides the group with a
major opportunity.
Currently it has just over 240 houses and
aims to have 300 by the end of 2005. Unlike
others in the industry it has concentrated on
freehold sites 95% of its pubs are freehold
rather than leased and so the group is immune
from future rent increases.
Belhaven also has a strategy of avoiding
expensive leaseholds in city centres. Although
the group has some city-centre pubs it prefers
to have community establishments in the
suburbs and recognises the potential of pubs
near universities.
It has concentrated on the central belt
Page 29
SMALL SHARES
The Scottish brewer is Despite serving a difficult industry the
group has a very good bad-debt record. Some
well positioned to make customers are on twice-monthly direct debits.
the most of its home The experience of free-trade customers
market. John Marshall allows the group to use its on-the-ground
knowledge and contacts rather than agents
reports when buying new pubs.
The brewery in Dunbar has a capacity of
where most Scots live and had avoided rural some 140,000 barrels. Currently it brews just
areas and pubs in areas of economic decline, over 65,000 barrels of Belhaven beers and
with only 12 pubs north of Dundee. contract brews 16,225 barrels of Calders, a
At the end of the last financial year, there Scottish ale, for Carlsberg. The group hopes to
were 89 managed houses and 137 tenanted brew 90,000 barrels this year in total.
houses. As the groups estate widens, so the
demands on the brewery should grow. The
BELHAVEN GROUP closure of the Fountain brewery by S&N
share price
480 should also mean little spare brewing capacity
460 in Scotland. This could mean that the
440 brewery might undertake more contract
brewing. Increased use of capacity should lead
420
to a more-than-proportionate increase in
400
profits.
LOW 360.00 3/7/03
380 Following the publication of the 2003/04
LAST 467.00
360 results, house broker Collins Stewart increased
340 its profit forecast for this year by 600,000 to
J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream 16.7 million giving earnings of 40.2p.
Analyst Nigel Popham at Teather &
However, the former are much larger and Greenwood is slightly more optimistic,
enjoy sales of 33.5 million and profits of 8.4 forecasting 16.8 million.
million. The tenanted estate has turnover of Although the companys shares reacted
10.7 million and contributes a profit of 5.8 positively to the figures, at 460p, the rating is
million to the group. not demanding and they should enjoy further
Apart from its own houses, the groups relative strength, having increased 9% in the
drinks division has over 2000 free-trade past 12 months.
accounts selling both Belhavens own beers, Shares says: Belhaven offers the
Tennents lager and Stella Artois, which are upside of the beverages sector with
Interbrew brands. few of the downsides.
17 June 2004 29
170604 p28-29 floats 6/14/04 7:14 PM Page 30

FLOATS
pSivida comes to Ofex
with porous silicon
by: Piper Terrett
IPT
Aussie biotech company pSivida (Ofex:PSD) has
listed on Ofex as one of the first companies to use
the fledgling exchanges new International Market
takes its
Service (IMS).
IMS allows investors to trade in a range of
companies listed on foreign markets.
message
The nanotechnology company has developed
a porous biocompatible form of silicon known as
BioSilicon.
to AIM CEO Lionel Thain

Its a platform technology with many potential

uses, says chairman Roger Brimblecombe.
There are potential applications in drug by: James Quinn

I
delivery, orthopedics, wound healing and tissue nternet direct marketing firm The firm collects this data and uses it to
engineering. IPT will cement its position as sell to agencies for direct marketing
The company recently tidied up its back yard the UKs leading company in its campaigns, accounting for 54% of
by buying up all the remaining shares in its UK field when it floats on AIM revenues. A further 35% comes from
subsidiary pSiMedica and Singapore subsidiary early next month. IPT, which stands for designing and operating white-label
pSiOncology for 22 million, including 59 million Interactive Prospective Targeting, has seen websites for clients.
new shares. sales rise by 90% a year from a standing Sales stood at 6.2 million last year,
The move brings in private company QinetiQ start in 2000 and is already profitable. making a pre-tax profit of 450,000.
as its largest shareholder with a 17% stake. House broker Canaccord Howard is expecting the
Formerly known as the UK Government Capital has high hopes for
Shares rating: bottom line to grow
Defence Evaluation and Research Agency (DERA) the company, with significantly, reaching 1.92
QinetiQ is Europes biggest R&D institution and is institutional marketing due IPT million by 2005.
still largely owned by the UK Government. to begin on 21 June. In a 1 (lo)-5 (high) Shares understands that
pSivida has no products on the market but has pathfinder note seen by management 3 2004 numbers currently
high hopes for its medical device BrachySil, a Shares, analyst Alan Howard market 4 being audited will show a
form of radioactive BioSilicon used to treat cancer says the company has strong product 3 record profit of more than
financial strength 4
locally. The device is currently undergoing phase prospects. Given its 1 million.
TOTAL SCORE 14/20
IIa safety studies in Singapore but the company leadership and first mover The firm is led by chief
plans to carry out phase IIb trials in Europe and advantage, IPT is well executive Lionel Thain, the
the US. positioned to enjoy sustainable future former boss of ICD which is now part of
The company, which has A$21 million cash, is growth, he says. GUS (GUS), with non-executives including
also developing the silicons use as a controlled- IPTs business centres on a database of Judges Capital (AIM:JDG) chief executive
release drug-delivery agent and hopes to work the e-mail addresses of more than three David Cicurel, and marketing officianado
with pharmaceutical companies having difficulty million customers, all of whom have Colin Lloyd.
delivering large-molecule drugs. opted-in by taking part in the companys IPT is raising around 5 million, giving a
pSivida plans to list fully in the UK and the US prize-draw websites. These include market capitalisation of 20 million to 30
when the time is right. myoffers.co.uk, which gives prizes million.
Shares says: Early days but the QinetiQ including cars and money for filling in a Shares says: A profitable firm in a
connection is prestigious. brief questionnaire, and quizplayer.co.uk. growing sector.

Forthcoming floats This new issues information has been provided

together with shares research site Digital Look.
To find out more visit www.DigitalLook.com

Company Business Market Float date Method Valuation () Broker

Palandri Wine producer AIM by 28 June Introduction 22m J M Finn
Ashcourt Holdings Asset management, pensions and financial advice AIM 25 June Introduction 5.2m Insinger de Beaufort
The Niche Group Specialist business investment AIM 24 June Introduction TBA John East
Monkleigh Corporate hospitality investments AIM 24 June Placing 3m Corporate Synergy
Independent Media Support Group Subtitling for films, TV programmes and advertisements AIM 24 June Placing 15m -20m Corporate Synergy
Playgolf Holdings Urban golf facilities operator AIM 23 June Placing 9m-11m Daniel Stewart
Shearings Holiday and coach operator AIM 23 June Placing 100m Robert W. Baird
Libertas Capital Group Corporate advisory services AIM 22 June Placing 20m Daniel Stewart
XN Checkout Holdings Electronic point-of-sale technology AIM 22 June Placing 20m Daniel Stewart
Kirkland Lake Gold Canadian gold mining company AIM Week commencing 21 June Introduction 46m Canaccord Capital
Nutrinnovator Developer of Wellbeing products AIM Second half of June Placing 10m Oriel Securities
Pavilion Insurance Network Specialist marketing of insurance products AIM 17 June Placing 2m Insinger de Beaufort
Biofuels Corporation Biodiesel production AIM 17 June Placing 22.5m Collins Stewart

30 Shares
170604 p28-29 floats 6/14/04 7:14 PM Page 31

FLOATS

XN to check out AIM

by: Polly Fergusson

Anyone who has spent an age

waiting for their bill to arrive in a
Shares rating:
restaurant only to find that the
wrong items have been listed XN Checkout
might want to support XN 1 (lo)-5 (high)
Checkout, a company that management 4
develops electronic tills and market 3
ordering machines for product 3
restaurants such as All Bar One financial strength 3
and Cafe Rouge. TOTAL SCORE 13/20
XN is planning to float on AIM
in June and raise 5 million from a placing, refocused on the
giving it a value of around 20 million. core UK
The company was founded in 1978 and hospitality
targets the restaurant, bar and leisure business.
markets. It has a 25% share of the total XN now
managed pubs market. This year, growth is expects to make a profit in 2004 over 1
expected to pick up and XN is forecast to million on a 30% increase on turnover. In RETROSPECTIVE
move back into profit. 2003, revenues were up just 4% to 14.3
Revenue streams come from the sale of million.
HOW WELL HAVE THE NEW
hardware and software, and support services. Blue chip clients include Mitchells & Butler, COMPANIES DONE?
After years of growth, the company started Scottish & Newcastle and Young & Co.
to suffer in the late 1990s from a misguided
attempt to expand overseas and a two-year
We are pretty confident for this year, says
Dyan. Weve had a good reception for the IPO
Torex annnounces
hiatus in IT spending. XN moved into the red
in 1999 and sales fell.
so far and we are going to continue investing
in better and broader products. He has
key appointments
But in 2002, chief executive and co-founder recently been joined by Chris Moore as by: Polly Fergusson
Ed Dayan returned to the company, removed chairman, who was chairman of Torex and
the management, reduced the headcount and financial director of Oxford Instruments. Torex Retail (TRX), which makes IT for
retailers, has strengthened its board and
announced several key new board members
TMG beefs up its business plan as it prepares since it listed in April, winning the operator
limited support from the City.
to take AIM by storm by: Polly Fergusson Last week, Torex announced that Richard
Thompson would be its new finance
Lord Razzall, Liberal business plan. strengthen the balance director. Thompson was finance director at
Democrat spokesman on It is now planning to sheet, for working capital Project Telecommunications, which was
trade and industry and raise up to 1.5 million and for acquisitions. bought by Vodafone. He joins Mark
formerly chief executive of from institutional TMG is accredited to Pearman, who became chief executive in
City law firm Frere investors before listing on install and maintain April.
Cholmeley Bischoff, has AIM in June. The company telephone systems for The latest news gave the shares a
joined the board of supplies a range of three major telephone bounce, but not enough to lift them over
Telephone Maintenance telecommunications manufacturers and has their float price of 60p. Management has
Group (TMG) as chairman, support services, including major corporate clients pointed out that there is a high degree of
prior to its AIM listing later corporate telephone including Travers Perkins, sales visibility, with 78% of forecast revenue
this month. maintenance, telephone De Vere Hotels, Dixons generated from existing contracts. But
He is joined on the board system sales and billing. It Motor Group and Bristol analysts at Durlacher are not so convinced.
by John Mitchell, reported sales of 3.26 Street Motors. There is no certainty the gap will be easily
previously chief executive million and a loss of The UK telephone filled. We do not share managements view
of Capel Court Investment 38,000 for the year ending maintenance and support that IT spending is now rising after years of
Bank and a director of in July 2003, and 1.77 market is currently stagnation due to riding high street
Turnbull & Partners. million in sales (and a loss estimated to be valued spending. The main risk...is on the
Midlands-based TMG was of 131,000) for the six around 750 million and is downside, they warn.
aiming to list last month months ending January serviced by around 1,000 Shares says: Market shares
but was told it first needed 2004. providers. concerns over growth. News of
to beef up its management It plans to use the funds Broker to the deal is City contract wins needed, driven by new
team and develop its raised from the float to Financial Associates. management.

17 June 2004 31
170604 p32 special sits 6/14/04 6:44 PM Page 32

SPECIAL SITUATIONS

Tibbett & Britten GI steps in for Yates

by: Emily Parkinson

rises on bid talk A White Knight has stepped forward for Yates (YTE)
in the form of GI Partners, the US private equity firm,
by: Piper Terrett with a 93 million management buy-out for the bar

T
ibbett & Britten (TBG) October 2003 to 400p but have
shares received a welcome recovered to 482.5p and jumped 6% to
boost following speculation 484p last week following the
that the company has rumours.
received a 600p bid from a foreign raider. Analyst Alastair Gunn at Arbuthnot
Freight giants UTI (NASDAQ:UTIW) argues that the main risk for a potential
or Kuehne & Nagel (Frankfurt) are takeover is contract clauses allowing
rumoured to be the predator. Both customers to renegotiate terms or walk
companies are currently shopping for a away, demonstrated by the
contract logistics group to create an disappointing price for the Hays (HAS)
Exel-style integrated-service offering. logistics division sale.
The ailing logistics provider has had a We think Salvesen is one of the more
tough year following the sacking of its credible targets given its very low
North American chief and subsequent starting valuation and 60% exposure to
US restructuring programme. networks, he says.
Shares in Tibbett & Britten have Shares says: Hold to see if bid
fallen from a high of around 550p in materialises.
operator. Bidding 140p a share or a 36.6% premium
to the pre-announcement closing price the bid is a
happy outcome after years of disappointing results.
Four years ago, the company was returning pre-tax
profit of 15.6 million but as oversupply in the High
Street hit prices and margins, profits slid to 10.0
million in 2002-03.
The worst may well be over, however. In the last
two years, most of the group's underperforming
units have been sold and gearing is now a relatively
attractive 50%. If these early signs of stability are
true it's reasonable to assume that Yates will not be
the only target of bid interest. Other contenders
include JD Wetherspoon (JDW) and Regent Inns (REG).
Shares says: With oversupply still an issue in
the sector, it is reasonable to expect additional
bid activity.

CURRENT DEALS Compiled by Digital Look

All information correct at
time of going to press

Company - Target Current share Company - Bidder Current share Timing Nature of deal Terms
price price
Airbath 2.63p n/a n/a n/a Possible offer n/a
Alvis 317p General Dynamics Holdings Limited n/a Offer lapsed Cash offer 280p cash per share
Alvis 317p BAE SYSTEMS 213.75p n/a Recommended cash offer 320p cash per share
BFS Managed Properties Limited 23.5p HR Properties n/a n/a Possible offer n/a
Bidcorp 19.5p Bid Services Division (UK) n/a Expected August Recommended proposal 20p cash per share
Celltech Group 547.75p UCB n/a n/a Recommended cash offer 550p cash per share
De Vere Group 435.25p GPG n/a Extended to 18 June Increased partial cash offer
(not recommended) 430p cash per share
DFS 428p Executive Chairman n/a n/a Possible offer 435p cash per share, plus right
to retain 7p interim dividend
Drew Scientific 5.75p Escalon Medical n/a Extended to 18 June Offer (not recommended) 0.0048 Escalon shares for one
Drew Scientific
Dynamic Commercial Finance 100p Enterprise London n/a n/a No firm offer has been made n/a
Gowrings 61.5p n/a n/a n/a Examining options, including sale of the company n/a
Hartstone Group 1.93p Cheng family n/a Extended to 21 June Recommended cash offer 2p cash per share
Integrated Dental Holdings 32.5p MBO n/a n/a Potential offer n/a
Inter-Alliance Group 0.8p Millfield Group 59.5p n/a Merger discussions n/a
Marks and Spencer Group 362p Revival Acquisitions n/a n/a Possible offer 290p to 310p cash per share plus
a 25% interest in the equity of Revival
Martin International 23.5p Crystal Martins n/a Open to 18 June Recommended cash offer 23.5p cash per share
PPL Therapeutics 6p Innovation Development n/a n/a Proposal to return cash to
shareholders and go private 6.2p cash per share
Profile Therapeutics 50.25p Respironics UK n/a Q2 2004 Recommended cash offer 50.9p cash per share
WH Smith 352.75p Permira n/a n/a Approach re possible offer 375p per share incl. partial equity alternative
Wembley 857.5p BLB Investors n/a Extended to 19 June Recommended cash offer 860p cash per share
Yates Group 137.5p GI Partners n/a n/a Recommended cash offer 140p cash per share

Rights issues
Current Amount Terms Issue Payment
Company Description Price being raised price date
BKN International Global animation 270p 17.01m 1:3 217p 18/06/2004 *
*Shareholders are asked to exercise their pre-emption rights from 4th June until 28th June 2004

Open offers
Company Why? First dealings Amount being Terms Issue Current
expected raised (m) price (p) price (p)
Dawson International To avoid going into administration 25/Jun 9.2 1 nominal of Loan Stock for every 10 Ordinary Shares 100 Ordinary shares 10p
Flintstone Technologies To fund investments 28/Jun 1.25 1:2 6 8.13
London & Boston Investments To finance acquisition 25/Jun 1.497 1:12 7 8
Sondex To fund acquisition 28/Jun 18.2 1:3 160 178.5

32 Shares
170604 p33-34 Chartist 6/14/04 5:01 PM Page 33

THE CHARTIST

The song remains the same

L
ast week saw the main indices squeeze out a bit more strength but some weakness
DAVID JONES, CHARTIST was creeping back in ahead of the weekend. The picture has yet to change for the likes
of the FTSE and the Dow the markets are still stuck in their wide ranges and up one
week, down the next, is still the order of the day.
FTSE 100 (UKX)
It is worth taking a step back now and
again and having a look at the bigger WELLINGTON UNDERWRITING
picture. The trend in the FTSE 100 from the share price
110
WELLINGTON UNDERWRITING (WUN)
beginning of July is still just about intact The two-year trend in insurance company Wellington
100
and the whole 4290/4400 area has been Underwriting is still just about intact following last
90
good support. At the moment the buyers weeks strong bounce. The share price has been
80
still have the balance of power but no real moving higher since April 2002 and the latest pullback
70
progress has been made this year. It will has turned around ahead of the 75p mark. This is
probably still be the US that decides the 60 where the buyers came in towards the end of last year
next major move. 50 and is the big support level to watch. The assumption
40
2002 2003 2004
is that the price will recover medium-term and set up a
Source: Thomson Financial/Datastream
FTSE 100 retest of the 100p area.
share price
4600
4500
4400
ATKINS (WS)
share price WS ATKINS (ATK)
650
4300
This is another company just about hanging on to its
600
4200
uptrend. The share price of the support services group
550
500
has fallen heavily over the last couple of months, but
4100
450 again this has stopped so far ahead of what is seen as
4000
400 important medium-term support. Back in March the
3900
J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream 350 share price slipped to the 525p area before resuming
300 its March higher. While this level remains unbroken,
250
J J A S O N D J F M A MJ
longer-term sentiment looks to be remaining positive
S&P 500 (SPX) Source: Thomson Financial/Datastream
and the target is for a run back up to this years 620p
Which is where things get confusing! It is high.
difficult to come up with a still-intact trend
for the S&P 500, the broad US index. This MMO2
share price
MM02 (OOM)
market has been trading sideways all year 120 It was a bad week for the mobile telecoms company
and looks unlikely to change at the 110 but it is still just about hanging on to its uptrend.
moment. There are no doubt plenty of 100 Trading for the last few months has been muted and
analysts out there with convincing reasons 90 sideways but if the share price is going to rally from
why the market should either go up 25% or 80 anywhere then this is the place. The 90p level had
drop 25%. However, the market wants to 70 been good support during May a break below here
go nowhere at the moment so sitting on the 60 means all bullish bets are off and that nine-month
fence and enjoying the sun until things 50
trend is coming under pressure.
J J A S O N D J F M A MJ
become clearer does not look like a bad Source: Thomson Financial/Datastream

strategy at all.

S&P 500 COMPOSITE BELLWAY BELLWAY (BWY)

share price share price

1160 850 Last weeks bout of weakness in this house-builders

1140 800 share price does not look like anything to worry about
750
1120 just yet. The latest leg of the uptrend that started early
1100 700
1080 650 last year is still going and this just appears to be a
1060 600 buying opportunity. As long as any weakness does
550
1040 not take out support at 700p, the trend remains
1020 500
450 healthy and further medium-term gains can be
1000
980 400 expected.
960 350 J J A S O N D J F MA MJ J A S O N D J F MA M
J J A S O N D J F M A MJ Source: Thomson Financial/Datastream
Source: Thomson Financial/Datastream

17 June 2004 33
170604 p33-34 Chartist 6/14/04 5:01 PM Page 34

THE CHARTIST

Finding the market range

W
hen markets are range-bound like they have been over the past few months, mathematical forms of analysis such as
oscillators are thought to be particularly effective at catching the turning points as individual shares swing from one extreme
to another.
One of the problems in blindly following these sorts of indicators in strong trending markets is the tendency for the indicator to
react too early to a strong move and signal that it is time for the trend to reverse. Following the buy signals during the bear market
or the sell signals in the face of last years strong recovery could have been an expensive and frustrating exercise. But with markets
trading in a sideways range, these indicators such as the relative strength index (RSI) used
below can help to gauge the likely direction of a share and when a particularly short-term trend BT GROUP
share price
has gone too far. 210
200
190
BT GROUP (BT.A) 180
170
The share price of this telecoms giant has been stuck in a range for even 160
A S O N D J F M A M
longer than the market looking back on the chart to the second half of last Problem level and overbought
80
year, it is clear that the 190p/195p area has proved to be a strong ceiling for
60
the share price. So even though the price has been strong over the last 40
couple of weeks, the assumption is that it could start running into some 20
resistance very soon. This is backed up by the RSI this is hovering around A S O N D J F M A M
Source: Thomson Financial/Datastream
the overbought area, another sign that it looks like the best of the move is
behind the price and it is time to head for the exits.
VODAFONE GROUP
share price
150
VODAFONE (VOD) 140
Another telecoms giant, but completely opposite short-term sentiment. 130
The Vodafone share price dropped by around 15% in May but some strength 120
DEC JAN FEB MAR APR MAY
has been creeping back in over the past week. The 120-125p area is also a big Support for year and oversold
level of support for the share price this year it was here where the buyers 100
80
stepped back in during March to drive the share price 20p higher. Adding 60
more fuel to the bullish argument for the short term is the RSI this has 40
20
dipped into oversold, suggesting the slide is overdone, and has started DEC JAN FEB MAR APR MAY
Source: Thomson Financial/Datastream
rising. Further strength is expected from current levels and any dips back to
that support should prove short-lived.
GALLAHER GROUP
share price

GALLAHER GROUP (GLH) 700

650
The share price of this tobacco company has had a good run since last
600
October but has constantly struggled with the 700p level. At the moment 550
it is proving to be the same old story again and the share price is once again DEC JAN FEB MAR APR MAY
Problem level and overbought
running out of puff. The RSI pushed briefly into the oversold area last week 100
80
also suggesting that the rally had gone quite far enough. From a longer 60
term perspective the 700p area was the major barrier back in 2002 yet 40
another reason why the balance of probabilities is favouring a move down, 20
DEC JAN FEB MAR APR MAY
at least in the short-term, from current levels. Source: Thomson Financial/Datastream

BARCLAYS (BARC) BARCLAYS

share price

The bank is another share that has been stuck in a sideways range for 540
520
longer than the market. Trips back to the 470p/480p area have tended to be 500
short lived for Barclays and this time is not expected to be an exception. 480
460
The price rallied out of this zone last week, following the RSI briefly dipping JAN FEB MAR APR MAY
Support for year and oversold
into oversold territory. Further short-term gains are expected with a run 100
back up to April/May highs around the 515p level the first target. 80
60
40
20
JAN FEB MAR APR MAY
Source: Thomson Financial/Datastream

34 Shares
170604 p35 Market Moves 6/14/04 5:36 PM Page 35

ALL INFORMATION SUPPLIED BY MARKET MOVES

by: David Jones

CONSECUTIVE NEW 52-WEEK HIGHS

5-DAY GAINERS
Last week saw online retailing minnow ASOS the end of May. Back then the company stated
NAME PRICE %
(p) CHANGE
(ASC) break out of its two-month trading range that its results for the year will beat market
and move to both fresh highs for the year, and expectations as a result of an upsurge in
Proteome Sciences 148.5 18.8 all-time highs since its 2001 float. There was no demand. The company also announced the
CML Microsystems 397.5 16.9 news behind the latest move the last 2.5 million takeover of domain name and
Minco 15.75 16.7 statement regarding trading was made in April hosting company Easily.
Sportingbet 105 112.0
RPC Group 1193 9.7 when the company when the company said The market responded positively last week
Paragon 358 8.5 that pre tax profit should be not less than to the release of results from Chapelthorpe
570,000. Results are due on 30 June. (CPL). Announced on Wednesday, operating
RISERS/FALLER OF Last week IT business NetBenefit (NBT) profit was up 23% to 7.2 million resulting in a
THE WEEK resumed the rise that was kick started towards big jump in pre-tax profit by 137% to 5.5
million.
Last week was a good one for FRESH HEIGHTS:
pharmaceuticals group Proteome Name Epic Current Change ASOS
Sciences (PRM) as the company price (p) (%) share price

continued its six-week recovery. ASOS ASC 36.5 10.6 35

There has been no real news since NetBenefit NBT 71.5 9.1 30
Aprils announcement that trading Chapelthorpe CPL 19.75 5.3
was stable and the company knew 25
Prezzo PRZ 130 5.2
of no reason for the share price fall. 20
At the moment it remains to be seen JKX Oil & Gas JKX 89.5 5.2
Sportingbet SBT 105 3.9 15
whether this recovery can continue
or whether it is just a dead cat Mucklow (A&J) MKLW 322 3.0 10
bounce. Cairn Energy CNE 1178 2.5 5
There is no such ambiguity over Camellia CAM 49 2
0
CML Microsystems (CML) rise UK Coal UKC 159.5 1.5 DEC JAN FEB MAR APR MAY
Source: Thomson Financial/Datastream
over the past week. The share has
been moving higher since early last
year and the trend still looks strong. NEW 52-WEEK LOWS
The finance director has been
putting his money where his Media group Land round (LDR) was one to be below current market expectations.
calculator is recently Nigel Clark of last weeks biggest casualties, plunging Most other fresh lows were shares that had
bought 4,654 shares on 8 and 9 on disappointing interim results. Turnover was been in a downtrend just grinding lower.
June, at an average price of 376p. up 25% to 4.9 million, but pre-tax profit Electronics firm Pressac (PRSC) continued to
It has been a volatile couple of dropped by nearly a half to 482,000. The slide after the company mentioned in its results
weeks for leisure group LA Fitness company expects an improvement in the announcement in April that it had a cautious
(LFS). The share soared in early second half but said it was unlikely that all the outlook, with tough trading expected to continue
June on bid speculation, but ground lost in the first six months will be made through 2004.
dropped back over the last week as up. Results for the full year are therefore likely Budget airline EasyJet (EZJ) continued to
no fresh news emerged. Despite this LANDROUND feel the affects of the recent profit warning,
the one-year trend remains intact share price hovering just around its all-time low price.
and further gains look likely medium 450
term.
Airports operator TBI (TBI) 400 FRESH LOWS:
announced full-year results last Name Epic Current Change (%)
week but it did not help lift the share 350 price (p)
price. Pre-tax profits came in at 23 Landround LDR 210 -31.5
million, around the same level as the 300 ML Labs MLB 16 -4.4
previous year and in the middle of Henlys HNL 0.875 -2.7
the range forecast by analysts. 250
Dawson Intl. DWSN 8.75 -2.7
200 Pressac PRSC 11.5 -2.1
J J A S O N D J F M A MJ EasyJet EZJ 160.5 -1.2
Source: Thomson Financial/Datastream

CONSECUTIVE MOST ACTIVE SHARES

5-DAY FALLERS
NAME PRICE % MOST ACTIVE:
(p) CHANGE
The list right shows the five most active stocks for the five Name Epic % Traded
days to last Friday. Most active is defined by the number of
LA Fitness 197.5 -10.0 shares traded that week as a percentage of the companys EasyJet EZJ 26
On-Line 37.5 -9.7 capitalisation. For example, EasyJet was the most active Xstrata XTA 16.1
TBI 62 -4.7 and saw a value of shares equivalent to 26% of its market
Signet 114 -3.8 Celltech CCH 12.8
cap trade during the week. Safeway SFW 11.1
Lastminute.com LMC 10.1

17 June 2004 35
170604 36-37 brokers tips 6/14/04 7:08 PM Page 36

BROKERS TIPS
by: Emily Parkinson

Pubs

Anyone fancy a pint?

A
s anyone who likes the occasional pint will know, the local pub
is often a welcome sanctuary from all the forward thrust of life
and work. Rarely, though, is it thought of as a safe haven for
wily investors. But if its an investment shelter youre after, the advice
from analysts at Arbuthnot is to buy into the tenanted pub sector.
The investment case for the sector is remarkably simple: for as long
the nation remains one of thirsty beer drinkers there will be companies
to profit. A word of caution though: a license to serve beer is not
necessarily a license to print money. As the balance sheets of many a
High Street bar operator can testify, the sector is also dogged by issues
of over-supply, increasing costs and margin slide. Buying into the
sector requires attention to the sort of business model a company
operates under, whether managed, tenanted or a mixture of both.
Of these, Arbuthnot favours the tenanted business model for the
shelter it provides from many of the wider issues facing the pub sector
in the foreseeable future. Operators offer reliable revenue streams and
their strong freehold asset backing also supports higher financial
leverage and, in turn, returns to equity. Although there are still some
uncertainties ahead, particularly with a smoking ban looming large, the
message from Arbuthnot is that tenanted operators are delivering solid
growth and should continue to do so.
Managed pub operators like JD Wetherspoon (JDW), Luminar (LMR)
and Regent Inns (REG) are characterised by larger venues, selling high
volumes of food and drink in busy High Street locations. The pitfalls of
this model involve higher overheads and exposure to tough trading
conditions, characterised in recent years by over-supply and price
discounting. Although there are signs that the some of the over-supply
is disappearing, analyst Alan Millar thinks it may be some time before
this market has returned to equilibrium.
Tenanted operators, on the other hand, pass most of this risk on to
retail tenants, who pay rent and purchase beer from parent companies
via fixed supply contracts. The nature of the relationship between
operator and tenant will come under scrutiny shortly by a
Parliamentary Select Committee but Arbuthnot believes any
investigation is unlikely to significantly dent the profitability of the
tenanted operators like Punch (PUB) and Enterprise Inns (ETI).
Arbuthnots key buy in the sector is Punch, the second-largest pub
owner in the UK, with an estate of some 7,400 pubs. The companys
integration of the recently acquired Pubmaster estate is proceeding
apace, with analysts forecasting potential cost savings in excess of the
10 million originally quoted by the company. Not only will the group
deliver on its Pubmaster promises but it also retains some fire-power
for further acquisition opportunities.
Although the short-term performance of the stock is likely to be
capped by speculation surrounding the review on tenancy agreements,
Arbuthnot thinks this represents an attractive buying opportunity for
investors willing to buy into the most likely outcome, which will
simply maintain the status quo.
Enterprise Inns, the countrys biggest landlord, is subject to the same
review but still remains a key buy recommendation for the same
reasons as Punch both offer good growth potential and long-term
earnings visibility. Operators running a mixed estate of tenanted and
managed pubs are also appealing for the balance of opportunities and
risks on offer, according to Arbuthnot.
Although companies like Wolverhampton & Dudley (WOLV) are
mature businesses, they are also highly cash-generative and
increasingly well-run, Millar says. While the managed side of the
business may carry significant cost-burdens they also have the
flexibility to transfer managed pubs to tenanted pubs and thereby limit
any inefficiencies. In the case of W&D, this has resulted in significant
internal efficiencies and, combined with greater visible growth
opportunities, should see the shares outperform.
Smaller stocks like Belhaven Breweries (BHG) and Hardy & Hansons
(HDYS) are also liked, as the former offers a unique position as the
leading independent in the Scottish market and the latters track record
of delivering double-digit growth is sustainable.
Less attractive is the entertainment and late night bar market, where
soft consumer spending and licensing issues are beginning to bite.
There are a few exceptions, however, including Urbium (URM) and
Ultimate Leisure (ULG), both of which Arbuthnot rates a buy. Urbium,
owner of 28 West End and City-based bars, is a shrewd and well-
positioned niche operator that makes up for its lack of scale through its
niche marketing pitched at the discerning and affluent customer base.
Ultimate Leisure too, is a canny operator with an estate of bars and
clubs focused mainly in the North-East.
While there are no shortage of buy opportunities across the sector,
Arbuthnot is also quick to warn investors away from some of the more
hazardous stocks where like-for-like sales are falling. One such stock is
JD Wetherspoon, which Arbuthnot reckons carries considerable
downside risk to forecasts which is not adequately factored into the
current valuation. Regent Inns and Yates (YTE) are also risky plays
in a tough marketplace Regent for its high-operational gearing
and potential dividend and Yates because of its risky reinvestment
strategy.
But aside from the self-inflicted woes of over-supply, Arbuthnot is
also wary of a number of legislation-driven issues which may prove a
headache for tenanted and managed operators alike. Not least of these
is the prospect of an industry-wide smoking ban.
Arbuthnot reckons the best way off minimising the impact of this
uncertainty is to focus on stocks where the relative predictability of
revenue streams and strong underlying cash generation far outweigh
the impact of any one-off legislative changes.

Brokers tips - Bullish Brokers tips - Bearish

COMPANY BROKER RECOMMENDATION PRICE (P) PRICE TARGET (P) COMPANY BROKER RECOMMENDATION PRICE (P) PRICE TARGET (P)
BHP Billiton Deutsche Bank Buy 435.5 560 (from 580) BP Merrill Lynch Neutral (from Buy) 482. n/a
Nbrian Water Deutsche Bank Buy 137.25 150 Dewhurst Seymour Pierce Underperform 145 n/a
Severn Trent JP Morgan Overweight 822.5 n/a Legal & General CSFB Underperform 92.2 n/a
Bwood Brewery Arbuthnot Buy 374.5 n/a AB Ports HSBC Reduce (from Add) 438 450
Lonmin Seymour Pierce Buy 972 1296 Next Merrill Lynch Neutral (from Buy) 1415 1520 (1600)
Allied Domecq Deutsche Bank Buy 460.75 500 IMI Goldman Sachs In-line (from Outperform) 371.25 n/a
First Group Oriel Buy 299.5 341 Rank Goldman Sachs In-line 304.25 600 (from 724p)
JD Wetherspoon Oriel Buy 287.75 n/a National Express SSB Sell (from Hold) 714.5 660 (from 690)
ICI DKW Add (from Reduce) 220 259 (from 191) Geest Numis Sell 575 450
Arena Leisure Seymour Pierce Outperform 48 n/a Rentokil UBS Reduce 149 135 (from 140)

36 Shares
170604 36-37 brokers tips 6/14/04 7:08 PM Page 37

BROKERS TIPS

BUY
MINES A PUNT ON PETER HAMBRO PLEASE
Share price: 55p Theres plenty of potential upside at Peter Hambro Mining (POG),
12-month hi/lo: according to Canaccord Capital, which recommends the stock as buy
72/55p with a 12-month price target of
Next news: 6.25. The company recently raised Share price: 405.5p
Annual report, 25 40 million through a share 12-month hi/lo:
September placement, but its two Russian 562.69/383.42p
EPS: 8.04 mines need another US$200 Next news: Interims, 22 Sept
PE: 6.84 million to tap into. Analyst Mike EPS: 9.03
Dividend yield: Jones says buy on the strength of PE: 45
No dividend the untapped production Dividend yield: No dividend
Dividend cover: potential. Dividend cover: N/A
N/A
HIGH ST BARS READY TO DRINK AGAIN
Trading on the High Street bar circuit may finally be improving for
Luminar (LMR), according to Bridgewell. Analysts are quick to
caution that they are not saying definitively that the company is in
the clear but they are prepared to
ITS ALL ABOUT EVOLUTION move their recommendation from Share price: 456p
The three key phrases behind Evolution Beeson Gregorys buy neutral to overweight on the basis 12-month hi/lo: 512/405p
PHOTO: NEWSCAST

recommendation on Torex Retail (TRX) are: secure, profitable and that a recovery is underway. The Next news: AGM, 6 July
cash generative. At Durlacher analysts prefer words like struggle, recent offer for rival Yates (YTE) also EPS: 60.9
precarious and risk. But EVBG analyst Lorne Daniel thinks the supports the view that a degree of PE: 9.49
stock offers cheap but secure exposure to the IT retail market. At a confidence is returning to the Dividend yield: 2.75
30% price/earnings discount to sector peers, EVBG says buy. beleaguered High St drinking circuit. Dividend cover: 4.86

SELL
DOUBTS MOUNT IN MORTGAGE SECTOR TOUGH ROAD AHEAD FOR TOREX
CSFB has cut its fair value estimate on Legal & General (LGEN) down EVBGs opinion of Torex Retail (TRX) as a sure-fire growth bet
2p to 88p to reflect doubts it has about profits at the groups couldnt be further from Durlachers take on the company. Analyst
mortality business. These doubts are shared by the market at large Sanjay Jha thinks the stock will struggle to meet market
and the shares have suffered as a expectations for 2004 and 2005. Where EVBG prefers to focus on the
result. There are other bugbears Share price: 92p revenue opportunities by signing clients like Argos and WH Smith,
to consider, including a possible 12-month hi/lo: 109.5/87.25p Durlacher thinks this is a risky strategy. With a client list made up of
cut to the dividend and mounting Next news: Interims, 24 July the larger retail clients, this leaves the company exposed to difficult
costs in mortgage endowment EPS: 4.65 High Street trading. There is also the risk of a sales decline next year
but CSFB thinks the market has PE: 19.78 which would hit hard at margins, making the stock a clear sell.
overplayed these fears. Even so, Dividend yield: 5.33%
the stock will underperform. Dividend cover: 1.27
Share price: 55p
MIXED BUSINESS FOR HELICAL BAR 12-month hi/lo: 72/55p
There are pluses and minuses to Seymour Pierces evaluation of Next news: Annual report, 25
property developer Helical Bar (HLCL). Firstly, analysts like the September
strategy of moving away from the EPS: 8.04
softer central London office market Share price: 900p PE: 6.84
into retail assets with higher yields 12-month hi/lo: 900/745p Dividend yield: No dividend
and growth prospects. But they take a Next news: Annual report, Dividend cover: N/A
more negative view of the stock based 24 June
on a valuation that places it a EPS: 32.82
price/earnings premium ahead of its PE: 27.27
peers. Analysts rate the stock Dividend yield: 1%
Underperform with a 845p price target. Dividend cover: 1.98
SHARES NORMALLY AVOIDS COVERING HOUSE BROKER RECOMMENDATIONS IN THIS SECTION. WHERE THE VIEW IS THAT OF THE HOUSE BROKER, THIS IS MARKED WITH AN ASTERISK.

Nippy Naps >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Arbuthnot says hold Yates (YTE) shares as the company looks
fair value at currrent prices, while High St trading remains tough.
Goldman Sachs downgrades IMI (IMI) to in-line as shares look
fully-priced for a recovery in its fluid power business.
Management at financial services group Close Brothers (CBG)
has a strong track record. Bridgewell remain firm buyers.
The worst is behind Brown & Jackson (BRJK), according to
Seymour Pierce. Analysts have moved their recommendation on
the stock to outperform for the first time in 20 years.
JD Wetherspoon (JDW) is an attractive target for private equity
firms on the prowl for good quality companies in the pub sector,
according to Oriel Securities. Buy.

log on to for our daily news updates 17 June 2004 37

170604 p38 analysis watch shell 6/14/04 7:09 PM Page 38

ANALYST WATCH

Calling the dip puts pair ahead

After all the scandal surrounding Shell was to drop below 350p in early February, closing on Friday 6 February
at 348.75p. Chairman Sir Philip Watts quit on 3 March. There was
Jeremy Lacey finds which brokers have another dip on 23 March to 352p before the stock started its climb to the
made the most of the subsequent rise present levels around 400p.
Leading the Shell table is Neil McMahon of Bernstein Research, part
of the US financial group Alliance Capital. London-based McMahon

H
aving examined the analysts covering BP in last weeks switched from a neutral marketperform rating to his top outperform
Shares, it seemed sensible to run the recommendation effectively a strong buy on
ruler over their track record on the SHELL TRANSPORT & TRDG. February 17.
other UK-listed oil major, Shell share price McMahon has been in bullish mode because
420
(SHEL). of his conviction that we are in for years of high
We all know the sorry story of the reserves 410 oil prices due to doubts over the ability of the
that never were. They may have caused a scandal 400 Saudis to meet increasing world demand for
and cost Shells top management their jobs, but 390 petroleum.
from an investors point of view each dip on bad 380 He said recently that it was disturbing that
news has offered a buying opportunity. the world had again become dependent on
370
Most of the analysts in the list have made new Saudi Arabia to meet its rising oil requirements.
recommendations this year, a reflection of both 360 Dennis Nacken of Germanys Helaba Trust,
the upheaval at Shell and the growing 350 who topped the BP table, again managed to get
conviction that oil prices are fixed on an upward 340 his timing right. He called the February dip on
DEC JAN FEB MAR APR MAY
path, spurred by continuing unrest in Iraq and Source: Thomson Financial/Datastream that stock right, going overweight on 19
lately by the terrorist threat to Saudi Arabia. February after the share price had bottomed on 12 February. His Shell
The first Shell-shock on proved reserves came on 9 January. The share bet is a similar story: a switch to overweight from a neutral equalweight
price had already started to fall from its New Year peak of 416p and it position on 10 February, two trading days after the low.

Whos getting it right?

Shares tracks the analysts recommendations on FTSE 100 stocks and
finds out who is winning. For each one, we take the movement in the share
price and compare it with the change in the index and sector.
These are rebased to 100. To take the leading example from this weeks
table, BP has risen 16.29% since Neil McMahon changed his
recommendation while the FTSE 100 has risen 0.55%. In effect, 100 invested
in BP would now be worth 116.29 while 100 invested in the index would be
worth 100.55. The analyst has therefore beaten the index by 15.65%.
For buy or equivalent recommendations, the analyst is credited with all
of the performance difference, and for hold or equivalent with 50%. For
sells, the rating is multiplied by -1.
Recommendations are as listed by research firm StarMine.

SHELL: ANALYSTS' PERFORMANCE

Analyst Firm Latest recommendation Date Price then Price 10-06-04 Change % FTSE 100 Oil & Gas sector Analyst performance: %
To From (p) (p) change % change % relative to relative to
FTSE 100 sector
Neil McMahon Bernstein Outperform Marketperform 17-Feb-04 343.97 400 16.29 0.55 14.51 15.65 1.56
Dennis Nacken Helaba Overweight Equal weight 10-Feb-04 339.74 400 17.74 1.84 15.75 15.61 1.72

RECOMMENDATIONS ARE AS LISTED BY RESEARCH FIRM STARMINE

Jonathan Copus HSBC Add New 13-Jan-04 356.2 400 12.3 1.04 10.01 11.15 2.08
Wilders/Rose Oriel Add Hold 7-Apr-04 367.25 400 8.92 0.39 2.05 8.5 6.73
Christopher Smith Credit Suisse Neutral New 16-Jan-04 349.48 400 14.46 -0.04 12.38 7.25 0.92
Jon Rigby Commerzbank Equal weight New 12-Feb-04 340.99 400 17.31 2.48 16.27 7.24 0.44
Gordon Gray JP Morgan Neutral Underweight 16-Feb-04 344.84 400 16 1.77 14.93 6.99 0.46
Charlie Sharp Canaccord Hold Buy 24-Feb-04 352.12 400 13.6 -0.24 13.25 6.93 0.15
Angus McPhail ING Hold Sell 16-Mar-04 357.63 400 11.85 1.29 7.43 5.21 2.06
Anne DAnselme CLSE-Oddo Add Reduce 22-Apr-04 388 400 3.09 -1.88 -0.45 5.06 3.56
Peter Nicol ABN Amro Reduce Sell 12-Aug-03 392.8 400 1.83 7.18 7.78 4.99 5.52
Mark Iannotti Merrill Lynch Neutral Buy 9-Jan-04 364.66 400 9.69 0.44 11.32 4.6 -0.73
Tony Shepard Charles Stanley Hold New 16-Apr-04 392.25 400 1.98 -1.13 -1.87 1.57 1.96
David Cline Exane BNP Paribas Hold New 19-May-04 388 400 3.09 0.32 -0.38 1.38 1.74
Thierry Baudin SG Securities Hold Sell 30-Apr-04 390.01 400 2.56 -0.08 -0.07 1.32 1.32
Richard Griffith Williams de Bro Hold New 29-Apr-04 393 400 1.78 -0.74 -0.64 1.27 1.22
Ralph Herre LBBW Buy Hold 5-May-04 402.75 400 -0.68 -1.83 -2.55 1.16 1.92
Gregor Elze Bayerische Landesbank Market weighting New 20-Oct-03 380.73 400 5.06 3.19 11.09 0.91 -2.71
Jonathan Wright Salomon Smith Barney Hold Buy 7-Jan-04 393.22 400 1.72 0.29 7.8 0.71 -2.82
Zac Phillips Teather & Greenwood Hold New 24-May-04 393.5 400 1.65 1.29 0.33 0.18 0.66
Ian Reid UBS Buy New 20-May-04 394.6 400 1.37 1.3 0.13 0.07 1.24
J.J. Traynor Deutsche Buy Hold 16-Jun-03 403.22 400 -0.8 8.02 7.03 -8.17 -7.31
Catherine Leveau CDC Ixis Reduce Sell 30-Mar-04 357.6 400 11.86 2.29 6.17 -9.35 -5.36
Jeremy Elden Lehman Underweight Equalweight 16-Mar-04 357.36 400 11.93 1.29 7.43 -10.5 -4.19

38 Shares
170604 p39 Direct. Deals 6/14/04 7:02 PM Page 39

DIRECTORS DEALINGS
by: John Marshall

All bets are off as Hartford tide turns at

last as optimism grows
William Hill flutters Hartford Group (HAR) has had an unfortunate
history. In recent times the shares peaked at
28.4p in 2000 but they have been in the penny-
share category almost continuously since then.
Long-suffering shareholders will be relieved that
the chairman and another non-executive
diirector celebrated the return to profitability by
buying shares.
Chairman Steven Thomas, who is also the
chief executive of troubled nightclub group
Luminar (LMR), bought two million shares at
1p while his colleague Christopher Poll acquired
five million at 2p.
Hartford bought Jamies Bars in 2002.
Jamies has a number of bars in the City and

T
he announcement that David
Harding, chief executive of William
Hill (WMH), had sold 946,954 shares
at 555p immediately knocked the share
price.
Although the sale was blamed on his
divorce settlement, the fact that he was
retaining only 50,000 shares has caused
concern to brokers and one firm, Seymour
Pierce, immediately told investors to sell the
stock.
The few shares he has hung on to is a
concern. Competition in the sector is
increasing and could worsen when reform of
the gambling industry takes place.
William Hill is anxious to enter the gaming
sector in order to reduce its dependence on
betting. However, this could be expensive.
The betting industry is blessed with a
strong cashflow that the group is investing in
share buybacks. These could become less
frequent if William Hill succeeds with its
ambitions to enter the gaming market.
Although it is looking for strong growth this
year, the outlook is less rosy for next year
when growth is expected to decelerate.
Meanwhile, the shares are selling on a
prospective PE of 14.5, which is a tad high for
a company where the rate of growth is
expected to decelerate.
Hardings share sale is likely to affect
sentiment for some time
should benefit from the return of better times for
brokers. That apart, the group has no other
brands. However, it seeks to appeal to young
professionals in London through a number of
unbranded outlets.
It recently reported a modest interim profit of
3,000. Brokers are forecasting a profit for the
year of 300,000 to be followed by further
growth to 670,000 next year.
Although this years profit will be modest
when compared with turnover of some 15
million, it is a maiden profit after several years of
substantial losses. Clearly the directors are even
more optimistic than the market. They will
obviously be better informed, too, which means
that others will probably follow their lead.

Top buys
Sly Trinity Mirror in full fettle as Company Director Announced Price Amount Value % held Current

execs give show of support London Clubs Int. George Hardy

date

7/6/04
(P)

0.94 597,800
()

559,780 0.79
share
price (P)
1.27
Trinity Mirror Sly Bailey 4/6/04 6.18 32,124 198,607 n/a 6.42
Shortly before Trinity Mirror in a competitive market Patientline Peter Coleridge 9/6/04 1.16 100,000 116,000 0.17 1.32
(TNI) entered its closed period, place. This optimism is BPB Ian Gibson 9/6/04 4.02 23,270 93,531 0.01 3.97
four directors including chief reflected in market forecasts, Hartford Group Christopher Poil 10/6/04 0.02 5,000,000 72,500 0.92 0.02
executive Sly Bailey invested with 14.4% growth in Wensum Stuart Lyons 11/6/04 0.71 100,000 70,500 1.92 0.77
Scottish Power Simon Lowth 7/6/04 3.95 17,710 69,999 0.00 3.9
315,642, buying a total of earnings this year and 9% Homeserve John Maxwell 10/6/04 6.46 10,000 64,600 0.02 6.49
51,046 shares at 618p. growth next year. Trinity Mirror Vijay Vaghela 4/6/04 6.18 8,884 54,925 n/a 6.42
The share buying is Trinity Mirror has strong Trinity Mirror Paul Vickers 4/6/04 6.18 6,023 37,237 n/a 6.42
reflective of the strong brands and benefits from any Hartford Group Steven Thomas 10/6/04 0.01 2,000,000 26,000 8.03 0.02
growth potential in the upturn in consumer Trinity Mirror Stephen Parker 4/6/04 6.18 4,015 24,823 n/a 6.42
company, with directors not advertising. It reacted
afraid to show their support quickly to the problems Top sells
for the stock. posed by the fake Iraq photos William Hill David Harding 10/6/04 5.55 946,954 5,255,595 n/a 5.21
Throughout this year the printed in the Daily Mirror Mitie Group Colin Hale 11/6/04 1.28 1,400,000 1,792,000 0.21 1.3
chairman, city grandee Sir and minimised the impact of NSB Retail Nikaila Beckett 7/6/04 0.25 6,000,000 1,500,000 5.80 0.25
Business Post Paul Carvell 9/6/04 5.00 148,249 741,245 n/a 5.03
Victor Blank, has been that sting.
Brixton Timothy Wheeler 9/6/04 2.87 250,000 717,500 n/a 2.87
optimistic about the outlook Brokers are impressed by Taylor Nelson Antony Cowling 11/6/04 2.08 300,000 624,000 0.04 2.09
for the group. As early as Bailey, who is managing to Wetherspoon Anthony C. Lowrie 8/6/04 2.92 200,000 582,920 n/a 2.87
February he boasted that it push profits forward after the Wetherspoon Anthony C. Lowrie 8/6/04 2.86 190,000 543,856 n/a 2.87
now has the self-confidence rather static performance in BPB Robert M. Heard 4/6/04 4.00 74,600 298,400 1.00 3.97
and commitment to succeed 2001 and 2002. Trinity Mirror Stephen Parker 11/6/04 6.56 28,300 185,506 n/a 6.42

17 June 2004 39
170604 p40 oth 6/14/04 5:45 PM Page 40

ON THE HORIZON

Perceived market weakness undermines strengths Publisher Pearson sticks to the plot
Alliance & Leicester (AL.) 847p, interims 27 July Pearson (PSON) 666.5p, interims - 26 July
The new strategy is to focus on revenue growth and cost reduction. In April at the annual general meeting of this international
Earnings have been boosted by the banks share buyback programme. publisher chairman Dennis Stevenson set out his stall for the half-
But a glance at the share price shows it is currently standing almost years results. Current performance is in line with expectations,
exactly where it was a year ago. The interest rate factor has had a with progress on all fronts, but Stevenson warned that due to the
cooling effect as have worries about a rise in bad debt and falling seasonal nature of its core book-publishing business most of the
house prices. Most of this is arrant nonsense based on suspicion and profits would be seen in the second half. Consensus analysts
ignorance, but that to a large extent is what makes the stock market forecasts estimate an annual profit of 423 million, up 3.6% on the
go round and round. Trading in the first quarter of the new year has year, but rising by 19.28% in 2005 to 505 million.
already shown solid progress in business volumes and the group Advertising at the FT itself is now level with last year, having
remains on target to achieve its primary objective of double-digit been down 4% at the start of March, and Pearson Education in the
percentage growth in its earnings US has made a good start to the
per share. Its costs savings target (m) 2004(e) 2005(e) year. Book group Penguin has (m) 2003 2004(e)
of 100 million is also on track. Turnover also started well, but will be Turnover 4,048 3,814
Interest-earning assets were up PTP 551 576 hit by a particularly strong Pre-tax profits 410 423
by 8% in the first quarter against EPS 86.5 91.7 comparative performance EPS 31.94p 31.7p
an average for 2003 while DPS 48 53.1 this time last year, and the DPS 24.2p 25.14p
customer deposits and loans weaker dollar.
ALLIANCE & LEICESTER PEARSON
were also higher. The wholesale share price More than two-thirds of share price
920 700
banking side saw volume growth Pearsons revenues are earned 680
900
in cash sales, commercial lending in dollars, and a five cent 660
balances and the number of 880 change in the exchange rate has 640
business banking accounts. (JC) 860 a 1p impact on EPS. (JQ) 620

Shares says: After a long 840

HIGH 909.00 12/8/03
Shares says: A steady-as- 600
580
period of reorganisation the 820 LOW 808.00 3/7/03 she-goes statement is likely 560
HIGH 681.50 8/6/04
LOW 549.50 1/7/03
LAST 847.00
group is expanding from a 800 from Pearson, with a few 540 LAST 666.50
J J A S O N D J F M A MJ J J A S O N D J F M A MJ
solid platform. Source: Thomson Financial/Datastream green shoots on the side. Source: Thomson Financial/Datastream

Reckitts healthy appetite BG is cooking on expensive gas

Reckitt Benckiser (RB.) 14.96, interims 26 July BG (BG.) 346p, Interims 28 July
Speculation that consumer the goods group might be about to hit Soaring oil prices may be a concern to many investors but it has done
the acquisition trail continues to excite investors and pump up the little harm to BG this year. The shares have jumped by close on a third
share price. since January. Improving sentiment towards the oil and gas explorer
Trading a fraction under 15, the stock has jumped about 25% formerly part of British Gas promises to send the share price
since the start of 2004 and has risen from lows of 940p last year. The even higher.
group, which makes Finish dish-washing detergent, Disprin and Trading has been boosted recently by acquisitions in the West
Lemsip, is rumoured to have qualified for the final round of bidding for Indies, Canada and Mauritania and it looks like investors can expect
the over-the-counter medicines business of Roche (Swiss:ROG), the continued improvements now that crude deliveries to the
Swiss drugs group. On top of that Reckitt is also thought to be mulling Novorossiisk oil terminal on the Black Sea are back on the agenda
a bid for Durex condoms-to-Scholl sandals group SSL (SSL), now after deliveries were halted due
that it has just sold its surgical to much-needed pipeline repairs.
(m) 2004(e) 2005(e) gloves and antiseptics business Analysts also predict BGs
(m) 2004(e) 2005(e)
Turnover 3814 4027 Turnover 3161 3304
to a management buyout for liquefied natural-gas unit to be a
Pre-tax profit 736 824 Pre-tax profit 1286 1275
173 million. Reckitt stalked SSL key driver behind future
EPS 75.6p 84.2p EPS 20.6 20.6
last year but decided against earnings. The operation
DPS 30.9p 33.8p DPS 3.7 4
launching a takeover then. In the generated more than a quarter of
RECKITT BENCKISER
meantime, the groups share the wider groups total revenue BG GROUP
share price
1550 buyback programme continues last year, although heavy share price
360
1500 to underpin shareholder value, investment has meant its
1450 340
1400 while the groups recent trading contribution to the bottom line HIGH 351.25 13/4/04
LOW 253.00 29/9/03
320
1350 performance and margin remained modest. That, LAST 346.00
1300 300
1250
improvement has impressed the however, is set to change over
1200 HIGH 1529.00 7/6/04 City. (SF) the medium term. (SF) 280
1150
1100
LOW 1070.00 10/7/03
LAST 1496.00
Shares says: The group Shares says: Improved 260

1050 will have to work hard to trading is catching the eye 240
J J A S O N D J F M A MJ
J J A S O N D J F M A MJ
justify its chunky rating.
Source: Thomson Financial/Datastream
of the City. Source: Thomson Financial/Datastream

40 Shares
170604 p41 Invest. Champ 6/14/04 5:44 PM Page 41
BATTLING FOR THE
PRIVATE SHAREHOLDER
The battle
for redemption
H
ow often have you paid for one thing and got another? As
the current shareholder debacle at Hunting (HTG) proves,
its not just a phenomenon exclusive to online
supermarket shoppers. Investors can also be subject to
these frustrations.
Preference shareholders in Hunting, an energy services company,
thought that their irredeemable preference shares were precisely that
shares that would guarantee them a fixed dividend, even in the event
of the companys default, and importantly, were classed as
irredeemable. So, when Hunting executives decided to cancel and
repay shares at par value without their consent, sparks flew.
It flies in the face of our understanding of what the shares were,
says Michael McKersie, manager of investment affairs at the
Association of British Insurers (ABI). It really is
very bad for holders of that class of share. They
were thought to be irredeemable. Capitalism depends
Hunting is proposing to redeem the 8.25%
cumulative convertible preference shares for their on genuine ownership
par value of 1, even though shares have recently
traded as high as 119.5p. Prior to the and capitalism will fail
announcement, the stock was worth 111.5p and
has since jumped to 137.5p. if ownership fails.
According to the UK Shareholders Association
(UKSA), the share certificates clearly state the
shares will not be redeemable though the
company intends to press ahead with the cancellation anyway,
claiming it can do this via a Return of Capital requirement.
We understand the desire of the company to get out of an onerous
obligation but this seems to be very inequitable, says David Blundell,
chairman of UKSA. The shares are held by a number of our members
as they were a good source of income and have always been listed as
irredeemable so we feel our members have been grossly misled in the
past.
Huntings argument is that cancelling the shares saves it money as
it can borrow at a lower rate of interest in the market than it was paying
for the preference shares something it says will ultimately benefit all
shareholders. This is a very expensive form of debt for us, says finance
director Denis Clark. Legally its quite clear we can cancel and repay
INVESTORS CHAMPION
Private investors
need to read the
small print to avoid
costly mistakes. The
good news is that
there are groups that
are fighting your
corner. Emily
Parkinson reports
these shares at par, and that is what we are doing. The ordinary
shareholders are very supportive of our action.
This has still raised the ire of shareholders associations including the
UKSA and the ABI. Both groups are attacking the move on the grounds
that allowing only holders of ordinary shares to vote on the proposal is
an effective transfer of value from the preference to the ordinary
shareholders. Both argue that it should be all the shareholders in the
company who are consulted, not just those likely to benefit.
The proposal will be subject to a vote by ordinary shareholders only
at the groups EGM on 30 June. In the meantime, the ABI is seeking
discussions with the board and is also investigating the possibility of
legal action.
We are taking this very seriously, says Michael McKersie, manager
of investment affairs at the Association of British
Insurers. We have been trying to ascertain from
the company why they are taking the path. We are
not yet at the stage to give a final view on this but
we are currently in the process of gathering
information from the company.
UKSAs Blundell says: This is yet another
example of small shareholders being
disadvantaged. Despite the emphasis on
corporate governance, time and time again it
doesnt work.
There are recent examples of where certain
classes of shareholders are being disadvantaged. Why isnt it working
in practice? Our answer is its a lack of political will. As long as we go in
batting for the private investor, soon enough the Government is going
to have to bring in measures to stop this sort of nonsense.
For shoppers who find themselves with a dodgy deckchair or a
cranky clotheshorse, a polite whinge will generally see the purchase
replaced. But for those preference shareholders who got what they
never bargained for, theres no such recourse. Blundell, for one, thinks
thats a matter of grave concern.
Capitalism depends on genuine ownership and capitalism will fail if
ownership fails. Its as simple as that. This is a genuine example of
that.
To contact UKSA call 0870 7060600 or visit www.uksa.org.uk
17 June 2004 41
170604 p43-44 adft spreadbet 6/14/04 5:53 PM Page 43

SPREAD BETTING

Making money Time is money in the long-hours short-

term world of spread betting. Philip
Battley looks at the opportunities and

round the clock freedom that this exciting product offers

you the investor

B
etting is endemic in the City of London. If you spend your
working life assessing risks, then it is only natural that it
could spill over into your private life. But city traders
know more about the markets than they know about
horses or football, so it is quite natural that the City
created its own form of gambling based on the basic principles of
market trading: spread betting.
It is ideally suited to the city pros lifestyle. Money-rich and time-
poor, these guys and gals want to use their in-depth knowledge of the
markets gained in the workplace to take a quick punt with their own,
rather than their companys money. And they spread bet because
spread betting is, like all betting and unlike most investment, a short-
term thing.
What is not so obvious then is why today 80% of all financial spread
betters are not city pros, but ordinary retail investors. This is a group
who by definition are not spending their entire lives immersing
themselves in the research and watching the tiny fluctuations in the
markets, but have other priorities.
So what has made spread betting so popular among private
investors over the past few years? There are number of things. Firstly,
over the past decade, there has been a huge rise in the number of
private investors. Privatisations started it off, followed by a relaxation
of trading rules and since the mid to late 1990s, the internet. You dont
have to work in the Square Mile any more to access the kind of
information and tools to play the markets.
Then there is the fact that spread betting has many advantages: it is
tax free, commission free, offers more flexibility than the standard
market, 24-hour trading, controlled risk, small initial outlays, easy
credit, immediate dealing, a vast range of markets to play from the
same account, the ability to profit from both rising and falling
markets the list goes on and on. Suddenly the boom becomes more
understandable.
So what is spread betting, how does it work, and should you get
involved as well?
Financial spread betting gives investors the opportunity to trade the
financial markets without ever taking physical ownership of the
underlying instrument. This means that you can speculate in the
direction of any financial instrument, whether it is specific shares,
currencies, commodities or indices without ever owning them.
The spread betting process is simple. Rather than quoting fixed odds,
the bookie acts like a market maker in shares, citing a two-way price to
potential punters that allows them to bet whether a market will rise or
fall.
Lets assume you think the FTSE 100 is very likely to rise in the next
day or two. You would contact your financial trading broker to find out
what prices they were quoting to buy the FTSE. (A buy signal is when
the market is expected to rise, conversely a sell signal is when the
market is expected to fall, also called going long and going short).
They will quote two prices, a lower price to sell and a higher price to
buy. You decide you will trade 1 per point for every point the FTSE
rises above your buy price. During that day the FTSE does rise and
continues to rise the following day as well (each point the market rises,
you have made a profit of 1). Lets assume after the second day your
data information signals indicate the peak is likely to be reached very
soon, so you now decide to sell and terminate your trade. Lets also
assume for the purpose of this example that in total, the FTSE rose
by 56 points a profit of 56.

17 June 2004 43
170604 p43-44 adft spreadbet 6/14/04 5:53 PM Page 44

SPREAD BETTING

The level at which you enter the market is up to you. You could for advantage either. Remember any losses made on a spread bet cannot
example choose to trade, say 10 per point. Using the same profit as be offset against capital gains on ordinary investments. And many
above, thats 56 points X 10 = 560, or 56 points X 20 = 1120 or 56 punters have been stung by the easy credit facilities available. Yes, it
points X 50 = 2800. Thats not too bad for two telephone calls and a eliminates the need to tie up capital, but you can get into hot water that
few calculations is it? Of course, if your indicators predicted the markets much quicker as well.
to fall, you would instruct your broker to sell the FTSE and the same So how can you ensure you use the advantages of spread betting
principle applies as in the above example but in reverse, i.e. The further without being hit too hard by the downsides? The most important
the market fell, the higher your profit would be. tools to use are the virtual trading platforms available now from many
The catch of course to all this that it could equally work in reverse. online brokers on which you can practice without spending a penny,
The market could fall and you could end up losing just as much as you and you can develop your own tactics. Make your mistakes on the
could win something that could never happen with a traditional bet practice ground, not in a live situation.
at the bookies, where you would just Heres an example: a first-time user of
lose your initial stake. As you may be the virtual trading platform might put
beginning to tell, spread betting is Spread betting has many down 100 a point, thinking that is the
essentially a short-term punt not equivalent of traditional 100 bet but
something for the nest-egg. advantages: it is tax free, in fact its closer to a 20,000 bet. Youve
But as well as the simplicity of got to multiply your stake by the price
trading, the other advantages are commission free, offers more to understand your market exposure.
considerable when compared with For example if you put 10 a point on
traditional trading on the stock market. flexibility than the standard the FTSE, thats 10 multiplied by 4454
For a start your winnings are tax free. thats the same risk as having a 44,540
They are not liable for capital gains tax, market, 24-hour trading, portfolio. An enormous amount of
stamp duty or income tax even money for many people.
though you may be spread betting on controlled risk, small initial The second major tool available, and
exactly the same indices like the FTSE often insisted on by the brokers is the
100 as shown in the example above; outlays, easy credit, immediate stop-loss order. If the market goes
there is no dealing commission per against your bet, a stop loss will
trade, unlike most other market deals; dealing, a vast range of markets automatically close your bet when it
when you spread bet, like CFDs or hits a certain mark in order to limit your
futures, it is just as easy to make money to play from the same account, losses while at the same time not
in a falling market as a rising one, limiting your potential gains. In fact if a
because unlike share trading, you dont the ability to profit from both spread bet firm makes stop-losses
ever actually own the underlying asset. mandatory it is a good sign.
To sell in share trading, you must own rising and falling markets the As well as learning the spread betting
to begin with, but not with spread ropes themselves, there are all sorts of
betting. list goes on and on ways to use spread betting as an
There is usually a standard market addition to your existing portfolio. For
contract size, but not in spread betting example - many people use spread bets
with some online brokers you even bet to hedge against potential losses in
with just 1p a point. And the size of the existing investments.
spread quoted is irrelevant to the size of Lets say you have a 7,000 ISA in a
the bet. Therefore small positions are FTSE 100 tracker fund, and you think the
not penalised as they can be in cash FTSE is going to fall. Rather than get out
markets. And you can trade when it of the ISA, you could hedge your
suits you most spread betting exposure with a spread bet. Say the
companies are open 24 hours a day. And index is trading at 4,404. You simply
the range of markets available for you to Some spread betting brokers divide the 7,000 value of your ISA by
bet on often from the same account 4,404, which gives you a figure of 1.60
is almost limitless you pick according Broker Web Phone per point. You can then go short on a
to where your knowledge lies. spread bet by 1.60 a point. If the FTSE
It is not, however, a perfect world. If it Cantor Index www.cantorindex.com 020 7894 8800 does fall lets say, by 9% to 4,004 - you
were, a lot more people would win a lot Capital Spreads www.capitalspreads.com 020 7600 0110 will make 630, which should be the
more money than they do through City Index www.cityindex.co.uk 020 7550 8500 same as the amount you have lost on
spread betting. In fact, Alexander Deal for Free www.deal4free.com 0800 093 3633 the FTSE tracker. You can make money
Davidson says in his book How to Win as Finspreads www.finspreads.com 0800 096 9620 from short-term fluctuations, while
a Stock Market Speculator that 95% to 97% IG Index www.igindex.co.uk 0800 195 3100 keeping your capital within an ISA.
of all punters in financial spread betting Spreadex www.spreadexfinancials.com 0800 052 6570 When it comes to choosing a broker,
lose money. He believes the few Tradindex www.tradindex.com 020 7422 3994 one of the most important things to
winners are either lucky or people with SOURCE: COMPILED BY THE AUTHOR bear in mind is that the costs associated
specialist knowledge. Whether that with financial spread betting are
figure is true or not, it does show that you need to know what youre included in the spread (the difference between the bid and the offer
doing before you get involved. For example no commission? Sounds price). Therefore the wider the spread, the more you pay to trade. So
great, until you see that youre paying it without realising through the always compare the spread of the different companies you are
width of the spreads. Gordon Brown would be proud. It is worth considering.
considering that in some cases you could actually be better off
financially to pay the brokers charges. Correction: In the article on investment software (6 May 04), the price given for
A closer look and the tax-free status is not necessarily a pure Intuits Quicken XG personal finance product should have been 59 and not 354.

44 Shares
170604 p46 Strategies 6/14/04 6:57 PM Page 44

STRATEGIES
ANALYSIS

The Millwall strategy

Contenders at the bottom of the table have further to
rise than their more celebrated peers. Jeremy Lacey
scouts for the teams that could reward discerning fans

N
obody loves us we dont care
Football followers will understand
when I label this the Millwall
strategy. Its about searching for
stocks which few of the great and powerful in
the City have been associating with by choice.
There is a perfectly good rationale for looking
at shares that have been relatively unloved. If
the fund managers and analysts have got in
there first, the chances are that the best of the
growth in the share price has been and gone,
leaving just the crumbs for private investors.
So the answer is to start looking at companies
that dont get a lot of attention from the
analysts, and where those brokers that do cover
the company have not been sending out raging
buy notes.
As a data-mining exercise, we started by
limiting the selection to stocks covered by no
more than three brokers and where the
consensus recommendation is hold at best.
But we are not looking for rubbish, so a few extra
criteria were added to ensure there is a real
business there: a return on capital employed
(ROCE) of at least 20% and at least some profit in
the latest full year.
I would stress that this is not a substitute for
research but a way of picking out a manageable
selection of stocks that fit the criteria in order to
give them a closer look.
The result is a list of shares which includes
several that one might expect to be enjoying
better sentiment before long, and one or two
where the tide has probably turned. It would be
a surprise if Telecom Plus has not been getting a
stack of love letters since reporting a 90% rise in
pretax profit in the year to March on 9 June,
thanks to strong performance by its virtual
network business.
Communications testing equipment group
Spirent recently issued better than expected full-
year results and has been looking cheap relative
to its peers, according to some observers. Theres
an EGM next week on a new stock option and
long-term incentive plan.
Reliance Security has warned that its year-to-
April results will be a bit below market
expectations, but has nevertheless been winning
Millwalls Dennis
Wise at this
seasons FA Cup
Final
new deals including a seven-year 250 million
contract this month with the prison service.
Nestor Healthcare is planning a business and
cost structure review led by acting chief executive
Stephen Booty. While computer games firm
Eidos put out a profits warning in May following
slower-than-expected sales of its Hitman:
Contracts game.
These are a few of the many stories out there:
there are plenty of Milwalls around and once in a
while they get to the Cup Final.

Den Selection
Company EPIC Mkt cap Analysts Index/ Price (p) PE Turnover ROCE Interest Latest
(m) consensus listing current 1 yr ago (m) % cover (x) profit (m)

Spirent SPT 654.40 3 hold FTSE Mid 250 0.69 0.38 23.39 466.20 25.50 3.18 0.30
Reliance Security RSG 125.90 3 hold FTSE Small Cap 5.40 5.20 13.32 268.10 58.90 33.20 6.007
Nestor Healthcare NSR 116.50 3 sell FTSE Small Cap 1.33 2.45 5.68 423.20 106.00 7.01 13.60
Intertek ITRK 818.70 3 hold FTSE Mid 250 5.30 4.43 17.71 471.10 46.40 8.16 70.60
Eidos EID 168.30 3 hold FTSE Small Cap 1.18 1.60 12.77 151.50 22.40 74.00 17.35
BWD Securities RBG 95.00 3 hold FTSE Small Cap 4.30 4.25 19.67 33.25 24.00 30.90 16.79
Collins Stewart Tullett CSTL 839.80 2 hold FTSE Mid 250 4.44 3.93 15.69 473.90 40.60 18.20 69.40
BPP Holdings BPP 179.50 2 hold FTSE Small Cap 3.14 2.95 16.81 111.60 27.60 36.90 8.85
Telecom plus TEP 196.80 1 hold FTSE Small Cap 3.20 2.23 44.51 58.04 86.30 52.30 5.59
Excel Airways EXA 160.80 1 hold AIM 1.68 1.35 17.23 247.30 80.30 228.00 13.37
Dickinson Legg DKL 8.40 1 hold AIM 0.23 0.31 3.09 49.19 88.60 14.70 2.22
Clarke (T) CTO 58.80 1 hold FTSE Small Cap 4.59 4.69 8.91 143.30 61.60 165.00 8.94
Belgravium Technologies BVM 8.00 1 hold AIM 0.12 0.15 15.79 3.90 31.80 0.80
Atlantic Global ATL 10.90 1 hold AIM 0.48 0.51 23.53 1.96 30.60 0.50
SOURCE: SHARESCOPE

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170604 p47-49 Lrg Caps 6/15/04 9:13 AM Page 47

RESULTS
LARGE
AND
& TABLES
MID CAP RESULTS
Key to Shares opinion on stock + Positive / Neutral - Negative

Persimmon brownfield acquisitions proves housing market is buoyant

by: Steven Frazer

Persimmon (PSN), the UKs largest
housebuilder by market capitalisation,
provided further evidence that the housing
market remains extremely buoyant by
announcing the purchase of two significant
brownfield sites for redevelopment.
Taken together these will produce the
equivalent of 14% of the total number of units
built by the company in 2003 and have a
combined sales value of 260 million. The
largest is a 78-acre site in Birmingham on land
formerly occupied by the Coors Brewery and
the second is a 40-acre site right by Colchester
station on land currently occupied by the Flakt
Wood factory.
Work on the Birmingham site is expected to
start next summer while the Colchester site
will see first phase work start this Autumn
with the full range of new homes starting next
summer.
Both schemes will include contributions for
environmental improvements including
educational facilities in Birmingham and 2.5
million of community contributions in
Colchester.
Current trading conditions for Persimmon
are getting even better, and forward sales
revenue is already up by 30% on last year while
the number of homes forward sold is 17%
ahead. Average prices are up 12% at around
169,000.
Shares says: Despite sectors rating,
housebuilders are money machines.

ENGINEERING & MACHINERY FOOD PRODUCERS & PROCESSORS

FKI (FKI) - 114.25P
The tone from the engineering
group was one of extreme caution
as it announced it swung into the
red in the full-year. A host of
negative factors contributed to
the losses, not least of which was
the cost of its latest restructuring
scheme which resulted in a 54.7
million write-down.
In the year ended 31 March, the
group lost 17.3 million compared
with a profit of 26.4 million last
year. Revenue fell 7.4%, with a
large hit from the weak US dollar.
Declining demand in its Logistex
business, which accounts for one-
third of sales, also hit hard at
revenue. The London-based
company, which provides
industrial lifting, ropes and
logistics systems, is trying to claw
its way back to profitability by
cutting debt, reducing staff
numbers and selling assets.
Tover Fin EPS Fin Total Div
PTP Div Div Yield
2004 1345 -17.3 -3.5 3.0 4.5 1.7
2003 1453 26.4 1.9 0.3 4.5 6.5
Div. Payable: 29.09.04 xd date: 29.10.04
- ARLA (ARU) - 60P +
FKI The results were the first since the ARLA FOODS
share price share price
130 merger between Arla and Express 65
120 Dairies. The merger has been 60
110
more successful than was initially 55
hoped. Although the group has 50
100
still to announce the final phase 45
90
HIGH 125.50 19/1/04 of rationalisation, which could be 40 HIGH 63.25 19/3/04
LOW 75.00 25/6/03 LOW 33.50 11/6/03
80 dependent on what happens to 35
LAST 114.25 LAST 60.00
30
70
J J A S O N D J F M A MJ the Morrison/Safeway business, it J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream
is confident that the benefits will
A number of asset sales have be greater than originally thought deliver 45 million. The major
been pencilled in for the first-half and that they will arrive more shareholder, Arla amba, promised
of the current financial year and quickly than anticipated. not to bid before October 2006.
the group has plans to lay-off The group inherited from Arla Meanwhile the new Stourton
another 600 workers to reach its some strong brands such as dairy, the new Scottish facility
target of 700. The moves are all Anchor and Lurpak butter. Sales and the improved Manchester
part of a strategic review are growing as is the demand for dairy should all ensure that the
announced in January which Cravendale milk and specialist group moves forward. There is
identified a number of non-core cheeses. The group has linked up probably more positive news to
businesses Management kept the with TNT, a subsidiary of Dutch come. (JM)
dividend unchanged at 4.5p. (EP) Post, to deliver packets and larger Shares says: The shares
Shares says: Too soon letters via its milk floats. reacted positively to the
to call it a clear recovery Currently it is delivering some 9 results and should remain a
play. million packets but is licensed to firm market.
Div Market Tover Int EPS Int Total Div Div Market
Cover Cap PTP Div Div Yield Cover Cap
- 677 2004 700 5.0 0.2 0.6 2.1 0.3 361
0.4 447 2003 - - - - - - -
Div. payable: n/a xd date: n/a

17 June 2004 47
170604 p47-49 Lrg Caps 6/15/04 9:13 AM Page 48

LARGE
LARGE &
& MID
MID CAP
CAPRESULTS
RESULTS

FOOD PRODUCERS & PROCESSORS GENERAL RETAILERS

TATE & LYLE (TATE) - 319P
Although Tate & Lyle is best TATE & LYLE
share price
known for its sugar, it has 370
HIGH 361.50 2/9/03
widened its range of sweeteners 360
LOW 273.00 28/1/04
350
to include a calorie-free sweetener LAST 319.00
340
called sucralose which is sold to 330
320
food manufacturers and high 310
fructose corn syrup which is sold 300
290
to soft drink manufacturers. 280
270
Although the quality of the J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream
group's earnings has improved
the latest statement confirmed be two years before the cereals
that the group is not immune market stabilises. Until it does
from the impact of fluctuations in the shares will be under some
raw material prices. Although it pressure despite the company's
has succeeded in recovering the progressive dividend policy.
increase in corn cost since the The results prompted a
beginning of 2004 it warned that downgrade rating from Smith
it will need another substantial Barney to hold from buy. The
price increase next year if it is to group's commodity exposure
succeed in recovering all its costs. makes it risky to take a long-term
If it fails to get the necessary view, with a further deterioration
price increase then margins will predicted for 2005. (JM)
again be under pressure. The Shares says: The shares
company has warned that it may are probably high enough.
Tover Fin EPS Fin Total Div Div Market
PTP Div Div Yield Cover Cap
2004 3167 224 32.7 13.2 13.2 18.8 2.5 1505
2003 3167 187 27.8 12.8 12.8 18.3 2.2 1544
Div. Payable: 04.08.04 xd date: 07.07.04
/ CARPHONE WAREHOUSE (CPW) - 143P +
As usual the company managed CARPHONE WHSE.GP.
share price
to exceed City expectations. The 160
group is motoring on all fronts. It 150
is now profitable in Germany 140
130
where it has acquired a service 120
provision operation. 110 HIGH 155.00 14/1/04
Its UK retail operations are 100 LOW 87.25 11/7/03
LAST 143.00
enjoying buoyant trading and 90
80
they benefit from recurring J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream
revenues as they take a percentage
of the customer's monthly spend very little to the bottom line.
from the networks. Brokers are wary of being caught
These recurring revenues are out with over-cautious forecasts.
now 55% of all turnover. Its UK Nick Bubb of Evolution Beeson
home phone offering TalkTalk is Gregory is forecasting 04/05
expected to enjoy better results profits of 95 million followed by
this year as customer acquisitions 120 million in 05/06.
costs should be lower. He has a price target of 185p.
The upside is also enhanced by Although the shares enjoy only a
the company's decision to offer small yield the growth prospects
users of its TalkTalk service free are still very encouraging. (JM)
calls when calling other Share says: Despite their
TalkTalkers. However, something relative strength the shares
for nothing customers contribute have much further to go.
Tover Fin EPS Fin Total Div Div Market
PTP Div Div Yield Cover Cap
2004 1849 44.5 3.17 0.9 1.3 1.0 2.4 1250
2003 1842 34.5 2.6 1.0 1.0 1.2 2.6 794
Div. payable: n/a xd date: n/a

LEISURE & HOTELS REAL ESTATE

FIRST CHOICE HOLIDAYS (FCD) - 126.5P / LONDON MERCHANT SECUR. (LMSO) - 180.75P /
The tour operator reported a FIRST CHOICE HOLS. London Merchant Securities has LONDON MER.SECS.
share price share price
narrowed full-year pre-tax loss of 155 spent the last three years 190
50.9 million against a loss of 55.1 150 HIGH 152.75 20/2/04 consolidating investments rather
LOW 108.00 11/6/03 180
145
million the previous year. LAST 126.50 than striking out strategically.
140 170
According to management, 135 Although this has meant a 160
130
the losses came amid a 125 somewhat sluggish portfolio 150 HIGH 181.00 14/1/04
background of a changing and 120 performance, its share price 140 LOW 124.50 12/6/03
LAST 180.75
115
challenging mainstream holidays 110 enjoyed an 80% rally in the last 130

marketplace. 105 J J A S O N D J F M A M J half of 2003. 120

The mainstream market is
notoriously competitive, with
low-cost European carriers
putting margins under pressure
hence the groups fascination
with the higher-margin,
specialist sector. In this sector,
its two divisions specialist
holidays and activity holidays
saw year-on-year bookings jump
20% and 8% respectively.
Its mainstream holiday unit is
still fending off fierce
competition from no-frills
carriers though it is hoped
Tover Int EPS Int Total Div
PTP Div Div Yield
2004 782 -50.9 -9.0 1.75 4.3
2003 760 -55.1 -9.6 1.6 4.6
Div. Payable: 01.11.04 xd date: 29.09.04
Source: Thomson Financial/Datastream
Latest results hint at a turning
revenues will recover along with point, with last years 15.8
its new focus on medium and million loss transformed into a
long-haul flights. Rising oil prices 17.2 million profit. Also, the
also loom large for many low-cost recent death of founder and
operators. However, First Choice president Lord Rayne means
has limited exposure to oil price changes are imminent.
increases because of its hedging The Net Asset Value increased
strategy, according to by 6.4% to 758 million, beating
management. The dividend was City expectations by around 2%.
increased by 9% to 1.75p. Around 20% of the portfolio is tied
Shares says: Set against up in venture capital, a side of the
MyTravels price graph, a business that has often confused
picture really does speak a investors. The news, therefore,
thousand words. that 50 to 100 million of VC
Div Market Tover Fin EPS Fin Total Div
Cover Cap PTP Div Div Yield
- 675 2004 60.2 17.2 4.85 4.4 6.4 3.9
- 564 2003 65.3 -15.8 -10.4 4.3 6.3 5.3
Div. Payable: 28.07.04 xd date: 16.06.04
J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream
funds are to be moved to the
property investment portfolio
over the next few years should be
welcome.
Although the dividend was
increased to 6.4p, there is some
concern over the companys
uncovered dividend position of
0.7x. Management believes that
the next two to three years will
see satisfactory realisations of
many current investments.(CB)
Shares says: Strictly a
long-term play.
Div Market
Cover Cap
0.7 433
- 314

48 Shares
170604 p47-49 Lrg Caps 6/15/04 9:13 AM Page 49

LARGE
LARGE&&MID
MIDCAP
CAP RESULTS
RESULTS

SUPPORT SERVICES TRANSPORT

MITIE (MTO) - 126P + TBI (TBI) - 64P /
Mitie, the maintenance and MITIE GROUP The operator of Luton and Belfast TBI
share price
management company, reported a 140 airports claims the aviation share price
75
HIGH 138.00 19/8/03
strong end to the year, with higher 135 LOW 112.00 5/4/04
industry is starting to recover 70
numbers than City forecasts, a 130
LAST 126.00 despite the fact pre-tax profits fell 65
dividend increase and news of a to 6.2 million from 11.2 million 60
125
share buyback programme. the previous year. Chief executive 55
120 HIGH 72.25 5/12/03
Support services had an Keith Brooks blamed the fall in LOW 49.75 9/6/03
115 50
excellent year with its three profits on the increase in LAST 64.00
110 45
acquisitions all meeting J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream
exceptional items for the year J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream

expectations. Over the year, Mitie including a 5.9 million goodwill

spent a total of 23.7 million on
acquisitions, including 18.4
million on beefing up its presence
in manned guarding and 2.9
million on Eagle Pest Control.
Costs of integrating acquisitions
were 1 million.
Building Services faced a more
challenging start to the year, with
high turnover and margin
pressure due to deferred start
dates for projects. Property
Services had a slow start to the
year but performed better in the
Tover Fin EPS Fin Total Div
PTP Div Div Yield
2004 694 38.2 7.6 1.4 2.5 2.2
2003 565 31.8 6.5 1.1 1.9 1.5
Div. Payable: 30.09.04 xd date: 01.09.04
second half and won more write down in the Airports
contracts. Services division.
The plan is to buy back up to 30 Passenger numbers rose 15%
million shares, and this will and TBI says it is cashing in on the
answer criticism that Mitie has boom in budget air travel, which
been sitting on a cash pile for too increased by 31% during the period
long. Last year 24 million was thanks to Ryanair and Easyjets
spent on acquisitions and net cash expansion programmes.
ended the year at 49 million UK traffic at Orlando Sanford
down 10 million from a year increased by 21% and US
earlier. (PF) passenger use increased by 67%.
Shares says: Good During the year Stockholm
results across the board Skavsta was extended and
and buyback good news. passenger numbers increased
Div Market Tover Fin EPS Fin Total Div
Cover Cap PTP Div Div Yield
3.4 391 2004 186 6.2 -0.17 1.6 2.3 4.0
3.4 381 2003 177 11.2 0.94 1.6 2.3 4.8
Div. Payable: 01.10.04 xd date: 01.08.04
almost 250% to 800,000. Basiq Air
and Ryanair have both
established hubs at the airport.
Belfast airport saw a 20%
increase in low cost traffic boosted
by bmibaby and new services to
Europe introduced by Easyjet.
Brooks fears the hike in oil prices
could put the kibosh on the boom
as yields fall. TBI maintained the
dividend for the year at 2.3p. (PT)
Shares says: Benefiting
from budget travel but oil
price hikes are looming.
Div Market
Cover Cap
- 354
0.4 294

UTILITIES
NORTHUMBRIAN WATER (NWG) - 133.25P
Water regulator Ofwat has
concerns over Northumbrian
Waters financial strength. Net
debts jumped by 579.8 million
last year to 1.77 billion, as it
raised funds to buy its
independence from French utility
Suez and float on the stock
market. This, however, compares
to its 704 million market value,
while its BBB credit rating,
according to Standard & Poors, is
only barely in investment grade
territory.
Howver, Northumbrians
managing director John Cuthbert
remains optimisti due to 205
million of repaid short-term
borrowings since the period end.
This was helped by a 10% hike in
real prices last year, while
Northumbrian is seeking a 28%
real price increase between 2005-
2010.
Tover Fin EPS Fin Total Div Div Market
PTP Div Div Yield Cover Cap
2004 449 45.5 11.5 4.63 6.95 5.7
2003 - - - - -
Div. Payable: 13.08.04 xd date: 14.07.04
UTILITIES
/ SEVERN TRENT (SVT) - 822P -
NORTHUMBRIAN WATER GRP The upcoming management SEVERN TRENT
share price share price
140 exodus has done little damage to 840
820 HIGH 827.00 17/5/04
135 HIGH 138.00 7/6/04 water utility Severn Trent in spite 800 LOW 640.00 29/8/03
130 LOW 101.25 7/10/03
LAST 133.25
of worries that it could signal a 780 LAST 824.50
125 760
change in policy. By the end of 740
120
this financial year the companys 720
115 700
110 chief executive, chairman, finance 680
660
105 director and the managing 640
100
J J A S O N D J F M A MJ director of its key regulated water 620
J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream
business will have all left.
The company, which supplies However, Robert Walker, chief billion. The dividend was upped
drinking water in the North East, executive until February, says the 2.5% to 47.04p a share. There was,
saw pre-tax profits fall to 45.5 company is very comfortable however, a nasty warning that the
million in the 10 months since with its current strategy of company faces 30-35 million of
joining the stock market, as combining steady growth from its pension fund charges this year.
higher interest charges and 11 regulated water business with Severn Trent, which supplies
million of one-off costs weighed faster growing operations. These water in the Bristol and
in. Operating profits on its key include waste management arm Humberside regions, hopes its
regulated water side, however, Biffa and SVT, which provides a proposed 27% hike in prices will be
rose 2% to 133.4 million. The range of support services. rubber-stamped by Ofwat in the
company declared a full year The company reported pre-tax regulators periodic review. (SF)
dividend of 6.95p a share. (SF) of 254 million last year, up from Shares says: Recent
Shares says: The 6.3% 180 million a year ago, on a near share price suggests it may
yield is worth holding. 9% rise in turnover at 2.019 be time to take-profits.
Tover Fin EPS Fin Total Div Div Market
PTP Div Div Yield Cover Cap
1.6 697 2004 2019 254 53.5 29.27 47.04 6.3 1.1 2810
- - 557 2003 1856 184 28.9 28.56 45.9 7.1 0.6 2484
Div. Payable: 01.10.04 xd date: 18.06.04

17 June 2004 49
170604 p50-54 tables 6/15/04 10:24 AM Page 50

LARGE &
LARGE & MID
MID CAP
CAPTABLES
TABLES

FTSE
350 CODE MARKET PRICE (p) VALUE 1,000 EBIT NET PROFIT EPS (p) PE RATIO DIVIDEND NTA GEARING RETURN
CAP Over Latest % Latest % Forecast Forecast Latest % Current ON EQUITY
m Current High Low 1 yr 3 yrs 000 change 000 change Current 1yr 2yrs Current 1yr 2yrs Paid Change Yield % (p) % %
AEROSPACE & DEFENCE
BAE SYSTEMS BA. 6364.95 208 225.5 132 1583.9 718.3 *309000 -167.17 *-61000 -91.06 16.6 1.19 3.99 12.5 174.6 52.1 *5.5 0 4.91 55.52 31.08 -0.28
COBHAM COB 1544.71 1392 1425 1120 1186.1 1230.8 *64300 -40.19 *16600 -75.91 93.5 82.85 93.06 14.9 16.8 15 *8.36 10 2.25 205.55 36.32 5.09
MEGGITT MGGT 724.84 245 269.75 198 1215 1104.8 *51038 5.88 *20898 15.2 18.3 11.89 13.94 13.4 20.6 17.6 *2.4 6.67 3.4 18.02 37.9 8.13
ROLLS-ROYCE GROUP RR. 3878.54 231 243.25 121.29 1979.4 1246.7 *244000 45.24 *98000 216.13 12.2 10.07 12.84 18.9 22.9 18 *3.110 0 1.53 104.23 37.59 5.71
SMITHS GROUP SMIN 3905.58 696 770 606 1067 947.2 *265800 -24.79 *112300 -41.69 44.2 35.64 40.28 15.7 19.5 17.3 *8.75 0 4.15 99.37 47.84 11.26
ULTRA ELEC. HDG. ULE 372.44 559 605 470 1146.3 1345.9 *32742 10.16 *20406 13.71 38.2 33.62 36.69 14.6 16.6 15.2 *8.2 9.33 2.44 28.77 43.3 37.35

AUTOMOBILES
VT GROUP VTG 447.36 262 280 220 1105.5 1075 *9481 0 *-2297 0 18.13 14.54 16.64 14.5 18 15.7 *2.57 7.08 3.82 92.36 40.46 1.81
GKN GKN 1747.19 238 296.25 205 1118.3 941.6 *112000 -14.5 *0 -100 22.8 15.75 19.41 10.4 15.1 12.3 *7.8 2.63 5.42 181.03 49.52 10.63
INCHCAPE INCH 1315.93 1667 1699 915 1880.6 3829.5 *170000 54.26 *120000 64.61 132.4 129.47 140.36 12.6 12.9 11.9 *12 20 2.53 345.71 4.69 32.8
PENDRAGON PDG 439.36 335 425 157.2 2018.8 3519 *57001 15.28 *30490 27.17 24.5 21.69 26.21 13.7 15.4 12.8 *3.8 -17.39 2.52 122.8 41.48 21.67
VARDY (REG) VDY 316.14 534 618 411.5 1347.6 1735.1 *43514 0 *28124 0 58.2 52.4 52.97 9.2 10.2 10.1 *5.2 20.93 3.15 261.45 32.6 18.86
BANKS
ABBEY NATIONAL ANL 7061.82 478.75 603 414 986.2 468.9 *-380000 -40.25 *-651000 -43.29 0 28.29 39.34 16.9 12.2 *16.67 126.8 5.8 18.17 90.77 -13.55
ALLIANCE & LEICESTER AL. 3803.48 832.5 917 798 1063.1 1232.2 *577600 12.29 *379200 11.43 79 87.57 92.37 10.5 9.5 9 *29.6 10.04 5.86 143.5 92.52 21.98
BARCLAYS BARC 31207.88 484.5 539.25 432 1104 994.3 *5695000 8.62 *2742000 21.38 42.3 45.26 49.98 11.5 10.7 9.7 *13.45 12.08 4.7 27.79 88.55 18.11
BRADFORD & BINGLEY BB. 1776.78 280.25 355.25 264.5 869.3 1043.7 N/A N/A *213700 20.46 28.7 27.81 30.74 9.8 10.1 9.1 *11 11.11 6.54 21.91 90.27 16.44
EGG EGG 1312.28 159.25 197.5 115.25 1240 1006.5 *37900 0 *-18800 0 0 9.53 12.51 16.7 12.7 N/A N/A 0 8.99 78.89 -3.97
HBOS HBOS 27760.15 714 815.5 669.5 951.4 1027.7 *4356000 28.42 *2645000 28.65 68.5 75.26 84.49 10.4 9.5 8.5 *20.6 5.1 4.81 120.73 89.56 18.09
HSBC HDG. (ORD $0.50) HSBA 89617.19 813 919 696 1201.2 1134.7 *8330292 20.42 *5840989 25.58 53.35 53.22 58.54 15.2 15.3 13.9 *0.24 -26.15 4.57 80 75.36 16.55
LLOYDS TSB GP. LLOY 24388.68 436 486 391.5 1071.5 785.5 *4992000 58.23 *3338000 79.85 58.3 41.99 43.88 7.5 10.4 9.9 *23.5 0 8.72 70.04 85.48 40.91
NORTHERN ROCK NRK 3072.65 729.5 794 658 1059.6 1518.7 *477500 19.35 *274600 19.55 66.3 74.02 80.95 11 9.9 9 *15.8 15.33 3.55 42.52 92.33 23.95
RYL.BK.OF SCTL. RBS 51621.52 1650 1794 1522 989 1044.2 *6698000 23.58 *4239000 32.18 159.3 145.82 159.38 10.4 11.3 10.4 *35.7 15.16 3.39 445.15 80.58 9.83
STD.CHARTERED STAN 10438.96 887 985 712.5 1220.7 1062.6 *1196640 6.87 *636304 9.76 47.42 53.49 62.35 18.7 16.6 14.2 *0.3649 -98.24 3.59 42.06 71.02 14.08
BEVERAGES
ALLIED DOMECQ ALLD 5106.82 461.5 480 326 1351 1193.3 *597000 -13.98 *342000 -13.85 34.6 31.44 34.91 13.3 14.7 13.2 *8.7 7.41 3.5 87.3 74.94 55.46
DIAGEO DGE 22163.7 725 783 612 1128.2 1070.4 *791000 -69.95 *-80000 -105.09 50.43 48.89 53.15 14.4 14.8 13.6 *10.6 7.07 4.03 64.57 55.61 1.31
SABMILLER SAB 6767.21 676 683 395.5 1735.2 1395.5 *540839 0 *222509 0 0.78 30.25 34.92 15.8 22.3 19.4 *0.075 15.38 2.78 205.13 33.58 11.76
SCOT.& NEWCASTLE SCTN 3824.7 428 440 335.75 1199.5 997.8 *198000 -54.21 *-21000 -109.45 39 10.54 13.27 11 40.6 32.2 *13.41 31.73 3.48 129.36 41.51 2.07
CHEMICALS
BOC GROUP BOC 4445.57 893 979 762 1245.3 929.9 *374500 -3.23 *202900 9.38 51 60.8 66.83 17.5 14.7 13.4 *15.5 0 4.98 585.23 43.68 13.35
BRITISH VITA BVIT 489.1 257 285 235 1014.3 1669.4 *48300 -53.38 *28200 -64.75 20.6 20.23 22.82 12.5 12.7 11.3 *6 4.35 5.08 138.14 20.08 8.95
CRODA INTL. CRDA 376.44 276.25 310.5 239 1084.6 1193 *47500 370.3 *29300 -1431.82 19.2 19.74 21.73 14.4 14 12.7 *4.02 2.81 4.77 97.53 25.77 20.03
IMP. CHM. INDS. ICI 2599.79 218.25 252 118.75 1634.9 675.2 *257000 -54.83 *42000 -80.47 19.4 18.78 21.7 11.3 11.6 10.1 *3.5 -22.22 3.18 150.6 78.72 4.32
JOHNSON MATTHEY JMAT 1938.94 866 1065 820 1010.2 901.2 *198200 0 *121600 0 64 58.48 64.21 13.5 14.8 13.5 *8.2 5.13 3.39 268.47 35.68 14.99
YULE CATTO YULC 346.44 239.25 385 216 692.5 1396.9 *61234 26.62 *27747 55.38 27.6 5.3 5.96 8.7 45.1 40.1 *5.3 3.92 6.04 120.9 49.55 15.42

CONSTRUCTION & BUILDING

AGGREGATE INDUSTRIES AGG 1102.32 86 95 77 1055.5 1106.1 *166100 -1.66 *96500 6.51 7.1 7.39 7.97 12.1 11.6 10.8 *1.13 9.71 3.62 99.11 35.82 10.84
AMEC AMEC 814.47 272.25 323 249 1117.8 614.1 *135600 281.97 *59100 -642.2 25.8 21.75 24.02 10.6 12.5 11.3 *3.6 5.88 4.29 69.19 68.46 24.23

SOURCE: THOMSON FINANCIAL/ DATASTREAM

BALFOUR BEATTY BBY 1124.05 267.5 275 171.25 1412 1494.9 *84000 18.31 *58000 75.76 20.6 19.27 21.37 13 13.9 12.5 *2.6 10.64 2.49 37.6 25.66 246.67
BARRATT DEVELOPMENTS BDEV 1391.64 581 649 421 1341.9 2128 *299300 30.47 *206400 30.55 100.5 106.25 115.71 5.8 5.5 5 *6.9 39.68 3.68 4.59 4.2 27.82
BELLWAY BWY 845.52 765 834.5 556 1396.6 2467 *176328 31.86 *118347 34.4 118.3 120.09 130.8 6.5 6.4 5.8 *13.8 23.21 3.36 14.74 18.92 26.6
BERKELEY GROUP BKL 1080.25 900 1068 693 1307.2 1446.6 *218059 0 *145283 0 122.9 129.49 139.25 7.3 7 6.5 *5.8 20.83 2.49 15.41 16.91 15.98
BOVIS HOMES GROUP BVS 584.73 509.25 607 405 1299.6 1718.9 *129378 17.19 *86513 17.7 74.2 85.17 95.21 6.9 6 5.3 *11.1 18.09 3.58 7.17 13.92 21.85
BPB BPB 1950.99 395.25 409.5 294 1249.4 1759.5 *209900 158.18 *113300 5565 23.4 30.4 33.97 16.9 13 11.6 *4.8 3.23 4.01 222.77 40.35 14.75
CARILLION CLLN 373.37 174.5 200 129.5 1090.6 1129.1 *21000 -45.31 *4600 -79.19 16.8 16.96 17.75 10.4 10.3 9.8 *1.575 5 3.22 31.83 30.93 5.87
CREST NICHOLSON CRST 370.24 332.5 367 226.5 1482.3 1951.6 *88300 19.81 *52100 22.01 45.2 48.64 53.13 7.4 6.8 6.3 *7.5 15.38 3.68 1.89 32.44 23.74
HANSON HNS 3036.31 412 457.75 327 1208.7 994.8 *199800 -42.17 *152400 -4.69 40.4 34.38 38.15 10.2 12 10.8 *11.95 10.14 4.57 347.79 47.48 6.79
MARSHALLS MSLH 471.95 282 303 233 1196.4 1355.3 *53190 1.07 *34501 2.56 21.46 22.72 24.85 13.1 12.4 11.3 *3.65 10.61 4.33 123.48 8.83 17.08
MCALPINE(ALFRED) MCA 292.59 289.75 322.5 254.5 1086.2 986.5 *26500 33.03 *18700 61.49 28.6 25.01 28.67 10.1 11.6 10.1 *6.5 10.17 4.22 52.39 3.22 7.36
MCCARTHY & STONE MCTY 565.42 545 615 441.5 1149.1 2204.7 *117400 51.48 *81200 54.08 77.4 84.52 91.91 7 6.4 5.9 *4.8 23.08 2.98 24.19 4.81 37.17
NOVAR NVR 549.49 127.5 149 118 1078 998.2 *-27500 -132.51 *-67100 -291.17 11.2 6.18 7.86 11.4 20.6 16.2 *6.6 0 8.28 53.92 50.37 -25.13
PERSIMMON PSN 1713.18 596 725.5 430 1356.2 2381 *372000 28.54 *234200 32.69 86.8 98.65 106.65 6.9 6 5.6 *11.3 8.65 3.41 8.38 21.92 24.99
PILKINGTON PILK 1169.05 91.75 100.75 65 1376.5 1104.5 *176000 0 *73000 0 7.4 7.46 8.53 12.4 12.3 10.8 *1.75 0 6.06 119.29 54.67 9.69
REDROW RDW 528.84 333.5 406 282.5 1149 1758.1 *115000 20.93 *74900 23.19 49.2 53.46 58.85 6.8 6.2 5.7 *3 20 2.67 10.41 24.83 31.14

GLOSSARY OF TERMS
Shares tables are among the most comprehensive
published in Britain. They provide information about
the Top 350 companies as well as any public
on SETS the price is the mid of the bid and ask EPS FORECAST (2 YRS): A mean of all the eps DIVIDEND % CHANGE: This expresses the
prices currently in the market. forecasts supplied by analysts for the next percentage change in the dividend in the latest
PRICE HIGH: The highest price achieved in the financial year of the company, defined as that 12 month period.
SOURCE: THOMSON FINANCIAL/ DATASTREAM

company that reports a profit result in the previous
week. The information is provided by Thomson
Financial's Datastream system.
Glossary
CODE: This is the EPIC Code that is most widely
used in recovering company information from
various data sources
MARKET CAP: This is the share price multiplied by
the number of ordinary shares on issue. For
companies with more than one class of equity
capital (see Schroders as an example) market
value is expressed according to individual
issue.
PRICE: This is the latest available price before
Shares goes to press, generally on Tuesday
morning around 10am. The price is adjusted to
capital actions. For shares electronically traded
the price is the last trade. For those not traded
previous 12 rolling months.
PRICE LOW: The lowest price achieved in the
previous 12 rolling months.
VALUE OF 1000: Growth in share value in the past
one or three years, assuming dividends are
reinvested.
EBIT: Earnings before interest and tax is
sometimes considered a way to look at the
company's operations.
NET PROFIT: The earnings of the company after
interest, tax, depreciation and amortisation.
EARNINGS PER SHARE (EPS): The annualised
rate that either reflects the latest financial year
or an aggregate of interim period earnings.
EARNINGS PER SHARE FORECAST (1YR): This is
a mean of all the eps forecasts supplied by
analysts for the current financial year of the
company ie the financial year not yet reported.
following the current year.
PE RATIO: The price earnings ratio is the price
dividend by earnings per share.
PE1: The current share price divided by the
consensus forecast eps for the current financial
year.
PE2: The current share price divided by the
consensus forecast eps for the next financial
year.
DIVIDEND: Latest paid. This is the most recent
actual dividend payment. It represents an
individual cash income dividend adjusted for
any capital change since the ex-dividend date
of that payment. Where two or more payments
fall on the same day, the adjusted dividend
rates are added to give a single dividend rate. If
the two or more payments are in different
currencies they are converted to a common
currency.
DIVIDEND YIELD: This expresses the dividend per
share as a percentage of the current share
price. The annual dividend excludes special or
one-off payments.
NTA: Net Tangible Assets per share is the net total
assets divided by the total number of shares on
issue. Included in net assets are land and
buildings, plant, machinery, construction in
progress and other fixed assets. Assets leased
out are excluded.
GEARING (%): This basically shows the debt to
equity ratio. Preference capital plus total debt is
divided by total capital employed plus short
term borrowings minus total intangibles.
RETURN ON SHAREHOLDERS EQUITY (%):
Adjusted earnings for ordinary shares divided
by equity capital and reserves less intangibles
plus deferred tax.
* denotes interims

50 Shares
170604 p50-54 tables 6/15/04 10:24 AM Page 51

LARGE & MID CAP TABLES

FTSE
350 CODE MARKET PRICE (p) VALUE 1,000 EBIT NET PROFIT EPS (p) PE RATIO DIVIDEND NTA GEARING RETURN
CAP Over Latest % Latest % Forecast Forecast Latest % Current ON EQUITY
m Current High Low 1 yr 3 yrs 000 change 000 change Current 1yr 2yrs Current 1yr 2yrs Paid Change Yield % (p) % %
RMC GROUP RMC 1548.16 581.5 744.5 448 1242.9 1083.6 *-66200 -131.27 *-137400 -250.49 37.1 36.1 48.45 15.7 16.1 12 *21.8 0 5.96 888.98 39.22 -9.1
SIG SHI 476.16 395 395 252.5 1502.3 1800.1 *62720 14.4 *34705 9.47 32.5 30.57 33.46 12.2 12.9 11.8 *8.3 7.79 3.49 57.4 39.74 17.65
TAYLOR WOODROW TWOD 1466.81 255 307.75 191.75 1291.7 1588.3 *348200 28.82 *202500 28 39 45.1 50.14 6.5 5.7 5.1 *2.4 9.09 3.88 33.12 34.42 14.43
TRAVIS PERKINS TPK 1560.69 1376 1463 1162 1200 1885.5 *172400 17.12 *108900 18.63 110 107.47 115.51 12.5 12.8 11.9 *16.8 25.37 1.97 254.8 25.4 27.54
WESTBURY WBY 479.57 420 514 353.75 1159.7 1892.8 *129634 25.85 *72151 26.8 71.7 73.89 82.4 5.9 5.7 5.1 *4.45 15.58 3.7 17.1 37.5 19.5
WILSON BOWDEN WLB 993.35 1057 1205 925 1135.1 1594.8 *240800 26.07 *155200 23.08 165.5 186.43 199.95 6.4 5.7 5.3 *25.5 24.39 3.47 22.66 22.18 23.88
WIMPEY (GEORGE) WMPY 1474.1 378.75 458 282 1368.5 2555.3 *433100 32.28 *260900 36.17 68.54 75.25 80.47 5.5 5 4.7 *8.45 43.22 3.59 5.45 32.12 27.67
WOLSELEY WOS 4764.08 817.5 865 642 1283.7 1908.2 *462200 -3.97 *298400 3.54 62.08 59.77 64.59 13.2 13.7 12.7 *7.8 -43.88 3.18 122.97 40.86 18.65

ELECTRICITY
INTERNATIONAL POWER IPR 1561.5 141 162.25 103 1098 463.6 *-193000 -195.54 *-323000 -1445.83 10.2 8.35 9.84 13.8 16.9 14.3 *6.34035 0 0 184.93 47.79 -12.59
SCOT. & SOUTH. ENGY SSE 5843.48 681.5 710 599.5 1161.8 1273.3 *658100 0 *417800 0 54.1 55.42 58.19 12.6 12.3 11.7 *11.3 7.62 6.15 438.26 45.34 26.15
SCOTTISH POWER SPW 7261.49 390.5 400.75 341.75 1137.9 958.9 *1039000 0 *480200 0 36.4 31.46 31.8 10.7 12.4 12.3 *4.75 -33.82 5.83 485.53 51.93 10.36
VIRIDIAN GROUP VRD 821.76 617 617 518.5 1172.4 1056.8 *113100 0 *58800 0 55.9 52.71 49.78 11 11.7 12.4 *9.46 3.5 6.06 817.65 64.7 22.15

ELECTRONICS
INVENSYS ISYS 909.98 16 38.54 14.45 733.2 135.1 *-1262000 0 *-1448000 0 0.12 0.28 0.8 133.3 57.3 20 *0.96356 0 0 15.47 95.86 -1001.39
LAIRD GROUP LARD 393.72 275 332 193.5 1346.9 1526.5 *26500 -155.44 *23800 -139.53 4.1 14.98 18.93 67.1 18.4 14.5 *5.6 3.7 3.47 43.1 32.66 11.91
RENISHAW RSW 343.56 472 591 405.5 1192.7 913.1 *17847 10.21 *14345 -5.51 19.88 23.43 29.67 23.7 20.1 15.9 *5.61 5.06 3.99 69.9 0 13.32
SPECTRIS SXS 596.02 480 507 382.5 1150.5 937.4 *47400 45.85 *26000 69.93 32.1 23.68 27.38 15 20.3 17.5 *9.3 5.08 3.09 74.41 50.74 14.99

ENGINEERING & MACHINERY

AGA FOODSERVICE AGA 293.76 232 265 191.5 1191.5 998.9 *28700 2.5 *22300 13.78 23.3 16.62 17.48 10 14 13.3 *5 21.95 3.45 57.81 7.35 8.2
BODYCOTE INTL. BOY 451.39 140.75 170.94 104.52 1396.6 712.9 *2100 -91.8 *-17300 -370.31 9.01 7.05 10.36 15.6 20 13.6 *2.09032 0 4.82 149.27 39.77 -4.46
COOKSON GROUP CKSN 789.86 41.75 50 23 1415.3 413.2 *-157000 246.58 *-202900 108.53 0.05 1.18 2.1 915.6 35.5 19.9 *3.12937 0 0 18.54 39.85 -57.14
ENODIS ENO 340.9 85 98 38.5 2058.1 761.6 *39500 -173.42 *9500 -110.94 4.2 4.42 5.78 20.2 19.2 14.7 *1.61946 0 0 20.35 56.59 6.03
FKI FKI 658.74 113.25 126.5 73.25 1384.1 522.8 *62500 0 *12600 0 8.7 4.57 6.49 13 24.8 17.4 *1.5 -64.29 4.42 61.41 57.52 2.67
HALMA HLMA 559.49 153 162.5 130.5 1271.7 1161.7 *44085 0 *28359 0 9.17 8.47 9.08 16.7 18.1 16.8 *2.44 6.78 4.33 13.64 14.48 18
IMI IMI 1313.54 371.75 388 280 1285.5 1622.1 *134400 38.7 *72000 26.98 26.8 22.95 25.97 13.9 16.2 14.3 *9.5 0 4.63 82.81 28.61 13.45
KIDDE KID 1001.27 119 120.25 81.5 1419.5 1583.6 *93400 14.18 *48800 26.75 8.8 7.67 8.4 13.5 15.5 14.2 *1.81 6.47 2.52 11.5 80.99 159.25
MORGAN CRUCIBLE MGCR 353.92 122 150 70.33 1684.9 419.5 *-60800 39.13 *-75600 29.9 9.12 8.35 8.4 13.4 14.6 14.5 *7.03278 0 0 133.16 54.12 -25.3
ROTORK ROR 327.26 381.25 402 300 1311.7 1201.7 *28151 7.23 *18632 7.74 23.2 22.97 25.2 16.4 16.6 15.1 *15.35 72.47 4.3 15.89 0.48 26.35
SPIRAX-SARCO SPX 418.06 559 605 466 1254.7 1348.7 *46861 7.92 *29426 9.77 38.5 40.81 44.69 14.5 13.7 12.5 *14.1 4.44 4 117.79 25.99 19.57
TOMKINS TOMK 1997.18 258.5 295 220 1174.3 1728 *150400 -41.67 *179300 -3.37 18.78 17.83 21.26 13.8 14.5 12.2 *7.4 -7.5 5.16 102.73 36.36 45.25
WEIR GROUP WEIR 622.73 304 310 230.5 1289.2 1234.8 *49822 -15.28 *35642 -17.95 21.4 19.86 22.1 14.2 15.3 13.8 *9.05 3.43 4.53 50.07 33.33 23.81

FOOD MANUFACTURERS
ARLA FOODS ARU 368.8 60.5 63.5 35 2303.9 2086.9 *21500 0 *7600 0 6.5 1.31 3.99 9.3 46.2 15.2 *0.5 25 2.02 21.83 73.86 24.36
ASSD.BRIT.FOODS ABF 4999.42 631.5 645.5 507.5 1228.6 1560.6 *480000 10.34 *324000 1.25 44.7 41.32 44.06 14.1 15.3 14.3 *9.85 9.44 2.66 177.6 12.6 11.14
CADBURY SCHWEPPES CBRY 9411.49 456 474.75 335.25 1343.8 1018.3 *749000 -19.38 *364000 -33.46 32 23.08 28.23 14.3 19.8 16.2 *8.35 4.38 2.92 79.12 60.91 13.1
DAIRY CREST DCG 495.86 401.75 495 348 974.4 1352.9 *63100 0 *33300 0 50 41.56 42.54 8 9.7 9.4 *5.5 7.84 5.23 279.6 60.07 18.27
GEEST GET 428.75 575 590 424.5 1281.9 1018.7 *39200 -16.95 *27100 -14.51 46.8 40.31 44.19 12.3 14.3 13 *8 10.34 4.04 359.29 35.18 16.51
NORTHERN FOODS NFDS 793.41 158 175 130 1107.3 1255.8 *124300 0 *99800 0 13.77 12.7 15.2 11.5 12.4 10.4 *3.3 1.54 6.26 133.54 50.52 35.89
TATE & LYLE TATE 1551 321.5 369 269.25 1022.2 1331.7 *209000 0 *104000 0 32.7 30.37 27.94 9.8 10.6 11.5 *5.6 1.82 6.5 243.77 38.76 12.84
UNILEVER (UK) ULVR 15168.69 521 582.5 473 997.9 1026.6 *3895603 10.79 *2062541 30.91 27.13 29.74 35.19 19.2 17.5 14.8 *11.92 10.06 3.86 161.77 71.43 69.74
FOOD RETAILERS
BIG FOOD GROUP BFP 374.43 109 183.75 80 1233.8 616.1 *42000 0 *11700 0 15.2 6.13 9.48 7.2 17.8 11.5 *1.1 10 3.06 140.84 46.18 2.99
GREGGS GRG 400.18 3300 3475 2950 1129.9 1073.5 *40480 10.31 *27237 10.33 230.5 245.12 265.94 14.3 13.5 12.4 *54.5 11.22 2.69 1325.22 0 23.4
MORRISON(WM)SPMKTS. MRW 6101.78 230 259.75 180 1237.3 1202.7 *320359 15.47 *197635 8.49 12.59 13.47 15.03 18.3 17.1 15.3 *2.7 20 1.57 65.54 7.63 15.82
SAINSBURY (J) SBRY 5363.03 276 315.5 246 1132.3 788.5 *772000 0 *461000 0 23.4 21.13 22.05 11.8 13.1 12.5 *4.33 2.61 6.32 388.03 29.38 9.54
SOMERFIELD SOF 736.74 147 174 112 1365 1130.7 *40500 0 *39800 0 8.1 8.88 11.74 18.1 16.6 12.5 *0.6 50 1.4 202.3 14.22 5.48
TESCO TSCO 19757.2 257.25 264.75 205.5 1261 1066.1 *1773000 15.58 *1043000 14.74 16.45 17.17 19.03 15.6 15 13.5 *2.07 10.7 2.95 183.51 39.46 17.02

FORESTRY & PAPER

SMITH (DS) SMDS 662.25 171 188 138.96 1084.9 1376.4 *83100 0 *47400 0 15.57 13.73 13.6 11 12.5 12.6 *2.61135 0 5.72 144.83 34.85 10.76
HEALTHCARE
SMITH & NEPHEW SN. 5363.11 574.5 600.5 340.5 1555.6 1766.6 *222300 26.81 *132800 34.41 18.49 19.41 22.96 31.1 29.6 25 *3.1 3.33 0.96 27.59 23.47 28.82
SSL INTERNATIONAL SSL 559.55 295.5 345 267.5 1081.3 651.4 *58600 0 *21800 0 25.1 27.17 24.64 11.8 10.9 12 *3.9 0 3.05 83.55 79.79 28.41
HOUSEHOLD & MISCELLANEOUS
ALBA ABA 401.85 795 880 495 1657.9 2108.5 *31200 0 *23400 0 47.8 48.7 57.18 16.6 16.3 13.9 *2.25 9.76 1.54 29.68 26.03 40.92
HEADLAM GROUP HEAD 350.07 410 417 274 1498.9 2078.8 *33469 6.86 *22129 7.73 27.3 29.95 32.85 15 13.7 12.5 *3.6 10.77 3.75 75.23 3.32 22.72
INFORMATION SERVICES
SOURCE: THOMSON FINANCIAL/ DATASTREAM

ARM HOLDINGS ARM 1217.78 119 147 64.5 1615.7 432 *23240 -48.93 *15263 -52.99 2.1 2.85 4.3 56.7 41.7 27.7 *0.6 N/A 0.56 1.62 0 8.81
SOURCE: THOMSON FINANCIAL/ DATASTREAM

FILTRONIC FTC 223.09 300 529 116.5 2243.2 1653.2 *11475 0 *1084 0 4.43 67.7 *0.9 0 1 129.46 35.54 1.03
MARCONI CORP. MONI 1308.14 654 747 285 2080.9 *-769000 0 *-1048000 0 0 -64.52 -35.45 N/A N/A 0 121.49 330.91
SPIRENT SPT 630.68 66.5 92 22.75 1941.6 378.8 *7900 -100.76 *-2900 -99.73 2.31 1.72 3.24 28.8 38.7 20.5 *1.35 0 0 9.51 43.78 -0.36
WOLFSON MICROELEC. WLF 271.69 267 325 218 *2424 0 *1598.12 0 12.01 8.25 10.21 22.2 32.4 26.2 N/A N/A 0 2.07 11.46
INSURANCE
ALEA GROUP HOLDINGS ALEA 385.94 221 275 210 *58621 0 *54123 0 23.31 33.4 31.33 9.5 6.6 7.1 N/A N/A 0 7.52 26.79
AMLIN AML 616.14 157 175 122 1202.4 1420.2 *120700 114.77 *83300 88.46 21.6 22.38 22.96 7.3 7 6.8 *1.65 32 1.77 1.63 2.67 27.15
BENFIELD GP. BFD 605.43 250 306 235 923 *40805 39.53 *18017 139.49 21.6 21.87 20.81 11.6 11.4 12 *6 N/A 2.67 7.32 22.16 120.12
BRIT INSURANCE HLDGS. BRE 769.7 79 91 66.75 1109.8 751 *81938 397.74 *57035 557.99 6.58 9.36 9.65 12 8.4 8.2 *2 -0.85 2.81 0.49 7.69 12.1
HISCOX HSX 463.88 159.25 181 135 1059.1 924.2 *85373 292 *60491 332.85 19.3 22.51 22.84 8.3 7.1 7 *1.3 13.75 2.93 2.52 0.22 21.58
JARDINE L. THOMPSON JLT 945.01 469 628.5 450 777.7 1121.3 *106738 9.92 *75443 12.94 38.8 37.6 37.92 12.1 12.5 12.4 *12 9.09 4.86 14.17 3.71 50.1
ROYAL & SUN ALL.IN. RSA 2289.66 79.25 132.06 72.5 761.5 251.6 *-23000 -97.62 *-375000 -60.4 0 12.49 11.79 6.3 6.7 *2.9 79.52 6.87 16.65 18.11 -13.47
WELLINGTON UWRITING WUN 416.19 85 102.5 74 904.7 596 *97200 212.65 *67000 243.96 17 12.08 12.23 5 7 6.9 *0.35 -67.84 2.61 0.92 0 28.96

17 June 2004 51
170604 p50-54 tables 6/15/04 10:24 AM Page 52

LARGE & MID CAP TABLES

FTSE
350 CODE MARKET PRICE (p) VALUE 1,000 EBIT NET PROFIT EPS (p) PE RATIO DIVIDEND NTA GEARING RETURN
CAP Over Latest % Latest % Forecast Forecast Latest % Current ON EQUITY
m Current High Low 1 yr 3 yrs 000 change 000 change Current 1yr 2yrs Current 1yr 2yrs Paid Change Yield % (p) % %
LEISURE, ENTERTAINMENT & HOTELS
CARNIVAL CCL 5305.15 2506 2672 1650 1405.2 2304.9 *869503 328.86 *732149 429.22 1.66 115.77 135.83 27.8 21.6 18.4 *0.125 19.05 1.19 4808.87 34.93 41.94
DE VERE GROUP DVR 498.75 435 467.75 331 1334.4 1448.1 *45798 -13.39 *25678 -5.1 27.16 27.02 28.23 16 16.1 15.4 *7.7 4.76 3.06 749.31 27.83 4.56
ENTERPRISE INNS ETI 1986.23 568.5 663.5 390.75 1454.1 2573.7 *264200 49.94 *116500 73.62 38.6 44.71 56.59 14.7 12.7 10 *5.7 21.28 1.82 722.65 56.57 17.99
FIRST CHOICE HOLS. FCD 622.49 118 152.75 109 1179.6 959 *55500 9.04 *32500 24.52 8.4 7.33 8.75 14 16.1 13.5 *3.4 13.33 4.85 55.64 17.8 6.49
GREENE KING GNK 670.12 930 978 778 1205.5 1643.4 *97900 0 *47200 0 75.8 68.07 72.35 12.3 13.7 12.9 *9.5 10.47 3.68 1193.94 49.36 10.41
HILTON GROUP HG. 4130.05 261 275.5 174.25 1480.1 1359.6 *260500 10.76 *103700 16.65 13.4 12.56 15.16 19.5 20.8 17.2 *5.52 0 3.8 162.32 41.67 4.53
ICTL.HTLS.GP. IHG 3792.06 534 583 416.5 1281.1 *149600 -78.93 *42400 -91.2 20.8 28.07 33.55 25.7 19 15.9 *9.45 N/A 2.81 556.38 26.92 0.28
LUMINAR LMR 330.57 451.75 512 390 1032.8 538.7 *68700 0 *31000 0 60.4 39.05 43.19 7.5 11.6 10.5 *3.67 9.88 3.08 776.09 33.13 6.49
MANCHESTER UTD. MNU 639.72 244 290 140 1660 1607.2 *39537 20.5 *29781 18.94 16 5.92 4.8 15.3 41.2 50.8 *1.25 86.57 1.4 47.88 0 21.67
MNNIUM & COPTHORNE MLC 936.62 329 344 235 1270.8 961.6 *57800 -45.27 *14800 -63.73 3.9 12.58 16.41 84.4 26.1 20 *2.05 -75.3 2.11 738.7 33.93 0.82
MITCHELLS & BUTLERS MAB 1385.24 265.25 272.5 215 1239.8 *222000 -23.18 *125000 -23.78 19.8 20.3 22.48 13.4 13.1 11.8 *5.65 N/A 3.56 674.4 37.44 5.13
PUNCH TAVERNS PUB 1192.05 480 575 262 1811.2 *237300 279.68 *97600 -178.65 42.9 41.85 54.59 11.2 11.5 8.8 *4.4 N/A 1.69 894.48 71.13 19.74
RANK GROUP RNK 1706.29 285.5 340.75 240 1260.6 1637 *173700 -22.11 *101000 -23.25 20.1 20.74 22.61 14.2 13.8 12.6 *9.3 5.68 5.41 134.39 61.94 16.52
STANLEY LEISURE SLY 565.43 446 510 312.5 1506.3 1838.6 *50813 0 *29175 0 21.7 19.92 25.67 20.6 22.4 17.4 *2.75 10 2.2 599.14 25.92 10.17
WETHERSPOON (JD) JDW 547.88 284 324 224 1145.4 847.4 *72105 1.79 *34044 -3.87 18.2 18.56 20.77 15.6 15.3 13.7 *1.33 9.92 1.43 401.12 50.42 10.98
WHITBREAD WTB 2429.05 816.5 860 659.5 1270.8 1373.4 *223800 -3.41 *137400 -2 58.22 62.45 69.81 14 13.1 11.7 *6.15 10.41 3.03 1004.96 29.1 8.32
WILLIAM HILL WMH 2181.98 520 567.25 272 2025.7 *198700 98.7 *123600 547.12 30 36.47 40.25 17.3 14.3 12.9 *9 55.17 2.67 24.07 56.51 51.29
WOLV.&.DUDLEY WOLV 590.06 814.5 880.5 647.5 1318.5 1932.9 *94800 0.53 *38500 -7.67 71 62.96 67.11 11.5 12.9 12.1 *21.2 10.13 4.53 1228.38 51.22 8.65

LIFE ASSURANCE
AVIVA AV. 12334.72 546.5 597 414.5 1309.6 711.1 *1985000 -678.72 *961000 -276.98 44 54.8 61.5 12.4 10 8.9 *15.15 6.32 4.91 32.12 23.75 9.99
BRITANNIC GROUP BRT 682.12 347 373 232.5 1433 430.4 N/A N/A *47300 -118.94 25.3 29.59 30.36 13.7 11.7 11.4 *10 -45.95 3.2 34.13 14.11 6.29
FRIENDS PROVIDENT FP. 2430.58 141 159 110.5 1234.9 *279000 -444.44 *188000 -368.57 10.4 11.79 12.86 13.6 12 11 *4.9 2.08 5.83 4.41 26.22 10.21
LEGAL & GENERAL LGEN 5918.51 91 110 81.75 1108.6 732.8 *683000 -388.19 *404000 -324.44 13.24 9.19 10.03 6.9 9.9 9.1 *3.33 2.46 5.98 1 23.71 12.74
OLD MUTUAL OML 3760.16 98 108 86 1177.6 736.2 *2263000 36.41 *202000 0.5 10 10.16 11.1 9.8 9.6 8.8 *3.1 0 5.44 2.11 15.56 10.22
PRUDENTIAL PRU 9122.68 451 534.75 352.25 1263.8 646.4 *1907000 344.52 *206000 -53.18 12.9 37.09 44.24 35 12.2 10.2 *10.7 -37.43 3.94 18.04 33.91 5.72
ST.JAMESS PLACE CAP. STJ 741.92 170.75 197 104 1284.6 420.3 *12300 -166.13 *4200 -125.15 1.5 13.16 16.7 113.8 13 10.2 *1.5 0 1.79 1.33 22.98 3.5

MEDIA & PHOTOGRAPHY

AEGIS GROUP AGS 965 86.75 116.5 75 1016.1 730.2 *58900 24.79 *23000 48.39 4.9 3.21 3.85 17.7 27 22.5 *0.52 4 1.69 4.85 72.79 17.87
BRIT.SKY BCAST. BSY 11928.96 615.5 786 582 930.8 910.6 *242100 -122.98 *188800 -114.5 13.1 13.47 24.74 47 45.7 24.9 *2.75 0 0.5 17.86 113.87
CAPITAL RADIO CAP 374.16 438 574 430 949.6 629 *12650 -16.9 *4888 -23.47 19.3 9.24 12.49 22.7 47.4 35.1 *12.5 0 0.47 19.73 17.27 4.5
CHRYSALIS GROUP CHS 307.09 183 263.75 175 896.7 775.4 *30169 138.96 *22697 240.64 9.43 3.7 5.71 19.4 49.4 32.1 *1 53.85 0.61 11.53 50.47 122.77
DAILY MAIL A DMGT 2585.79 678 733.5 524.75 1188.6 940 *176400 1.26 *60900 -28.6 37.3 20.56 24.29 18.2 33 27.9 *6.85 9.6 1.69 131.94 75.61 22.5
EMAP EMA 1909.65 735.5 965 735.5 884.2 1021.2 *156000 0 *97000 0 55.8 38.82 44.04 13.2 18.9 16.7 *7.6 8.57 3.55 12.32 48.97 44.79
EMI GROUP EMI 1736.89 220.25 282 113 1757.8 654.6 *400400 0 *236600 0 15.8 11.78 11.77 13.9 18.7 18.7 *2 0 4.04 36.7 244.4
EMONEY INSTL.INVEST. ERM 337.74 384 460 257.5 1473.3 1066.6 *11496 -54.13 *3985 -82.79 22.34 14.99 18.16 17.2 25.6 21.1 *9.75 0 4.27 9.85 -783.52
GWR GROUP GWG 326.93 249.75 330 200 1192.2 711.2 *-7979 0 *-15916 0 8 6.29 7.14 31.2 39.7 35 *2.3 0 2.8 17.05 60.21 -20.23
HIT ENTERTAINMENT HTE 448.67 285 341 235.5 1105.8 864.9 *30344 53.5 *15346 38.84 16.5 6.21 7.83 17.3 45.9 36.4 *0.636 100 0.37 6.77 34.82 6.59
ITV ITV 4524.86 111 150 78.26 1470 791.4 N/A N/A N/A N/A 4.8 2.37 5.44 23.1 46.8 20.4 *0.94577 0 2 7.33 0
JOHNSTON PRESS JPR 1594.67 561 572.25 417 1389.8 2172.4 *160970 29.54 *89233 36.02 32.36 34.5 37.34 17.3 16.3 15 *4 11.11 1.19 55.22 40.55 15.99
PEARSON PSON 5267.68 656.5 697.25 546.5 1171.7 614.4 *237000 196.25 *74000 -187.06 32 -0.1 6.47 20.5 101.5 *14.8 3.5 4.1 58.33 38.27 1.67
PHOTO-ME INTL. PHTM 334.24 92 145.75 48.5 1882.7 1136.7 *-421 0 *-3882 0 1.32 3.7 5.8 69.7 24.9 15.9 *0.3 0 0 21.65 41.92 -7.34
REED ELSEVIER REL 6714.64 528.25 548.5 441 1019 918.1 *2000 0 *1000 0 31.2 10.97 15.47 16.9 48.2 34.2 *8.7 8.75 2.52 2.72 12.01
REUTERS GP. RTR 5213.34 363.75 445 168 2012.4 469.7 *119000 -131.4 *57000 -112.81 3.1 3.82 11.87 117.3 95.3 30.6 *6.15 0 3.05 33.56 65.45 10.05
SCOT.RADIO HDG. SRH 323.42 899.5 988 772.5 1118.9 956.9 *14400 -222.03 *7300 -144.24 39.7 20.64 25.07 22.7 43.6 35.9 *13 8.33 2.47 47.28 36.48 6.62
SMG SMG 345.68 110 137 71.5 1325.6 581.4 *18600 186.15 *-900 -96.09 5 0.65 1.35 22 169.8 81.5 *2.5 66.67 2.53 11.07 78.39 6.34
ST.IVES SIV 390.77 378.25 430 355 1029 1100.8 *35209 38.89 *22483 42.05 10.77 23.99 27.67 35.1 15.8 13.7 *5 0 5.04 179.36 9.28 9.57
T&F INFORMA TFI 1059.48 355 390 207.5 1460.1 795.8 *14978 -26.19 *943 -80.46 17.23 7.25 16.59 20.6 48.9 21.4 *4.94 0 2.38 9.13 71.21 3.8
TAYLOR NELSON SOFRES TNN 929.24 209 230 162 1247.9 920.1 *46300 18.41 *11400 -5 10.5 5.66 8.06 19.9 37 25.9 *0.95 5.56 1.59 18.22 83.91 44.79
TRINITY MIRROR TNI 1918.56 653 670 427 1427.9 1670.7 *99900 41.9 *13700 -172.11 41.1 44.49 50.64 15.9 14.7 12.9 *12.8 4.07 3.11 136.48 38.31 1.18
UNITED BUSINESS MEDIA UBM 1547.93 461.5 576.5 283.25 1424.3 733 *-1000 -99.49 *-44200 -81.57 24 -7.6 -2.18 19.2 *5.7 42.5 2.17 16.25 81.91 -20.23
WPP GROUP WPP 6465.02 551 648.5 451.75 1162.5 852.6 *415300 41.26 *204400 147.16 29.8 28.62 31.72 18.5 19.3 17.4 *2.08 20.23 1.31 29.37 32.15 6.2
YELL GROUP YELL 2351.6 337 346 276 *185800 0 *-40600 0 20.9 12.73 14.53 16.1 26.5 23.2 *3 N/A 2.97 6.75 105.47

MINING
ANGLO AMERICAN AAL 16413.78 1100 1425 910 1201.1 1157.7 *1332850 -24.97 *734440 -30.37 1.2 1.8 1.98 16.8 11.1 10.1 *0.39 8.33 2.9 914.93 31.61 10
ANTOFAGASTA ANTO 1750.88 888 1283 600 1464.6 2092.5 *237626 60.54 *177946 82.82 49.8 102.78 88.99 17.8 8.6 10 *12.8404 12.81 2.47 529.18 40.71 18.45
BHP BILLITON BLT 10983.24 445 527 310 1422 1438.3 *1929936 -4.74 *1127941 7.29 0.35 27.92 39.09 23.8 15.9 11.4 *0.085 21.43 2.23 484.76 37.21 14.8
LONMIN LMI 1358.26 960 1255 736 1244 1047.6 *199832 -12.48 *67233 -61.39 28.5 68.32 74.61 33.7 14.1 12.9 *22.7 -11.78 4.59 417.56 23.1 10.76
RANDGOLD RESOURCES RRS 273.27 466.75 835 336 966.9 2546.2 *45846 0 *43404 0 0.01 1022.2 *0.025 0 0 81.07 26.38 207.86
RIO TINTO RIO 13567.16 1271 1585 1123 1103.1 1155.8 *940782 72.94 *639950 699.94 53.4 85.17 107.5 23.8 14.9 11.8 *18.68 0.43 3.25 797.21 35.37 19.68
VEDANTA RESOURCES VED 809.38 283 400 266 N/A N/A N/A N/A 17.89 29.86 15.8 9.5 N/A N/A 0 214.49 18.86
XSTRATA XTA 4411.04 698.5 767.5 374.75 1626.7 *269654 82.99 *187062 90.63 0.76 69.04 75.87 14.7 10.1 9.2 *0.133 0.23 1.69 675.26 25.86 7.65
OIL & GAS
SOURCE: THOMSON FINANCIAL/ DATASTREAM

ABBOT GROUP ABG 322.66 183.5 197.5 136 1144.6 1157.6 *24128 -58.86 *12512 -72.7 11.8 9.9 15.6 18.5 *3.1 12.73 2.72 75.76 21.07 8.91
BG GROUP BG. 12108.45 342.75 354.25 252.25 1261.1 1260.6 *1201000 63.4 *641000 112.25 19.4 20.77 20.76 17.7 16.5 16.5 *1.86 20 1.12 113.79 20.89 23.1
BP BP. 104430.25 478 508.25 402 1142.8 855 *9615662 25.36 *5686623 34.97 26.44 29.27 26.19 18.1 16.3 18.3 *3.807 -3.55 3.57 235.59 22.48 14.51
CAIRN ENERGY CNE 1776.79 1180 1200 291 3856.6 3605.3 *70888 51.51 *46303 74.83 31.52 27.77 24.99 37.4 42.5 47.2 N/A N/A 0 261.23 0 14.39
PALADIN RESOURCES PLR 383.63 119 131 75.5 1661.5 2316.9 *91762 30.81 *28446 41.18 8.92 9.06 10.95 13.3 13.1 10.9 *1.05 5 1.47 90.25 42.98 26.87
PREMIER OIL PMO 432.81 525.25 3475 300 1656.3 2344.9 *52900 -22.32 *9900 3.12 30 35.15 26.07 17.5 14.9 20.1 *6.05003 0 0 249.63 20.38 13.06
SHELL TPORT & TRDG. SHEL 38264.68 396 427 346.25 997.1 718.2 *4199898 0 *2204768 0 29.8 33 30.27 13.3 12 13.1 *9.65 3.76 4.42 204.09 23.63 16.18
TULLOW OIL TLW 698.03 107 114 70.5 1389.1 1177.1 N/A N/A N/A N/A 2.92 5.07 4.53 36.6 21.1 23.6 *1 N/A 2.08
WOOD GROUP (JOHN) WG. 658.82 136.5 192.25 121.75 770.7 *40962 -37.55 *12763 -59.53 0.15 7.15 8.75 16.4 19.1 15.6 *0.022 10 1.46 20.21 31.18 7.98

PERSONAL & HOUSEHOLD GOODS

PZ CUSSONS PZC 237.53 1110 1190 830 1337.7 2407.9 *54374 0 *34311 0 84.05 13.2 *8.05 7.33 2.96 700.65 4.97 11.76
PZ CUSSONS A PZCA 209.36 988 1080 732.5 1384.1 2579.8 *54374 0 *34311 0 71.9 13.7 *8.05 7.33 3.32 707.56 4.97 11.76
RECKITT BENCKISER RB. 10413.83 1494 1534 1065 1378.7 1689.5 *703000 17.76 *489000 19.85 72.4 75.51 84.21 20.6 19.8 17.7 *14 9.38 2.08 72.02 24.99 40.89

52 Shares
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LARGE & MID CAP TABLES

FTSE
350 CODE MARKET PRICE (p) VALUE 1,000 EBIT NET PROFIT EPS (p) PE RATIO DIVIDEND NTA GEARING RETURN
CAP Over Latest % Latest % Forecast Forecast Latest % Current ON EQUITY
m Current High Low 1 yr 3 yrs 000 change 000 change Current 1yr 2yrs Current 1yr 2yrs Paid Change Yield % (p) % %
PHARMACEUTICALS & BIOTECH
ACAMBIS ACM 354.15 335.25 401.5 257 960.9 2456.4 *40400 274.46 *35500 270.76 34.5 23.17 14.3 9.7 14.5 23.4 N/A N/A 0 19.88 16.02 78.1
ALLIANCE UNICHEM AUN 2247.06 631 649.5 470.5 1322.8 1314.4 *225300 9.8 *106800 8.87 41.6 43.2 47.53 15.2 14.6 13.3 *11 8.91 2.94 85.62 50.11 15.29
ASTRAZENECA AZN 42404.87 2528 2894 2360 991.3 770.9 *2569524 -5.96 *1859076 -1.89 98.15 113.91 135.69 25.8 22.2 18.6 *0.54 14.89 1.93 251.59 3.32 26.59
CELLTECH GROUP CCH 1524.11 547.5 549 300 1565 447.1 *-79800 94.63 *-53900 17.69 16 -19.2 -21.17 34.2 N/A N/A 0 31.36 0.2 -9.67
GALEN HOLDINGS GAL 1316.27 716.5 874 515 1258.8 797.5 *79544 -34.75 *58540 -36.4 40.72 0.65 0.78 17.6 20.3 16.8 *2.4 20 0.6 20.31 23.29 8.71
GLAXOSMITHKLINE GSK 66817.75 1130 1395 1044 972.1 640.4 *6452000 14.42 *4539000 13.31 79.8 78.45 83.2 14.2 14.4 13.6 *14 7.69 4.13 108.93 47.28 119.41
SHIRE PHARM. SHP 2363.65 493 579.5 363.75 1149.1 388.3 *-288878 -44.26 *-363355 -38.25 33.27 33.37 39.41 14.8 14.8 12.5 N/A N/A 0 20.24 8.23 -13.22
SKYEPHARMA SKP 393.01 63 81 49.5 843.7 736.4 *-38490 -763.96 *-43223 -3997.48 0 0.9 1.4 70.2 44.9 *7.90494 0 0 6.83 46.15 -38.62
REAL ESTATE
BRITISH LAND BLND 3301.66 677 695 467.5 1386.1 1451.3 *426600 0 *122900 0 37 28.21 30.75 18.3 24 22 *4.43 8.05 2.38 1657.86 52.1 3.39
BRIXTON BXTN 765.12 285 306 212.5 1255.9 1480.8 *86600 9.34 *39000 24.6 15 13.67 14.88 19 20.9 19.2 *3.95 2.6 4.37 547.79 48.6 5.25
CAPITAL & REGIONAL CAL 312.09 494.5 543 296 1741 2230.5 *17931 -859.14 *3678 -126.17 31.4 24.27 28.86 15.7 20.4 17.1 *4 33.33 2.02 101.03 26.82 7.18
CLS HOLDINGS CLI 269.94 308 351 226 1367.3 1334.8 *49230 4.76 *17389 16.53 20 19.42 23.84 15.4 15.9 12.9 *2.4 0 0 1014.66 58.4 5.05
COUNTRYWIDE CWD 480.32 284 286.5 273 N/A N/A N/A N/A N/A N/A 0
DERWENT VALLEY DWV 464.68 874 876 563 1441.5 1183.3 *35800 6.55 *14800 28.7 26.62 27.08 28.51 32.8 32.3 30.7 *8.1 10.2 1.45 1518.04 39.07 2.89
GRAINGER TRUST GRI 411.06 1645 1955 1070 1599.5 2198.5 *52300 15.37 *25800 42.26 118.5 109.76 72.49 13.9 15 22.7 *12.8 15 1.1 436.6 75.73 24.57
GT.PORTLAND EST. GPOR 528.04 260 272 221 1154.4 1033.5 *-9300 0 *-20500 0 12.8 10.06 10.36 20.3 25.8 25.1 *3.5 2.34 4.49 383.76 33.59 -2.92
HAMMERSON HMSO 1899.02 687 718 478.5 1304.9 1491.4 *155700 -8.89 *52300 -32.34 29.8 28.15 31.59 23.1 24.4 21.7 *11.71 6.55 2.72 1431.44 44.54 2.47
LAND SECURITIES LAND 5487.5 1176 1194 767 1519.4 1461.8 *449000 0 *216900 0 47.86 55.37 58.91 24.6 21.2 20 *9.9 4.21 3.51 1805.05 32.58 3.8
LIBERTY INTL. LII 2440.04 737.5 782 608 1228.3 1543.4 *236000 1.24 *75800 -2.82 27.45 27.53 30.53 26.9 26.8 24.2 *13.25 6 3.77 1398.17 41.72 3.03
LDN.MER.SECS. LMSO 426.36 175 183 122.5 1539.1 1335.2 *9251 0 *-23219 0 4.18 3.95 4.29 41.9 44.3 40.8 *2 0 4.06 337.59 32.34 -3.54
LONDON MER.DFD. LMSD 147.74 176 179.5 114.5 1541.5 1368.2 *9251 0 *-23219 0 0 *10.5 0 0 979.83 32.34 -3.54
MINERVA MNR 399.84 248.75 261 173.5 1447.6 860.2 *45636 3.48 *-647 -113.45 0 -0.1 1.36 183.2 *1.07 1.9 1.42 659.96 56.72 -0.84
NHP NHP 383.32 188.25 201.5 110.5 1655.6 6085.8 *67408 9.46 *25289 52.15 13.9 13.44 12.54 13.5 14 15 *2.25 -24.53 3.1 363.42 63.99 12.18
PILLAR PR. PLL 609.04 561 588 421.5 1346 1677 *31700 0 *14600 0 19.1 6.36 10.53 29.4 88.2 53.3 *2.4 4.35 1.68 439.37 42.79 2.35
QUINTAIN ESTATES & DEV. QED 524.22 407 443.75 296 1409.6 2207.5 *30659 0 *12321 0 9.6 8.31 10.33 42.4 49 39.4 *2.75 0 2.18 561.31 40.13 3.05
SHAFTESBURY SHB 328.71 249 290 199.5 1217.3 879.7 *32945 1.19 *8238 -15.19 10.25 7.97 9.28 24.3 31.2 26.8 *2.54 9.96 1.81 551.77 45.46 2.19
SLOUGH ESTATES SLOU 1807.91 432.75 484.5 321.75 1236.5 1353.7 *181100 -13.88 *79100 -9.29 27.6 25.27 27.77 15.7 17.1 15.6 *9.2 7.6 3.85 863.08 43.07 3.88
ST MODWEN PROPS. SMP 365.04 302.25 331 181.5 1672.6 2853.2 *39927 35.51 *20912 56.09 20.1 22.08 22.97 15 13.7 13.2 *4.4 15.79 2.43 222.75 37.29 12.43
RETAIL
BOOTS GROUP BOOT 4933.31 644 756.5 591 1136.6 1285.5 *541200 0 *314200 0 48.2 48.08 55.79 13.4 13.4 11.5 *8.8 4.76 5.14 197.97 22.25 15.76
BROWN (N) GROUP BWNG 299.75 101.5 159.5 98.5 760.5 422.1 *38000 -36.19 *18400 -52.41 6.11 12.03 12.25 16.6 8.4 8.3 *1.74 0 6.39 28.1 41.37 7.37
BURBERRY GROUP BRBY 1950.76 390 411.75 238 1613.9 *87800 0 *52200 0 19.5 20.61 22.91 20 18.9 17 *1.5 50 1.28 32.27 1.78 18.48
CARPETRIGHT CPR 670.5 963 1059 604 1641.6 1874.9 *52957 0 *36714 0 65.5 63.37 67.22 14.7 15.2 14.3 *17 13.33 4.5 201.29 45.45 69.96
CARPHONE WHSE.GP. CPW 1245.77 142.5 155.75 86 1452.4 980.6 *41993 0 *22069 0 6.81 3.74 5.22 20.9 38.1 27.3 *0.4 N/A 1.01 15.22 8.84 5.47
DFS FURNITURE CO. DFS 459.19 427 447 354 1151.2 1161.8 *56427 -20.57 *38147 -24.51 34.5 33.22 33.5 12.4 12.9 12.7 *17 6.25 6.25 103.43 0 74.48
DIXONS GP. DXNS 2986.24 153.25 165 107.75 1481.9 771.7 *310400 0 *209200 0 11.5 11.91 12.89 13.3 12.9 11.9 *1.66 9.93 4.93 31.88 28.64 13.16
FINDEL FDL 325.08 389 405 255 1559 1533 *48508 38.46 *28205 51.88 33.4 11.6 *3.1 10.71 4.14 65.6 52.41 30.88
FRENCH CONNECTN. FCCN 459.86 482.25 494 244 1778.4 2935.5 *38400 27.15 *26400 29.41 28.4 31.15 34.02 17 15.5 14.2 *1 66.67 1.67 33.35 6.35 33.04
GUS GUS 8478.06 836 860 644.5 1313.4 1543.5 *417000 0 *218000 0 60.7 45.45 52.09 13.8 18.4 16 *8 15.94 3.59 102.85 48.42 10.52
HMV GROUP HMV 982.41 243 258 123.75 2016.8 *83715 0 *47026 0 18.8 19.96 21.89 12.9 12.2 11.1 *1.3 18.18 2.15 36.63 206.93
JJB SPORTS JJB 621.18 264 328 175 1322.9 702 *88589 0 *49768 0 26.99 20.33 21.75 9.8 13 12.1 *3 33.33 4.21 84.45 45.22 15.71
KESA ELECTRICALS KESA 1594.1 301 317 186 *197800 11.69 *105600 12.94 21.4 23.28 25.68 14.1 12.9 11.7 *2.5 N/A 3.69 98.68 65.25 17.9
KINGFISHER KGF 6812.82 292 320 255.39 1135.8 1057 *606000 9.25 *446400 75.2 17.8 20.35 22.6 16.4 14.3 12.9 *6.15 3.99 3.67 119.2 18.67 5.3
LASTMINUTE.COM LMC 590.72 180.5 318 150.5 1053.5 5194.4 *-46485 22.29 *-47645 25.11 0 -9.44 -0.6 N/A N/A 0 6.67 42.34 -45.56
MARKS & SPENCER MKS 8181.38 359.75 370 260.5 1280.6 1649.9 *814500 0 *480100 0 24.7 24.23 26.26 14.6 14.8 13.7 *4.4 10 3.55 151.05 43.13 16.9
MATALAN MTN 801.99 190.75 268 150.75 1087.6 492.6 *118800 0 *86700 0 10.6 13.8 15.53 18 13.8 12.3 *2.7 0 4.72 39.86 14.88 62.87
MFI FURNITURE MFI 966.15 155.5 190 131 966.9 1339.6 *119100 46.86 *86800 51.22 12.9 12.65 15.47 12.1 12.3 10.1 *2 25 2.72 62.29 10.06 22.72
NEXT NXT 3675.09 1400 1462 978 1506.7 1640.3 *368900 22.97 *243400 17.08 68.7 104.68 116.6 20.4 13.4 12 *11 10 2.78 135.5 70.42 107.5
SIGNET GROUP SIG 1933.46 112 120.25 87 1293.3 1466.2 *224600 3.36 *137200 6.44 8 8.35 9.07 14 13.4 12.3 *0.341 10 2.48 11.75 22.22 19.7
SMITH(WH) SMWH 844.33 337 410 220.5 1059.6 756.7 *54000 -41.3 *23000 -55.77 21 18.11 23.22 16 18.6 14.5 *13 0 5.61 108.56 5.1 3.88
TOPPS TILES TPT 395.96 174.5 176 71.9 2535.9 3199.4 *17625 50.42 *12258 52.48 8.42 8.43 9.67 20.7 20.7 18 *3.08 359.7 11.08 10.25 9.99 51.58
WOOLWORTHS GROUP WLW 628.97 44.5 49.75 35.75 1291.2 *77500 48.47 *45400 60.42 3.5 3.69 4.38 12.7 12 10.1 *0.36 10.77 3.75 22.9 18.28 10.68

SOFTWARE & COMPUTER SERVICES

AUTONOMY AU. 241.95 221 328 159 1067.3 472.3 N/A N/A *3797.16 -15.23 3.31 4.48 6.67 66.8 49.3 33.1 N/A N/A 0 1.09 0 3.67
COMPUTACENTER CCC 717.76 380 500.5 345 1143.6 1214.1 *69187 7.44 *45982 21.16 25 26.57 28.74 15.2 14.3 13.2 *5 -13.79 2.05 53.23 14.24 19.08
DIMENSION DATA HDG. DDT 396.01 29.5 52 20.75 1174.8 100.8 *-243789 -85.79 *-266436 -84.6 0 0.5 1.42 59.1 20.8 N/A N/A 0 4.47 24.09 -64.17
ISOFT GROUP IOT 879 388 429.5 258.5 1379.3 1687.3 *21278 0 *13396 0 5.89 4.83 10.34 65.9 80.3 37.5 *0.7 16.67 0.54 0.78 39.66 27.23
LOGICACMG LOG 1375.97 183.5 337 133.75 1247.3 241.1 *-16100 -98.16 *-43700 -95.23 9.2 7.91 10.59 19.9 23.2 17.3 *3.4 13.33 3.45 11.22 42.53 -8.92
MISYS MSY 1120.26 210.5 318.5 189 955.5 438.6 *71700 0 *43800 0 17.3 4.4 6.43 12.2 47.8 32.8 *2.44 15.09 3.16 5.09 190.67
NORTHGATE INFO.SLTN. NIS 314.28 63.5 73 27 2254.4 1168.2 *28155 0 *29746 0 2.12 -0.63 1.98 30 32.1 *0.35937 0 0 1.02 0.26 195.75
SAGE GROUP SGE 2295.48 179.25 210.5 155 1076.6 732 *157300 13 *104216 16.94 8.82 9.55 10.73 20.3 18.8 16.7 *1.095 97.3 1.06 7.75 22.5 16.75
SOURCE: THOMSON FINANCIAL/ DATASTREAM

XANSA XAN 292.34 86 127 76.75 863 268.9 *-155200 0 *-158900 0 4.26 -1.98 3.26 20.2 26.4 *1.08 0 4.19 7.77 16.27 -62.53
SOURCE: THOMSON FINANCIAL/ DATASTREAM

SPECIALITY & OTHER FINANCE

AMVESCAP AVZ 2938.33 363 570 331 836.7 325.4 *84665 -45.31 *-17281 -202.3 23.4 9.03 11.64 15.5 40.2 31.2 *6.5 0 3.52 21.08 25.88 -0.81
CATTLES CTT 1065.88 325 367 308.5 1073.1 1213.1 *175247 20.83 *82915 24.4 26.37 29.37 34.1 12.3 11.1 9.5 *8.15 16.43 4.14 11.74 72.62 24.25
CLOSE BROTHERS CBG 1103.28 765 902 622.5 1218.6 890.3 N/A N/A *52590 12.9 49.4 47.39 60.43 15.5 16.1 12.7 *9 0 3.78 16.54 65.18 10.82
COLLINS STEW.TULLETT CSTL 813.33 430 496 353.5 1049.2 1144.6 *73500 161.43 *40900 155.5 28.8 14.9 *5.25 16.67 2 13.53 15.2 37.42
EVOLUTION GROUP EVG 340.89 137.25 149.75 56 2315.4 2033.4 *17920 -175.44 *16048 -167.18 6.7 20.5 *0.25 N/A 0.2 0.61 0 22.64
HHG HHG 1178.94 43.5 53.25 37 *-652000 60.2 *-847000 178.62 0 -1.57 0 21750 N/A N/A 0 2.32 21.09 -111.14
ICAP IAP 1580.42 274 331.4 221.2 1205.4 2679.6 *112400 0 *75400 0 18.4 13.84 14.34 14.9 19.8 19.1 *1.7 21.43 3 8.86 0.38 41.18
INTM.CAPITAL GROUP ICP 746.25 1100 1235 926.59 1237.3 1568 *92400 18.61 *43600 24.22 70.4 74.16 74.74 15.6 14.8 14.7 *24 12.94 3.48 2.06 71.19 20.17
INVESTEC INVP 765 1025 1200 785 1443.2 73436 N/A *-71658 0 103.7 9.9 *28 7.69 6.29 119.59 84.26 -8.95
ISIS ASSET MMENT ISIS 270.46 180 260 172 898.9 556.5 *4507 -164.92 *-11821 -10.12 11.98 -0.76 2.43 15 73.9 *7 0 6.79 5.71 60.18 -7.54
LONDON STOCK EX. LSE 1088.5 366.5 391 313 1050.1 1030.9 *79300 0 *52000 0 21.3 20.97 23.58 17.2 17.5 15.5 *1.4 7.69 1.46 42.53 0 19.55
MAN GROUP EMG 4871.2 1570 1860 1163 1276.1 1773.2 *308800 0 *227300 0 129.6 103.36 120.23 12.1 15.2 13.1 *11.4 25.27 2.12 13.44 41.32 49.64
PARAGON GP.OF COS. PAG 425.79 355.5 405 273 1311.9 1485.1 *214000 5.37 *40300 10.11 41.8 8.5 *3.7 23.33 2.38 3.51 92.82 21.04

17 June 2004 53
170604 p50-54 tables 6/15/04 10:24 AM Page 54

LARGE & MID CAP TABLES

FTSE
350 CODE MARKET PRICE (p) VALUE 1,000 EBIT NET PROFIT EPS (p) PE RATIO DIVIDEND NTA GEARING RETURN
CAP Over Latest % Latest % Forecast Forecast Latest % Current ON EQUITY
m Current High Low 1 yr 3 yrs 000 change 000 change Current 1yr 2yrs Current 1yr 2yrs Paid Change Yield % (p) % %
PROVIDENT FINL. PFG 1581.09 621.5 773.5 586.5 1020.9 949 *252800 19.68 *141100 18.99 57.54 59.73 66.01 10.8 10.4 9.4 *19.9 7.92 5.9 18.91 64.6 36.01
SCHRODERS SDR 1350.48 597.5 809.5 576.5 906.9 748.1 *65600 247.09 *49200 84.96 16.7 27.44 37.9 35.8 21.8 15.8 *13 0 3.44 4.47 33.18 4.68
SCHRODERS NV SDRC 385.04 548 718.5 513 927.7 700.8 *65600 247.09 *49200 84.96 16.7 32.8 *13 0 3.75 14.37 33.18 4.68
SINGER &.FRIED.GP. SFL 399.18 231.5 254.92 141.01 1661.5 1038.1 116956 N/A *95267 267.74 12.13 10.35 11.36 19.1 22.4 20.4 *29.5 434.43 6.75 79.69 57.21 30.57
STEEL & OTHER METALS
CORUS GROUP CS. 1574.34 35.5 46.75 12.63 1931 538.3 *-150000 -52.23 *-313000 -34.52 0 -0.62 2.45 14.5 *0.97172 0 0 61.54 32.57 -11.2
SUPPORT SERVICES
AGGREKO AGK 412.51 154 177.5 120.25 1026.4 347.2 *45300 -26.94 *27300 -22 10.17 10.12 10.44 15.1 15.2 14.7 *3.45 2.99 4.08 105.43 36.42 15.73
ATKINS(WS) ATK 585.9 561 622 254.5 2098.8 718.7 *-62500 0 *-59200 0 39.1 28.67 30.93 14.3 19.6 18.1 *2 -73.54 0.99 62.62 63.93 -62.85
BRAMBLES INDUSTRIES BI. 1548.81 214 228 154.75 1375.7 *267000 -26.45 *111000 -33.93 11.2 8.68 11.24 19.1 24.6 19 *4.155 10.59 4.26 330.5 58.13 10.36
BUNZL BNZL 2074.8 462.25 494 399.75 1061.9 1046.4 *216800 5.09 *125600 -0.08 31.3 27.51 30.16 14.8 16.8 15.3 *3.85 5.48 2.91 43.78 36.99 23.74
CAPITA GROUP CPI 2049.8 307.5 319 208.25 1321.1 672.5 *104500 19.63 *59400 24.15 13.04 11.09 13.4 23.6 27.7 23 *2.7 35 1.45 16.76 31.6 18.7
COMPASS GROUP CPG 7266.01 337.25 387.75 321 1013.2 710.6 *495000 -8.16 *206000 -13.08 21.2 9.93 12.44 15.9 34 27.1 *5.7 14 2.9 80.48 49.77 6.5
DAVIS SER.GP. DVSG 735.16 365 417.5 330 991.9 1280.8 *53290 -40.86 *10372 -78.17 30.01 22.26 25.48 12.2 16.4 14.3 *10.6 4.95 4.75 278.55 49.38 2.35
DE LA RUE DLAR 586.85 320.5 344 232 1449.4 691 *-12300 0 *-14100 0 24.2 23.05 17.79 13.2 13.9 18 *4.4 0 4.92 89.24 15.79 -2.7
ELECTROCOMP. ECM 1595.14 365.75 391.25 310.75 1105.6 715.8 *92800 0 *60300 0 17.5 16.67 18.43 20.9 21.9 19.8 *5.6 6.67 5.53 39 15.81 14.67
HAYS HAS 2173.84 125.25 147 92 1383.7 750.8 *-460200 -373.6 *-523200 -763.96 6.88 5.2 6.79 18.2 24.1 18.5 *1 -42.86 4.11 18.78 100.65 -123.5
HOMESERVE HSV 403.34 645 677 458.94 1378.8 1333.5 *44740 0 *25767 0 51 29.29 35.31 12.6 22 18.3 *6.086 8.93 2.62 273.65 46.74 21.42
INTERSERVE IRV 291.22 256 304.75 227 1058.1 573.2 *-5100 -112.23 *-7300 -129.67 16.7 17.03 20.8 15.3 15 12.3 *9.3 132.5 5.86 79.2 23.69 -3.88
INTERTEK GROUP ITRK 814.92 528 547 417.5 1211.7 *79000 2.2 *51000 36.73 29.1 30.75 34.96 18.1 17.2 15.1 *2.9 N/A 1.85 50.41 120.19
LAING (JOHN) LNGO 379.84 215 226 146.5 1379.8 501.4 *36000 291.3 *1600 -104.55 3.1 3.82 4.53 69.4 56.3 47.5 *2 0 1.55 17.66 74.28 2.92
MICHAEL PAGE INTL. MPI 620.66 175 202 107 1659.5 924.8 *22487 -31.78 *13745 -35.02 4.1 6.14 8.25 42.7 28.5 21.2 *2.3 0 2.16 6.51 1.44 28.13
MITIE GROUP MTO 396.02 128 138 111.25 1051.9 862.5 *31843 0 *21601 0 8.3 8.55 9.57 15.4 15 13.4 *1.1 37.5 2.17 12.05 0.04 26.15
PHS GROUP PHY 405.89 78.5 96.5 72 1041.5 *41216 0 *25402 0 5.41 5.79 6.43 14.5 13.6 12.2 *0.22 29.41 0.85 6.16 26.05 10.41
PREMIER FARNELL PFL 885.59 244 282.5 197 1197.2 916.7 *69300 -8.94 *39000 -6.25 10.1 10.97 13.03 24.2 22.2 18.7 *4 0 4.1 29.54 67.57
RAC RAC 798.21 676 730 520 1374.9 1327.5 *10300 -14.17 *-9900 45.59 54.4 50.71 53.76 12.4 13.3 12.6 *14.6 5.8 3.99 150.07 32.99 2.36
REGUS GROUP RGU 527.85 67 82 27.46 2024.9 377.5 *-20102 -82.03 *-22854 -81.65 0 0.27 248.1 N/A N/A 0 8.52 93.46
RENTOKIL INITIAL RTO 2671.25 147 232.75 140.5 791.1 699.1 *494700 1.31 *289700 2.04 16.47 14.79 15.4 8.9 9.9 9.5 *4.35 10.13 4.61 36.47 172.96
REXAM REX 2407.02 437.75 471 342.85 1308.7 1809.4 *90000 7.14 *-41000 -66.39 38.1 23.45 27.49 11.5 18.7 15.9 *9.58 5.36 4.28 229.51 60.26 -5.41
RPS GROUP RPS 243.17 124.25 173.5 110 940.3 680 *16532 15.24 *11831 20.37 8.62 6.51 7.53 14.4 19.1 16.5 *0.94 14.63 0.89 7.01 0.18 10.87
SECURICOR SCR 631.83 118.5 135 67.88 1527.9 741.7 *55800 -408.29 *39200 -180.82 8.7 7.21 8.11 13.6 16.4 14.6 *1.62 18.47 2.33 33.22 41.29 16.67
SERCO GROUP SRP 880.63 202.5 234.75 146.5 1144.5 478 *44446 42.25 *17513 11.36 11.03 8.18 9.87 18.4 24.8 20.5 *1.62 12.5 1.28 17.8 66.21 13.34
TELECOMS
BT GROUP BT.A 15959.13 186 210.25 166.25 1018.3 579.5 *4311000 0 *2617000 0 16.9 18.45 19.74 11 10.1 9.4 *3.2 42.22 5.08 185.17 85.99
CABLE & WIRELESS CW. 3011.65 126.25 155.5 99 1229.7 340.3 *-6361000 0 *-6470000 0 0 4.63 8.68 27.3 14.5 *1.6 0 0 81.2 38.27 -73.4
COLT TELECOM CTM 1261.56 83.5 131 58 1272.1 149.1 *-36352 -94.16 *-124647 -82.65 0 -4.86 -0.97 N/A N/A 0 88.98 57.02 -13.05
MMO2 OOM 8284.62 95.5 117.75 51 1701.8 *-101230000 *-10151000 0 1.9 2.22 3.12 50.3 43.1 30.6 N/A N/A 0 44.67 12.71 -53.89
THUS GROUP THUS 354.01 26.25 39 17.25 1339.3 495.3 *-19357 -62.43 *-25221 -57.24 0 -0.65 0.34 77.7 N/A N/A 0 30.61 13.4 -6.22
VODAFONE GROUP VOD 85558.94 127.25 150.25 112 1077.7 825.9 *-5085000 0 *-9164000 0 9.1 -13.16 -12.36 14 *0.9535 20 1.77 29.11 10 -7.52
TOBACCO
BRIT.AMERICAN TOBACCO BATS 16485.67 807 873.5 615 1295.4 1807.1 *1832000 -21.34 *772000 -36.88 26.93 52.21 58.13 30 15.5 13.9 *27 10.2 5.34 126.2 62.73 13.46
GALLAHER GROUP GLH 4449.25 680.5 697 544 1232 1673.7 *504000 -2.7 *243000 -6.18 55.5 45.62 51.14 12.3 14.9 13.3 *20.15 7.47 4.83 91 112.43
IMPERIAL TOBACCO GP. IMT 8619.15 1182 1295 955.5 1205.6 2002 *914000 54.65 *424000 49.82 97.9 71.61 84.18 12.1 16.5 14 *30 30.43 4.23 97.92 98.56
TRANSPORT
ARRIVA ARI 780.93 402.75 418.25 330 1240.2 1452.8 *100800 3.17 *57800 -26.84 36 28.46 30.2 11.2 14.2 13.3 *13.4 4.69 4.97 392.73 45.09 12.2
ASSD.BRIT.PORTS ABP 1355.22 427.5 498 375.5 1159.4 1223.4 *169100 1.26 *96700 2.44 31 31.66 33.46 13.8 13.5 12.8 *8.5 3.03 3.96 454.81 29.07 10.34
AVIS EUROPE AVE 585.79 100 117.75 87.5 1037.1 831.2 *13209 -87.66 *-35528 -169.68 5.4 5.24 8.5 18.5 19.1 11.8 *2.6 -31.58 4.33 169.53 98.69 -114.46
BAA BAA 5810.36 542.5 560.5 441.75 1139 971.2 *706000 0 *376000 0 35.5 37.98 42.41 15.3 14.3 12.8 *6.6 4.76 4.1 728.45 40.38 7.86
BBA GROUP BBA 1123.22 249 281.25 198.5 1186.8 1136.6 *83700 -10.86 *19700 -39.76 19.6 16.29 17.71 12.7 15.3 14.1 *7.6 2.7 4.82 170.76 47.44 3.63
BRITISH AIRWAYS BAY 2723.25 251.5 343 140.25 1625.8 768.8 *406000 0 *69000 0 0 19.77 28.72 12.7 8.8 *12.8 0 0 876.15 75.2 3.62
EASYJET EZJ 645.33 161.5 389 152.5 829.9 434.5 *53072 -30.9 *32402 -33.89 0 11.82 14.56 13.7 11.1 N/A N/A 0 80.28 8.76 4.45
EUROTUNNEL SA UNITS ETL 630.06 24.75 73.5 22 518.3 316.3 *-974711 -257.34 *-1334225 -541.09 0 -3.4 -2.94 N/A N/A 0 291.74 84.09 -55.15
EXEL EXL 2103.7 705.5 792 614 1109 1181 *168100 -15.61 *98200 -18.3 34.07 35.52 40.87 20.7 19.9 17.3 *16.8 9.8 3.89 183.58 26.29 11
FIRST GROUP FGP 1119.29 278 307.5 249 1110.4 943.3 *168000 -12.64 *92200 -5.53 27.3 21.34 21.87 10.2 13 12.7 *3.75 5.63 4.66 198.1 68.04 22.77
FORTH PORTS FPT 540.28 1185 1260 885 1392.6 1754.9 *59400 18.36 *40400 20.93 70.4 73.53 79.63 16.8 16.1 14.9 *24.2 10 3.4 631.46 30.54 18.61
GO-AHEAD GROUP GOG 589.35 1163 1300 735 1581 1409.2 *42100 0 *19300 0 97.5 97.01 108.12 11.9 12 10.8 *11 57.14 2.77 407.7 41.97 9.67
MERSEY DOCKS MDK 533 681.5 713 536 1350.6 1384 *65900 4.77 *36800 -0.27 46.9 50.15 53.68 14.5 13.6 12.7 *16 8.84 3.77 821.25 38.27 9
NATIONAL EXPRESS NEX 970.95 709 749.5 545 1360.9 843.6 *87100 -248.89 *42000 -139.66 61.4 30.14 37.61 11.5 23.5 18.9 *17.5 6.71 4.07 296.17 58.99 17.06
NORTHGATE NTG 404.06 631 648 472.5 1373.2 1598.4 *50121 0 *23827 0 45.2 45.95 51.67 14 13.7 12.2 *7 42.86 3.19 606.78 66.23 18.43
PEN.&.ORNTL.DFD. PO. 1608.15 218 288.25 208 1046.9 988.4 *126000 452.63 *19900 -119.74 12.4 11.45 14.43 17.6 19 15.1 *9 0 6.88 227.47 53.81 3.86
STAGECOACH GP. SGC 1106.29 83.75 97 55 1565.9 1491.1 *-452800 0 *-525600 0 5.2 5.34 4.87 16.1 15.7 17.2 *0.9 12.5 3.58 64.47 69.56 -57.77
TBI TBI 346.51 62 73.75 53 1174.3 803.1 *22479 0 *6204 0 2.66 1.83 2.32 23.3 33.8 26.7 *0.7 0 4.12 63.15 36.83 1.54
SOURCE: THOMSON FINANCIAL/ DATASTREAM

UTILITIES
AWG AWG 886.59 619 640 463.38 1156.9 1437.4 *197600 0 *-50000 0 50.6 37.98 45.35 12.2 16.3 13.6 *19.9502 0 0 2873.92 76.51 -3.9
CENTRICA CNA 9163.49 214.75 236.5 168.25 1242.6 962 *817000 7.93 *474000 6.04 16.8 16.67 19.19 12.8 12.9 11.2 *1.7 21.43 2.79 63.98 28.28 22.46
KELDA GROUP KEL 1864.21 496.25 510 396 1239.4 1562.3 *270300 0 *127300 0 46.2 40.54 40.45 10.7 12.2 12.3 *8.1 3.05 6.01 960.1 52.52 7.57
NATIONAL GRID TRANSCO NGT 13084.09 425 441.25 370 1127.1 875.7 *1568000 0 *362000 0 34.7 33.66 34.79 12.2 12.6 12.2 *7.91 15.31 5.17 547.23 92.36 12.41
NORTHUMBRIAN WATER NWG 697.55 134.5 138.75 101.25 1290.9 *182500 0 *89400 0 12.2 10.53 14.61 11 12.8 9.2 *2.32 N/A 5.74 493.5 57.98
PENNON GROUP PNN 956.78 764.5 769 565 1207.8 1513.3 *136300 0 *57100 0 57.7 52.95 58.81 13.2 14.4 13 *13.2 4.76 5.96 1635.14 57.03 5.86
SEVERN TRENT SVT 2824.12 818.5 840 635 1230.5 1369.8 *335000 0 *98200 0 61.4 54.68 61.46 13.3 15 13.3 *17.77 2.48 6.39 1463.21 53.77 4.33
UNITED UTILITIES UU. 3037.94 545.5 569.5 448.73 1128.2 1237.8 *569200 0 *277500 0 54.7 49.31 47.45 10 11.1 11.5 *14.43 7.68 9.03 1272.61 58.89 10.95
UNITED UTILITIES A UU.A 1076.32 348 371.25 259 *569200 0 *277500 0 *7.215 N/A 7.07 2291.5 58.89 10.95

54 Shares
170604 p55-63 sml caps 6/15/04 9:16 AM Page 55

SMALL CAP RESULTS

AEROSPACE & DEFENCE AEROSPACE & DEFENCE AEROSPACE & DEFENCE

HAMPSON INDUSTRIES (HAMP) UMECO (UMC) - 362.5P / VOLEX (VLX) - 127.5P /
- 19.25P / As a supplier of nuts and bolts to the aerospace The bulk of Volexs business is supplying cabling
Its no secret that the recent history of the
industry, the last few years have really tested to connect large computer networks. During the
aerospace industry has been a painful one. If
UMECOs mettle. The word from management is tech boom the stock peaked at an impressive 830p
Hampsons lastest results are any indication, it
that the worst is now over: There are continuing but its been in the doldrums ever since. At the
seems the worst is not over yet. In the year ended
signs of a recovery in the civil aerospace market time of the results it was trading at 127.5p. In the
March, the companys pre-tax profit disappeared
and the US defence market remains strong, said year ended 4 April, the company managed to
to show a loss of 1.86 million from a 1.99
chief executive Clive Snowden. In the year ended narrow pre-tax losses to 8.3 million against 13.6
million profit a year ago. Sales slid 7%, which
31 March, US dollar exposure and losses at its million a year ago. The group has 30 offices around
management blames on an industry-wide
Pattonair unit in France cut into profits. The the world but the bulk of its revenue comes from
contraction in demand. The group decided to
acquisition of the Advanced Composites Group the US, making the weakness of the dollar a factor
drop its dividend in light of current civil
in April as well as the recent Bombadier contract in its recent earnings. The negative currency effect
aerospace market conditions and the priority to
were not reflected in the results but both are sliced 600,000 off full-year operating profit, which
fund investment in major contracts. (EP)
expected to significantly lift earnings in 2005. The rose to 2.5 million from 0.6 million this time last
company will pay a total dividend of 12.5p. (EP) year. There was no dividend. (EP)
Shares says: accounted for. Shares says: Early UMECO attractive. Shares says: The Normal market size:
Buyers beware: the Normal market size: signs of strength in Normal market size: company is struggling 10,000
effect of higher oil 25,000 the US civil aerospace 2,000 with overbearing % spread: 6.90
prices is yet to be % spread: 2.56 market, making % spread: 4.17 costs.

HAMPSON INDS.
2004 2003 share price
24
2004 2003 UMECO
share price
2004 2003 VOLEX GROUP
share price
380 220
22
Tover m 68.6 74.1 20 Tover m 184 181 360
Tover m 238 230 200
180
340
18 160
Fin PTP (m) -1.86 1.99 16 Fin PTP (m) 7.0 8.1 320
Fin PTP (m) -8.35 -13.6 140
300
14 120
280
EPS (p) -1.14 1.01 12 EPS (p) 16.7 20.9 260
EPS (p) -39.1 -44.3 100
80
10
240 60
J J A S O N D J F M A MJ J J A S O N D J F M A MJ
Mkt cap (m) 40.7 13.6 8
J J A S O N D J F M A MJ Mkt cap (m) 118 61.2 Source: Thomson Financial/Datastream Mkt cap (m) 39.9 19.0 Source: Thomson Financial/Datastream

Source: Thomson Financial/Datastream

AUTOMOBILES & PARTS AUTOMOBILES & PARTS BEVERAGES

CAFFYNS (CFYN) - 742.5P
Pre-tax profits at the car distributor hit the skids,
falling to 3.1 million from 4.7 million in 2003
but before exceptional items profits improved to
3.4 million from 3.2 million the previous year.
Sales jumped to 153.1 million from 148.5
million but the company, which owns 14 car
franchises in the South-East, undertook a
refurbishment programme that disrupted
trading in its Volkswagen dealerships in
Haywards Heath and Eastbourne. Caffyns also
acquired an Audi franchise in Eastbourne, a
Vauxhall business in Tunbridge Wells and a
Volkswagen business in Brighton. The final
dividend rose to 15p from 14p. (PT)
Shares says: Profits Normal market size:
improved and further 500
acquisitions are % spread: 2.68
planned.
/ WAGON (WAGN) - 166.5P
The maker of car components managed to rise
above a flat European automotive market to post
a rise in full-year operating profit but a sharp slide
after exceptional items. Product sales, which
include car doors, glazing and panels, rose a
healthy 19% to 486 million. During the year the
group built a new plant in France to cater almost
exclusively for demand from its largest
customer, Peugeot, and has plans to ramp-up
production throughout the year. Management is
cautious on the outlook, saying only that trading
remains in-line with expectations and will show
further progress in the current financial year. The
dividend was unchanged at 5p. (EP)
Shares says: Watch Normal market size:
for more restructuring 5,000
measures from new % spread: 2.91
CEO Pierre Vareille.
/ MERRYDOWN (MYW) - 94P +
Drinks manufacturer and distributor Merrydowns
profits were up 26% from a sales increase of 20%.
Merrydown, which makes the cider of the same
name as well as Shloer soft drinks, benefitted from
the first uplift in cider sales for some time, up 4% on
an annual basis thanks to the warmer summer in
2003. Shloer sales rose 30%, and the drink became
the number one table-top adult soft drink in the
year. This all followed through to the bottom line,
with the firms net cash position increasing by 38%
to 3.52 million, after share buy-backs of 840,000.
A dividend of 1.35p a share is payable on 4 August
based on 9 Julys register. (JQ)
Shares says: Good Normal market size:
results, but growth 10,000
could slow as shares % spread: 2.10
reach year-high.

2004 2003 CAFFYNS

share price
2004 2003 WAGON
share price
2004 2003 MERRYDOWN
share price
800 200 110
105
Tover m 153 148 750 Tover m 486 443 190
180
Tover m 20.3 16.9 100
700 95
170
Fin PTP (m) 3.11 4.74 650 Fin PTP (m) 6.5 22.2 160 Fin PTP (m) 1.72 1.37 90
85
150 80
600
EPS (p) 88.1 144 550 EPS (p) 0.5 32.9 140
130
EPS (p) 5.51 4.15 75
70
500 120 65
J J A S O N D J F M A MJ J J A S O N D J F M A MJ J J A S O N D J F M A MJ
Mkt cap (m) 21.1 15.0 Source: Thomson Financial/Datastream Mkt cap (m) 85.6 64.3 Source: Thomson Financial/Datastream Mkt cap (m) 24.1 19.9 Source: Thomson Financial/Datastream

17 June 2004 55
170604 p55-63 sml caps 6/15/04 9:17 AM Page 56

SMALL
SMALL CAP
CAP RESULTS
RESULTS

CHEMICALS CHEMICALS CHEMICALS

EUROPEAN COLOUR (EUC) - 17P- RPC (RPC) - 185P
European Colour shares dropped 7% after the
organic pigments supplier reposted losses of 3.2
million compared to 4.1 million in 2003.
Turnover fell to 28.5 million from 38.1 million
the previous year due to the competitive markets
and weak dollar. The company was hit by 3
million of exceptional items following the
reorganisation. Although initial trading was
good at the beginning of the year management
says competition and legacy issues took their
toll. As such the company is not paying a
dividend. It also says that although the market is
to some extent stabilising the environment
continues to be uncertain. (PT)
Shares says: A Normal market size:
disappointing set of 5,000
results and tough % spread: 11.1
trading conditions.
+ VICTREX (VCT) - 352.25P
The plastic packaging manufacturer put in a
record performance for 2004. Turnover rose 6% to
430 million and pre-tax profits were up 8% to
23.2 million. The company hiked the dividend
to 6.6p from 6.3p last year. RPC completed a
project for Unilever to convert its margarine
brands to in-mould labelling and pre-printed
lids. Approval was received for the US
distribution of the Handihaler inhaler device
made for Boehringer Ingelheim. Increased oil
prices have not yet impacted due to the poor
demand for polymers. Four factories were
bought from Rexam and RPC is currently eying
acquisition opportunities. (PT)
Shares says: A Normal market size:
strong set of results 5,000
and resilience to oil % spread: 2.11
prices.
/
Speciality plastics moulder Victrex saw pre-tax
profits for the half year rise to a record 13.8
million from 12 million in 2003. Turnover for the
period improved to 44.8 million from 38.7
million. Volumes rose 17% to 869 tonnes and
gross margins also improved to 55% from 54.7%.
Victrex has hiked the dividend by 9% to 2.4p. Sales
growth in the electronics sector was up 59% and
sales into Asia-Pacific rose 49%. Sales volumes
have been strong in the second half and as long
as demand for electronics continues volumes
should be on a par with the first half. (PT)
Shares says: Normal market size:
Electronics revival SETS
boosting sales but fear % spread: 1.12
competitors.

EUROPEAN COLOUR
2004 2003 share price
30
2004 2003 RPC GROUP
share price
2004 2003 VICTREX
share price
215 400
28 210 390
Tover m 28.5 38.1 26
Tover m 430 407 205 Tover m 44.8 38.7 380
200 370
24 195 360
Fin PTP (m) -3.18 -4.14 22 Fin PTP (m) 23.2 21.5 190 Int PTP (m) 13.8 12.0 350
185 340
20 180 330
EPS (p) -6.76 11.1 18 EPS (p) 19.1 17.3 175 EPS (p) 11.6 10.1 320
170 310
16 165 300
J J A S O N D J F M A MJ J J A S O N D J F M A MJ
Mkt cap (m) 8.15 13.2 14
J J A S O N D J F M A MJ
Mkt cap (m) 162 166 Source: Thomson Financial/Datastream Mkt cap (m) 281 249 Source: Thomson Financial/Datastream

Source: Thomson Financial/Datastream

CONSTRUCTION & BUILDING MATERIALS
ENSOR HOLDINGS (ESR)
- 17.25P
Ensor has many strings to its bow including the
manufacture and supply of building materials,
electric motors and access control automation
equipment. The building side has concentrated
with some success on the service side, notably for
the roofing and draining requirements of the
construction industry. Much the same happened
on the electrical side, helped by a comprehensive
advice programme and a policy of prompt delivery.
The new year has started well, and further progress
is expected despite the ever-increasing burden of
obligations. The total dividend payout rose to 0.85p
from 0.75p per share. (JC)
CONSTRUCTION & BUILDING MATERIALS ELECTRONIC & ELECTRICAL EQUIPMENT
MONTPELLIER (MPL) - 22.25P + DELTRON ELECTRONICS (DET)
+ As a construction company it would be natural to
- 67.5P -
The electromechanicals company returned to
assume that business is booming. As it is,
profit in the first half of the year, and
turnover is holding up while profits have
management reckons the second-half will be
vanished. The group has taken steps to identify
another forecast-beater. The electromechanical
the problems and there are question marks over
components maker posted a small pre-tax profit
previous contracts and also the level of costs. On
of 0.3 million compared to a loss of 0.4 million
the bright side, its operating subsidiaries remain
a year-earlier. Management said the market for
profitable and the group retains a strong cash
electromechanical parts is more buoyant than it
position. If all goes to plan, the second half of the
has been. Chairman Paul Gourmand said: There
year should see the group return to profitability.
is an increased air of confidence in the sector and
For the time being, the interim dividend
the value of orders received has increased by over
payment has been dropped. (JC)
6% over the same period last year. The dividend
was unchanged at 0.585p. (EP)

Shares says: Strong Normal market size: Shares says: The Normal market size: Shares says: Normal market size:
business plan but 5,000 shares have fallen so 10,000 Return to profitability 5,000
plagued with needless % spread: 13.6 far they must be % spread: 2.22 is encouraging in such % spread: 1.47
interference. oversold by now. a tough sector.

ENSOR HOLDINGS MONTPELLIER GP. DELTRON ELECTRONICS

2004 2003 share price 2004 2003 share price
50
2004 2003 share price
82
23
22 45 80
Tover m 22.7 20.4 21 Tover m 212 212 40
Tover m 31.8 31.8 78
76
20 74
35
Fin PTP (m) 1.07 0.74 19 Int PTP (m) -20.7 2.95 Int PTP (m) 0.31 -0.41 72
18 30 70
68
17
EPS (p) 2.5 1.8 16
EPS (p) -33.6 4.3 25
EPS (p) 0.2 -1.5 66
20 64
15 62
Mkt cap (m) 6.03 4.52 14
J J A S O N D J F M A MJ
Mkt cap (m) 16.9 24.8 15
J J A S O N D J F M A MJ Mkt cap (m) 28.5 19.8 60
J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream

56 Shares
170604 p55-63 sml caps 6/15/04 9:17 AM Page 57

SMALL
SMALLCAP
CAP RESULTS
RESULTS

ELECTRONIC & ELECTRICAL EQUIPMENT HEALTH HEALTH

DEWHURST (DWHT) - 145P
Turnover for Dewhurst, which makes lift fixtures,
components and keypads, increased by 8% to
14.3 million, while earnings per share increased
from 6.33p to 9.01p, up 42%. An interim dividend
of 1.55p will be paid, compared to 1.46p for the
same period. Sales were evenly spread between
its Lift and Keypad Divisions. Keypad sales for
ATM machines are particularly buoyant, due to
changes in PIN recognition on debit and credit
cards. But while the ATM keypad replacement
programme is good business for Dewhurst, it is
likely to tail off in 2005. Dewhurst has historically
been bought for yield. But with the sharp rise in
shares, yields are not looking so attractive. (PF)
Shares says: Might Normal market size:
be time to take some 1,000
profits. % spread: 6.67
/ HEALTHCARE ENTERPRISE GROUP MICAP (AIM:MIC) - 50P /
(AIM:HCEG) - 1.75P / The micro-encapsulation technology group that
The healthcare investment group that listed on
floated on AIM last summer stemmed losses
AIM last March via a reverse takeover with
from 4.22 million to 850,000 in 2004. Turnover
Interactivity Group saw losses increase to 2.92
improved to 900,000 from 290,000. During the
million from 285,000 last year after goodwill
period the company secured its first commercial
amortisation of 1.1 million and acquisition costs
licensing agreement for savoury flavours with
of 1 million. The group, which focuses on
Firmenich, a flavour and fragrance giant. Micap
occupational health and first aid, purchased
also signed a licensing deal with Skyepharma for
SAFA Group and Industrial Pharmaceutical
10 of its drug candidates. A feasibility study for
Service in November. Its Ebiox decontamination
AstraZeneca is also underway and Micap is
product, which came as part of the SAFA
working with Boots regarding the use of
acquisition, is being rolled out and HEG has high
essential oils in woundcare products.
hopes for the product in the fight against
Unfortunately its agrochemicals product proved
hospital-acquired infections. (PT)
ineffective in crop trials. (PT)
Shares says: Busy Normal market size: Shares says: Normal market size:
consolidating 2,500 Moving from 5,000
occupational health % spread: 4.44 milestones to royalties % spread: 8.0
acquisitions likely. is key.

MICAP
2004 2003 DEWHURST
share price
2004 2003 HEALTHCARE ENTS. GROUP
share price
2004 2003 share price
85
140 2.60
80
135 2.40
Tover m 14.3 13.3 130 Tover m 3.0 0.109 2.20 Tover m 0.90 0.29 75
125 2.00 70
120 65
Int PTP (m) 1.4 0.95 115 Fin PTP (m) -2.92 -0.28 1.80
1.60
Fin PTP (m) -0.85 -4.22 60
110
1.40 55
105
EPS (p) 9.01 6.33 100 EPS (p) -0.17 -0.02 1.20 EPS (p) -2.61 -28.2 50
95 1.00 45
90 0.80
Mkt cap (m) 6.08 3.98 J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream
Mkt cap (m) 51.2 12.0 J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream Mkt cap (m) 13.8 - 40
DEC JAN FEB MAR APR MAY
Source: Thomson Financial/Datastream

HOUSEHOLD GOODS & TEXTILES
HORNBY (HRN) - 11.00
The results from this model railway and
Scalextric group enabled it to increase the
dividend by 20% to 30p. The company also
announced a share split which may encourage
some smaller investors. Its success last year was
due to several new products especially the
MotoGP Scalextric motor bikes. The group is
acquiring businesses in Spain and Italy where it
hopes to replicate its recent successes which have
seen profits rise from 1.5 million in 2000/01. Key
to this growth has been the use of Chinese
manufacturing. This will be extended to the
Spanish and Italian businesses. (JM)
Shares says: The Normal market size:
share price should rise 1,000
along with profits. % spread: 2.27
INFORMATION TECHNOLOGY HARDWARE LEISURE & HOTELS
+ INTELEK (ITK) - 11P / BELHAVEN GROUP (BHG)
Intelek is trading in a challenging market,
- 457P +
The results were better than expected and the
providing electronic components and systems
dividend was increased by 10.3% to 11.2p. The
for the satellite, wireless and aerospace sectors.
company has two main income streams the
Turnover slightly fell in the period, largely due to
profit from brewing and the returns from its pub
its Labtech businesss planned realignment
estate. Although sales of Belhaven Best have
towards higher value circuit boards. Despite this,
grown substantially the brewery still has
pre-tax profits managed to increase and EPS rose
substantial spare capacity. By the end of last year
by 23%. Its US satellite division, Paradise
the group had 229 pubs but hopes to have 300 by
Datacom, won a 1 million homeland security
the end of 2005. The Scottish pub market is
contract, helping it make record results which are
dominated by independents, which means that
not likely to be repeated this year. Intelek expects
it should be relatively easy to achieve this target.
to make steady progress in 2004, although the
Brokers are forecasting earnings of over 40p and a
company is vulnerable to rising oil prices and a
dividend of 12.4p. (JM)
weakening US exchange rate. (CB)
Shares says: Some Normal market size: Shares says: The Normal market size:
good growth potential, 25,000 rating ignores the 2,500
but approach with % spread: 9.52 growth record and % spread: 1.09
caution. future potential.

INTELEK
2004 2003 HORNBY
share price
2004 2003 share price
15
2004 2003 BELHAVEN GROUP
share price
1300 480
14
Tover m 39.0 34.1 1200 Tover m 38.9 41.6 13
Tover m 95.0 79.0 460

1100 440
12
Fin PTP (m) 6.47 5.41 1000 Fin PTP (m) 0.72 0.49 Fin PTP (m) 14.2 10.8 420
11 400
900
EPS (p) 61.0 53.3 800
EPS (p) 0.61 0.21 10
EPS (p) 37.2 34.8 380

9 360
700 340
Mkt cap (m) 77.4 47.0 J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream Mkt cap (m) 9.68 10.0 8
J J A S O N D J F M A MJ Mkt cap (m) 131 82.3 J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream
Source: Thomson Financial/Datastream

17 June 2004 57
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SMALL CAP
SMALL CAP RESULTS
RESULTS

LEISURE & HOTELS LEISURE & HOTELS LEISURE & HOTELS

BURTONWOOD BREWERY (BWB) CLAPHAM HOUSE (AIM:CPH)
- 378.5P + - 144.5P
Burtonwood has struck upon the golden formula
with its focus on non-branded community pubs.
Away from the more competitive High St.
drinking circuit, small country pubs are thriving.
This is certainly true of Burtonwoods 465 pubs
where the steady flow of drink resulted in record
profits. Pre-tax profit rose to 10.4 million in the
year ended April from 5.6 million the previous
year. At the same time, it announced the
acquisition of another 16 Yorkshire-based pubs
from Country Estates Management for 6
million. The dividend was raised 9.5% to 10.4%.
(EP)
+ - 7.65P
Clapham House had a lot of support around its
float in November thanks to extensive
management experience. This stood the
company in good stead and the stock has
outperformed the wider AIM market. Since
listing at just over 112p it has acquired two
restaurant brands the Real Greek and Bombay
Bicycle Club and is currently trying to raise 7
million by issuing shares at 140p to fund a third.
Net cash is 13.3 million and the company is loss-
making, with relatively heavy exceptional losses
relating to the listing, granting directors shares
and a NI contribution. (PF)
TOP TEN HOLDINGS (AIM:TTH)
+
The bingo and snooker hall operator hit the
jackpot with pre-tax profits jumping 119% to 1.27
million from 579,156 in 2003. Turnover also
jumped 43.3% to 11.3 million from 7.9 million
the year before. Top Ten Holdings is paying a
maiden dividend of 0.05p. Figures were boosted
by the five months contribution from the seven
Masons clubs purchased in October. Four clubs
performed well during the period. One club was
hit by competition but is now recovering. The
refurbishment programme should be finished by
the end of 2005 and management look forward to
the new gaming legislation. (PT)

Shares says: For as Normal market size: Shares says: Share Normal market size: Shares says: Normal market size:
long as its pubs serve 2,500 rise likely on news of 3,000 Strong growth which 25,000
beer and its tenants % spread: 1.86 third acquisition. % spread: 3.40 gaming legislation % spread: 11.7
pay rent, a steady bet. should nurture.

TOP TEN HOLDINGS

2004 2003 BURTONWOOD BREW.
share price
2004 2003 CLAPHAM HOUSE GRP
share price
2004 2003 share price
14
380 155 13
Tover m 55.6 51.7 360 Tover m 0.53 - 150
145
Tover m 11.3 7.92 12
11
340 140 10
Fin PTP (m) 10.4 5.64 320
Fin PTP (m) -0.38 - 135
130
Fin PTP (m) 1.27 0.57 9
8
300
125 7
EPS (p) 34.5 14.7 280
EPS (p) -3.3 - 120
115
EPS (p) 0.29 0.15 6
5
260
110 4
240 105
Mkt cap (m) 80.8 54.0 J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream Mkt cap (m) 21.7 - DEC JAN FEB MAR APR MAY
Source: Thomson Financial/Datastream
Mkt cap (m) 32.9 9.67 3
J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream

LEISURE & HOTELS MEDIA & ENTERTAINMENT MINING

YATES GROUP (YTE) - 143P
A steady set of full-year results was sidelined by
news of 93 million cash offer from GI Partners.
The offer of 140p a share will see GI Partners
become majority owners through its investment
vehicle Thorium with the remaining 18.6% stake
held by Yates management team. Results for the
full year ended March saw pre-tax profit before
exceptionals jump to 10.6 million from a
comparable 10 million a year ago. Though an
improvement, it is still a far cry from the level of
profits seen in 2000. A final dividend of 3.3p will
be included in the offer price if the bid is
successful. (EP)
+ SANCTUARY (SGP) - 48.5P
Once renowned for signing rock acts, music
company Sanctuary is successfully moving into
other genres. The Strokes, Beyonce and Russell
Watson are all new signings and helped increase
sales over the year. In Artist Services turnover
rose by 86%, with significant growth in retail and
touring products. Live Agency continues to
benefit from major tours undertaken ranging
from Busted to Jamie Cullum. Acquisitions
included US-based World Online, adding artists
such as Elton John and Simon & Garfunkel. The
Creole Records catalogue was also acquired,
making Sanctuary the worlds largest reggae
label. (PF)
+ CAMBRIDGE MINERAL RESOURCES
(AIM:CMR) - 50.5P /
Takeover speculation continues to swirl around as
the mining group revealed ongoing talks that may
lead to an offer. Meanwhile, shareholders must
stomach widening full-year losses of 873,939, a
fifth increase on the previous year. The junior gold
miner has interests in the Falkland Islands and
Spain but has yet to convert projects into profits.
However, early results are encouraging and
maiden drilling is targeted to start around the end
of 2004. The company raised 5 million cash in
October through a share placing and is
considering a number of options to raise more
cash to fund the Falklands venture. (SF)

Shares says: Solid Normal market size: Shares says: year. Shares says: The Normal market size:
results amid testy 10,000 Bucking trends in Normal market size: shares remain highly 25,000
conditions of the High % spread: 2.07 music industry. 25,000 speculative. % spread: 8.82
St. pub scene. Looking to a strong % spread: 2.04

SANCTUARY GP. CAMBRIDGE MINERAL RES.

2004 2003 YATES GROUP
share price
2004 2003 share price
56
2004 2003 share price
20
150
54
18
Tover m 151 153 140
Tover m 89.0 65.5 52 Tover m - -
130 16
50
120
Fin PTP (m) 4.13 9.66 110
Int PTP (m) 3.82 3.43 48 Fin PTP (m) -0.87 -0.73 14
46
100 44 12
EPS (p) 1.1 10.1 90
EPS (p) 0.67 0.6 42 EPS (p) -1.05 -1.22
10
80 40
J J A S O N D J F M A MJ
Mkt cap (m) 93.7 57.3 Source: Thomson Financial/Datastream Mkt cap (m) 167 122 38
J J A S O N D J F M A MJ Mkt cap (m) 22.2 9.87 8
J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream

58 Shares
170604 p55-63 sml caps 6/15/04 9:17 AM Page 59

SMALL
SMALLCAP
CAP RESULTS
RESULTS

REAL ESTATE REAL ESTATE REAL ESTATE

COMPROP (CPP) - 123.5P
The Channel Islands-based property developer
saw profits increase by half and an impressive
32% leap in net asset value. During the year, AIM-
listed ComProp completed two major
developments, being a B&Q Supercentre and an
office scheme in St Peter Port. The groups
investment portfolio was also revalued, resulting
in an 11.9 million uplift, or 20% gain. Interest
costs rose as a result of an increase in debt from
33.2 million to 50.9 million to fund the current
development programme. The groups largest
development to date is now under way at
Admiral Park, a 90,000 sq ft office scheme. Again,
no dividend. (CB)
Shares says: Slow Normal market size:
but steady long-term 5,000
growth ahead. % spread: 5.51
/ HELICAL BAR (HLCL) - 900P
Although pre-tax profits halved for the property
developer and investor, results were better than
expected. Net asset value rose by 14% to 874p,
around 2% higher than City forecasts.
Strategically, Helical Bar is risk-averse and this
year saw the completion of a repositioning which
started in 2001. The office downturn at that time
prompted the group to cease City developments,
which resulted in this years forecasted lack of
profits. However, the strategy also ensures that
Helical is immune to development losses.
Management expects profits to resume this year
from its retail interests and Berkeley Square
scheme. Dividend increased to 16.6p. (CB)
Shares says: Normal market size:
Helical takes a long- 2,000
term view and so % spread: 2.19
should investors.
/ WARNER ESTATE (WNER)
- 501P +
As Warners business model drifts further to that
of asset manager, its strategy appears to be paying
off. The real estate firm is aggressively expanding
in 2004, with property under management up by
46% to 877 million. Net asset value per share has
duly risen by 13% to 498p. Pre-tax profits did fall
slightly due to investment disposals, but were
still slightly better than City expectations. Warner
has formed three new funds during the year and
increased the size of its existing Agora shopping
centre fund. It aims to double its portfolio within
two years. Dividend was increased for the thirty-
third successive year. (CB)
Shares says: Normal market size:
Expect more news 1,000
soon as Warner takes % spread: 1.16
on its peers.

2004 2003 COMPROP

share price
2004 2003 HELICAL BAR
share price
2004 2003 WARNER ESTATE
share price

122 900 520

500
Tover m 4.75 4.05 120
118 Tover m 56.0 136 850 Tover m 63.0 53.0 480
116 800 460
114
Fin PTP (m) 0.75 0.50 112 Fin PTP (m) 13.7 25.2 750 Fin PTP (m) 15.7 16.6 440
420
110
108 700 400
EPS (p) 2.0 1.4 106
104
EPS (p) 40.9 61.2 650 EPS (p) 21.7 24.3 380
360
102
600 340
100 J J A S O N D J F M A MJ J J A S O N D J F M A MJ
Mkt cap (m) 43.7 35.9 J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream
Mkt cap (m) 234 189 Source: Thomson Financial/Datastream Mkt cap (m) 247 174 Source: Thomson Financial/Datastream

SOFTWARE & COMPUTER SERVICES
CML MICROSYSTEMS (CML)
- 372.5P
CML, which makes semiconductors, reckons that
it has turned the corner after the years of losses,
and headline results would certainly indicate
this. But look closer and most of this
improvement is really thanks to Hyperstones
contribution, which CML bought last year.
Without Hyperstone, CMLs sales only
marginally increased and pre-tax profits fell
massively. Cash reduced to 3.8 million from 9.6
million after spend on Hyperstone, dividend
payouts and the weak US dollar. R&D spend was
also up 23%. The dividend was held flat. (PF)
SOFTWARE & COMPUTER SERVICES
DA GROUP (AIM: DAG) - 58.5P
/ DA Group, the mobile telecoms specialist hoping
to jump on the texting bandwagon, reported
narrowing losses in the year to end-March, but
also a fall in turnover. Chairman Rob Walker
sounded caution and does not foresee any
significant change to economic conditions, with
continued pressure on cost containment and IT
budgets still weak. Chief executive Michael
Antliff added that results were disappointing.
The group is targeting European network
providers and is aiming to build a significant
presence in the mobile market for person-to-
person messaging. No dividend was paid. (PF)
SOFTWARE & COMPUTER SERVICES
- FIRST DERIVATIVES (AIM:FDP)
- 80.5P /
Prospects have brightened for First Derivatives.
The IT consultancy serving investment banks is
in upbeat mood after surging sales and profits for
the year to February. The board looks to the
coming year with confidence, says chairman
David Anderson after unveiling a 62.5% jump in
turnover, to 2.68 million, and profits before tax
of 577,000, from 406,000 a year earlier. The
company also paid its first ever dividend, worth
1.1p a share and payable on 12 July. (SF)

Shares says: underlying business. Shares says: Poor Normal market size: Shares says: The Normal market size:
Reckons it has turned Normal market size: markets make it an 5,000 shares are beginning 1,000
around sales, but 2,000 uphill struggle. % spread: 6.67 to look cheap. % spread: 6.02
needs to work on the % spread: 3.90

DA GROUP FIRST DERIVATIVES

2004 2003 CML MICROSYSTEMS
share price
2004 2003 share price 2004 2003 share price
85
400 80
70 80
Tover m 16.3 12.4 350 Tover m 0.69 1.54 Tover m 2.68 1.65
60 75
300
Fin PTP (m) -0.97 -0.32 Fin PTP (m) -2.47 -2.61 50
Fin PTP (m) 0.57 0.40 70
250 40
65
EPS (p) -5.28 0.53 200 EPS (p) -10.5 -8.53 30 EPS (p) 3.3 2.4
60
20
150
J J A S O N D J F M A MJ
Mkt cap (m) 52.6 25.4 Source: Thomson Financial/Datastream Mkt cap (m) 11.08 5.06 10
J J A S O N D J F M A MJ Mkt cap (m) 9.8 8.4 55
J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream

17 June 2004 59
170604 p55-63 sml caps 6/15/04 9:17 AM Page 60

SMALL CAP
SMALL CAP RESULTS
RESULTS

SOFTWARE & COMPUTER SERVICES
FOCUS SOLUTIONS (AIM: FSG)
- 45.5P
Financial software company Focus broke into
profit in the second half of the year, despite the
reduction in revenues as large contracts with
Norwich Union and Zurich Life mature. Revenues
from these will be reduced further this year and
will end in 2006. This has been offset by
increasing demand for technology sales and
related services to the existing customer base
from life & pensions providers. Cash outflow
from operations was substantially reduced,
largely covered by the 700,000 financing raised
in the year. This left net funds little changed at
1.5 million at the year end. (PF)
SOFTWARE & COMPUTER SERVICES SOFTWARE & COMPUTER SERVICES
INTECHNOLOGY (ITO) - 87P + KEWILL SYSTEMS (KWL)
/ Intechnology is in the home straight at last. Sales
- 63P /
Kewill Systems is back in the black after three
are starting to rocket, admittedly helped by the
long years of losses. The computer services firm
purchase of Allasso, but there are encouraging
reported 1.5 million of taxable profits compared
signs of cross-selling. Soon the company will offer
to a 6 million deficit, restated for the year before,
a voice-over IP solution plus other networking
as wide-ranging cost savings kicked in. Revenue
solutions. It is only using 15% of capacity on its
growth remains a priority, says chairman Andy
phone network. The company offers resellers a
Roberts, while chief executive Paul Nichols
15% commission on all ongoing revenues. This
remains confident the company can build on
may encourage smaller firms to compete with the
this progress. Cash balances stood at 19.1
big time integrators. Brokers expect 3.8p EPS this
million at the year end although no dividend was
year and 6.5p in March 2006. After years of lagging
announced. (SF)
forecasts, there is a chance Intechnology can start
to overtake them as Vbak moves into profit. (TF)

Shares says: Major Normal market size: Shares says: A Normal market size: Shares says: On 20 Normal market size:
contracts reducing, so 5,000 long haul, but now 10,000 times earnings, 25,000
needs to beef up % spread: 6.25 heading sharply % spread: 6.67 improving prospects % spread: 3.12
technology sales. upwards. look priced in.

FOCUS SOLUTIONS KEWILL SYSTEMS

2004 2003 share price
60
2004 2003 INTECHNOLOGY
share price
2004 2003 share price
90
105
85
55 100
Tover m 5.39 6.58 50
Tover m 223 156 95 Tover m 22.1 25.0 80
90 75
45 85 70
Fin PTP (m) -0.38 -3.83 40
Fin PTP (m) -3.8 -6.7 80 Fin PTP (m) 1.53 -5.99 65
75 60
35 70
55
EPS (p) -1.0 -13.4 30 EPS (p) -3.4 -5.1 65 EPS (p) 2.7 -7.9 50
60
25 55 45
J J A S O N D J F M A MJ
Mkt cap (m) 13.5 5.91 20
J J A S O N D J F M A MJ
Mkt cap (m) 119 98.0 Source: Thomson Financial/Datastream Mkt cap (m) 50.8 32.6 40
J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream
Source: Thomson Financial/Datastream

SOFTWARE & COMPUTER SERVICES
LONDON SCOTTISH BANK (LSB)
- 127.5P
Specialist lender LSB performed better than the
figures suggest. The fall in earnings per share was
due to London Scottish Reinsurance losing its tax
exempt status and a subsequent increase in the
tax charge. Meanwhile, around 400,000 has been
spent on continued IT investment and setting up
its mortgage business, and neither of these have
yet to contribute to the bottom line. On the
consumer credit side, most growth is coming from
the secured lending side. Home collection is
slowly being run down as more people make
repayments through a bank account. The interim
dividend is increased to 1.7p from 1.65p. (JC)
SPECIALITY & OTHER FINANCE
CHARLES STANLEY (CAY)
+ - 217.5P
While the latest year has been encouraging, this
independent stockbroker is adopting a much
more cautious attitude for the year ahead as
trading shows distinctive signs of a slow-down.
The strong increase in earnings prompted a rise
in the dividend payout to 4.75p from 4.5p per
share for the year as a whole, with the final
dividend boosted to 3.75p from 3.5p. Net assets
rose to 40.6 million from 38.2 million and cash
balances rose to 34.0 million from 26.9 million.
The first two months of business were ahead of
the same period a year earlier. (JC)
SPECIALITY & OTHER FINANCE
COMPASS FINANCE(AIM:CAF)
/ - 70.5P +
Compass is a broker for consumer loans and
mortgages and has not been around for very
long, having been incorporated in April 2003. It
was known formerly as Sound Growth until the
acquisition of Compass Finance in March this
year. Trading since the end of the financial half
year on 31 March has been quite encouraging and
up to management expectations. And the
outlook for the rest of the year is equally
encouraging. The key appears to be in the debt
consolidation sector especially now that lending
costs are starting to rise. There was no dividend
payment. (JC)

Shares says: A Normal market size: Shares says: Signs Normal market size: Shares says: Debt Normal market size:
good prospect. 5,000 of a confident return 2,500 consolidation likely to 2,500
% spread: 0.78 but the next few % spread: 2.70 provide a bulk of the % spread: 6.85
months may be dull. growth preferential.

COMPASS FINANCE GROUP

2004 2003 LONDON SCOT.BANK
share price
2004 2003 CHARLES STANLEY GROUP
share price
2004 2003 share price
80
138 320
136 75
Tover m - - 134 Tover m 68.2 51.0 300
280
Tover m 1.03 - 70
132 260
130 65
Int PTP (m) 9.21 8.89 128 Fin PTP (m) 6.58 0.98 240
220
Int PTP (m) 0.15 -
126 60
200
124 180 55
EPS (p) 4.5 4.7 122 EPS (p) 9.04 1.05 160 EPS (p) 0.16 -
120 140
50
118 120
J J A S O N D J F M A MJ 45
Mkt cap (m) 180 160 Source: Thomson Financial/Datastream Mkt cap (m) 92.5 56.9 J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream
Mkt cap (m) 47.2 - MAR APR MAY JUN
Source: Thomson Financial/Datastream

60 Shares
170604 p55-63 sml caps 6/15/04 9:17 AM Page 61

SMALL CAP RESULTS

SPECIALITY & OTHER FINANCE SPECIALITY & OTHER FINANCE SUPPORT SERVICES
IFX (IXF) - 105P + INFLEXION (AIM:IFX) -15.5P / ACAL (ACL) - 497.5P /
Financial trading and spread betting is a lively
The private equity investment vehicle cut losses The components industry has had a difficult few
business at the best of times, and the dollars
to 1 million from 4.4 million. Net assets years and these results show Acal is still sporting
sudden trend reversal was particularly unhelpful.
improved to 46.4 million from 15.5 million. the bruises. Full-year pre-tax profit was 9.2
The group did manage to sport a profit before
During the period the company completed a 34 million against 13.4 million the previous year.
exceptional items of 800,000. Unfortunately, a
million share issue to purchase a 12 million Turnover also fell to 268.9 million from 272.1
root and branch restructuring hit the bottom line
portfolio from London Merchant Securities (LMS) million. In a candid profit statement,
hard. However, the benefits should now start to
and raise 22 million. LMS now has a 58.8% management admitted it could have been more
show through, and the management remains
shareholding. Inflexion also acquired Guinness aggressive on cutting costs to counter the fall-
sufficiently upbeat to maintain the final dividend
Flights VCT advisory contract last July, boosting out in sales across some of its European
at 0.5p per share making 0.75p for the year, up
funds under management by 22 million, and businesses. Even so, the dividend was increased
from 0.5p a year earlier. The longer term promises
completed the first transaction for the Inflexion to 14p, from 13.4p a year-ago. The worst may well
a more diversified revenue stream as the group
private equity fund 2 - the buy-out of Ster be over, according to chairman John Curry, who
moves towards a broader base of financial
Century cinemas. Inflexion says it is looking for foreshadowed year-on-year order growth in the
services on offer. (JC)
new investment opportunities. (PT) second-half of the year. (EP)
Shares says: A Normal market size: Shares says: LMS Normal market size: Shares says: Normal market size:
good market to be in, 2,500 shareholding is a 25,000 Management says the 1,000
and IFX is now better % spread: 3.74 boost but markets are % spread: 6.25 group is poised for a % spread: 4.85
placed to advance. still choppy. sales recovery.

2004 2003 IFX GROUP

share price
2004 2003 INFLEXION
share price
2004 2003 ACAL
share price
135 18 640
130
Tover m 16.3 21.4 125
Tover m 0.45 - 17
Tover m 269 272 620
600
16
120 580
15
Fin PTP (m) -2.6 1.3 115
110
Fin PTP (m) -0.99 -4.37 14
Fin PTP (m) 9.19 13.4 560
540
105 520
13 500
EPS (p) -8.6 2.2 100 EPS (p) -1.34 -7.18 12
EPS (p) 18.4 30.7 480
95
460
90 11
J J A S O N D J F M A MJ J J A S O N D J F M A MJ 440
Mkt cap (m) 29.9 33.7 Source: Thomson Financial/Datastream Mkt cap (m) 28.5 8.99 Source: Thomson Financial/Datastream Mkt cap (m) 133 136 J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream

SUPPORT SERVICES SUPPORT SERVICES SUPPORT SERVICES

APPLIED OPTICAL TECHNOLOGIES ERINACEOUS (AIM: ERG)
(ALT) - 31P - - 152.5P
While this anti-counterfeiting technology and
service company still dithers over its strategic
review, operating losses without exceptionals
continue to rise and major customers continue to
delay contracts. The result is a fall in turnover and
while pre-tax profit looks improved it has been
enhanced by a 16 million goodwill write-off last
year. The European market improved in the second
half and the Maryland operation in the US showed
record earnings, with the weak dollar dragging
down profits. Cash now stands at 1.1 million,
compared to 2.7 million last year and net funds at
1.1 million, compared to 2.3 million last year. (PF)
GENUS (GNS) - 214P +
/ The company, which specialises in bovine
A good performance all round for new AIM
genetics, produced better than expected results
property services company Erinaceous. Its
and increased the dividend to 6.5p. Bovine
lettings business provided the major growth,
genetics faced a series of problems last year and
with operating profits up 59%, and management
the growth was generated by the animal health
will be doubling the sales team. Insurance
division and consultancy which was helped by
showed the strongest rise in margins thanks to
reorganisation. The outlook for this year is more
sales of niche products, with the property
encouraging as the prospects for the genetics
services arm performing well after various
business are much better. It is intending to
acquisitions throughout the year. Management
acquire a smaller UK competitor. T&G, the house
should watch out for spiralling costs of growing
broker, is forecasting earnings of 22.3p. (JM)
at such a rate however. Overhead costs are up 31%
THE WRITER HOLDS SHARES IN THIS COMPANY
and the cost of sales doubled. The dividend is
1.75p (PF)

Shares says: The Normal market size: Shares says: Fast Normal market size: Shares says: This Normal market size:
outlook still appears to 25,000 growth but it needs 5,000 unique company is 2,500
be uncertain. % spread: 6.25 time to absorb new % spread: 1.96 undervalued. % spread: 4.51
business now.

APPLIED OPTICAL TECHS.

2004 2003 share price
50
2004 2003 ERINACEOUS
share price
2004 2003 GENUS
share price
170 250
45
Tover m 28.3 28.6 Tover m 42.2 33.7 165
160
Tover m 183 172 240
230
40 155 220
Fin PTP (m) -1.53 -19.4 35 Fin PTP (m) 4.3 2.2 150 Fin PTP (m) 8.14 5.14 210
145
200
30 140
EPS (p) -4.6 -38.7 EPS (p) 7.2 4.2 135 EPS (p) 15.5 8.3 190
180
25 130
125 170
J J A S O N D J F M A MJ
Mkt cap (m) 16.5 14.9 20
J J A S O N D J F M A MJ Mkt cap (m) 69.7 - DEC JAN FEB MAR APR MAY
Source: Thomson Financial/Datastream
Mkt cap (m) 73.3 65.7 Source: Thomson Financial/Datastream

Source: Thomson Financial/Datastream

17 June 2004 61
170604 p55-63 sml caps 6/15/04 9:17 AM Page 62

SMALL CAP RESULTS

SUPPORT SERVICES TELECOMMUNICATION SERVICES TELECOMMUNICATION SERVICES

HYDER CONSULTING (HYC) PATIENTLINE (PTL) - 110.5P + TELECOM PLUS (TEP) - 319P +
- 141.5P + Hospital stays are no longer a dreary experience, Is there anything that this company doesnt do?
Hyder, the engineering consultant, continues its
thanks to Patientline. The company provides Mobiles, landlines, internet, electricity, gas - and
turnaround and pleased investors with a maiden
bedside entertainment in the form of terminals vacuum cleaners. Telecom Plus calls itself the
dividend payment since splitting from its water
that offer television, internet, radio and phone UKs leading multi-utility, and its claim appears
operations in 2002 . Operating profit is up from 1.1
services. The period saw a healthy increase in to be well deserved. In an encouraging year, the
million to 3.2 million. Much of the growth was in
revenues of 69%, reflected by the groups surge in groups profits almost doubled after turnover
the UK Hyders biggest market while losses in
contract wins from 159 to 191. Heavy investment leapt by 41%. While the subscriber base has risen
Hong Kong and loss-making contracts are
in new terminals and its Dutch business meant by an impressive 33%, so has the average number
reducing. Hyder is steadily rebuilding margins,
that Patientlines pre-tax loss rose slightly to 11 of services they pay for, thanks to the
which now approach 2.6% across the board
million. However, progress of the groups new introduction of a Discount Club concept in
compared to an industry average of 6%. The group
generation Terminal 2 system is encouraging, October 2003. The groups gas margins are
is halfway into its Best Practice programme, which
with new services such as web access and games suffering after a sharp hike in prices, but the
has won Hyder more support from institutional
being rolled out. No dividend yet, as cash is being other areas remain extremely satisfactory. Final
investors in the City. (PF)
plowed into growth. (CB) dividend raised from 5.75p to 10p. (CB)
Shares says: Normal market size: Shares says: Normal market size: Shares says: This Normal market size:
Turnaround 5,000 Patience is required, 10,000 company isnt cheap, 5,000
programme delivering % spread: 2.10 but the demand is % spread: 4.39 but its products are. % spread: 2.21
results. there and rising.

2004 2003 HYDER CONSULTING

share price
2004 2003 PATIENTLINE
share price
2004 2003 TELECOM PLUS
share price
170 180 450
160
Tover m 122 50.5 150 Tover m 37.2 22.0 160 Tover m 81.8 58.0 400

140 140
350

Fin PTP (m) 2.22 2.19 130

120
Fin PTP (m) -11.0 -10.0 120
Fin PTP (m) 10.63 5.59 300
100
110 250
80
EPS (p) 9.02 10.7 100 EPS (p) -12.1 -12.1 60
EPS (p) 12.2 6.8 200
90
80 40 150
J J A S O N D J F M A MJ J J A S O N D J F M A MJ J J A S O N D J F M A MJ
Mkt cap (m) 34.8 5.66 Source: Thomson Financial/Datastream Mkt cap (m) 99.5 45.5 Source: Thomson Financial/Datastream Mkt cap (m) 192 130 Source: Thomson Financial/Datastream

TRANSPORT TRANSPORT UTILITIES

CHRISTIAN SALVESEN (SVC) WINCANTON (WIN) - 203.3P / DEE VALLEY (DVW) - 735P +
- 58P + The European logistics provider saw pre-tax Water provider Dee Valley announced a healthy
After the round of profits warnings and
profits fall to 22.4 million from 26.7 million in increase in margins thanks mainly to the
subsequent departure of the chief executive, all
2003 as the company was hit by 10 exceptional realisation of energy debts. While turnover was
eyes are focused on where the business is heading
items, relating to the restructuring of the fractionally up, pre-tax profits revealed a far
and if it can stay independent. Sales and pre-tax
German, UK and Irish businesses following the stronger rise. The company spend was 9.8
profits before exceptionals fell, but capital
acquisition of Trans European. However cash million this year but it plans to splash out 30
expenditure at 20 million was halved and
generation was strong and subsequently net million over the next five years on upgrading its
exceptional costs of 8 million were lower than
debt was slashed to 75.3 million from 147.7 systems and operations. This is all part of the
expected, on the back of 9.8 million property
million. The German business has recovered water industrys five-year plan for 2005-2010. The
disposals. Net debt is in line at 109 million. The
from the previous years problems regarding the spend will be financed by raising water bills in
dividend was maintained with a final payment of
low level of the Rhine. Wincanton also says it is homes. The dividend increased to 44p and with
2.45p, yielding 4.9%. But pricing pressure on
unlikely to be hit by oil price hikes as it passes an impressive dividend yield of 6%, but low PE of
contract renewals remains and outlook for new
fuel costs on to customers and buys in bulk. (PT) 11, it is worth hanging on. (PF)
business conversion is cautious. (PF)

Shares says: Buy Normal market size: Shares says: Normal market size: Shares says: A Normal market size:
for income but should 25,000 Savings from Trans 10,000 definite for the income 500
not stay independent % spread: 4.08 European better than % spread: 1.43 investor % spread: 2.68
for long. expected.

SALVESEN (CHRIS.)
2004 2003 share price
75
2004 2003 WINCANTON
share price
2004 2003 DEE VALLEY GROUP
share price
240 800
70
Tover m 795 829 Tover m 1680 998 230
Tover m 16.7 18.4 750
65 220
700
Fin PTP (m) 4.5 -5.5 60 Fin PTP (m) 22.4 26.7 210
Fin PTP (m) 4.33 3.06 650
200
55 190 600
EPS (p) 1.36 -3.09 EPS (p) 9.6 17.5 180
EPS (p) 66.5 55.9 550
50
170
J J A S O N D J F M A MJ 500
Mkt cap (m) 127 151 45
J J A S O N D J F M A MJ Mkt cap (m) 240 202 Source: Thomson Financial/Datastream Mkt cap (m) 30.4 22.2 J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream
Source: Thomson Financial/Datastream

62 Shares
170604 p55-63 sml caps 6/15/04 9:17 AM Page 63

SMALL CAP RESULTS

COMPANIES WITH MARKET CAP & TURNOVER BELOW 10M

ACQUISITOR HOLDINGS AKERS BIOSCIENCE ASITE

(AIM:ACQ) 48.5P
Shares says: As an investment company,
Acquisitors claim to fame is its determination to
oust the board of Baltimore Technologies in
which it has a 21% stake. For now, Baltimore has
abandoned its plan to invest in Clean Energy
and the chief executive is stepping down.
(AIM:AKR) 82P
Shares says: Akers develops and markets
rapid diagnostic screening and testing products
and should launch its first one towards the
middle of the year with more to follow. The group
also expects to receive substantial licence fees.
(AIM:ASE) 4.625P
Shares says: Asite is building on its core
operations which include software development
and the provision of solution consulting,
integration and support services for its clients.
Costs are being cut, and with new product
offerings further positive progress is anticipated.

2004 2003 2003 2002 2003 2002

52-week high/low 52p/40p 52-week high/low 100p/35.5p 52-week high/low 7.25p/3p
Turnover m - - Turnover $m 1.11 0.81 Turnover m 1.69 1.60
Interim pre-tax profits (m) -0.106 -0.032 Final pre-tax profits ($m) -2.89 -7.01 Final pre-tax profits (m) -2.46 -5.39
Earnings per share (p) -3.7 3.1 Earnings per share (c) -0.07 -0.19 Earnings per share (p) -2.1 -4.7
Market cap (m) 1.39 1.36 Market cap ($m) 36.8 16.0 Market cap (m) 4.76 4.5
Normal market size 1,000 Normal market size 5,000 Normal market size 25,000
% spread 6.0 % spread 4.76 % spread 15.0

BKN CITY OF LONDON CIVILIAN CONTENT

(AIM:BKN) 270P
Shares says: BKN markets and distributes
childrens animated television programmes and
has only been trading on AIM since December
last year. The group has also managed to make a
pre-tax profit and has several fresh titles ready
for production.
(CIN) 59P
Shares says: With little or no borrowing and
with royalties and investment income expected to
exceed 500,000, the specialist investor and
public relations group looks set to move into the
black this year.
(AIM:CCN) 9.375P
Shares says: Civilian content produces and
distributes feature films and television
programmes but slipped into the red because of
delays in releasing two titles. Trading conditions
remain tough but the group maintains that it is
well-placed to make positive progress.

2004 2003 2004 2003 2004 2003

52-week high/low 360p/110p 52-week high/low 66.5p-35p 52-week high/low 10p/1.75p
Turnover Em 2.76 1.95 Turnover m 0.24 0.37 Turnover m 2.44 6.66
Interim pre-tax profits (Em) 0.29 -1.34 Final pre-tax profits (m) -0.79 -3.49 Final pre-tax profits (m) -1.18 0.10
Earnings per share (c) 3.0 -16 Earnings per share (p) -8.82 -40.6 Earnings per share (p) -2.89 0.27
Market cap (Em) 39.1 - Market cap (m) 5.6 5.2 Market cap (m) 4.03 1.43
Normal market size 2,000 Normal market size 1,000 Normal market size 25,000
% spread 7.7 % spread 12.7 % spread 7.69

DINKIE HEEL FLIGHTSTORE HARTFORD GROUP

(AIM:DINK) 2.125P
Shares says: Having recently raised 873,000,
the footwear component manufacturer is
expected to tap shareholders again to fund its
acquisition programme. Trading in the current
year has seen sales rise sharply for body armour
and stiletto heel pieces.
(AIM:FLG) 6P
Shares says: Flightstore is spreading its wings
and applying its technology to a wider range of
uses. Initially it was concentrating on providing
digital media to allow airline passengers to view
and buy goods while in the air. Potential is strong
and there is 1.76 million in cash.
(AIM:HAR) 1.475P
Shares says: Gross margins showed an
improvement at this restaurant and bar proprietor
and a small pre-tax profit was achieved. Costs
have been sorted out to the extent that the group
now has the potential to double the number of
trading sites with just a minimal rise in outlay.

2003 2002 2003 2002 2004 2003

52-week high/low 3.4p-1.18p 52-week high/low 14.25p-8.25p 52-week high/low 1.875p-0.6p
Turnover m 5.63 6.91 Turnover m 0.27 0.04 Turnover m 6.1 7.5
Final pre-tax profits (m) -0.68 -1.75 Final pre-tax profits (m) -1.02 -0.86 Interim pre-tax profits (m) 0.03 -0.39
Earnings per share (p) -4.41 -11.78 Earnings per share (p) -1.17 -1.07 Earnings per share (p) 0.01 -0.07
Market cap (m) 3.07 0.89 Market cap (m) 6.02 - Market cap (m) 7.89 3.48
Normal market size 5,000 Normal market size 25,000 Normal market size 100,000
% spread 11.1 % spread 15.3 % spread 3.33

INTELLEXIS PREMIER ASSET MANAGEMENT TECC-IS

(AIM:ILX) 83.5P
Shares says: This company specialises in
financial and project management training.
Losses have been cut, and the recent acquisition
of Key Skills and the subsequent synergies
should see turnover more than double in the next
year, allowing a return to profitability.
(PAM) 68P
Shares says: Premier specialises in open and
closed end investment fund management and
managed to move into black during the first half.
Management remains upbeat over the second half,
pointing out that funds under management have
jumped 49% to 539 million from a year earlier.
(AIM:TIS) 6.875P
Shares says: Specialising in tech stocks,
current interests held in unlisted Israeli
companies have been valued at 558,000,
resulting in a write-down of 1.04 million. Cash
balances currently stand at 2.67 million.

2004 2003 2004 2003 2003 2002

52-week high/low 100.5p-62.2p 52-week high/low 76p-46.5p 52-week high/low 8.75p-5.875p
Turnover m 1.61 1.38 Turnover m 3.17 2.41 Turnover m - -
Final pre-tax profits (m) -0.25 -2.04 Interim pre-tax profits (m) 0.054 -0.44 Final pre-tax profits (m) -1.41 -0.63
Earnings per share (p) -7.45 -70.9 Earnings per share (p) 0.35 -3.93 Earnings per share (p) -3.24 -1.47
Market cap (m) 5.74 3.23 Market cap (m) 9.0 5.59 Market cap (m) 3.0 3.16
Normal market size 1,000 Normal market size 1,000 Normal market size 25,000
% spread 9.09 % spread 5.71 % spread 3.57

17 June 2004 63
170604 p64-65 Derivatives 6/15/04 4:54 PM Page 64

DERIVATIVES

SPREADBETTING INDEX VIEW

Regular bread and butter is Dow Jones: 10,334.71

Since the start of 2004 we have seen a

preferable to occasional jam descending price channel bounded by

10,420 on the January resistance line and
currently 9800 on the downside.
With volatility being the buzzword these days, the Therefore we have a 600-point band that
the US average is occupying and while
hunting dog must have a nose for market movements below 10,420 on a weekly close stop-loss

I
t just goes to show that if, as a trader, positions are taken out on all manner of basis one would be looking for a possible
commodities how important it is to keep permanently in touch with these markets. return below the 200-day moving average at
Volatility is the by-word these days and failure to invoke personal discipline can, more 10,100 down to new lows for the year.
often than not, cause a heavy toll to be paid. Conditions for up-bets on gold and oil seemed However, an end of week close above
propitious on 1 June. Gold stood at $396.8 an ounce and crude Nymex at $41.28. By the end of the 10,420 could just as easily bring a new leg
day gold was nudging $400 an ounce and oil had breached the $42 threshold! up for the Dow through to post-March highs
Everything in the garden was rosy. But some of the sound bites coming from the OPEC above 10,700. We are on a knife-edge with
meeting in Beirut offered hope and encouragement and before the sun rose above the yardarm, both scenarios equally possible.
oil was beginning to fall like a stone. By the time the hunting dog reached the boys at Cantors
the next day it had fallen through the purchase price. DOW JONES INDUSTRIALS
It looked as if it was in freefall so the Rottweiler chopped it out at $41.04 in 20 a point. 11.0
Unfortunately, in the same breath the Rottweiler was stopped-out at $392 in his gold position,
which he bought at 10 a point on 1 June, before he had a chance to consider matters. It was just 10.50
as well, as gold now stands at $385.8. An embarrassing loss of 960 was incurred, but my word, 10.0
without that stop-loss it would have been carnage!
However, it wasnt all bad news last week, though the up-bet on Sovereign Bancorp, made at 9.50
$21.62 in 10 a point, was beginning to show anxiety by Wednesday 9 June so the position was 9.0
liquidated at $21.10 incurring a loss of 520. There was always the chance that with these two
8.50
commodities normally associated with investing rabbits facing headlights slipping sharply into
reverse, the risk taken when buying common or garden equities could eventually come right. 000'S 8.0
J J A S O N D J F M A M J
The hunting dog was deeply grateful that this was the case in the past two weeks, particularly ACTUAL
200 DAY MOVING AVERAGE (M1)
in the US where there has been a much more positive approach to equities, despite the constant Source: Thomson Financial/Datastream

threat of terrorism and geo-political unrest, than there has been in the UK. Admittedly the tech
sector, which is non-existent in the UK, was extremely robust in some quarters, which gave
other parts of the old economy the stimulus it required to keep pushing on in a slightly guarded
manner. CFDs
WPP and BSkyB had, until early June, a pretty torrid time of it. The Rottweiler listened very
carefully to that celebrated historian David Schwartz who reminded him that the first week in
June is nearly always a very positive week for investors. His reminder came in extremely handy.
Both media stocks had a great run on the rails for 10 days or so. WPP was bought at 542p and
City loses out to f
BSkyB at 603p both in 30 per point. The mastiff decided to lob them out on the Thursday before by: Piper Terrett
the US holiday commemorating the life and times of President Ronald Reagan, at 564p and 626p

D
respectively. istractions from CFD trading were
The up-bet on Proctor & Gamble made at $107.88 in 10 a point rallied strongly to the cause and plenty as voters went to the polls for
the Rottweiler did not hesitate one minute in chopping it out ahead of the holiday at $110.55. As the European elections, the European
for Pharmaceutical Holders Trust, which was bought at $79.34 in 20 a point, this basket drug Championships beckoned and the Americans
stock took a little time to take hold of the bit. It reached $80.10 last Thursday and so, in keeping buried former president Ronald Reagan, after
with the rest of the portfolio, the wild dog took his profit. A net profit of 4,060 seemed very his struggle with Alzheimers.
acceptable bounty in such difficult trading conditions. As the England players limbered up ahead
Though corporate news seems thin on the ground this week, there is CPI and PPI today plus of their defeat at the hands of the French,
triple-witching on Friday, which often produces significant volatility, to consider. Though punters were forced to stay on the subs
increasing interest rates threaten to blunt progress in equities, the Rottweiler feels he would bench as little action came their way.
rather stock pick in equities than consider alternatives. He particularly likes some under-valued It was a week for sitting on the sidelines,
energy related stocks in the US, which may not be vulnerable to a massive drop in the price of says Harpreet Kondal at Blue Index. Its been
oil. So Burlington Resources and Marathon Oil were both purchased at $34.32 and $34.15 in 30 a a very boring week a week of staying out of
point. To round the portfolio off, he had a pop at the market.
Schering-Plough at $16.25 in 50 a point. UK An early flutter of the FTSE briefly captured
equities currently have no appeal to the hunting investors imaginations but soon left the pitch
dog whatsoever, despite advice to the contrary for an early shower.
suggesting the US is over-valued. We thought there was a bit of excitement

64 Shares
 170604 p64-65 Derivatives 6/15/04 4:54 PM Page 65

DERIVATIVES

OPTIONS by DR M. KALAIRAJAH OF CAPITAL ORACLE INDEPENDENT FINANCIAL ADVISERS. 020 8853 2220

TechMARK 100: 1,145.2

Although on looking at a chart of the
TechMARK over the past few years the 1200
level is not one that seems to represent any
major significance, in March 2002 1,200-1,250
did block the way in terms of the highs then
and we have failed here in 2004.
The lower June high that we have seen so
far has been combined with a failure to cross
the 50-day moving average and this would
suggest a retest of May support and/or the
200-day moving average at 1080. A weekly
close below this level would be the first sign Tesco feeling the effects of industry chill
that the doubling of the index from below 600 Tesco has long been a favourite in the food and drug retailers sector. It has nearly 223,335
in March 2003 was starting to unwravel itself. employees; the companys turnover is 30,316 million with 1,574.12 million of pre-tax profit.
The closing price of the share on 14 June was 257.75p. Its value has fallen from nearly
260p over the last last two months following concerns over TNS data which showed that
growth in the industry has slowed over the
FTSE TECHMARK 100 CALL TSCO SEP 260 past 12 weeks.
share price
1300 20 Tesco is also facing tough competition
HIGH 19.25 7/1/04
1200 18 LOW 6.00 7/4/04 from its opponents on petrol prices, a tactic
1100 16 LAST 10.50 used to entice customers in-store. Asda
14 slashed the cost of a litre of unleaded petrol
1000
12 to below 80p. Tesco is going to release its
900 first-quarter figures in the next week. The
10
800 8 chart suggests plenty of scope to the
700 6 downside should the results fail to impress.
600 4 Bearish investors should research options
ACTUAL
J J A S O N D J F M A M J DEC JAN FEB MAR APR MAY like the September 260 Calls.
200 DAY MOVING AVERAGE (M1) Source: Thomson Financial/Datastream
Source: Thomson Financial/Datastream

* OPINIONS EXPRESSED ARE A PERSONAL VIEW AND READERS ARE URGED TO CONSULT THEIR INDEPENDENT ADVISERS

o football The banking sector

Shell and selling off British Airways. Interest rate
speculation and the housing market has prompted
interest in the banking sector among our clients.
The banking sector provided some much-needed
on Monday when the FTSE broke out of its provided some much- colour with rumours of Barclays mounting a bid for
range of 4400-4470, says Kondal. The blue-blooded bank Cazenove and Abbey National a
FTSE continued to go up on Tuesday but we needed colour with possible takeover target.
were wrongfooted on Wednesday as it Traders at City Index saw buying in Geest
declined. rumours of Barclays following bid rumours and the continuing Marks &
Commentators are cautious on the Spencer saga provided opportunities for buyers and
FTSEs future. mounting a bid for blue- sellers. Meanwhile Barnaby Trystram of Camplc.com
The FTSE failed to break above 4515 last reckons Next, a former buyers darling, looks a good
week, perhaps not helped by light volume blooded bank Cazenove shorting opportunity.
on both Thursday and Friday, says Kypro The recent rate rise while largely expected does
Zoumidou at SFS International Securities. not bode well for the retail sector, considering that
The way the land lies we may see some retracement before coming to further increases are inevitable, he says. This deteriorating picture for
test the 4515 level. the heavily indebted consumer comes at an interesting time technically
Traders played safe and stuck to familiar territory such as interest for this stock. Next has signally failed to break above the 14.50 level on
rates raised again by the Bank of England to 4.5% and oil price a closing basis and on a shorter-term horizon appears to be
plays. commencing a leg lower. We identify support at the 13.15 level but are
Clients are scouring the markets for opportunities and have aware of the trading gap down to 11.48 created in early January 2004.
been very selective about which stocks they trade, says Richard The technicals and risk/reward make this an attractive short at current
Miller at Etrade. Oil prices remained firm with clients buying BP and levels (14.08), he adds.

17 June 2004 65
170604 p66-71 directories 6/15/04 3:35 PM Page 74

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Tel: 020 7464 8408 month. With dealing Euros or Sterling
E-mail: desks in New York, Free Real Time Charts
London, and Hong 24 Hour News & Analysis From Thomson
info@fxcm.co.uk Financial
Kong, the FXCM Group
Website: offers institutional For free 30-day Virtual Account with full access to
www.fxcm.co.uk FXCMs charting and analytic resources, please go to
quality execution. www.fxcm.co.uk

E*TRADE Securities Dealing Charges: Products: Services:

Limited
UK & US Shares 15 Second Execution Guarantee
www.etrade.com
Online trades from Covered Warrants
9.95 flat-rate ISA, PEP, SIPP Advanced Portfolio Tools
0845 045 60 60 Gilts, Bonds Hemscott Fundamentals
uksupport@etrade.com CFDs Charting & Technical Analysis
Authorised and regulated by
Direct Access CFDs
the Financial Services Authority Forex Free Level 2 for Active Traders

Website Prices Investments Services

www.selftrade.co.uk
Telephone
0845 0700 720
Email
info@selftrade.co.uk
SELF trade is authorised
& regulated by FSA
Share trading from 7.50
CFD trading from 12.50 Equities Flexible Self Select ISA
Free ISAs Unit trusts & OEICs 90-day limit & stop orders
Funds with up to 75% off Exchange traded Share price alerts
initial charges funds Real time prices, tips &
No minimum dealing Investment trusts research
amounts CFDs Special rates & benefits for Member of the
active traders London Stock Exchange
170604 p66-71 directories 6/15/04 3:35 PM Page 75

INVESTOR SERVICES DIRECTORY

Online Trading (contd)

ShareCrazy Trader Minimum investment: Web address: Services offered:
FREE - Extensive investor resources.
ShareCrazy.com Ltd 50 www.sharecrazy.com
Trader helpdesk: FREE - Daily newspaper summary comments etc.
Sussex Innovation Annual fee: None 0845 070 1125 FREE - Daily commentary from shares guru
Centre Quarterly fee: None Email:
Malcolm Stacey.
FREE - Stock picking tool.
Science Park Square Inactivity charges: None crazyadmin@sharecrazy.com FREE - Quotes, charts, fundamentals, RNS news,
Falmer ShareCrazy.com Ltd are
Online dealing charges: appointed representatives for
virtual portfolio.
Brighton BN1 9SB 9 per trade. Flat fee. HBP plc who are authorised
FREE - Morning market view newsletter.
FREE - ShareCrazy community, the most
Tel: 0870 161 3500 Limit/stops 24/7 and regulated by the FSA, informed investment community bar none.
Local rate helpdesk: Member of the
and members of the LSE and Hosted by the worlds only cartoon investor, Joe
London Stock Exchange
0845 070 1125 NASDAQ Europe Public!

TD Waterhouse Standard trades Web Address: Services offered:

Exchange Court Online: 12.50 flat rate Low rates for frequent traders
Streaming Level 2 prices with TD
Duncombe Street Telephone: Min 17.50 tdwaterhouse.co.uk Waterhouse ProTrader
Leeds
Frequent Traders Contracts for Difference (CFDs)
LS1 4AX Trading
Tel: 0800 531 6699 Online: 11.95 flat rate
Trader Covered Warrants online
Telephone: 16.95 flat International Trading
rate PEP & ISAs and SIPPs Member of the
Banking Services London Stock Exchange

Dealing Charges Web Address: Services Offered:

www.investelink.co.uk Credit Facility (Buy shares
on Credit)*
Internet Dealing Commission: 0.5% E-mail Address: Real-time prices
Made Easy INVESTeLINK Subject to: investelink@wcwb.co.uk FREE streaming prices
WCWB plc FREE online portfolio tracking
An Online Dealing Service by
WALKER CRIPS Sophia House Min 12.50 Tel: 020 7871 2222 FREE charting*
STOCKBROKERS Ltd
76/80 City Road Fax: 020 7253 7500 FREE Nominee Service*
A member of the London Stock Exchange plc
Ma 19.50 Other services
Member of the
Authorised and regulated by
the Financial Services Authority Ltd
London EC1Y 2EQ *conditions apply
London Stock Exchange

Contracts for Difference

City Index Limited
Park House,
16 Finsbury Circus
London EC2M 7PQ
Main Tel: 020 7550 8500
New Accounts: 020 7550 8599
Head of CFD Trading:
Roger Hambury: 020 7550 8596
Established 1983
Part of the Intercapital Private
Group
City Index quotes CFDs Web and Online Dealing: Free Level 2 data*
on leading: www.cityindex.co.uk Fully Interactive on-line dealing
Email: Short and Long trading ability
UK Equities newaccounts@cityindex. No stamp duty**
US Equities Low commission
co.uk
European Equities Low initial margin requirements
Major Stock Indices: Regulated and authorised by Limited risk CFDs
FTSE 100, Wall Street, the Financial Services Authority Small dealing sizes
Best Spread Betting Service
Dax, S+P 500, Nikkei, 2001 and 2002 **Tax laws can change
etc. Shares Magazine UK Equity Awards * Terms and conditions apply

IG Markets Ltd: No minimum web address: Market prices on 1000s of UK, US and
Friars House account size www.igmarkets.com European shares
157-168 Blackfriars No minimum deal
Road size e-mail: CFDs on stock indices, commodities
London Margin require- info@igmarkets.com and Foreign Exchange
SE1 8EZ ments from 5%
Limited Risk CFDs fax: 020 7896 0010 IG Markets is regulated by the FSA and
Contact Tim Morris on: Advisory service is a member of the London Stock
0800 195 6300 Exchange

Speak to our trading team We quote on: Advisory service including expert Twowaytrade is owned by: a
on: 01234 757553 analysis of all major quoted
UK equities instruments Mogul Media Ltd, PO Box 37211 London SW11
or see
www.twowaytrade.com
US equities Special rates for frequent traders 6XS
Twice daily newsletters with
Trent House Authorised & regulated by European equities recommendations
University Way the Financial Services Index CFDs Helpful and friendly staff Authorised by the FSA as an advisor and
Chatroom (with fully interactive
Cranfield Technology Authority Dealing desk available from chat to brokers and technical
arranger in spread betting and CFDs
Park Head of Broking: 07.30 through to 21.30 analysts)
Jerry Miller SMS trade alerts We are an independent firm, founded in 2000
Cranfield Out of hours advisory Free seminars
Email contact: and run by experienced professionals
MK43 0AN enquiries@twowaytrade.com
service available Smaller accounts welcomed
Free trial of advisory service
170604 p66-71 directories 6/15/04 3:35 PM Page 76

TO ADVERTISE IN THE SHARES SERVICES DIRECTORY, PLEASE TELEPHONE:

LIAM WILLIAMS: 020 7378 4465 OR EMAIL LWILLIAMS@MSM.CO.UK
Contracts for Difference (contd)

Futures Pacific Continental Securities (UK) LTD Winner Best Multi-product platform
Share Trading 80 Cannon Street Personal Account Manager
Foreign Exchange London EC4N 6HL Full Advisory Trading or Execution Only
All leading global Tel: 0800 358 7769 Training seminars and education packages
markets Real-time on-line trading
Fax: 0207 769 7789
Members of the London Guaranteed stops
website: www.pacconsec.com Market-leading analysis and research
Stock Exchange Full orders Member of the
Regulated by the FSA E-mail: marketing@pacconsec.com Established 1961 London Stock Exchange
capability

Spread Betting

Cantor Index Ltd Profile: Products traded: Services:

CANTOR INDEX LTD,
1 America Square part of the Cantor Fitzgerald
London EC3N 2LS Group, is authorised and
Tel: 020 7894 8800 regulated by the Financial
Services Authority and is a
Fax: 020 7894 8855 member of the London Stock
Web Address: Exchange The aim is to
cantorindex.co.uk provide the highest standards
of customer service, combined
Email Address: with the very latest trading
cs@cantorindex.co.uk technology.
A comprehensive range of
tax free products from the
global financial markets,
available 24 hrs Monday -
Friday including; equities,
stock indices, sector
indices, bonds, interest
rates, currencies and
commodities. Options
available on many of these
markets.
Online credit and deposit account opening.
Cantor Index offers the ultimate online
spread betting service, including:
Price improvement during online execution
Online Guranteed Stop Loss and Limits
facility
Margin adjustment to reflect all stops
Deposit funds online.
Please call Kurt Carroll, Fiona OLeary or Felix
Member of the
Riley on 020 7894 8800 London Stock Exchange

Capital Spreads Profile: Products traded: Services:

51-55 Gresham Street,
London, EC2V 7EL
Trading: 020 7600 0110
Enquiries: 020 7600 0122
Web:
www.capitalspreads.com
Email:
admin@capitalspreads.com
Spread bet online with
www.capitalspreads.com
A division of London Capital Group
Ltd.
We are comitted to offering you
great value spreads and excellent
customer service.
If you are new to spread betting, try
our TRADING SIMULATOR (demo
acct) which mirrors our live trading
system.
www.capitalspreads.com
*Authorised and regulated by the
Financial Services Authority (FSA)
Great value spreads e.g. Daily FTSE = 3pts, FTSE
Indices
Individual Shares Future=5pts, Daily Dow=5pts, DOW Future=8pts
Open an account quickly online TODAY! In just a few
Foreign Exchange minutes
Bonds/Interest Rates
Limited Risk FLEXIBLE stops placed on ALL trades
Commodities Only minimum deposit required
All profits Capital Gains Tax Free* & no Commission/Fees
Call 020 7600 0122 or email: Buy and SELL shares, stocks, indicies, commodities, FX &
more
admin@capitalspreads.com www.capitalspreads.com
for more information * Tax law can change

City Index Limited
Park House,
16 Finsbury Circus
London EC2M 7PQ
Main Tel: 020 7550 8500
New Accounts: 020 7550 8599
Email:
newaccounts@cityindex.co.uk
Regulated by the FSA
Web and online trading:
www.cityindex.co.uk
Trading Tel: 020 7550 8502
Regulated by the FSA
Established in 1983 a world
leader in Financial Spread
Betting.
Best Trading platform in the
business
Part of the Intercapital Private
Group of Companies
Winner of:
Best Spread Betting Service
2001 and 2002
Shares Magazine UK Equity Awards
Comprehensive range of Tax Advantages of Spread Betting with City
Free* spread betting products Index:
across the global markets. Market leading Trading Platform
These include: No emailing for prices
All profits free of UK Capital Gains Tax*
Major Indices
Currencies Low NTR (deposit requirements)
No commission, brokerage or stamp duty
Commodities
Options Ability to bet on markets going down as well as up
1000s of UK, US & European Instant execution and clear documentation
Stocks Guaranteed stop losses on line
Interest Rates Improved liquidity
Foreign Exchange Small stake sizes *Tax laws can change

Finspreads Profile: Markets traded: Finspreads provides instant prices, instant

One America Square,
London EC3N 2LB
Freephone: 08000 96 96 20
Intl tel: +44 (0)20 7150 0450
Fax: +44 (0)20 7891 1313
Web Address:
www.finspreads.com
Email Address:
jbenton@finspreads.com
Launched in April 1999 to
concentrate exclusively on
offering a new, innovative
and dedicated financial
spread betting service. Our
award winning website
handles over a million trades
each year. Finspreads is a
division of IFX Markets Ltd.,
regulated by the Financial
Services Authority.
You can trade (BUY or SELL)
with a credit or deposit account
FTSE Top 350 All the worlds
major stock markets Currencies
Options Bonds & Interest Rates
Metals & Commodities Grey
Markets
Guaranteed Stop Loss
automatically close your
position at a predefined level
trading and access to account information via
both the telephone and on the internet site:
www.finspreads.com. The company provides
a thoroughly professional and friendly service
to those familiar with spread betting and to
newcomers who might prefer to limit their
exposure. For more information please call
customer services on 08000 96 96 20.
170604 p66-71 directories 6/15/04 3:35 PM Page 77

INVESTOR SERVICES DIRECTORY

Spread Betting (contd)

IG Index Ltd Spread betting prices on: IG Index are the world Spread betting is the intelligent alternative to
Friars House all major world stock leaders in spread betting conventional dealing. Profits are tax-free and there
157-168 Blackfriars Road indices, currencies, com- and have been in business is no stamp duty to pay.*
London
SE1 8EZ modity and interest rate since 1974.
IG welcomes all sizes of account. Credit facilities are
contracts available, subject to status. Limited Risk accounts
Freephone: 0800 195 3100 all FTSE-350 shares, S&P The company has a history are also available.
Email: 500 and NASDAQ stocks, of innovation, pioneering
info@igindex.co.uk 24-hour trading and spread Friendly, knowledgeable staff. A choice of
Fax: 020 7896 0010 all leading European
Web address: shares betting on individual Freephone or Internet dealing 24-hours a day, from
www.igindex.co.uk grey markets and politics shares. Sunday night to Friday night. * Tax law can change

TradIndex.com
Beaufort House
15 St. Botolph Street
London, EC3A 7QX
Tel: 020 7422 3994
Fax: 020 7422 3613
Web Address:
TradIndex.com
Email Address:
customerservice@tradindex.com
TradIndex.com is owned
and managed by Tradition,
which is part of Compagnie
Financiere Tradition,
Europes no1 Broker Firm in
over the counter financial
and non-financial products.
TradIndex.com launched
in April 2002 and is
regulated by the FSA.
TradIndexs product Professional, fast and easy to access website
range focuses on the Debit accounts only, therefore no long-winded
most liquid and credit checks
Start trading within 24 hours
heavily traded Limited Risk mandatory stop losses on all trades,
financial markets: at no extra cost
Stocks On-line browser based trading. No down-loads
Commodities
Register for free and make your first virtual money
Currencies trade within moments
Bonds TradIndex.com Financial Spread Betting made easy

Futures & Options

ADM Securities Commissions: Products We provide a personal telephone brokerage

10th Floor, Temple LIFFE Options Futures and clearing service to both private clients and
Court, Opening 1% min 30 Options fund managers.
11 Queen Victoria
Street, Closing 0.5% min 10 USFs
Equities Structuring investment portfolios with the use
London EC4N 4TJ UK Equities
Bonds of Stock, Bonds, Options and Futures
0.5% min 30
(A division of ADM Sipps
Investor Services Minimum Portfolio Contact: Steve Hanson 020 7716 8300
Web: www.admisi.com/sec International Ltd) value: 50,000 Forex
Email: ADM.Securities@admisi.com

Refco Overseas Limited Minimum investment: Dedicated to personal Services:

Investor Services
Division
Trinity Tower
9 Thomas More Street
London, E1W 1YH
www.refcoinvestors.com
info@refcoeurope.com
020 7702 9436
10,000
Commissions and charges
Negotiable by volume
service and improving Global exchange-traded futures &
options
investor awareness of
Margined foreign exchange
derivatives and other CFDs
markets Cash equities
OTC Derivatives
Education Alternative Investments
Online research and technical analysis Member of the
Please email us to be kept up-to-date with our forthcoming
Evening seminars London Stock Exchange
events and new products: info@refcoeurope.com

Savoy Investment Commissions: Other Details: Services:

Management Limited Min: 35 Dedicated to tailoring a
Lilly House, 2% on the first 10,000, professional service to Discretionary trading service 35,000
13 Hanover Square 1% thereafter suit our clients personal minimum
London W1S 1HN 1.80 per lot investment needs
SAVOY Contact Jamie MacLean
Direct Tel: 0207 659 7480 Charges negotiable by Equities Thrice weekly dedicated derivative
Email: JMaclean@savoyim.com Futures
volume newsletter
Authorised and regulated by the FSA Options
A Member of the LSE
A Member of the Savoy Asset Minimum portfolio size: USFs www.savoyim.com
Management Group of Companies 25,000 CFDs
170604 p66-71 directories 6/15/04 3:35 PM Page 78

TO ADVERTISE IN THE SHARES SERVICES DIRECTORY, PLEASE TELEPHONE:

LIAM WILLIAMS: 020 7378 4465 OR EMAIL LWILLIAMS@MSM.CO.UK
Offshore Online Sharedealing

Product and Services: Contact: Fees: Other benefits:

wwww.internaxx.lu -
* Real time access to 12 info@internaxx.lu * From only 19.60 per * Internaxx is based in Luxembourg, one of
international markets trade (approx. 12.50) Europes foremost international financial
* Offshore investment Tel (00-352) 2603 2003 centres
funds Fax (00-352) 2603 2043 * Discounts on entry
* Attractive interest * Internaxx is a joint-venture between TD
bearing cash account 46a, avenue JF Kennedy fees of investment Waterhouse and Banque Gnrale du
(in EUR, USD, GBP, funds by up to 50%
L-2958 Luxembourg Luxembourg, member of Fortis group
CAD)

Investment Information

Ionic Information Ltd ShareScope is the UKs End of Day Comprehensive, accurate data from LSE
The Business Centre number one investment 11.95 / month FTSE Indices, AFX News, Unit Trusts, Gilts,
19-23 Wedmore St and trading software Real Time Charting with over 60 Indicators, Portfolios,
London N19 4RU for private investors 84.95 / month CGT Calculator, Alarms, Directors Dealings
Sales: 0800 052 1515 providing a complete (includes Nasdaq, NYSE, 12 years fundamentals, 3 years forecasts
stock market Amex, S&P 500, DAX, CAC Data Mining advanced filtering system
Support: 0845 045 0111 & Dow Jones in real time) Free software upgrades & support for life
information and
info@sharescope.co.uk Voted Best Investment Software 2002 &
analysis package. To join: 79.95
www.sharescope.co.uk 2003 by Investors Chronicle and Shares

Hemscott Plc Activity Web address: Services:

Finsbury Tower Hemscott is the www.hemscott.com Hemscott Premium Plus
103 105 Bunhill leading provider of Hemscott Premium Plus includes all the
Row Email: features of Hemscott Premium together with
online business and premiumplus@hemscott.co.uk streaming real-time prices and news,
London financial information
EC1Y 8TY personalised stock tracker, comparison charts,
to both the news charts, Company Facts reports,
Tel: 020 7496 0055 professional and corporate calendar, excel downloads, PDF
Fax: 020 7847 1719 private investor. annual reports, and more. A FREE 7-day trial is
available.

MoneyAM Launched by Shares in Website: Real Time Share Prices

Thames House 2003, MoneyAM is now www.MoneyAM.com Charts
18 Park Street the UKs fastest growing Market news
London SE1 9ER financial website for Email: Bulletin Boards
private investors. support@moneyam.com Portfolio
Company Research
Tel: 0870 770 8300
Alerts
Fax: 0870 770 9300
Level2
Terminal

Global Markets Ltd Global Markets are Share Prices

www.globalmarketsonline.com
info@globalmarketsonline.com
the profound leaders Live CFD Prices
for providing New Site to be Market News
Portfolio Bulletin Boards
financial information launched in Company Research
to a private and retail
June 2004 Alerts
market Futures & Options Prices
Options Calculator & Strategy Runner
Risk management
170604 p66-71 directories 6/15/04 3:35 PM Page 79

INVESTOR SERVICES DIRECTORY

Advisory Stockbroking

Services
Fyshe Horton Finney Ltd Profile Products
107 High Cross Street Established 1896 Excellent stockbroking advice wrapped up in
UK and International world class service
Leicester LE1 4PH We know our clients by Equities FREE stockbroking advice to clients who trade
Tel: 01480 811 400 name, not by number Gilts and Corporate through us
We combine all the best Bonds Discretionary Fund Management with Low
Web: www.fyshe.co.uk aspects of traditional Minimums
British service ISAs, PEPs and Sipps
Email: Professional Intermediary services for IFAs,
Covered Warrants
chris.pook@fyshe.co.uk excellence, with the Lawyers and Accountants
Member of LSE, Regulated by benefits from employing CFDs FREE monthly newsletter with share tips Member of the
the Financial Services state of the art 24 hours x 7 days a week service
Authority technology
Options Trading London Stock Exchange
Corporate Broking service

Investment Management
Gerrard Limited
Old Mutual Place
2 Lambeth Hill
London
EC4V 4GG
www.gerrard.com
email:
enquiries@gerrard.com
Tel: 0845 601 3218
Minimum Investment
100,000
Authorised and regulated
by the FSA and a member
of the London Stock
Exchange
Gerrard Limited offers individually
tailored discretionary and advisory
portfolios for private clients.
As one of the UKs largest
companies specialising in
creating and managing wealth,
with a network of offices
nationwide, we value the quality
of personal service that we can
deliver to our clients, backed by
efficient administration. This has
been the key to our success.
Additional Services
Investment Management
Stockbroking
Charities Investment
Pensions Investment
Ethical Investment
SIPPs
ISAs
Financial planning is provided by Member of the
London Stock Exchange
Gerrard Financial Services Limited

Killik & Co Killik & Co is one of the Additional Services:

At Killik & Co we offer a
UKs leading range of discretionary Advise dealing
46 Grosvenor Street
stockbrokers management services
London which are designed for
Investment management
providing client Charity & Trust investments
W1K 3HN investors who wish to
investment services
delegate the Integrated financial planning
through a personal
0870 606 1444 advisor.
responsibilities to a Tax services
professional asset manager
Trust & estate planning
www.killik.co.uk Authorised and regulated by the
email: Financial Services Authority and a No minimum investment SIPPS Member of the
member of the London Stock
info@killik.co.uk Exchange required ISAs London Stock Exchange

Individual Savings Accounts and Personal Equity Plans

WALKER, CRIPS, Website: Maxi Isas Self-Select and Quarterly Newsletter
STOCKBROKERS LIMITED www.wcwb.co.uk Managed Own WCWB Unit Trusts
Sophia House, Minimum investment
76/80, City Road, email: 1,000 up to Corporate Bond Fund 5%
LONDON EC1Y 2EQ client.services@wcwb.co. Maximum of 7,000 UK Growth Fund 3%
uk Comm. 1.65% subject to Equity Income Fund 4%
Member of the London Stock minimum 25
Exchange Tel: 020 7253 7502 Annual fee 15 per stock ISA and PEP Transfers
Authorised and regulated by Magi Andrews Payable on a half year Other Services
the Financial Services Member of the
basis 7.50 5th April / 5th
Authority Ltd. London Stock Exchange
October

Options/Training

Contact: Free OptionsWorkshops Investor training Profile

Contact us for full details and to
Andrew Butler
book your seat at our FREE 2
Freephone: hour Option trading workshops
0808 1431082 in London and Milton Keynes
with the UKs leading Options
E-mail: expert Guy Cohen.
Andrew@self-investment.com Next Available:
Web address: Milton Keynes 9.30am-
www.self-investment.com 12.00noon, Sat 26th June
London 6.45pm-9.15 pm, Wed
30th June
Specialising in the highly profitable
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provides award winning multi-level Award 2004 for quality education, Self-
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170604 p73 next week 6/15/04 5:20 PM Page 73

by: Chris Bourke

This weeks upcoming events

Monday 21 June Interims - GW Pharmaceuticals
Expect an update on the groups Diary
Finals - UBC Media Group cannabis-based drug, Sativex, the COMPANY WHAT'S COMPANY WHAT'S
In April, the AIM-listed radio approval of which has been delayed as
NAME DATE ON NAME DATE ON
broadcaster reported that trading was regulators ask for more information.
in line with expectations, and that its FAUPEL 21 JUN F RUGBY ESTATES 23 JUN G
The drug is used to combat pain GW PHARMA 21 JUN I SKYEPHARMA 23 JUN G
ambitious plans remained on track. caused by Rheumatoid Arthritis. GWP
Last week, UBC confirmed it was UBC MEDIA GROUP 21 JUN F STAGECOACH 23 JUN F
is in a strong cash position and the TOYE & CO 21 JUN G TOUCHSTONE GROUP 23 JUN F
talking to both Channel 4 and 19 delay should not impact its value.
Management about potential ATKINS (WS) 22 JUN F WEALTH MNGMNT S. 23 JUN G
projects. CHRISTIE GROUP 22 JUN G HAVELOCK EUROPA 24 JUN G
COURTS 22 JUN F BLOOMSBURY 24 JUN G
EL ORO 22 JUN G BRIT AMERICAN INV 24 JUN G

Tuesday 22 June Interims - OMG

Motion capture firm OMGs results for
HALMA
HISCOX
22 JUN
22 JUN
F
G
COMPUTERLAND
CREST NICHOLSON
24 JUN
24 JUN
F
I
Finals - Trifast the first six months of the year will be ITIS HOLDINGS 22 JUN F DS SMITH 24 JUN F
A year-end update in March was solid tempered by like-for-like sales, after a IVORY & SIME UK 22 JUN G DYSON GROUP 24 JUN F
but suggested that upgrade large sale to Sony Pictures in the same N ATLANTIC SMLLR 22 JUN G IOMART 24 JUN G
momentum was still some time away period last year. But it should show OMG 22 JUN I RELIANCE SECURITY GRP 24
for the industrial manufacturer. benefits of its increased cost control TRIBAL GROUP 22 JUN F JUN F
Positive points are Eastern Europe and investment in development. TRIFAST 22 JUN F WENSUM COMPANY 24 JUN G
and the Far East (especially China). Sales are likely to be heavily weighted VICTORIA 22 JUN F DUNEDIN ENTERPRISE IT 25
Pre-tax profits are forecast at 4.8 towards the second-half. CHAUCER 23 JUN G JUN F
million.
CYBIT HOLDINGS 23 JUN F JENNINGS BROTHERS 25 JUN G
DEXION ABSOLUTE 23 JUN G KELLER GROUP 25 JUN G
Ex-dividend - Land Securities DIXONS GROUP 23 JUN F SHIRES INCOME 25 JUN G
Wednesday 23 June Europes largest property investor HANSARD GROUP 23 JUN E SOPHEON 25 JUN G
Ex-dividend - Man Group said it saw market conditions HARDY UNDERWRITING 23 JUN E TELFORD HOMES 25 JUN G
The worlds biggest listed hedge fund improving for London offices when it ISOFT GROUP 23 JUN F WATERMAN GROUP 26 JUN G
business posted a larger than expected posted an estimate-topping rise in net JUST CAR CLINICS 23 JUN G
underlying profit of 484.5 million in asset value last month. The full-year
* see comments for companies marked with asterisk. G - annual general meeting. E -
the year to the end of March, lifted by dividend increased by 4.5% to 37.1p. extraordinary general meeting. F - final results to be announced.
strong sales and fee income. Man The City was particularly encouraged I - interim results to be announced
proposed a final dividend of 30p per by the outperformance of the groups
share, against forecasts of 29p, and up 3.4 billion retail portfolio.
Ex-Dividend - 23 June 2004
from 23.2p a year ago. COMPANY PAY DIVIDEND COMPANY PAY DIVIDEND
NAME DATE (p) TYPE NAME DATE (p) TYPE
ABBEYCREST 15/Jul/04 1.00P FIN GAME GROUP 16/Jul/04 1.50P FIN

Thursday 24 June Finals - Reliance Security Group

Finals - Computerland
The IT services provider recently
confirmed that second-half trading
had progressed well, and that results
should meet market expectations of
around 1.8 million pre-tax profits. Its
January purchase, Information
Technology Solutions, has been
successfully integrated .
Friday 25 June
AGM - Jennings Group
Shareholders at todays meeting of
the AIM-listed North West pub
operator should be fairly content. In
May the group announced an increase
in profits and dividends. Discussion
should be largely focused on
potential acquisitions in the year
ahead.
A profit warning in April sent these
shares plunging from 700p to their
current 550p levels. The group blamed
difficult conditions in the security
sector, with continuing pressure on
margins and lower levels of new
CARE UK
business in management and
manpower divisions. Loyal
shareholders are bracing themselves.
AGM - Keller Group
The ground engineering specialist will
have to work fairly hard today to
cheer its shareholders. Marchs results
were less than spectacular, with
management conceding they marked
a disappointing pause in the groups
long-term track record of growth.
Keller will need to address its strategy
in the troubled Makers and Suncoast
divisions.
ANGLO PAC.GRO 06/Aug/04 1.30P FIN
ATA GROUP 30/Jul/04 3.90P FIN
BASEPOINT 23/Jul/04 2.20P FIN
BIG FOOD GROU 23/Jul/04 1.90P FIN
BSS GROUP 20/Jul/04 9.85P FIN
CAFFYNS 2.9/Jul/04 15.00P FIN
CALEDONIA INV 29/Jul/04 18.60P FIN
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17 June 2004 73
170604 p74 letters 6/15/04
LETTERS
Over to you...
Its the cash element
In the Letters section of your 27
May issue, Polly Ferguson
answered a question from
Barnaby St-John Gray about the
difference between rights issues
and open offers.
However, from the
shareholders point of view,
isnt the main difference that,
with rights issues, if you elect
not to take up the new shares
you are likely to receive a cash
element instead, but with open
offers you dont? And is it this
scenario that is more likely to be
the real reason why open offers
are becoming more popular
with companies?
RICHARD WILSON
VIA EMAIL
Polly Fergusson replies:
Apologies maybe it should
have been more clear!
With a rights issue you have
four choices: take up rights in
full, sell all your rights, take up
some and sell the remainder or
sit tight and do nothing.
If you sell part or all of the
results, you will get some cash.
If you sit tight and do nothing
then the company will sell the
new shares that have not been
taken up to the underwriters. It
will then send you cash for your
share of the rights however,
this means you have no say in
the price for which the rights are
sold.
Open offers or placings are
becoming more popular
because they are quick, cheap
and easy to implement not just
because they dont have to give
out cash to shareholders, but
they are also faster and easier to
manage in fast-moving stock
markets. This is not a hard and
Send your comments to: The Editor, Shares Magazine, Thames House, 18 Park Street, London, SE1 9ER. . . or email us at: editorial@shares.msm.co.uk.
Shares is happy to answer readers' questions through the Letters page but we are unable to deal with queries over the telephone nor can we advise on investments.
74 Shares
5:14 PM Page 74
fast rule, but more of a gradual
trend.
Tell us more
I believe that investors will
benefit greatly if we know more
about the behaviour of sectors
during the different economic
cycles.
It is correct, I believe, that 80%
of the price of a stock is
influenced by the health of the
economy and the sector in
which it is classified.
Shares could help us to make
the best investment desicion by
providing a list of web
addresses or reading material
on market sector behaviour
during the upswing and
downswing in the global
economy.
Could you also publish
monthly and quarterly forecasts
for business indicators such as
GDP, employment and so on for
all global markets?
JUAN NERVI
VIA EMAIL
Editor replies: We're always open
to ideas. What do other readers
feel about the need for this kind of
information?
A need to know basis
I would like to request a little
help. I am trying to get skilled
up on various aspects of the
stock market options, futures,
foreign exchange, derivatives,
bonds and so on. Also I would
like to know if any companies
hold free initial training
seminars for the uninitiated on
the market and how to invest
and make money.
I would like to understand the
fundamentals of trading prior to
making a large payment to a Editor replies: An awkward
company for a course which will question, which we put to brokers
go above my head. TD Waterhouse, who is among the
most accustomed to dealing in US
PATRICK LEAHY
VIA EMAIL stocks. The firm says that while Mr
Samuels would indeed need to
Editor replies: A number of open a nominee account in order
stockbrokers offer help with to sell his Nasdaq stock, this need
training. It is often in their interests not delay the sale by more than a
to ensure that their clients know few days: We should be able to
what they are getting into, open an account and register his
particularly when it comes to stock within a week or so, and the
derivative investments where the sale will be T+3 (compared to
unwary can quickly lose their T+10 settlement for certificated
shirts. trades).
This subject is too wide to deal Waterhouse adds that there are
with in a small space here but no additional charges for holding
Shares will be presenting a full or selling an international stock.
guide at some point in the future.
In the meantime, why not try
asking brokers before you open an
account about what level of Open offers or
training they provide?
In addition I would recommend placings are
some solid reading there are
dozens of excellent books pitched
at the novice investor, as a browse
becoming more
around a good bookshop or on-
line will reveal. Read Shares each
popular because
week most of the subjects you
mention are covered regularly. they are quick,
Fortunately, many brokers will
want you to demonstrate some cheap and easy
knowledge of the market before
they allow you to get involved in to implement
things like futures, so your first
objective is to get some modest and they are also
share trades under your belt.
faster and easier
How to make a sale
What is the easiest way of to manage in
selling the shares of a company
quoted on NASDAQ? I hold the
share certificates but most
fast-moving stock
broking organisations want me
to set up a nominee account markets
which could take up to two
weeks to organise.
JOHN SAMUELS
VIA E-MAIL
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