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240604 p01 Cover 6/21/04 2:49 PM Page 1

UKs title contenders
Unlocking potential
Shares going places
3.20 WEEKLY | VOL 6 ISSUE 26 | 24 - 30 JUNE 2004

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streaming share prices
240604 p03 Contents/Eds 6/22/04 4:54 PM Page 3

24.06.2004 CONTENTS

the editors desk
Pay now, profit

later hey say that
In future, shareholders will need to good news
grill directors when average pay
falls behind the level in rival doesnt sell
companies, says Tim Freeborn. papers, so
This is because the successful perhaps Shares should not
companies are those that be publishing the article
automate dull tasks and pay
people to work smarter. which appears on page 41
this week.
Its about Charles Breese, who has
personally set up a shareholder group for
investors in Elektron, an AIM-listed electro-
mechanical components manufacturer.
Quite often, whenever we report the
activities of shareholder groups its because
something has gone wrong or they dont
agree with the boards actions. Not so with
Mr Breeses group, however. He supports the
chairman, Adrian Girling, and hopes to work
with the management in developing
shareholder communications. It must help
that Mr Breese has a background as a fund
manager and presumably is accustomed to
questioning company managements on
their business and plans for the future and
getting answers.
Not so woolly The Heavyweights
Woolworths was a fine business and a Many FTSE 100 heavyweights are So thats the good news. For the bad news,
major player on the High Street but had matched by able sparring partners. look no further than our old friend Shell.
suffered from being the ugly sister in Shares pairs 10 blue-chip companies Even under its new leadership, shareholder
Kingfisher. But things are looking up for with their closest UK rivals in a bid to communication appears to be the last thing
the store, with a closer market focus and see who is the British champion in on the groups mind. Only after heavy
plans to rebrand the Big W chain. each sector.
pressure from the institutions did Shell
release the names of members of the steering
group charged with carrying out a review of
the groups structure, leadership and
decision-making processes. The annual
general meeting next week promises to be a
lively one, particularly as the group is facing a
possible revolt by major shareholders against
two resolutions that would absolve the
present directors from responsibility for the
groups recent problems. Corporate
governance groups such as PIRC say that the
company cannot go on the way it has been
26 ANALYSIS 37 THE CHARTIST and if it wont change its unwieldy structure,
Safe as houses Bucking the trend shareholders will have to consider any means
While Bank of England governor Mervyn Most shares have been busy doing to make it change its mind.
King warns house buyers they could lose nothing lately but, says Shares
money, there are still plenty of reasons chartist David Jones, there are always What a contrast between transparency
why housebuilders will prosper. Jonas exceptions. He identifies the and involvement with shareholders at one
Crosland looks at a company well placed companies that are bucking the overall company and a tradition of opacity and
to do well in the current climate. market trend and doing their own thing. intransigence at the other. Maybe along with
all the other fundamentals, we need a
shareholder communication rating on a
Companies, regular features: more contents on page 4 stock before we decide whether to invest.

Daily news updates from the Shares editorial team appear on our website

24 June 2004 3
240604 p04 Contents 6/22/04 4:40 PM Page 4


tel: 020 7378 7131
fax: 020 7378 6605
10 06 Plays of the Week
Delivery enquiries: Off Games
First it was Eidos, now it is the turn of Game Best investment ideas from the Shares team
Subscription/back issues Group, the video games retailer, to announce
tel: 01444 475 661 poor sales so far this year. Increasing competition and weak new game releases are 08 Shares Uncovered
moneyam helpline: 0870 770 8300 expected to lead to a loss for the first six Latest stock opportunities and news
EDITORIAL months of 2004. You have been warned!
14 News Focus
Editor Our views on the big stories
Jeremy Lacey
Deputy Editor
Polly Fergusson
14 29 Small Shares
Investment Editor
Top Gear News, views and profiles
Timon Day The British love of cars is motoring ahead. Last
Growth Companies Editor week European Motor Holdings and Pendragon 34 Special Situations
Tim Freeborn both announced great performances, so what Takeovers & rights issues
Companies Editor about the rest? Steve Frazer says expect more
Steven Frazer
Small Companies Editor
takeovers while sales are so strong and share 35 Upcoming floats
James Quinn prices relatively low. Focus on the IPOs
Features Editor
Emma-Lou Montgomery
Senior Reporters
36 The Chartist
Jonas Crosland John Marshall 33 David Jones spots the key signals
Reporters V for Victory
Piper Terrett Emily Parkinson Recently-published results suggest that 39 On the Horizon
Chris Bourke cosmetics specialist Victory has turned the Plan ahead for upcoming events
Technical Analyst corner from substantial losses into sustained
David Jones
Head of Production profitability. John Marshall explores how the 40 Directors Dealings
John Perkins group has shaken off legacies of the past to Inside track on board buys and sells
Chief Sub Editor become one of Richard Bransons more
Danile Vautrat successful ventures. 41 Investors Champion
Designers Into bat for the private shareholder
Quentin Radburn Jeff Duncan
Sub-Editor 34 42 Brokers Tips
Nick Eisen Sad times in furniture land Shares tracks the analysts ideas
COMMERCIAL Former Tory-party fundraiser Lord Kirkham is
Publisher expected to unveil a firm offer to take furniture 44 Analyst Watch
Mark Van de Weyer giant DFS off the market within a few weeks, Tracking who gets it right
Marketing Manager news that one analyst said moved him to
Michael Shannon
Group Advertising Manager
tears. Investors will have to dry their eyes 45 Strategies
however and face the music as a rival offer Digging the data for share ideas
Paul Jacobs
Advertising Representatives looks unlikely.
Liam Williams 52 Tables & Results
Advertising Director 40
David Motum
Cox Sure 63 Next Week
Its abandoned takeover discussions, lost a Meetings, ex-dividend information
chief executive and changed its mind on his
Managing Director replacement, but two Cox Insurance directors 64 Derivatives
Mike Boydell still believe in the companys shares. We Spread betting, CFDs, options
Business Development Manager
explore all the latest directors dealings and
Angela Lopez
Developers what it could mean for shareholders. 74 Letters
Felix Dilke Geoff Drummond
City Editor
Kam Patel Subscription/Back issue enquiries/Delivery enquiries DOWNLOAD SHARES
Customer Support Manager Subscribers can download
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Systems Administrator Rockwood House, 118 one year; 225 two years; week on our website
Jonathan Tullett Perrymount Road 26.99 quarterly by direct debit. Visit the Archive section to view content
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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
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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
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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
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Reproduction in whole or part is not
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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
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240604 p05 Cos Index 6/22/04 5:16 PM Page 5


+ 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,
which can be the result of reporters writing about the same company from different standpoints.
3DM Worldwide TDM - 58 Gyrus GYG + 28 Pearson PSON / 42
Abbey National
Advanced MS
AIT Group
Havelock Europe
Polar Cap. Tech.
of your
Allied Domecq
+ 52
Public Recruit.
Pursuit Dynam.s
Award Intl H. AWI / 62 Howle Holdings HOH / 62 Quintain Estates QED + 8
Babcock BAB + 33 IDN Telecom IDN + 62 Radstone Tech. RST - 59
Bristol & London BTL - 29 Immedia IME / 39 Raft Intl RFT / 8
BSS Group BTSM + 37 Innovation TIG + 18 Reed Elsevier REL + 42
Burren Energy BUR + 10 Innovision INN + 18 Regus RGU + 15
Cable & W. CW. + 18 ITE Group ITE + 6 Rentokil Initial RTO - 43
Capcon Holdings CPC / 62 James Beattie BTT / 15 RMC RMC / 11
Capital & Reg. CAL + 8 Johnston Press JPR / 30 Royal & Sun All RSA / 15
Capital Radio CAP + 10, 36 Kenmare Res. KMR + 30 Safeland SAF - 60
Chapelthorpe CPL + 59 Land Securities (LAND + 37 SectorGuard SGD + 6
Conroy D. & G CDG / 31 Latchways LTC + 61 SPG Media SPM - 59
Conygar CIC / 62 Laura Ashley ALY - 43 Sports & Leisure SOP / 62
Country & Met. CRY + 26 Loades LOD / 62 Stanley Leisure SLY / 36
Courts CRTO + 58 Local Radio Co. TLR + 30 Stilo Intl STL + 28
Cox Insurance COX / 40 London Town LTW / 8 Tomkins TOMK / 40
Cropper (J) CRPR / 58 Majestic Wine MJW + 58 Tops Estate TOPS + 60
Cyberes CYB / 29 Mark Kingsley MKP / 62 TradingSports TES / 30
Dee Valley DVW + 33 Marlborough S. MAS + 18 VEGA Group VEG + 33
Deep Sea Leisure DSL / 62 Matalan MTN + 6 Victory Corp. VRY + 60
DFS DFS + 33 McKay Secs MCKS / 60 Vodafone VOD / 10, 43
Dynamic CF
Media Square
MFI Furniture
Waterford W.
- 61
59 with
European Motor
Wellington H.
WH Smith
TD Waterhouse
First Technology FRS + 11 Northern Pet. NOP / u Whitehead Mann WHT / 62
Fountains FNT / 11 Northgate NTG + 37 Woolworths WLW + 12 Trade Covered
Game Group
George Wimpey
- 10
NSB Retail
Oasis Healthcare
Workplace Sys.
/ 61
Warrants online
Goldshield GSD / 60 Oxford Biomedica OXB + 43 WS Atkins ATP + 14 or by phone
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240604 06-07 Plays 6/22/04 5:23 PM Page 6



by: Polly Fergusson

When a company issues two 60.7 million from 117.4 million

profits warnings it is all too the previous year on sales of
tempting to expect a third 1.05 billion, up from 1.02
pretty quickly. Its a basic stock billion in 2002/03.
market lesson. But fast forward to May and
Step forward Matalan, the value things were looking a lot better.
retailer. This former stock market While other fashion retailers
darling lost more than a few have faced a tricky start to the
supporters over the festive season season, Matalan got off to a solid
when it announced two profits start, with like-for-like sales
warnings either side of Christmas. growth of 3% for the first nine
Shares plunged to 145p from 220p weeks, which compares with a
in early December, losing a third of drop for H1 last year of 6.7%.
their value. Question-marks about Added to that, the weather has Shares Summary
the strategy of new chief executive (for a change) been pretty good
John King were rife and rumours so far this summer, expected to 1 Strong trading start to year
that chairman and founder John drive sales further. With a large 2 Takeover speculation to drive
Hargreaves (a 52% shareholder) was degree of fixed costs, any shares higher
a seller at the right price ensured material improvement in sales 3 Weak comparatives will flatter
that the shares were given no goes straight through to the results
reason to rise. bottom line, reversing the drop
BUSINESS: Value clothes and
But finally it seems that market in gross margins Matalan suffered short-term speculation
household goods
opinion is changing for Matalan, in the second half of last year. play (on a continues to
which sells low-cost clothes and The heat about a possible rise six-month mount. At
Market value: 836.7 million
housing goods. With good in interest rates is naturally horizon), these sort of
Historic PE for 2003: 19.1
newsflow combined with analyst scaring investors off investing in rather than a level and
Prospective PE for 2004: 18.7
upgrades expected over the next house builders and the like, but it stock to hold trading on a PE
Prospective PE for 2005: 15.7
few weeks, investors would be is good news for the value end for a few of 15.7 (around
Dividend yield: 4.07%
wise to get in ahead of the market of the market. If consumers are years. the sector
Spread: 0.49%
and an update from the company starting to feel the credit pinch There are average), any
NMS: 75,000
on 8 July. with climbing interest rates, then few stocks in takeout price
While King has had just under a going for less expensive items the retail would be much
year to settle into his job and has when you are at the shops is the sector that do not attract some higher. The dividend yield is a
been welcomed by the City, his natural route. While increasing sort of bid speculation but the healthy 4%, attracting those
Christmas cannot have been too competition from Asda and Tesco rumours surrounding Matalans income investors.
merry. Matalan was forced to is a major concern, growth in the own future refuse to die down. Matalan is trading against weak
admit that its sales promotions value sector is strong with room Names in the frame include rivals comparatives and it appears that
and discounting had been too still for considerable capacity Tesco, Asda and an MBO. Against a third profits warning is out of
little too late. Pre-tax profit for growth in the near term. For this this background, investors the window for the time being.
the year to February 2004 fell to reason, Matalan appears a better should expect shares to climb as Buy up to 225p.


by: Timon Day

Russia was once a super In fact ITE is really a Russian and Doors exhibitions were forseeable future giving it a
power but by the late 1990s company listed in London. also very successful two formidably strong market
its economy had shrunk to It has gone back to its months ago. It is partially position.
around 250 billion-worth of Russian roots after a foolish financing the construction of The company has also
output or less than diversification spree under three new exhibition buildings bought two trade events in
Belgiums. Today the country former chief executive including a pavilion in Kiev in the health and
is booming and GNP has Stephen Warshaw which has Kazakhstan to increase space telecoms sectors following its
doubled due largely to now been largely reversed at its Almaty centre and new policy of expansion through
soaring oil prices. following the appointment of halls in Kiev and St bolt-on purchases that fit with
This economic boom is Ian Tomkins. Petersburg. its existing operations.
good news for ITE which does ITE runs 10 top events in By using its enormous In the first half ITE
most of its business in Russia, Russia led by the MODA cashflow to help finance these organised 62 events against
which accounted for three fashion show in Moscow. The projects ITE secures exhibition 69 events the previous year.
quarters of last years profits. Building Week and Windows tenancy rights into the The fall is explained by the

240604 06-07 Plays 6/22/04 5:23 PM Page 7



by: Timon Day

Shares in little SectorGuard expected and the purchase

have tumbled a third from a price will be reduced. The
high of 5.5p earlier this year recent Abbot purchase is
and now look oversold. This probably the best as it is a
weeks interim results were higher-margin alarm response
bang in line with expectations and key-holding business.
and the company should The cost of integrating
make record profits of 1.1 and re-branding the ac-
million this year against quisitions has temporarily
900,000 last year. reduced margins.
This drops the PE to 9 High staff retention is one
which is too cheap for a of the main factors
company growing at around differentiating Sectorguard
10% a year with good long- from the dozens of
term contracts in place and competitors. Staff are highly
good-quality management. motivated through a company
Admittedly there is no share scheme and bonuses. If
dividend but this might be a guard remains in place for Shares Summary
rectified next year. months rather than days he is
Chief executive David Marks much more effective at Overpriced at 5.5p but
is targeting the protection of guarding a building. underpriced at 3.75p, the shares
schools, colleges, local Residential guarding has should recover to 4.5p before long
authority buildings and migrated from America and but dont look for a quick profit on
residential guarding. looks set to take off here. this sort of spread. A longer-term
Sectorguard was appointed Sectorguards main scheme is purchase on the basis of a quality
preferred security services in Hadley Wood, north operation in a sector often run by
supplier to London London, where residents cowboys.
universities. decided to call in guards
The company recently won following several serious BUSINESS: Guarding buildings
the security contract for the attacks and the inability of the using security officers
College of North West London police to provide the desired VITAL STATS:
to add to other London level of security. Market value: 8 million
colleges like Birkbeck and the The company will continue Historic PE to Sep 03: 10.4
School of Oriental and African to make more acquisitions in Prospective PE to Sep 04: 9.4
Studies. Further wins are this fragmented market and Prospective PE to Sep 05: 8.5
expected. can spend several million as No dividend
Not all the four acquisitions net debt is only 10% of NMS: 10,000 shares
made last year have shareholders funds. Spread: 13.3%
performed well. Two of them Economies of scale will further
have lost more sales than boost profit margins.


sale of the Czech business. The African exhibition business with

top ten shows experienced a several successful launches of Shares Summary
10% rise in revenue. various events.
ITE shares have
Interim profits fell from 1.2 Net cash has jumped from BUSINESS: Exhibitions and conference had a great run but
million to 800,000 because the 22 million to 29 million or a organiser mostly in Russia and Ukraine. should carry on
highly lucrative Moscow Oil & sixth of ITEs stock market VITAL STATS: rising as Russias
Gas show takes place every valuation.Current-year profits will Market value: 175 million economy booms.
other year. But overheads were be a bit over 14 million Historic PE to Sep 03: 14.8 There is also a
also reduced by 700,000. compared to the record 15.6 Prospective PE to Sep 04: 15.6 good chance of a
Forward bookings for 2004 are million last year but should Prospective PE to Sep 05: 12.9 bid from a big
almost 10% ahead of last year at post a new record of 18 million Prospective dividend yield 2004: 2.8% German or British
this stage and most of the space next year which, excluding exhibition/media
NMS: 15,000
company like
has been taken. cash, drops the PE to an Spread: 1.6% EMAP.
ITE is dipping its toe into the undemanding 11.

log on to for our daily news updates 24 June 2004 7

240604 p08 Uncovered 6/22/04 4:15 PM Page 8


GWs cannabis drug
by: Emily Parkinson
Human trials of Savitex, a drug
for MS sufferers from GW
Pharma (GWP), have shown the
cannabis-based treatment eases
symptoms of the disease. GW,
the only company in the UK
licensed to sell cannabis-based
products, said regulatory
Big boys may dig for gem miners
by: Emily Parkinson
approval of the drug was

progressing well though offered nvestors are betting junior mining Oxus Gold shares also jumped 16% last week to
no more detail on a possible companies Monterrico Metals (AIM:MNA) around 64.25p as word spread South Africas Harmony
timeline. The company also and Oxus Gold (AIM:OXS) will be the next Gold (SA: HARJ) may consider a bid for the group as
reported a widening in net losses takeover targets for large mining companies keen to part of its strategy to diversify outside its South-
for the half-year to 6.9 million beef up their development portfolios. African base. Oxus recently ramped up production of
from 6.7 million a year ago. A flurry of buying in Monterrico last week saw the its Amantaytau silver and gold mine in Uzbekistan to
stock jump 14% to 395p on rumours that mining take advantage of strong precious metal prices. The
giant Xstrata (XTA) may bid for the AIM-listed asset would be a valuable diversification strategy for
Higher techs company. A bid would hand Xstrata control of Harmony which is suffering from over-exposure to the
by: Steven Frazer Monterricos Rio Blanco copper project in Peru, volatile South African rand.
Raft International (RFT) shares currently in the pre-feasibility stages with further Harmony is a pure South African gold producer
shot up 11% after the company drilling results expected in the next two months. and has been marked down a bit for that so it wants to
won a major contract with RWE, We are anticipating an updated resource figure diversify and this is a way of picking up reserves
the German owner of Thames and that should show the deposit is a lot bigger than outside of its traditional base, says Guy. It is well
Water and nPower. The current figures reflect. For that reason I think its too accepted that Harmony may take a look at them.
company recently signed a early for someone to come in for a bid for them at the Shares says: Beware of larger miners
similar deal with US-based present time, says Jonothan Guy, analyst at preying on junior miners before the full size
energy group Sungard Energy Seymour Pierce. and value of any deposit is known.
NSB Retail (NSB) shares
perked up to 24.75p after the Quintain raises the roof on profits
point-of-sale software firm settled by: Chris Bourke
a legal dispute with Cablevision.
The row, which had been going Quintain Estates (QED) is on The Greenwich Peninsula Wembley Stadium. Some
on since 2002, was finally ended track to make 500 million regeneration scheme is one of analysts estimate that the
with the North American profits from the transformation the largest ever undertaken in group will make 350 million
company agreeing a one-off of two London eyesores. The the UK. In a joint venture with profits from the two projects
payment of $800,000, less costs. developer has received Lend Lease, Quintain will over the next twenty years.
unconditional planning provide over 10,000 new homes Others are estimating more.
consent for its Millennium alongside 450,000 square I believe that 350 million is
Property, hot and cold Dome and Greenwich metres of commercial, retail too conservative a figure, and
by: Chris Bourke regeneration schemes, only and leisure space, including a that 500 million is closer to
Hammerson (HMSO) has sold weeks after winning 20,000 seat entertainment the mark, said one analyst.
a 135,000 retail park in Swansea preliminary approval for its arena inside the Dome. There is some real potential
for 85 million. Capital & colossal Wembley project. We are essentially building a here for wild profits. The pace
Regionals (CAL) Mall Rounding off a month of new town for London, said of progress has been rapid, and
Partnership has acquired The good news for the group, the Adrian Wyatt, chief executive. this is a very positive signal.
Galleries Shopping Centre in announcement was included in With a strong shared vision, Juliana Weiss-Dalton,
Bristol for 123 million. The Mall Quintains full-year results there has been real momentum analyst at Seymour Pierce,
now owns 18 shopping centres which comfortably beat City to deliver a new community on said: While the shares are not
totalling over 5.5 million square expectations. Net asset value the Greenwich Peninsula, and cheap relative to the sector, we
feet of floorspace, valued at leaped by 16.4%, largely thanks we are able to turn this vision continue to expect positive
1.54 billion. AIM-listed London to revaluation surpluses from into a reality. share price momentum as
Town (AIM: LTW) is to raise 7.8 the Wembley and Greenwich Quintains other core scheme Greenwich and Wembley
million via open offer after developments. Pre-tax profits involves the regeneration of 8 continue to progress.
warning that losses would also increased, climbing 14.8% million square feet of neglected Shares says: A solid, risk-
continue throughout 2004. to 16 million. land surrounding the new averse, long-term investment.

240604 p09 TDW ad 6/22/04 3:13 PM Page 1

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240604 p10 Uncovered 6/22/04 4:16 PM Page 10


Vaughan adds verve

to Capital Radio
by: Polly Fergusson
Johnny Vaughan, the new
replacement for CapitalFMs
breakfast show star DJ Chris
Tarrant, has rejuvenated the
station, according to a senior
media buyer.
Vaughan, who started
hosting the breakfast show at
Capital (CAP) with sidekick
Becky Jago in April, has been
well received by listeners and
advertisers alike and is expected
to revive flagging audience
CapitalFM makes up an
estimated 40% of Capital Radios
No fun to be had in games sector
by: Polly Fergusson
revenues and Tarrant was

believed to make up an ame Group (GRG), the computer and throughout the whole computer games sector.
estimated 15% of CapitalFMs video games retailer, is widely expected to Games sellers are suffering further as general
revenues. His market-leading report weak trading for the start of this retail rivals including Argos and Woolworths have
show enabled Capital to financial year at its AGM on 7 July. embarked on a strategy to offer games at heavy
command advertising rate The company is likely to reveal that it has discounts, hitting margins for specialist retailers
premiums, although these have suffered from a drop in sales after a poor start to like Game.
been eroded in the recent past the year due to a lack of new game releases, Game's fall into the red is likely to affect
due to a fall in audience share. coupled with heavy product discounting from sentiment on the stock. It has already fallen to 58p
non-specialist retailers. from 74p in March and a poor trading update
Game is now forecast to announce a loss of would send shares falling.
Burren doing well around 4 million compared to last year's profit of 'We have an add recommendation on Game, but
by: Timon Day 2 million. would not recommend buying now. Investors
The Western desert of Egypt is The most notable flop so far this year has been should buy on the dips wait for the results to
expected to prove a major oil 'Hitman' from Eidos (EID), the games publisher come out, shares to fall, and then buy.
producing area for Burren and developer. It had been tipped as a surefire hit, We think that Games' H2 is going to be
Energy (BUR). but weak sales of the game so far this year recently spectacularly strong,' says Assad Malic, analyst at
Burren Energy fought off six forced Eidos to issue a profits warning. Evolution Beeson Gregory.
much larger oil companies to Andecdotal evidence of poor game sales Shares says: Weak trading update will
win an exploration concession throughout the market is now affecting sentiment push shares down.
and has just signed a Production
Sharing Agreement with the
Egyptian Government. This Rumours and rivals hit Vodafone share price
paves the way for a full-scale by: Chris Bourke
geological and seismic
programme at East Kanayis with Vodafone (VOD) shares have abdicate to Britains first 3G moment, we have no reason to
results expected by the end of dropped, sparked by Italian operator. 3 has more than believe the reports are true.
the year. press reports that 42-year old 600,000 customers and is on But the third-generation
Burren has a 35% stake in the Vittorio Colao, well-respected course to beat the 19 months it threat is causing the City
M'Boundi field in the Congo and head of Vodafones southern took Virgin Mobile to reach its greater concern. Vodafone is
the Congo government is European Middle East and first million customers. planning to launch its 3G
expected to grant a 4,200 sq km African region, might resign. Analysts fear the heat is on product in the UK during the
extension to the field shortly. A spokesman for Vodafone for Vodafone: Colao has an run-up to Christmas and the
Burren shares have rocketed told Shares: These reports are impressive operational track aggressive marketing,
this year on the back of rising oil pure speculation. We have not record, said one analyst who established competition and
prices and with production rising heard anything from Mr Colao. did not wish to be named. high costs involved could all
rapidly profits will rocket. Pressure from third- In Vodafones recent results, hurt Vodafones margins.
Shares says: Investors generation rival 3 has also hit southern Europe was one of the Shares says:
could strike it rich with the group. Vodafone has been best performing regions. If Shareholders are right to be
Burren. forced to halve customer tariffs Colao was to go, it would be a concerned, but should take
in response to its threats to blow to the group. But at this a long-term view.

240604 p11 Uncovered 6/22/04 4:20 PM Page 11


AGM file: Shell Fountain set for growth

by: Steven Frazer by: Chris Bourke
Petrol stations, oil rigs and year it overstated proven oil Shares in AIM-listed forestry and
stuff, eh? reserves by a fifth. It was then grounds maintenance specialist
Yes, although thats just the tip of warned by its own internal Fountains (AIM:FNT) retreated
the iceberg. Shell is the worlds investigation that it may have to modestly after the company
fourth largest oil and gas get out of Nigeria, one of its announced plans to place 4.4
producer exploring, refining biggest markets, because of million new shares at 125p. The
and shipping billions of barrels of violence and thieving and it has company, which will raise 5.125
oil, gas and other chemicals all recently been criticised for not million, wants to use the
over the world. It also runs a load being more open with additional cash to fund further
of those funny wind farms shareholders on what it plans to acquisitions as it homes in on
through its eco-friendly arm do about it all. Shell: fueling th growth opportunities.
e fires of
Shell renewables. speculation The placing will be subject to
A subtle word in its shell-like shareholder approval at an
Very right-on, but what about then? Any fuel for the share price? extraordinary meeting pencilled
holes in the Ozone? Is that on Actually no, more like lots of The stock has performed in for the 20 July, but chief
the agenda? shouting and hollering from half surprisingly well given the year executive Barry Gamble is
Not likely. Investors are way too the City. A number of big the company has had so far, confident that his plans will be
miffed over the firms catalogue institutions have threatened to although that may be about to given the thumbs-up. Early
of recent cock-ups to fret over embarrass the group with change. UBS recently indications are that the placing
the environment earlier this tough questions unless it lays its downgraded the shares saying will be oversubscribed with
cards on the table. The there are no near-term catalysts strong support from existing and
share price
investment committee of the to drive outperformance. new institutions, he says.
420 Association of British Insurers Shares says: Growth
410 recently emerged unhappy from Time & place: Monday 28 June, potential should see
a meeting with acting chairman Excel, 1 Western Gateway, Royal shares grow.
380 Lord Oxburgh and Sir Peter Victoria Dock, London, E16 1XL
370 Burt, senior independent Chartists view
360 HIGH 416.25 2/1/04 director, claiming that there is a Potential for fireworks: by: David Jones
350 LOW 348.75 6/2/04
LAST 411.75 lack of transparency in the
Source: Thomson Financial/Datastream groups plans to deal with its Positive outlook for
First Technology
Next Tuesday, 29 June, sees the
release of full-year results from
electronics equipment business
RMC set to cement its position in construction market First Technology (FRS). It has
by: Steven Frazer been a busy few months for the
company with a few acquisitions
Rising cement prices in says Leslie Kent, analyst at the City in March, saying our the latest one is a 106 million
Germany could spell good broker JM Finn. The question performance in Germany will cash offer for BW Technologies,
news for building materials is, will they stick? Kent adds. recover in 2004 and we are which trades on the Toronto
group RMC (RMC). French Over the past two years targeting a return to stock exchange.
industrial group Lafarge, one of cement prices have halved as profitability in 2005. Back in May, First updated
Europes biggest cement recession upset the German Thus far, however, the City the market on current trading,
mixers, is on the verge of economy and building appears unconvinced the commenting that the second half
pushing through its third price industries. However, price share price has tumbled from a of the year was stronger than the
rise in a year. This will ease the increases could ease the 2004 high of 748p and is first. It has been a flat six months
pressure on cement prices competition, which has made currently trading just 10% above for the share price, but while
throughout the German RMCs German operations the its lowest level for the year. above the 290p mark the chart
construction market and take worst performing part of the Analysts are forecasting a 174 remains positive.
some of the strain off RMC, the group over the past few years. million pre-tax profit for the
worlds largest ready-mixed Last year, the German division group this year, although the share price
concrete firm. racked up operating losses of dividend is expected to remain 360

RMC makes around 16% of its 48 million. static at 31.2p a share. Interim 340
revenue in Germany, so any The company appointed results are due in September. 300
positive signs for the David Munro as chief executive Shares says: A 5.3% yield 280

construction industry are in January. The former BHP is attractive to investors 260
reasons for hope. Any rise in Billiton man struck an upbeat willing to cling to recovery 220
the price of cement is good, note in his first presentation to hopes. Source: Thomson Financial/Datastream

24 June 2004 11
240604 p12 Woolworths 6/22/04 4:44 PM Page 12


From ugly sister to worthy contender

After a difficult demerger in 2000 from retail giant Kingfisher it seems prospects for
high street chain Woolworths are at last looking up. John Marshall reports

hen Woolworths (WLW) was re-branded as Woolworths. Currently the
Woolworths demerged from Kingfisher (KGF) group has 21 of these and is committed to
Market cap 644m in 2000, the chairman Gerald another three sites. They are mixed
(m) 03/04) 04/05(e) Corbett had a bleak inheritance. performers, fluctuating between profits of 1.5
Turnover 2775 2892 The company had not been the most favoured million and losses of 1.5 million.
Pre-tax profit 71.9 79.4 part of the Kingfisher empire. It had a small These 100,000-plus sq ft mega stores may
EPS (p) 3.5 3.8 chain of loss-making stores. It was heavily have been justified under Kingfisher when
Div (p) 1.5 1.7
overstocked, it was overmanned and it they could benefit from the purchasing power
suffered from inadequate systems. It also of Comet in electricals, Superdrug in
lacked a Retail King. That apart, it was a fine cosmetics and B&Q in DIY. Those advantages
business which had been a major player on have now gone and the group recognises that
the High Street but had suffered from being the only future for this chain lies in
the ugly sister in Kingfisher. downsizing the stores to some 35,000 sq ft so
Corbett moved quickly to solve some of the that they can offer an improved range of the
problems. Trevor Bish-Jones was recruited groups specialisms.
from Dixons, there was a sale of redundant However, the potential is substantial. Ten
stock and the general stores were closed. of the stores have planning consent to sell
Systems have been improved and head office food and might appeal to a supermarket
downsized. Just as importantly, the group has group. In six of these cases the group does not
defined its target market: mums with kids, need to apply for landlord consent for a
and more particularly, celebrations and change. In four it does. Clearly there is likely to
childrens clothing. be real interest in the future of these stores.
This clearer emphasis has enabled it to Similarly, the other stores will appeal to those
move forward. Its share of the toy market has retailers anxious to acquire 80,000 sq ft of
increased from 17% to 20%, with the Chad selling space with commensurate car parking.
Valley brand now worth over 70 million. With Whatever happens, these stores clearly offer
Ladybird, Woolworths is vying for the No. 2 the group a potential bonus. More should
spot in childrens clothing and it has 40% of become clearer later this year.
the childrens video market. The success of One example of the change in the group is
this emphasis upon celebrations can be its attitude to confectionery. In both 2002 and
gauged from the fact that halloween sales this last year, it was caught up in the Easter-egg
year should be some 7.5 million compared price wars. This year it altered its strategy and
with 2 million two years ago. decided not to be a busy fool. The result?
At the same time, there has been an Woolworths sold fewer eggs but made a
emphasis upon improving the groups greater profit.
systems in an effort to increase the woefully The company will still focus on
narrow margins. The group has introduced a confectionery as a market, but in a wider area
new till system, which covered 320 stores by than just pick n mix. It has now introduced
the end of 2003/04. These have tended to be Thorntons bars into 400 stores and is pleased
the larger stores as they account for two-thirds with the results. There is to be a greater
of the groups space but the system will be emphasis upon countlines which are an
rolled out to all stores by the end of this year. impulse market and less of an emphasis on
It will be quicker and will improve the flow of gift boxes which are more slow moving.
information, which should lead to greater Although Philip Green suggested that he
availability in the stores. might bid for the group some four years ago,
The main till is situated near the exit in an he seems to have moved on. However,
effort to reduce shrinkage especially takeover rumours do surface from time to
shoplifting and success in that goal would time. Even without these rumours, brokers
automatically improve margins. So far are warming to the shares. Richard Ratner of
shrinkage has fallen from 2.1% in 2001/02 to Seymour Pierce is forecasting profits growth

1.7% last year. As the roll-out continues, there of 17% this year to 78 million (earnings of
should be a further reduction this year. 3.6p) and further growth to 94 million next
One of the more intriguing possibilities is year (earnings of 4.3p). He believes the shares
the future of the Big W chain. These are being will outperform the market.

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240604 p14-15 news focus 6/22/04 5:03 PM Page 14


Plenty left in car

markets tank
by: Steven Frazer ROUND UP

he appetite for new cars among British motorists is
showing no sign of abating. If worries over rising Pension fund raises fears at WH Smith
interest rates and supposedly ballooning consumer by: John Marshall
borrowings are cause for concern for car sales, there has When Permira indicated that it might bid for WH Smith (SMWH) at
been precious little evidence so far. 375p, few would have given decent odds on the bookseller-cum-
In the past week two UK-quoted dealers have told newspaper distributor surviving as an independent. However,
investors that business is going so well they will outperform investors may not have counted on the trustees of its underfunded
the expectations of the City. Firstly, European Motor pension fund, who may have unwittingly scuppered the takeover. The
Holdings (EMH) said trading in its first three months was fund has run at a deficit for over 20 years, but the trustees remain
significantly ahead of adamant that Permira, should its bid succeed, will have to act.
share price last year. Pendragon That the fund was underfunded was obviously no secret but
320 (PDG), one of Permira appears to have been surprised by the reaction of the
HIGH 335.00 14/6/04
LOW 158.20 24/6/03 Britains biggest car trustees, and it looks like the venture capital firm will slash the value of
LAST 328.75 dealers, followed up its bid by between 90 million 115 million, to around 340p a share.
240 by promising to beat How would the trustees react if the current management sold its
200 forecasts for 2004. publishing arm? Would the proceeds be returned to shareholders or
180 The dealers point would the company be forced to top up the pension fund? The latter
to the host of new would not appeal to investors. Nick Bubb, retail analyst at Evolution
Source: Thomson Financial/Datastream models due to hit Beeson Gregory, has placed a 300p price target on the shares,
forecourts this year as implying 7% downside from current levels and a 2004/05 PE of 15.5,
a sales stimulator. However, sector consolidation has falling to 13.9 the following year. Given the companys troubled trading,
whetted the appetite of investors for motor dealer shares that still seems high and rumours that rival venture capital group
recently, and this appears to be an ongoing fashion. Cinven might join the bidding battle may prove unfounded. It would
The sector has already seen plenty of buyout action, with appear that the risk/reward ratio is skewing towards risk.
four dealers leaving the stock market over the past three Shares says: Cash in while you can.
years. Dixon Motors fell to a bid from Royal Bank of THE WRITER HOLDS SHARES IN WH SMITH
Scotland; Ryland was given the green light to be taken
private by the founding family, Quicks was snapped up by
CD Bramall, while Sytner became the vehicle allowing US WS Atkins builds success on success
giant United Auto Group to enter the UK market. by: Polly Fergusson
In the meantime, vehicle minnows Alexanders and the WS Atkins (ATK), the engineering consultant and support services
Perry Group have also exited the business. Alexanders company, this week reported yet another set of stonking results,
eventually turned itself into a cash shell, while Perry flogged providing yet more fuel for the already impressive rise in share prices,
its retail business to concentrate on crash repairs, renaming but can it keep up the good work?
itself Nationwide Accident Repair Services. While attention is focused on its tubelines work, which contributed
Pendragons swoop for rival CD Bramall, in a 230 12 million for its first year, there is plenty more room for growth. Atkins
million deal at the beginning of the year, rekindled the has moved into the black and has tripled its full-year dividend to 9p.
interest, creating one of Britains biggest dealer groups. It Margins have doubled from 2.4% to 4.9%, and are widely reported to
now owns 250 car and truck franchises selling the likes of have an internal target of 6%.
Aston Martins and BMWs through to Fords, Rovers and It is not just a Metronet story, chief executive Keith Clarke told
Vauxhalls across the UK. Shares. We are looking at growth across the aint seen
The question is, how much longer can this go on? nothing yet!
The answer is open to debate, although it seems The shares have recovered to around 575p and are trading at a PE
reasonable to suspect more sector takeovers while sales of 46. New finance director Robert MacLeod expects to increase
are so strong and share prices relatively low. Some margins by more selective bids, winning more complex bids, more
dealers remain on single-digit PE multiples while few trade networking of teams throughout the country and more communication
above low double digits. Factor in well-covered and between management.
growing dividends sporting decent yields, and the sector New directions include more work in the public sector in schools
remains an attractive area of the current side-ways and regeneration schemes. Around 60% of the order book for 2005 is
trending stock market. secured already, which is an improvement on this time last year.
Shares says: positive newsflow and Shares says: Better quality contracts should lead to
consolidation hopes should keep sector share strong growth outside the underground work.
prices motoring.

240604 p14-15 news focus 6/22/04 5:03 PM Page 15


Slim silver lining for Royal & SunAlliance Regus recovers to target US rival
by: Jonas Crosland by: Chris Bourke
The latest attempt by Royal & Sun Alliance (RSA) to flog its closed UK If at first you dont succeed, try again. And then try again. It could well
life insurance operations marks a further attempt to get the company be third time lucky for Mark Dixon, chief executive of Regus (RGU),
back on an even keel. The name in the frame is Resolution Life Group, as he once more attempts to snap up US rival HQ Global.
set up by Clive Cowdery, former chief executive of GE Insurance It could also be third time lucky for shareholders, who dont seem
Holdings Europe, and the deal may be worth up to 900 million. RSA is too phased by the possibility of a rights issue supporting HQs 190
saddled with 550,000 closed with profits policies which have been million price tag. So they shouldnt be. Regus has made a steady
treated savagely as the projected return on equities over the past four recovery since hitting rock bottom in 2002 and suffering the
years failed to materialise. With asbestos liability in the US the casual humiliation of Chapter 11 protection from creditors. Dixon isnt about
observer might think RSA was about to be a has been. to make any reckless moves.
But for shareholders who have hung on through thick and thin and Indeed, the possible takeover comes as little surprise after the
a fall in the share price of 82% over the past three-and-a-half years success of Novembers re-financing and the continuing recovery in
there may be a ray of hope. Nearly 1 billion was raised last September the serviced office marketplace. Regus recently reported that trading
to shore up the balance sheet while operating profits have improved was slightly ahead of expectations. While HQ numbers are not
this year. Optimism is based on the groups ability to generate cash available, Regus will only complete this transaction if it adds value.
without selling off further parts of the business. The fact that it is now The US market may have proved Regus undoing in the past, but
achieving this may mark a turning point. It also implies that RSA will that was in Silicon Valley after the tech crash, where HQ has light
have enough capital to underwrite a future expansion in business. exposure. This acquisition would strengthen the groups US presence
However, it may be wise not to get too excited. The group may be significantly, taking it from 90 offices to close on 300. Crucially, it
able to throw the odd dividend olive to its shareholders and convince would provide Regus with access to the lucrative New York market,
analysts that the rot has stopped. As to whether this turns the company where the economy is growing at its fastest rate in four years.
into a growth play in an already vicious sector is more open to question. Shares says: Hold out for figures as Reguss
Shares says: The shares are cheap enough now to recovery continues.
tempt those who fancy a flutter.

Stocks low at store operator Beattie

by: John Marshall
A yield of 9.4% might imply an immediate cut to what looks like an
unsustainable dividend. Shareholders in department store operator
James Beattie (BTT) may avoid such a disaster. Chairman Chris Jones
told Shares that the company regards the dividend as sacrosanct,
perhaps his way of saying the payout will be cut over his dead body.
The question is, however, whether the company can afford to maintain
it. Uncovered by earnings for the foreseeable future, the company
points out that it has cash in the bank with which to support the payout.
Beattie also generates cash. But the decision might not prove to be his.
Korn Ferry, the recruitment consultancy, is leading the hunt for Beatties
new managing director but investors cannot expect a recovery anytime
soon, whoever the new boss turns out to be.
Beattie has been badly hit by increased competition in its West
Midlands heartland where the Bullring development has hurt sales.
There has been speculation recently that the group might be a
candidate for takeover, with privately-owned Fenwicks, which previously
bought Bentalls, seen as a possible bidder. However, such speculation
looks rather hollow. It has been robustly denied by the company. For
investors to bank on a takeover to rescue the beleaguered share price
appears unwise. More likely, the company will have to dig itself out of its
current mess.
Shares says: High yields imply high risk.

24 June 2004 15
240604 p16-17 Analysis h2h 6/22/04 4:26 PM Page 16


Battling it out to be the best buy in t Market giants will always prove popular with
GlaxoSmithKline Vs AstraZeneca investors. But as Steven Frazer finds out, bigger
(GSK) (AZN) isnt always better as he takes a look at 10 UK
67,745 WEIGHT (Market cap m) 42,825 heavyweights fighting for supremacy in their
21,441 REACH (Sales m) 10,561 specialist fields
3.7 POWER (Div yield %) 2.1

1 AMBITION (EPS growth %) 16 oes size matter when it comes to picking one FTSE 100 firm over its
16.9 RECORD (1yr relative strength %) -12.4 closest British rival? Does having a weightier market cap make a
Shares verdict: Lower rating and better difference? If so, then investors should probably go with Glaxo and
yield gives Glaxo a knock-out victory. avoid AstraZeneca, buy BP and sell Shell. However, in share price
performance terms, bigger doesnt necessarily equal better.
World's top 5 contenders Take British drugs giants GlaxoSmithKline and AstraZeneca, for example.
(market value bn)
Shares in both companies have enjoyed a strong recovery since
Pfizer (NYSE:PFE) US (156) plumbing the depths of the markets bear plunge in March 2003, yet over
Johnson & Johnson (NYSE:JNJ) US (88) one and three-year time frames, the results are significantly different.
GSK (GSK) UK (68)
GlaxoSmithKline truly is a global big-hitter, ranked number three in the
Novartis (Virt-X:NOVN.VX) Switzerland (63)
Merck (NYSE:MRK) US (60) world in market value terms, yet its share price performance has been far
from world-class of late. The stock has fallen 8% over the past 12 months,
but has dragged itself off the canvas by registering a decent 15% rise since
OIL March 2003 lows. However, over the past three years the stock has taken
BP Vs Shell a battering, falling a painful 43%.
Compare that record with AstraZenecas. Despite being just two-
107,094 WEIGHT (Market cap m) 39,598 thirds the size of its UK rival, its shares have bobbed and weaved to
130,314 REACH (Sales m) 45,213 far greater advantage for investors. Its shares have also eased off
3.2 POWER (Div yield %) 4 over the past year, but by a more modest 5%. However, the stock
5 AMBITION (EPS growth %) 40 has bounced-back impressively since March 2003, hammering
home a thumping 40% increase. Like its rival, AstraZenecas
3.7 RECORD (I yr relative strength %) -10.2
Shares verdict: Shell wins on a narrow shares are also down since late 2000, but its 29% slump has been
points decision for its recovery potential. significantly less bruising for investors than the pounding
taken by Glaxo shareholders.
World's top 5 contenders There are many FTSE 100 heavyweights matching-up with
(market value bn)
equally able sparring partners. So weve paired up 10 Footsie
ExxonMobil (NYSE:XON) US (151) companies with their closest UK rivals starting with Glaxo and
BP (BP.) UK (107) AstraZeneca and looked at a few of the most basic investment
Total (Euronext Paris:FP) France (64) fundamentals in a bid to see who is the British champion in
ChevronTexaco (NYSE:CVX) US (50) each sector.
Shell (SHEL) UK (40)

BOC Vs ICI Reed Pearson
4,523 WEIGHT (Market cap m) 2,653 6,735 WEIGHT (Market cap m) 5,280
3,718 REACH (Sales m) 5,849 2,605 REACH (Sales m) 4,048
4.5 POWER (Div yield %) 3.1 2.3 POWER (Div yield %) 3.9
11 AMBITION (EPS growth %) 7 22 AMBITION (EPS growth %) na
4.8 RECORD (I yr relative strength %) 47.8 -10.1 RECORD (I yr relative strength %) -0.6
Shares verdict: A tight fight, but ICI's Shares verdict: Reed wins a points decision
massive debts hand BOC victory. with a better track record and prospects.
World's top 5 contenders World's top 5 contenders
(market value bn) (market value bn)
El du Pont de Nemours (NYSE:DD) US (24) Time Warner (NYSE:TWX) US (78)
Dow Chemicals (NYSE:DOW) US (22) Viacom (NYSE:VIA.B) US (38)
BASF (Germany:BAS) Germany (16) Comcast (NYSE:CMCSA) US (37)
Bayer (Germany:BAY) Germany (12) News Corp (Australia:NCP) Australia (30)
L'Air Liquide (Euronext Paris:AI) France (10) Walt Disney (NYSE:DIS) US (30)

240604 p16-17 Analysis h2h 6/22/04 4:26 PM Page 17


WEIGHT (Market cap m)
WEIGHT (Market cap m)
30,814 REACH (Sales m) 17,141 na REACH (Sales m) na
3 POWER (Div yield %) 5.5 4.6 POWER (Div yield %) 3.6
10 AMBITION (EPS growth %) na 8 AMBITION (EPS growth %) 52
11 RECORD (I yr relative strength %) -2.7 8.6 RECORD (I yr relative strength %) -9.6
Shares verdict: Flat sales for four years Shares verdict: The Pru takes a points
leave Sainsbury looking punch-drunk. Tesco a decision on its Far East growth prospects.
clear winner by early knock-out.
World's top 5 contenders World's top 5 contenders
(market value bn) (market value bn)
Wal-Mart (NYSE:WMT) US (133) Berkshire Hathaway (NYSE:BRK.A) US (77)
Carrefour (Euronext Paris:CA) France (20) ING (Euronext Amsterdam:ING) Holland (30)
Tesco (TSCO) UK (20) Allianz (Germany:ALV) Germany (26)
Sysco (NYSE:SYY) US (13) AXA (Euronext Paris:CS) France (22)
Ito-Yokado (JAPAN) Japan (8) Generali (Italy:G) Italy (19)


HSBC Royal Bank of Scotland Vodafone mm02
(HSBA) Vs (RBS) (VOD) Vs (OOM)
89,247 WEIGHT (Market cap m) 52,240 86,005 WEIGHT (Market cap m) 8,263
na REACH (Sales m) na 33,559 REACH (Sales m) 5,694
4.8 POWER (Div yield %) 3.7 2 POWER (Div yield %) 1.3
13 AMBITION (EPS growth %) 28 7 AMBITION (EPS growth %) 9
-0.1 RECORD (I yr relative strength %) -13.3 -4.7 RECORD (I yr relative strength %) 50.4
Shares verdict: A close match-up pound- Shares verdict: Points win for the mighty
for-pound, but RBoS shades it with better Vod, on its consistent growth record.
growth prospects.
World's top 5 contenders World's top 5 contenders
(market value bn) (market value bn)
Citigroup (NYSE:C) US (139) Vodafone (VOD) UK (87)
HSBC (HSBA) UK (90) Verizon (NYSE:VZ) US (57)
Bank of America (NYSE:BAC) US (64) Telefonica (Spain:TEF) Spain (47)
Wells Fargo (NYSE:WFC) US (54) Deutsche Telekom (Germany:DTE) Germany (46)
Royal Bank of Scotland (RBS) UK (52) SBC Communications (NYSE:SBC) US (45)


BAT Imperial Tobacco Unilever Vs Reckitt Benckiser
(BATS) Vs (IMT) (ULVR) (RB.)
16,543 WEIGHT (Market cap m) 8,823 15,474 WEIGHT (Market cap m) 10,805
10,570 REACH (Sales m) 3,200 30,150 REACH (Sales m) 3,713
5.5 POWER (Div yield %) 4.35 3.7 POWER (Div yield %) 2.1
7 AMBITION (EPS growth %) 11 6 AMBITION (EPS growth %) 12
15.1 RECORD (I yr relative strength %) 6.5 -10.4 RECORD (1 yr relative strength %) 24.6
Shares verdict: A draw as Imperial's better Shares verdict: Reckitt floors Unilever at the
growth prospects are evenly matched against death with its consistent track record.
BAT's fatter yield.
World's top 5 contenders World's top 5 contenders
(market value bn) (market value bn)
Altria (NYSE:MO) US (61) Proctor & Gamble (NYSE:PG) US (72)
BAT (BATS) UK (16) Nestle (Swiss:NESN) Switzerland (58)
Imperial Tobacco (IMT) UK (9) L'Oreal (Euronext Paris:OR) France (31)
Japan Tobacco (Japan) Japan (8) Gillette (NYSE:G) US (20)
Altadis (Spain:ALT) Spain (5) Unilever(ULVR) UK (15)

24 June 2004 17
240604 p18-22 cover story 6/22/04 12:54 PM Page 18


Companies % rise in Average cost % share
from FTSE 100 average pay per employee price gain
over ten years (000) over ten years
SCHRODERS 37 104 52
REUTERS 33 68 -18
AMVESCAP 20 65 154
BARCLAYS 107 58 248
BP 82 51 140
BAE SYSTEMS 79 43 78
WPP GROUP 26 43 389
BG GROUP 62 42 185
BT GROUP 58 41 -25
SMITH & NEPHEW 116 41 273
EMAP 117 39 97
PEARSON 73 38 17
BAA 36 38 18
SAGE GROUP 73 38 1523
CABLE & WIRELESS 116 37 -70
ICI 37 37 -66
RBS 61 37 325

LIBERTY INTL. 118 37 97 ere is a puzzle: 1) Most companies biggest cost is their
SCOTTISH POWER 106 37 14 employees. 2) Companies with the fastest-rising average
ALLIED DOMECQ 208 37 46 pay are also in the profits fast lane. How can both these
ABBEY NATIONAL 112 36 15 statements be true? The answer is because an increase in
HSBC 32 33 243 average pay does not automatically trigger an increase in
JOHNSON MATTHEY 28 32 67 total pay.
GKN 35 31 93
Successful companies work smarter. They concentrate on what they
DAILY MAIL 24 31 151
are good at and farm out other work to specialists. They automate dull
SEVERN TRENT 67 30 56 tasks so their people can use their brains on more challenging work.
SMITHS GROUP 36 30 57 It is always possible to fiddle statistics, but to prove the case we
REXAM 38 29 10 compared the share price performance of companies in the FTSE 100
WOLSELEY 33 28 125 with the increase in their average employee costs. Getting consistent
RIO TINTO 211 28 48 data over that period is a headache but using Datastream we have the
HANSON 42 27 -14 numbers for 64 companies in the Top 100. And it does seem to show a
STD.CHARTERED 35 27 224 genuine relationship!
BUNZL 23 27 183 Splitting the 64 into the good payers and bad payers, we get the
DIAGEO 0 24 57 following results:
RECKITT BENCKISER 50 24 158 The difference in average pay rises is striking. Examples of more
BOC GROUP 5 23 23 generous payers which have prospered are Sage (SGE), Smith &
TOMKINS 22 22 13 Nephew (SN.) and Barclays (BARC). At the miserly end of the scale are
EXEL 22 22 179 underperformers such as Rentokil Initial (RTO), BOC Group (BOC) and
UNITED UTILITIES -13 21 34 Diageo (DGE).
Companies that compete with Far Eastern rivals have suffered
HAYS 5 21 79
squeezed profits and also been forced to move operations to lower
ALLIANCE UNICHEM 111 19 142 wage countries. In terms of sales per head their efficiency may be very
ASSD.BRIT.FOODS 38 18 142 respectable, but they are riding deflations downward escalator. On the
UNILEVER (UK) 13 18 111 other hand, Rentokil just looks like a low added value company which
SCOT. & NEWCASTLE 89 17 -14 has given low returns to investors.
GUS 42 17 47 There will always be many exceptions because few businesses are
MARKS & SPENCER 42 17 -12 alike. But there is also a general connection between low average pay
HILTON GROUP 36 15 63 and lower share price performance.
NEXT 60 16 468 The 32 better payers on average rose 153% over the last 10 years. The
KINGFISHER 88 15 54 32 less generous payers rose by 103%. High pay and high share prices
BOOTS GROUP 40 14 26 seem to go together. Untangling all the causes and effects is a matter
TESCO 0 14 249 for academics. But the lesson for investors is not to believe that cost-
ANTOFAGASTA 75 14 148 cutting is a sure recipe for capital gains.
MORRISON (WM) 30 13 276 In future, shareholders will need to grill directors when average pay
falls behind the level in rival companies. We may not want fat cats in
SAINSBURY (J) 10 11 -31
the boardroom but we should look for plump pay packets lower down
WHITBREAD 25 11 51
Average 53.8 31.5 127.9
the corporate ladder.
Average of top 32 payers 43.1 153.5 If you find these ideas hard to swallow, take a look at a sector where
Average of bottom 32 payers 19.9 102.5 cross-company comparisons are fairly easy to make.

240604 p18-22 cover story 6/22/04 12:54 PM Page 19


How can some companies that fork out huge sums of money
on employees still enjoy the best returns? Tim Freeborn
discovers that cost-cutting isnt always the right road to profit
and investigates just what the smart companies are doing

Perceptions in retailing may lag some way behind the underlying
realities. The front of store can look fine while the back-of-store FTSE 100 companies: last 10 years
logistics and warehousing are in chaos. Or vice versa. Average rise in Average share
Our analysis turns some of the conventional rankings on their heads. employment costs % price rise %
The Big Food Group (BFP) numbers are higher because of its cash and Faster pay rises 0.84 1.38
carry wholesale business. The trend is not encouraging, though, as its Slower pay rises 0.22 1.18
smaller retail customers continue to lose ground.
Tesco (TSCO) is still far ahead of its supermarket rivals in sales per
employee. But notice that its lead is starting to close. Is this the first Average employment costs (000)
sign of the law of diminishing returns? The best supermarket sites may Name 2001 2002 2003 2004 36 month
already have been exploited. Newer ones and there are few enough of % change
them may be less promising. Investors have to ask if it is smarter to BIG FOOD GROUP 17 15 16 -5.9
buy the champion which is already miles in front or the backmarkers TESCO 13 14 14 14 0
who show signs of catching up. GREGGS 10 10 10 0
MORRISON (WM) 10 12 13 13 8.3
On this comparison Sainsbury (SBRY) comes off badly and Tesco is SOMERFIELD 8 8 9 12.5
again at a standstill. Its move into lower-wage countries will affect the
averages. But it is still ahead of Sainsbury and Morrisons (MRW), so
again they have scope to catch up. The absolute numbers may be
Sales per employee (000)
distorted by the use of part timers so it seems more useful to Name 2001 2002 2003 2004 36 month
% change
concentrate on the trend.
Investors might want to focus on the profit generated, but a broader MORRISON (WM) 15 18 19 21 16.7
measure of a businesss health is its value added. This adds back SAINSBURY (J) 13 15 15 15.4
employment costs to operating profits to measure the gross wealth SOMERFIELD 8 8 9 12.5
created. TESCO 21 21 22 22 4.8
GREGGS 12 12 12 0
Morrisons is again the standout performer in terms of growth. It has
BIG FOOD GROUP 20 18 17 -15
also nearly closed the gap on Tesco, which has delivered a very
pedestrian performance. At least the sector leader is healthier than Big
Food Group, which wears many badges of long-term decline. March 2004 to 19p in 2005 and then recover to 21p and 23p in 2006 and
Take away the neon signs outside and many consumers would 2007. The PE rating of 12-13 for these years looks fair enough, but the
struggle to tell between a Morrisons, Sainsbury or Tesco. The colour surprises will probably be on the upside because it seems Sainsbury is
schemes may differ but the general experience is much the same. gradually clawing back lost ground.
However, behind the scenes the differences are greater. Morrisons remains a star by comparison. EPS is forecast to grow from
Tesco built a huge lead in logistics and warehousing. Sainsbury has 12.4p in January 2004 to 19p in 2007. The Safeway takeover promises big
spent recent years trying trying to catch up and its sales suffered while savings back-of-shop as systems are integrated. Value added per
its main efforts went into modernising back-of-shop. employee will be diluted by the deal, but this in turn means there is
Admittedly this remains work in progress. Forecasts for the next few scope to improve.
years make distinctly dull reading. EPS is expected to fall from 23p in Often it makes sense to buy the chump of the sector rather than the

24 June 2004 19
240604 p18-22 cover story 6/22/04 12:54 PM Page 20

Automation: The suppliers
Just hiring more skilled people is only part of
the story. They need to be set to work with
clever cost-saving tools. For investors the
difficulty here is that capital equipment, which
includes software, is a feast-or-famine
business. Companies typically let rip with their
investment budgets fairly late in the business
champ provided the management show they know how to remedy cycle. Life has been miserable since 2000 but
the situation. Somerfield (SOF) is perhaps the most attractive of the there are good prospects of recovery at last.
supermarket chains. It is the furthest behind in terms of sales per We are not generally talking about armies
employee and its profits are still meagre at well under 1% of sales. of robots replacing human labour. Instead the
Brokers forecast EPS of 8.6p for this April, process is typically the less glamourous
rising to 11.2p in 05 and 12.5p in 06. That
suggests the PE will fall from 17 to below 11.
For years considered a hopeless case,
Marks & sounding straight-through processing.
With STP a piece of information is
entered only once rather than in a whole
Somerfield has already staged a remarkable
comeback in both profit and share terms.
The price has already more than trebled
Spencer saw a sequence. The single entry reduces error but
it also saves hugely on clerical labour. STP is
central to the moves to save money in the
from its 44p low in late 2002. Even so, the
valuation looks modest compared to the
benefits from raising the companys value-
21% rise in insurance industry. Companies such as
Innovation Group (TIG) and Marlborough
Stirling (MAS) serve the insurance industry.
added benchmarks even to Sainsburys
level. employment They apply the principles of straight-through
Marlborough is promoting a system that

Looking at other retailers, we can try to
costs but profits integrates insurers with intermediaries. For
instance, a customer could apply for cover
online and have the transaction handled
spot which ones are grinding out efficiency
gains and still have plenty of scope.
This section compares the growth in
per employee directly by the underwriting software. No
human is involved at any stage of the
process. Of course the system is only as
value added per employee with the growth
in sales per employee. The absolute
numbers are distorted by the use of part-
grew 63%, good as the criteria set by the underwriter, but
that is always the case.
Brokers forecast Marlborough will make
timers. It is better to focus on the
percentage change over the three years. As
you would expect, there is a good
showing that 10.6 million pre-tax this year, worth 3.6p, and
13 million in 2005, worth 4.2p. At 57.5p the
forward rating is a miserly 14 times. This
correlation between growth in value added
and sales. Kingfisher is an exception as its
value added benefited from demerging
profits and pay reflects the companys reliance last year on
outsourcing work for most of its profits. The
rating will change when software licences are
Kesa, the electrical retailer.
Marks & Spencer (MKS) comes high up
the rankings. It saw the highest rise in
go hand in hand announced.
Innovation Group still labours under even
heavier issues of credibility. In March it
employment costs in the sector, up 21% to 17,000. But profits per announced a 3 million contract with RAC
employee grew 63% to 13,000, underlining the point that
profits and pay go hand in hand. City analysts have Value added per employee (000)
favoured Next and forecast it will grow earnings much Name 2001 2002 2003 2004 % Growth Sales growth
faster than M&S. Yet it is M&S whose shares have last 3 yrs per employee
rocketed courtesy of Philip Green. Has he spotted the BURBERRY GROUP 42 54 56 33.3 9
changes already under way beneath the surface at M&S? MARKS & SPENCER GROUP 22 26 29 31.8 13
Topps Tiles (TPT) shows the most consistent record of KINGFISHER 17 18 21 23 27.8 6
improvement for both value added and sales. It also MFI FURNITURE 29 34 37 27.6 13
raised total sales by an impressive 54% thanks to new TOPPS TILES 27 31 34 25.9 23
store openings. The burden of the chains head office HMV GROUP 20 23 25 25 11
costs become proportionately smaller as more stores are WOOLWORTHS GROUP 11 10 11 12 20 16
added, again helping the statistics per employee. It is SMITH (WH) 21 27 24 14.3 17
harder to recommend the shares strongly now that FINDEL 28 26 32 14.3 13
interest rates are rising each month. The trend towards FRENCH CONNECTN. 30 28 31 31 10.7 1
second and third bathrooms looks here to stay. But the BOOTS GROUP 19 21 21 10.5 15
level of interest rates and the health of the housing GUS 22 23 24 9.1 10
market are bound to have an influence. CARPETRIGHT 33 34 35 6.1 3
Woolworths(WLW) looks an interesting defensive DIXONS GP. 25 24 26 4 9
JJB SPORTS 19 23 19 0 13
opportunity. Again the use of part-timers affects the
DFS FURNITURE CO. 49 48 49 0 -1
absolute numbers, but the trends are attractive. Brokers SIGNET GROUP 36 37 37 36 -2.7 -4
forecast 3.8p EPS in the year to 2 February 2005, with 4.3p BROWN (N) GROUP 34 36 33 -2.9 0
and 4.6p in 2006 and 2007. That takes the PE from 12 to NEXT 16 33 28 30 -9.1 -13
below 10. Perhaps not as dull as it looks. MATALAN 18 18 16 -11.1 -11
CARPHONE WHSE.GP. 29 24 25 -13.8 11

SHARES04.06.04 28/5/2004 2:19 PM Page 1

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240604 p18-22 cover story 6/22/04 12:54 PM Page 22

for its claims management system. In May
the interim statement reported cautious
optimism thanks to a strengthening pipeline.
Incidentally, RAC (RAC) looks one of the
stars of the support services sector. In the last
three years it has raised its profit per
employee by 50% to 6,000 and average
employment costs have risen 8% to 27,000.
Heavy use of new software should help boost
these numbers nicely, though brokers
forecasts see EPS advancing only 3% this
BANKS year and 6% in 2005.
Banks have been big Moving away from the financial sector,
purchasers of software for
Banks average cost per employee logistics management is well suited to straight-
automation. Some have also through processing. Kewill Systems (KWS)
led the way in outsourcing Name 2001 2002 2003 3-yr % has had a torrid time supplying logistics to
huge chunks of their IT costs. retailers and shipping firms. It cites investment
Different strategies have seen a ABBEY NATIONAL 27 29 36 33.3 paybacks of 12 to 18 months but has been
big difference in cost increases. LLOYDS TSB 22 28 29 31.8 faced with extreme caution, especially in the
The table shows a confusing BARCLAYS 48 49 58 20.8 hard-pressed European market.
divergence and again a counter- ALLIANCE & LEICESTER 25 27 28 12 Kewill has assembled a portfolio of
intuitive message. If the BRADFORD & BINGLEY 25 26 27 8
services. These include shipping
NORTHERN ROCK 22 22 23 4.5
companies spending the most EGG 36 34
management, mainly in the US, and online
on their staff are the ones to HBOS 26 24 26 0 ordering hubs, mainly in Europe. Next year
buy, then much-troubled RBS 38 40 37 -2.6 the company will integrate the two. This
Abbey National (ANL) looks HSBC 35 31 33 -5.7 means a retailers order hub will generate and
interesting. Brokers forecast 30p STD.CHARTERED 30 29 27 -10 manage the product shipping bar-code
EPS this year and 38p in 2005. identifications without further human
Rumours of corporate action have helped the share price as Abbey gets involvement. There is currently little on the
clear of its wholesale banking nightmare. market along these lines. The nearest
Rising interest rates and narrowing yield curves are not great for competitor is Nasdaq-listed company
bank shares. In this context Abbey may be the best of a bad lot. It will Manhattan Associates (NAS:MANH), which
certainly no longer be distracted by ideas of empire building. at $30 trades on a typically generous multiple
of 31 for this year and 27 for 2005.
House broker Arbuthnot sees Kewill making
TELECOMS 3.8p in March 2005 and 4.4p in 2006. As net
The telecoms sector is the cash is still worth 24p per share the underlying
epitome of job substitution by Telecoms average cost per employee multiple at 66p is around 14, falling to 11.4 in
machine. Unfortunately for (000) March 2006. If successful with STP, it is hard to
investors it has also seen the Name 2001 2002 2003 3yr % believe the firm will stay independent for long.
fastest loss of pricing power as change
all that clever equipment CABLE & WIRELESS 22 26 37 68.2 On the horizon: RFID tags
boosted capacity through the COLT TELECOM 36 41 52 44.4
roof. The company which FIBERNET GROUP 42 49 59 40.5 Radio frequency identity tags (RFID) are
manages to go upmarket fastest THUS GROUP 26 31 34 30.8 making a big buzz in the US. People worry
is likely to see the best returns. KINGSTON COMMUNICATIONS 31 37 38 22.6 that even their underwear will start
Notice that all the companies VODAFONE GROUP 28 30 34 21.4 broadcasting personal details to hidden
are drastically raising their pay BT GROUP 34 40 41 20.6
receivers in stores. It is all a little far-fetched.
levels. Like the banks, it has been the sector laughing stock which tops Much more relevant will be the impact of tags
the tables. Cable & Wireless (CW.) has certainly been re-rated since the in logistics. Each box or pallet may soon have
arrival of chairman Richard Lapthorne. But our table suggests it remains its own radio identifier. Bar-codes already give
a good stock to watch. It looks better to focus on the rate of increase. a unique identity to each package, but tags
Vodafones (VOD) pay rates will also look lower because the great take this further by automatically telling the
bulk of its staff work outside the UK. But BT is worth a thought. Notice warehouse and delivery system where it is.
that its average pay is only exceeded by Colt (COLT) and Fibernet (FIB). People wielding bar-code readers will fade into
BT has been no slouch in moving its services upmarket. history and the cost savings will be enormous.
After several terrible years, the whole telecoms sector looks well The tagging hardware market needs to
placed to benefit from its smarter employees. Those relatively highly become a cut-throat commodity operation.
paid staffers are working on converting the networks to full internet Software to run the systems should be a
protocol systems, bringing massive savings in capacity plus the much more lucrative place to be and as such
possibility of many new services. Broker ING sees EPS at C&W of 9.5p in Kewill looks extremely well placed. The only
March 2005 and 10.9p in 2006. pure play is Innovision Research &
Technology (INN), which designs chips for
RFID. It is still early days but house broker
CONCLUSION KBC Peel Hunt forecasts 1.1m pre-tax in
If higher pay is a badge of business success, it might seem tempting 2005, rising to 3.7 million in 2006. That gives
to start demanding a pay rise. But the higher pay has to be funded by EPS of 2.9p and 9p. The shares are likely to
higher productivity, which means producing the same or more enjoy scarcity value as investors become
output with fewer people. Put that way, it becomes more more excited about RFID in the coming
challenging but at the very essence of a successful business. months.

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240604 p24 LTI 6/21/04 6:07 PM Page 20


Pick up on financial fitness with PE Peter Webb

In the second of his two-part strategy focus on how you can spot undervalued
companies Peter Webb turns to earnings bought cheap using price to earnings

sing earnings figures depends on
your belief in the figures produced EXAMPLE COMPANY PLC
by the profit-and-loss statement How much did the company earn last year in profits?
issued by the company. But Earnings 1,000
Shares in issue 10000 How many shares are in issue
excluding the complexity of this for the (How many shares will this profit be divided into)
Earnings per share 0.10
moment, we shall assume a general integrity of
this accounting statement. Current market price of the share
Current share price 2.00
Most financial websites will list a companys PE ratio 20.00 Current share price divided by earnings per share
PE (price/earnings) ratio for you, but in any case Earnings yeild 5.00%
Earnings per share divided by current share price
it is easy to calculate.
If a company earns that is has a net income
Investment Performance of Common Stocks
of 1000 and has 10,000 shares in issue, one
in Relation to Their Price/Earnings Ratios:
share is worth 10p in earnings (1000/10,000). If
A Test of the Efficient Market Hypothesis
the market price of its stock is trading at 200p, it - Sanjoy Basu, Professorof Finance
will have a PE of 20 (200p/10p). McMaster University
The best way to look at a PE ratio is to invert
it. This will give you the earnings yield. If you Highest PE ratios
Highest (Without loss companies)
have a PE, of 20 then you are effectively saying PE ratios Highest 20% Lowest 20%
that for every 1000 you invest the company is Lowest
Portfolio A 1 2 3 4 5 PE ratios
earning 5% on your investment (1 divided by 20). Median price / earnings ratio 35.80 30.50 19.10 15.00 12.80 9.80
If you were to invest 1000 with a bank or Average annual return 9.30% 9.50% 9.30% 11.70% 13.60% 16.30%
building society would you be happy with 5%?
Your judgement on whether to invest in a and investment results in a paper called perform better than somebody who put their
company or not is no different from that of Investment performance of common stocks in relation money in the highest interest account.
choosing a deposit account. to their price/earnings ratios: a test of the efficient In January 2000, just as the FTSE-100 index
Unfortunately, unlike a building society it is market hypothesis. was hitting an all-time high and the
the management of the company that decides His study was conducted over 14 years of boom was in full effect, I had my value eyes
how to allocate and spend your capital, so you data. It assumed that equal investments were focused on Great Universal Stores (GUS). In
may not immediately get a return but you may made in each stock and that the stocks were May 1998 it had hit an all-time high of 918p and
receive a dividend. Also, the company may sold after one year. had a PE of over 23. By January 2000 it had
perform badly and be If you had invested plunged to an intra-month low of 331p and a PE
unable to earn a 5% earnings It has been shown in the lowest PE ratio of only 9.56, an earnings yield of 10.4%. The price
yield next year. group over the 14-year of the company had sunk by 64% but it still had
However, the company very often by period, your capital accounting earnings about the same as when it
potentially has some added would have grown to was trading at its all-time high. The dividend
value that a building society academics that PE 8.28 times your yield was good as well, standing at 5.9%.
does not. The earnings of a original investment, I figured any rebound in earnings was not in
good company tend to ratios are a good while the investment the price and if no rebound occurred the down-
expand over time, so that 5% in the highest PE side was limited. I started buying, achieving an
is likely to grow. A building proxy for the future group would have average price of around 350p.
society has no obligation to grown by only 3.47 Four years on and the price has gone up by
offer you a better rate of general returns of a times. more than 2.6 times my original investment
interest year after year. There is a strong including dividends.
It has been shown very basket of investments correlation between Price-to-book value and price-to-earnings are
often by academics that PE what you pay for useful ratios to use to start spotting potentially
ratios are a good proxy for the future general earnings today and what the long-term return undervalued companies but they often dont
returns of a basket of investments. will be. Which is pretty obvious really! If you tell the whole story. Next week we will look at
The late Sanjoy Basu, Professor of Finance at went into a building society and asked for the how to use other ratios to identify potential
McMaster University in the US, examined PEs lowest possible rate, you would be unlikely to opportunities or problems with companies.


Best Online Broker 2003

(Joint winner)
240604 p26-27 hs bld 6/21/04 6:10 PM Page 2


Betting the house on it

Those prophesying a collapse in the share prices of
house builders once again need to do their homework in
subjects like supply and demand, says Jonas Crosland

nterest rates are up again and
Stephen Wicks
rumours of the death of the house
building sector have once again
been wheeled out. So it is time to
nail the lie about a supposedly teetering
housing sector. It is also time to take a look at
a company that is
probably one of the best Country & Metropolitan
placed to take advantage (m) 2004(e) 2005(e)
Pre-tax profit 11.1 12.9
of the current climate. affordable housing are seen by many builders
EPS 31.3p 36.4p
The first myth that DPS 4.5p 5.3p as uneconomic.
needs dispelling is the old PE 6 5.1 Small wonder that the builders are not
chestnut about potential Yield 2.4 2.8 climbing over each other to build even more
house buyers being houses, even though their record here is good.
caught out by a possible fall in house prices. It is also worth trying to consider exactly
What Bank of England governor Mervyn King what constitutes an affordable house. A
seems to have failed to grasp is that the vast COUNTRY & METROPOLITAN modest unit built in the south east of the UK
share price
majority of people buy a house because they 220 will be completely out of the financial reach of
want somewhere to live. After 25 years, the 200 most first-time buyers in the north. By the
house will be worth a lot more than the same token, the sale price of an affordable
purchase price and the mortgage will have house in the north can be less than the cost of
been paid off. 160 just a plot of land in the south east.
Unless the bank fails in its primary objective Still, the pent-up and ever-growing demand
we will never see interest rates at 15% again HIGH 218.50 26/3/04 for property on the first rung of the housing
accompanied by three million people 120 LOW 104.13 16/6/03 ladder, together with political pressure to
LAST 179.50
unemployed. That would kill the housing 100 tackle the problem means that once again
market. Meanwhile, putting a first-time Source: Thomson Financial/Datastream necessity becomes the mother of invention.
bought house up for sale and getting 10 Stephen Wicks, chief executive of house
inquiries in the first week is hardly likely to builder Country & Metropolitan (CRY), has
encourage a seller to drop the price. Unless the bank fails in been around long enough to remember what
Things have changed since the early 1990s, happened when builders were highly geared
when the last significant downturn in house its primary objective we and stuffed full of over-priced land just when
prices happened. Builders are now much better the bottom fell out of the housing market as
placed to weather a potential storm and there will never see interest interest rates doubled and stayed high.
are a few home truths that need pursuing. Until a few years ago his company was a
The major house builders never have and rates at 15% again house builder operating in the south east and
never will build enough houses to satisfy building expensive houses or luxury homes.
demand. The reason that the supply of accompanied by three Since then things have changed, and his long
housing is so poor is because local authorities experience and immaculate timing have been
have largely ducked out of building the sort of million unemployed. put to good use. The purchase two years ago of
homes that those on low incomes are NorthCountry Homes gave the group a better
desperately looking for. holding private sector builders to ransom by geographical spread and provided an exposure
While house building volumes are currently delaying or denying planning consent unless in a part of the country where prices were
at their lowest level since 1947, completions in each project contains an element of affordable clearly not overheating at that time.
the private sector are running 10% above the 30- housing. So more often than not, builders are Meanwhile, it was decided to reduce the
year average. It was fine to let everyone buy obliged to include an element of low-cost units companys exposure to the high end of the
their own council house on the cheap but not alongside the rest of the development. These market in the south east. Last week this
so clever electing not to replenish the are sold at a loss and run the risk of creating process reached fruition with the sale of the
affordable housing stock with new property. social friction between the occupiers of the two last plot in Gerrards Cross, Buckinghamshire,
In a half-hearted and tardy attempt to types of housing. And calls by some parties for for 830,000. The move to the north was
redress the balance, local authorities are new developments to include one-third of extremely well timed and many developments

240604 p26-27 hs bld 6/21/04 6:10 PM Page 3


have seen potential buyers many of these sites from the bigger house So what does all this lead the potential
camping out in queues. builders has been conspicuous by its absence: investor in the sector to believe? As Max King
Planning problems have as Wicks has said, the big boys would probably of the Eden Group points out, house-building
been reduced because a lot of not like to see their flags flying over some of share prices have fallen more than 10% from
the sites before redevelopment the sites where we build. their post-budget highs on concerns over
are unsightly or run down and While abandoning the luxury market, the rising interest rates. Trading on a PE between
local authorities are happy to company has not abandoned the south east. 5.3% and 7.6%, the shares look cheap. On an
see regeneration as soon as The microflat concept is off the drawing board asset-based valuation, they all trade at a
possible. Competition for and is being developed right now. The idea is premium but when throwing in the land
to provide housing in key areas for bank as a pipeline for future earnings the
key workers at a price they can premium suddenly becomes a significant
afford. These will be high density discount.
developments utilising space- It is also worth bearing in mind that the
saving technology. As they are relationship between shares in house builders
surrounded by good transport and stern warnings from the Bank of England
links, there will be no parking should not really be that strong.
facilities and further funds will be If the authorities want to see a fall in
saved on the marketing spend remortgaging and people using collateral in
because of the restricted list of their houses to spend on holidays and new
potential buyers and huge cars, then fine. But where does this fit in with
demand. Unless you are a nurse, someone scraping together a deposit to buy a
policeman or someone in a similar newly-built flat with a 95% mortgage? Not
trade you will not be able to exactly your profligate spender here.
purchase a micro flat and the leases It may take a while yet to convince investors
will stipulate you may sell only to that the house builders are significantly
other key workers. Two sites in removed from the previous boom/bust cycle.
London have already been acquired What is beyond argument, however, is the low
and the company is currently valuation, strong demand for houses and good
liaising with the relevant local cashflow enjoyed by most house builders. And
authorities. A mock-up is expected Country & Metropolitan, especially, has its
in a few months. finger on the pulse.

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Competition not open to

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The winner of the competition, if
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240604 p28 reality bytes 6/21/04 6:13 PM Page 22


A matter of record
An accidental video provides an entertaining comparison
between bygone predictions and the way things turned out

he other week my wife The Iraq conflict would be quickly
asked me to record some over, he said, and the price of oil would
tennis. The timer was set then tumble. The world would have
but when I checked the a tax cut in 2004 thanks to lower
recording all I found was several hours prices.
of CBNC, the stock market channel. It Mr Biggs is widely respected but it is
had been recorded, again by accident, in hard to see how he could have got this
early 2003. more wrong. But he did get the
Out of curiosity I watched a few prediction right on the market, so
minutes of this now-historical perhaps that is the key thing.
document. There was an interview with Whenever any outcome looks certain,
Barton Biggs, the Morgan Stanley it usually means we are missing a big
strategist. He was bullish about the chunk of information. Certainty is a
market but his reasons were strikingly matter of religion; the markets are
wayward. seldom so obliging.

Stilo International
Feel the Polar heat but keep an eye on the
If Polar has built its success on picking
changing seasons winners early, then Stilo International (STL)
might well come into its sights.
So much for the health warning, and now for more market predictions. There were This truly tiny software company (market
forecasts aplenty at Polar Capital Technology Trust (PCT), which unveiled full-year results value 3.5 million at 3.88p) is due to launch a
last week. Fund manager Brian Ashford-Russell has a great track record, only bested by new product this month: CF2 helps manage
Katie Potts at Herald Investment Trust (HRI). the updating of documents written using
He was fundamentally bullish on tech and brought two main points of evidence. XML, the modern mark-up code. It will sell for
Talking about the US, he pointed out that forecasts for earnings for the S&P for 2004 and 100,000 per time versus 30,000 for
2005 are being upgraded. Usually analysts start full of hope and steadily downgrade. This Omnimark, Stilos main earner.
time they are behind the curve, especially in tech. This is worthy enough but Stilo has
Ashford-Russells second point was the heavy short position in tech shares. This is something much more exciting up its sleeve
bullish because it means there are few people left to go short. By the same token, a heavy called SophX-Pack, which was developed for
bull position is bad news because it means everyone already believes the good news Airbus UK and cost over 1 million. It aims to
story. build a databank of engineering knowledge.
Unfortunately it is never quite this easy. Very few techs prosper decade after decade. Engineers would be able to ask why a door
They are bright fireflies which must die when winter comes. In the US, only IBM has clunks when it closes, and get an intelligible
managed to remain a leading player over the years. By grim contrast, Digital Equipment answer.
was sold to Compaq in 1998 for a third of its value in 1987. Stilo reckons the world market for SophX-
Technology gives a short lease, not a freehold. IBM was able to defy this rule because Pack is over 50 million per year. Tapping it
its hardware also had a long working life, generating lucrative parts and maintenance will be a very slow process but Airbus is
income all the while. Desktop computers are trashed (or should be) every few years. Only happy to be used as a marketing tool.
Microsoft has a long lease. In various capacities, Stilo is partnered
One area of tech where equipment does last longer is medical equipment. But the with giants such as SAP, IBM and
important point is to have a good revenue or maintenance stream as well. It seems to me Documentum. This is a huge endorsement of
that Gyrus (GYG) fits this model well. Brokers expect 11.4p EPS this year and 15.4p in 2005, its abilities. It lost 1.2 million pre-goodwill last
giving a PE of 17.6 and 13.3. These are attractive ratings in a sector which is seldom cheap. year on 2.3 million sales. At the end of April
Polar itself looks good value at an 18% discount to net assets. That discount reflects the it had 1.2 million cash after a 1 million
markets sensible nervousness about tech. But Polar points out its team has produced a placing. Supporters reckon this is enough to
21% compound return over the past 19 years. Tech can pay off handsomely, just never fall see it through to profitability. The risks are
in love with it. obviously high but so could be the rewards.

240604 p29 SS comment jj 6/22/04 12:28 PM Page 29

edited by: James Quinn

James Quinn

Down, down and away Researcher of the Year

hares never likes to see things go wrong at companies it has of its new booking system, and the development of revenue streams.
previously taken a keen interest in, and Cyberes is one of those But then, earlier this month, news came that Cant was leaving the
companies. board altogether, to be replaced by Ian White, the former boss of
For those not in the know, Cyberes (AIM:CYB) is a software company Corporate Travel.
that allows independent travel agents to automate their systems and And then came news of the suspension. But why? What had White
take advantage of more competitive offers to match the big-boys of the identified that had previously gone undetected? Or has the company
high street. merely run out of cash, and that was why Cant was replaced by White?
Cyberes shares were suspended on 22 June, however, pending A comment on the situation did not appear on house broker
clarification of the companys financial position, with no date given as Durlachers morning meeting note that morning, leaving investors
to how long this is likely to take. none the wiser.
The companys standing of late has, granted, not been as good as it But Shares understands that the problems relate to a hiccup with the
could have been, but could shareholders have known that the shares companys IATA bonding, although it is not clear whether this relates
were about to be suspended in this way? to a cash issue or a registration issue, and a call to the company had, at
One sign perhaps comes from the near-constant musical chairs at the the time of going to press, gone unreturned.
company in the last few months. In February, following the delayed The underlying travel business is thought to be performing well, and
acquisition of travel agents Corporate Travel Holdings, founding chief so it might be that some form of restructuring is in order to perhaps
executive Tariq Malik was moved aside to be replaced by finance hive off the technology part and to focus on the travel agency business.
director Mark Cant, who was to fulfil both roles until a suitable In the meantime, as long as the shares remain suspended,
numbers man could be located. shareholders can only sit and wait to find out exactly what has gone on
Malik was to remain on board, focusing his attention on the roll-out at Cyberes.

Bristol & London drives into trouble with firm and broker at loggerheads
All is not at well at upmarket car replacement firm Bristol & London resign its brokership, and more importantly its role as B&Ls
(AIM:BTL) less than a year after it floated on the Alternative nominated adviser, with effect from 30 September unless Abel and
Investment Market (AIM). co. meet its demands by 30 June.
A disagreement over strategy with its own stockbroker has The brokerages John Wakefield has been leading the charge
degenerated into a public row, with the broker, Rowan Dartington, against B&L, saying that his firm has lost confidence in the current
threatening to quit unless it gets its own way. executive management of the company, and due to the failure to
But that would involve removing the chief executive and 93.6% make any progress in informal discussions with the company it
shareholder Richard Abel as well as a root-and-branch review of the intends to resign as both broker and nominated adviser.
companys financials and strategies by external consultants not to The latter is far more serious to B&L than the former, as an AIM
mention a tender offer to buy the companys shares held in public company without a nominated adviser is immediately suspended
hands at the companys AIM admission price. until it finds one, and that could hurt the companys shares even
Perhaps not surprisingly, Abel has balked at Rowan Dartingtons harder than they already have been.
demands, and has released a statement to shareholders saying that Sources close to Abel suggest that he is four-fifths of the way
he is actively searching for a new adviser, which could prove to be towards appointing a new adviser, and that he is keen to put the
particularly interesting given the very public black marks made whole Rowan Dartington scenario behind him.
against his company by the Bristol-based broker. Thats all well and good, but shareholders are still aware that not
The only response to date from the board, other than to say it is only has the company had two profit warnings in the last five months,
looking for a new adviser, seems to have been disdain for the but that its own adviser felt so strongly that the company was heading
situation, with both finance director Andrew Daw and non-executive in the wrong direction that it went on the record to say as much.
director Christopher Rowlands quitting. B&Ls shares have fallen from 130p since listing last September to
Rowan Dartington is standing firm, however, and says it will 50p now, and they may have further to fall before things get better.

log on to for our daily news updates 24 June 2004 29

240604 p30 ss news 6/22/04 1:18 PM Page 30

edited by: James Quinn

Financing prepares
way for Kenmare

titanium mine he founder
by: Emily Parkinson and chief
executive of
After six years of intense betting exchange
lobbying, Irish-based mining technology provider
exploration firm Kenmare TradingSports
Resources (KMR) has finally Exchange Systems
signed off financing for its (AIM:TES) has
titanium mine in Mozam- stepped down just a
bique, believed to be one year after the
of the largest-ever financing company floated on
deals for a junior mining AIM.
company. The departure of Joe
The $269 million debt Tighe follows a period
package will be used to bring in which the
its Moma mineral sands companys share price
deposit in Northern collapsed from 115p
Mozambique into production on listing in May last
by 2006. year to 25.5p now.
Described by managing Tighe is to be
director Michael Carvill as replaced by former Scottish Premier League chief At the time, Tighe said the placing was necessary
the mother of all titanium executive Roger Mitchell who becomes interim chief due to the delay in implementation of some of its
projects, the mine is set to executive, and whom chairman Andrew Tottenham larger sales contracts.
produce 619,000 tonnes described as well known and respected in the sports Tighe still holds a 13.6% stake in the firm, and will
of ilmenite annually, plus and entertainment industry. continue to work as a consultant for it, specialising
smaller amounts of zircon Mitchells job will be to increase the commercial in business development as well as focusing on
and rutile. profile of the firm and to increase the number of other projects.
What we would expect to contracts for its white label person-to-person betting His departure follows a series of board changes at
do pretty well immediately is exchange technology. the faltering firm, including the introduction of
increase production by 60%, Results for the year to December showed a Tottenham to the board earlier this year, so
Carvill told Shares. turnover of just 228,000, posting a pre-tax loss of separating Tighes then role as chairman and chief
Weve built in dredging 2.06 million. executive. Shares in TradingSports fell 1.9% to 25.5p
capacity to move it from Those numbers were accompanied by a 1 million on the news based on very light volumes.
600,000 tonnes of ilmenite share placing despite the fact that the company Shares says: A new broom may bring
per annum to 1,000,000 raised 4 million net of expenses on listing last year. about brighter hope for shareholders.
tonnes all of which is purely
marketable. All we have to do
is get Mr. DuPont to say he
wants to take some extra
Acquisition heralds future for Local Radio Company
Kenmare has secured AIM newboy The Local Radio 2BR is the local radio licensee acquisition warchest of 6.1
forward sales of 62% of Company(AIM:TLR) has made serving the east Lancashire million, and chief executive
annual production with large its first acquisition since towns of Burnley, Nelson, Colne Richard Wheatley the former
chemical companies like joining the junior market just a and Accrington, with first- head of Jazz FM is keen to
DuPont, which use the month ago. quarter RAJAR audience figures consolidate the local radio
mineral to make the The radio station acquirer showing a weekly reach of 38%, market in the UK.
pigments used in plastics, has upped its stake in and a market share of 21.6%. Shares in LRC remained flat
fabrics and paints. Lancashire-based 2BR after The firm made a profit of at 100.5p on the news, 5.7%
The mine is forecast to taking out a stake held by 260,000 before tax in the year higher than its 95p placing
generate annual revenues of regional media monolith to December from sales of 1.18 price on 21 May, in spite of a
around $90 million. Johnston Press (JPR). million. brief trading update that said
Shares says: LRC is to buy Johnstons 32.6% The acquisition brings LRCs trading for the three months to
Securing of project stake in Johnston for 1.2 total number of stations to 23, May was up 14% year-on-year.
finances marks a major million, taking its holding in the with the majority concentrated Shares says: Wheatley
milestone and any firm to 65% as long as no other in the south-west and north of has good form, and this will
hurdles from here on shareholder exercises its pre- England. be the first of many
are comparatively small. emption rights within 21 days. LRC is left with an acquisitions.

240604 p31 ss news 6/21/04 5:59 PM Page 31


Evolutec ticks
over towards
Conroy splits off diamonds AIM
ublin-based exploration minnow Conroy The demerger is to take place by way of a scheme of A company that looks at
Diamonds & Gold (AIM:CDG) is to demerge arrangement and a reduction of Conroy D&Gs share the saliva of ticks to treat
its Finnish diamond interests in an attempt premium account, ensuring that the approval of both diseases is in fundraising
to focus efforts on finding gold in its native Eire. shareholders and the Court is met. talks to raise 9.5 million
The new diamond company to be called Karelian If approved at meetings to be held consecutively ahead of a listing on the
Diamond Resources will focus on exploiting Conroy on 8 July shareholders will receive one Karelian share Alternative Investment
D&Gs 11 diamond licences, all of which are in Finland. for every six Conroy D&G shares. Market (AIM) next month.
It will also buy the diamond interests of another This will give shareholders of Conroy D&G a 29.5% Evolutec looks at the
company, simply named Conroy, which is controlled stake in Karelian, with the remaining 70.5% being held saliva to create drugs to
by Professor Richard Conroy. by Conroys shareholders, of which Professor Conroy treat allergies, auto-
He hopes that separation of the two different types holds a 55% stake. immune and inflammatory
of assets will speed up exploration across the board. Conroy, a member of the Irish Parliament, made diseases. The company is
Recent focus at Conroy D&G has been on hunting his exploration name when he found the Galmoy doing this because the
for gold on the Longford-Down Massif, while the zinc deposit in southern Eire. That was held through ticks have evolved
diamond licences have remained on the back burner. Conroy Exploration, now Arcon (AIN), of which molecules that can outwit
Separation should also ensure that each asset is he lost control after Tony OReilly stepped in to human defence
correctly valued, an issue which is known to have provide finance to fund production of the world- mechanisms.
aggrieved the companys board for some time. class site. Ticks can remain
Karelian will continue to be run by Conroy himself Shares says:Separating the two makes undetected in humans for
and managing director Maureen Jones, with her perfect sense, but Karelian shares will be up to two weeks, during
brother James acting as finance director. tightly held by Conroys directors. which time they can be
stealing blood from their
hosts. It is the molecules
Dynamic claims offer undervalues company potential that suppress defence
mechanisms that enable
The board of invoice discounter However, Martin Large, the ticks to do this.
Chairman of
Dynamic Commercial Finance actually Enterprise London Evolutec isolates these
(AIM:DCF) has rejected an all- earnings per molecules to be used
cash offer from its largest share for the against diseases where the
shareholder. year were immune system is
Chairman Tony Caplin, the 3.4p, he overactive, and its lead
former boss of broker Durlacher, says. human product is already
has rejected the offer on behalf Even in phase II trials, having
of the board, suggesting that it Dynamics licensed out its technology
undervalues the companys own broker for the treatment of
potential. does not animals.
But the 107p-a-share offer expect the The firm was founded in
which values the firm at 4.19 company to 1998, during which time it
million is a 26.6% premium to achieve the has raised 6.6 million. The
the closing price the day before original 2003 new money will come in
US-based Enterprise London target in the form of a 7.5 million
bought its 28.91% stake in the either 2004 placing and a further 2
company in May. or 2005, he million from existing
Enterprise Londons chairman goes on. shareholder ISIS.
Martin Large, who has met Enterprise It is led by chairman Dr
with DCFs board, suggests bought its stake from small- companys shares, and Large is David Bloxham, a former
the firms management team company fund management now lobbying them to accept director of companies
has overpromised and firm Unicorn Asset the offer. which included Celltech
underdelivered. Management in May, and Large Shares in DCF rose 3% to 100p Group, and boasts former
Consider the managements says he wants to offer that same on the news, suggesting the GlaxkoSmithKline (GSK)
performance against their own chance to exit the situation to Enterprise London offer values chairman John Burke as a
incentive targets. Management private shareholders. the company fairly. non-executive director.
stood to increase their own Three fund management Shares says: Hold on A market capitalisation
stakes if they achieved earnings groups Laing & Cruickshank, for the ride for now the of around 20 million is
per share greater than 15p for Credit Lyonnais and Close first approach is rarely expected on listing, which
the year to December 2003. Finsbury control 46.8% of the the last. is likely to be in early July.

24 June 2004 31
240604 p32-33 SS profile&play 6/21/04 5:35 PM Page 32

edited by: James Quinn

up the
Wound care specialist AMS has overtaken its rivals in the A&E and surgery sector with
its revolutionary new product Liquiband. Piper Terrett sheds light on what is a steadily
growing company and market

dvanced Medical Solutions (AMS) ADVANCED MED.SLTN.GP. wound as bacteria can inadvertently be
unveiled its latest technology review share price stitched into it. Given the bad publicity
to City analysts last week, revealing the health service has had in recent years
the company in confident mood and looking 12.00 regarding contamination and hospital
to branch out on its own in the global wound 11.50 superbugs it is no surprise that AMS has
care market. 11.00 had success.
While AMS counts among its partners 10.50 The more invasive a product is the more
blue-chip giants such as Johnson & Johnson 10.00 opportunity there is for bugs to get in, says
(NYSE: JNJ), Teva (NASDAQ:TEVA) in Israel, 9.50 HIGH 12.37 Richard Stenton, managing director of
Smith & Nephew(SN.), 3M (NYSE:3M), 9.00 29/8/03 MedLogic. Skin cant be sterilised and every
8.50 LOW 8.25 4/6/04
Mnlycke and Novartis (NYSE:NVS), now the time you drive a needle in you can drive
8.00 LAST 8.62
wound care specialist has its own sales and J J A S O N D J F M A MJ bugs in.
marketing muscle on board following the Source: Thomson Financial/Datastream The medical world is gradually coming
acquisition of MedLogic last year. The round to the idea that gluing is easier, more
company is limbering up to focus more on all A&E repeat buying, closing 30,000 wounds hygienic and more patient-friendly. Further
distributing products itself, rather than a month, and is now also used to close benefits are that gluing a wound produces
giving away valuable margin to distribution surgical wounds. less scarring than stitching and valuable NHS
partners. Ironically the glue known as time and money is saved as there are no
Historically weve relied entirely on our cyanoacrylate was first used in the Vietnam stitches to be removed.
partners to distribute our products, says war to patch up wounded soldiers but was The company is busy working on other
chief executive Don Evans. Weve taken the abandoned after the substance proved toxic. added value, advanced wound care projects
decision to go direct in the UK. Through However, it has since been modified and and has high hopes for its silver alginate
MedLogic we acquired a sales and marketing there are now no safety issues. technology. Alginate comes from seaweed
operation thats well known in the NHS. Our NHS sales are driven by Liquiband, and is super-absorbent. It is ideal for chronic
These are products we make routinely and says Evans. If a wound is in the face youll be wounds such as leg ulcers. In its Silvercel
the margins are better here than through our given glue. Its used in A&E and now in the wound dressing, which was launched in May
branded partners. operating room with Liquiband Surgical. through partner Johnson & Johnson, AMS
Last year the company held a similar Sutures or stitches and staples account for has added silver, an antibacterial agent.
presentation in which it unveiled Liquiband, 28% of the global wound care market. Of that Resistance to silver is incredibly rare, says
a type of glue used to close wounds that AMS slice of the market AMS estimates that Richard Freeman, R&D manager of AMS
hoped would replace stitches. The product around 40% could go over to adhesives and advanced wound care division. It's an ideal
has since been sold successfully into the sealants. It is thought that the act of stitching material to use as an antibacterial.
NHS. It is now market leader with 75% of can contribute to contamination of the Shares says: One to watch.

240604 p32-33 SS profile&play 6/21/04 5:35 PM Page 33



For years Victory Corporation (VRY) seemed to work, however indirectly, for Richard Branson. complementary range with high margins,
be misnamed. Founded in the late 1990s to Last year it recruited 1,932. which would also appeal to women
exploit the Virgin brand initially in cosmetics The retail outlets consist of three customers. Care is being taken to ensure that
and then in clothing it chalked up substantial differentiated streams. There are 12 flagship the new product will not cannibalise existing
losses. But the recently published 2003/04 stores in the main shopping centres, nine sales. This years results are likely to bear the
results suggest it has now turned from outlet stores and 11 stores allied to Virgin spas. cost of any launch while the benefits should
substantial losses into sustained profitability. The group would like two more outlet stores start to appear next year.
It has also become more focused, specialising but other major changes in One of the legacies of the
in cosmetics although there is a residual the retail business Shares Summary past is the fact that the
interest in clothing through various licensees. structure are unlikely. The group has tax losses of
Although the cosmetics business originally group has a strong some 40 million which
hoped to develop a chain of over 100 retail philosophy for its retail BUSINESS: should mean that it will
stores the emphasis has changed since the businesses. Initial sale Cosmetics and clothing not pay tax for several
arrival of John Jackson, who is now the stock is sold in the main VITAL STATS: years.
chairman. He and Ros Simmons, the stores in January and is Market capitalisation: 37.3 million The shares suffer from
managing director, were both formerly with then transferred to the Historic PE: 9.24 limited liquidity as the
Body Shop (BOS) and understand direct outlet stores that never sell Prospective PE: 8.9 Virgin Group holds 89%.
selling. Now the group is the second largest products appearing in the Dividend yield: Nil However, we understand
direct-selling organisation in the UK after Avon consultants catalogue. that Virgin would be
and well ahead of the Body Shop. It has almost Because of the high willing to place shares if
10,000 consultants who last year held over margins which are usual in the cosmetic there was institutional demand. Meanwhile
200,000 classes at which to sell the groups industry the outlets stores are profitable house broker Seymour Pierce is forecasting
cosmetics. What was planned as an add-on is despite substantial at least 50% price cuts. earnings of 39.9p for 04/05 and 66.4p for
now the dominant part of the company. Sales The group believes that its head office could 2005/06. As yet few other brokers follow the
are 85% through direct sales and 15% through service a much higher level of sales, company which provides an opportunity for
the groups retail outlets. encouraging the company to continue to individual investors to cash in on the markets
Victory seems to have little difficulty recruit more consultants. It is also encouraging imperfect knowledge of Victorys prospects.
recruiting new consultants who are happy to management to consider the launch of a THE WRITER HOLDS SHARES IN VICTORY CORPORATION


All four of the companies here DEE VALLEY GROUP

share price
Computer services company HAVELOCK EUROPA
share price
have a market capitalisation of 800 VEGA Group (VEG) took a 100
750 90
around 30 million. 700
battering in the technology
650 meltdown from 2000 but the 70
FTSE Fledgling engineer 600 recovery that has been in place 60
Wellington Holdings (WLN). for a year is still intact. If this trend 50
500 40
share price has been in a steady 450
is going to resume then some
recovery over the last four years 400 strength should start creeping 20
2001 2002 2003 2004 2001 2002 2003 2004
and surged in May. With the price Source: Thomson Financial/Datastream
back in from current levels. The Source: Thomson Financial/Datastream

trading around its highest level first target is for a run back up to
since late 1998, further medium- The trend in water company this years highs around 200p and This year has seen construction
term gains are expected and any Dee Valley (DVW) is clear to see a break through here would be company Havelock Europe
weakness is viewed as a buying the share price has recently very positive on the charts, (HVE) resume its recovery, with a
opportunity. Only a slide below moved out to fresh 10-year plus suggesting even more gains to nudge on to fresh five-year highs.
100p/110p puts a question mark highs. This is another one where 250p and beyond. The 100p mark is proving to be
over the trend. any weakness is expected to be an effective barrier at the moment
short-lived and should bring in but a break above here is
share price fresh buyers. It would take a slide share price expected to accelerate the
140 220
below the 640p mark to signal 200 recovery and set up 120p next.
120 that the two-year uptrend is 180
As long as any dips do not push
110 coming under pressure. More 140 below this years low around 80p,
100 strength is expected in the 100
the chart remains positive.
90 months to come with 800p+ 80
80 looking achievable. 40
70 20
2001 2002 2003 2004 J A S O N D J F MA MJ J A S O N D J F MA MJ
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream

24 June 2004 33
2400604 p34 special sits 6/21/04 5:57 PM Page 2


Babcock gets its way

Moves on DFS noticed
by: Polly Fergusson
by: Polly Fergusson

Babcock (BAB) has taken over Peterhouse

ormer Tory party fundraiser Lord Retail analysts have highlighted DFSs (PHS) and extended its move into support
Kirkham is expected to unveil a downbeat forecast for the market and say the services. Peterhouse chairman David
firm offer to take DFS (DFS) future of the dividend is suspiciously helpful Jackson and director Simon Foster
private within a few weeks. to Lord Kirkhams takeover ambitions. DFS is announced their resignation a day later.
The offer is widely expected to be at 442p a also planning to halt its expansion Peter Rogers, chairman of Babcock, has
5% premium to the aborted offer of 415p a programme for at least a year. taken over as chief executive. The offer
share in March. This will be a 435p cash per Richard Ratner at Seymour Pierce says: If gained more than 50.1% of acceptances.
share offer, plus the right to retain the 7p one were cynical one might suggest a rather It is important to remind investors that
dividend, which values the company at 475 too negative view is being portrayed. Markets Babcock had an excellent set of results in
million. are tough out there but DFS is not going to March, with EPS up by 53%, says Michael
Kirkham, who founded the company 30 collapse. I was almost moved to tears when Donnelly, analyst at Bridgewell. Net debt
years ago and whose family holds a 10% stake, Kirkham made his announcement. was down by more than half and dividend
is determined to take DFS private. A bid team A higher offer for the company is not up by 12% at 3.35p. The order book (ex-
is reportedly trying to structure an offer to be expected. Rival Courts (CRTO) issued very Peterhouse) stood at 1 billion.
presented via a scheme of arrangement, weak results last week which have sent ripples Remaining shares in Peterhouse will be
instead of a straightforward bid requiring 51% of concern through the sector. Shares in DFS cancelled on 14 July and investors will
of shareholders approving the offer. Kirkham have risen to 428p since news of its imminent have lost out if they did not agree to the
is expected to provide 150 million of the offer takeover bid. takeover. Shares in the stock have risen on
funds, with the rest from investment bank Shares says: Still some upside left if news of the deal closure and are now
Nomura in the form of debt financing. you want to squeeze more out of the trading at 115p.

Takeover bids
Target company Current Bidding company Current Timing Nature of deal Terms
share price share price
Airbath 2.63p n/a n/a n/a Possible offer n/a
Alvis 316.25p BAE Systes 204.75p n/a Recommended cash offer 320p cash per share
Aston Villa 281.5p Ray Ranson n/a n/a Potential interest in making an offer n/a
Cambridge Mineral Resources 15p n/a n/a n/a Early stage discussions re possible offer n/a
Cazenove Group n/a n/a n/a n/a Considering takeover approaches n/a
Celltech Group 547.5p UCB n/a n/a Recommended cash offer 550p cash per share
De Vere Group 435.25p GPG n/a Increased partial cash offer (not recommended) 430p cash per share
DFS Furniture 430p Graham Kirkham, chairman n/a n/a Possible offer 435p cash per share + right to retain 7p interim dividend
Drew Scientific 5.75p Escalon Medical n/a Offer (not recommended) 0.0048 Escalon shares for 1 Drew Scientific
Dynamic Commercial Finance 100p Enterprise London n/a n/a Approach, no firm offer n/a
Egg 162p n/a n/a n/a Prudential in talks re Egg n/a
Eurocopy 38.5p IOT n/a n/a Offer approach Approx. 42p cash per share
Gaming International 52.5p Management team n/a Talks re possible offer n/a
GeneMedix 14.75p n/a n/a n/a Talks re possible merger n/a
Gowrings 56p n/a n/a n/a Examining options including sale n/a
Hampton Trust 1.75p n/a n/a n/a Talks n/a
Headway 99.5p n/a n/a n/a Talks re possible offer n/a
Integrated Dental Holdings 34.5p MBO n/a n/a Potential offer Approx. 40p per share
Inter-Alliance 0.7p Millfield 59p n/a Merger discussions n/a
Marks & Spencer 357p Revival Acquisitions n/a n/a Possible offer Between 290p and 310p cash per share plus a 25%
interest in the equity of Revival
Martin International 23.5p Crystal Martins n/a Recommended cash offer 23.5p cash per share
Mezzanine Group n/a Management Team n/a
Photo-Scan 133.5p n/a n/a n/a Possible offer n/a
PPL Therapeutics 6p Innovation Development n/a n/a Proposal to return cash to shareholders 6.2p cash per share
and take company private
WH Smith 325p Permira n/a n/a Approach re possible offer 375p cash per share less the declared 4p interim
dividend, with a partial equity alternative
Tibbett & Britten 584.5p Exel 705p n/a Recommended cash offer 668p cash per share
Wembley 860p BLB Investors n/a Recommended cash offer 860p cash per share
Wintrust 587.5p n/a n/a n/a Talks re possible approach n/a
Yates Group 142.5p Thorium n/a n/a Recommended cash offer 140p cash per share

Open offers
Company Why? First dealings Amount being Terms Issue Current
expected raised (m) price (p) price (p)
Sondex To pay for acquisition of Geolink 28 June 18.2 1:3 160 178.5
Dawson International To avoid going into administration 25 June 9.2 1 nominal of Loan Stock for every 10.1 Ordinary Shares 1 Ordinary shares 7p
Flintstone Technologies To fund investments in new technologies 28 June 1.25 1:2 6 7.5
London & Boston Investments To fund acquisition of PSG Franchising 25 June 1.5 (before expenses) 1:12 7 8.88
Melrose Resources To fund exploration in Bulgaria and Egypt
and cut debt 08 July 13.95 1:16 210 255
Synergy Healthcare For acquisition of a Dutch company 06 July 37.5 (before expenses) 1:5 270 293.5

240604 p35 floats 6/21/04 4:20 PM Page 35


Meristem goes flat out for AIM

by: Piper Terrett

f you thought Ikea had quenched In the year ending 31 March with bedroom furniture. The
consumers appetites for the 2004 Meristem made a pre-tax
Shares rating: DIY king now plans to roll out
delights of flat-pack furniture, profit of 3.1 million on Meristems furniture range in
think again. Meristem Furniture, turnover of 62.1 million. Meristem all its 325 stores.
the UKs leading independent manufacturer of House broker Westhouse 1 (lo)-5 (high) Argos is also a big client. In
affordable self-assembly furniture is set for a forecasts profits will increase to management 3 2004 20% of the companys
July flotation on AIM. 5 million in 2005 and 6 market 4 sales came from Argos and
The company already counts among its million in 2006. product 3 Meristem provides a strong
customers B&Q, Argos and European retailer The growth is largely financial strength 4 after-sale service for the
Leenbakker, and has been going since 1986, expected to come from retailer. Sales to Homebase are
when it started out with one factory in Meristems existing customer also expected to increase in the
Redruth. Now Meristem has three factories in base. Last year 91% of sales came from the near future.
the UK and one in Holland. companys top 10 customers. In fact the However, the company, which already has a
It supplies DIY stores with furniture ranges company has been actively working to move European presence, also plans to develop a
over individual pieces, specialising in bedroom, away from contracts with smaller players as low-cost operation in Poland to attract more
home-office and lounge furniture, which it sells these are generally less competitive. customers in continental Europe.
into large retailers. It also provides added Analysts at Westhouse forecast Shares says: Given the continued
services for retailers, including backup considerable revenue growth from a new deal popularity of Ikea and Meristems blue-
telephone services for customer enquiries, with B&Q. Under a pilot scheme worth 2.1 chip clients this looks an interesting
monitoring stock and dealing with returns. million Meristem is supplying 24 B&Q stores one.

Public Recruitments first big win This is the kind of deal the educational staffing operator
by: Polly Fergusson City needs to know about, says Supply Desk, and locum
the group. Sales are due to leap recruiters Birmingham and
New AIM entrant Public contract with Warwickshire this year to 46 million from Midlands Locums and JCJ.
Recruitment Group (PUG) has County Council worth 56 23.6 million in 2003, with pre-tax Britain is facing a desperate
won its first major contract since million a year and a minimum profits gently rallying from 1 shortage of doctors and teachers.
listing in April. The public sector operating profit of 200,000. million to 1.6 million, according It has the lowest number of
recruitment company beat off Hopefully this will provide a to housebroker Collins Stewart. doctors in Europe and cannot fill
larger rivals including industry boost to the shares, which have PRG specialises in the existing vacancies. It is the same
giant Capita (CPI) to gain a barely traded since listing at healthcare and teacher sectors situation in the teaching
managed supply-teacher service 134.5p and are now at 132p. and has three companies; profession.

Forthcoming floats This new issues information has been provided

together with shares research site Digital Look.
To find out more visit
Company Main activity Market Float date Method Valuation () Broker
The PFI Infrastructure Co Holding company AIM End June TBA TBA Collins Stewart
Eyebright Elective day surgery AIM End June / early July Placing 11m12m John East
Music Copyright Solutions Music copyright administration and exploitation AIM June TBA TBA JM Finn
Avanti Screenmedia Group In-store TV services supplier AIM End June Placing 13m Seymour Pierce
Kirkland Lake Gold Canadian gold mining company AIM Late June Introduction 46m Canaccord Capital
2e2 Group IT services provider AIM 29 June Placing 65m Robert W Baird
EXC Holding company AIM 29 June Placing 17.5m John East
Microscience Vaccine development AIM 29 June Placing 120m140m ABN
XN Checkout Retail software AIM 29 Jun Placing 20m25m Daniel Stewart
Prologic Fashion software and IT services AIM 28 June Placing 7.5m WH Ireland
The Hotel Corporation Hotels investor AIM 28 June Placing 40m Shore Capital
Nutrinnovator Healthfood products AIM 28 June Placing 10m Oriel Securities
Brady Financial software AIM 28 June Placing 20m25m Oriel Securities
Palandri Oz wine producer AIM by 28 June Introduction 22m JM Finn
Libertas Capital Corporate advisory services AIM 25 June Placing 20m Daniel Stewart
Ashcourt Holdings Asset management, pensions and financial advice AIMm 25 June Introduction 5.2m Insinger de Beaufort
IP Live Shell company AIM 24 Jun Placing 1m Corporate Synergy
Independent Media Support Subtitling for films, TV programmes and advertisements AIM 24 June Placing 15m20m Corporate Synergy

24 June 2004 35
240604 p36-37 chartist 6/21/04 5:41 PM Page 36


Still the summertime blues

he early summertime blues continued for the major indices over the last week the
DAVID JONES, CHARTIST FTSE managed to scrape a bit higher while the US marked time. These indices,
particularly in the US, are starting to look a little vulnerable and overbought, so any
weakness should not be too surprising.
FTSE 100 (UKX)
At the risk of sounding like a broken record,
it was business as usual for the FTSE over the YULE CATTO
last week. There were some half-decent share price
gains on the odd day but the net result for 380 Last week was a good one for shareholders in Yule
the week left the blue chip index up just over 360 Catto. The chemicals company has spent the last few
20 points. In the short term it looks like there 320
months flirting with the major 210p level, which
could be a few extra points to come, but the 300 represents key chart support back to 2002. If the
trend for this year remains sideways until the 280 company is going to stage a recovery this is where it
4600 level is decisively broken. Dont hold 240
should start from. The 270p resistance is still proving
your breath. 220 to be a barrier and strength through here is needed to
J A S O N D J F MA MJ J A S O N D J F MA MJ signal that the strength is sustainable. For now, any
Source: Thomson Financial/Datastream
weakness remains a buying opportunity, as long as
210p stays intact.
share price
share price CAPITAL RADIO (CAP)
It is a similar story at Capital Radio. The FTSE 250 media
550 company bounced back in the first half of 2003 but has
spent most of the last nine months trading in a wide
4450 500
sideways range. The 420p/440p area has proved to be
4400 strong chart support since May last year an area where
4350 the buyers have stepped in to turn the share around.
This has been the case again this time around and
Source: Thomson Financial/Datastream
further recovery looks likely. The first target is 500p and
Source: Thomson Financial/Datastream
strength through here opens up the chance of a run
back up to last years highs in the 560p area.


share price MISYS (MSY)
Over the last couple of weeks, the US index 320 The gloom continued at IT company Misys last week,
has been marking time, adding weight to 280
with the share price edging nearer to setting new lows
the argument that the best of the rally from 260 for the year so far. A break below the 190p mark would
Mays 1076 low is behind us. There is 240 accelerate the weakness and set up last years low
resistance at 1150 from early April, and 220 around the 150p area. Based on the chart over the past
strong resistance at 1160 set from January 200 six months, it is difficult to come up with a bullish
to March. Again, a few extra points are argument for the shares and any bounces are expected
possible but it is difficult to be a raging 140
to be short lived. Only a rally through 220p would start
short-term bull at current levels. Source: Thomson Financial/Datastream to hint that the sellers were running out of steam.


share price
share price
550 The rise of this gambling company has stalled over the
500 last couple of months with the share price slipping
1140 back to levels seen in late January. If the one-year
uptrend is going to stay intact, then the share price
1120 400 needs to start showing some strength from current
350 levels. A break below the 420p/440p area would put this
1100 uptrend under pressure and suggest the best is behind
the share price for now. An interesting one to watch in
1080 250
JAN FEB MAR APR MAY JUN J F M A M J J A S O N D J F M A MJ the weeks ahead.
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream

240604 p36-37 chartist 6/21/04 5:41 PM Page 37


Live wires bucking the boring trend

f you have spent most of this year watching the major stock market indices, you will correctly have assumed that most
shares have been busy doing nothing with minimal progress being made. But there are always exceptions companies that
buck the overall market trend and do their own thing whether it is up, down, or sideways.
The companies below all fall into this category. They have recently broken out through key chart levels suggesting there is still
plenty of momentum behind them and further gains to come. This approach to stock picking is far from perfect trends do end
but the fact that these shares are all still rising shows they have far greater relative strength than a lot of the market at the moment.


share price
This FTSE small-cap retailer had a cracking recovery in 2003, which saw the 260
shares just about quadruple in price. The momentum faded in November 240
and the price followed the rest of the market sideways. But the latest 220
break through the 240p level signals the momentum has returned and 200
there should be interesting times ahead. This move points to a 180
continuation of the 18-month uptrend and sets up 300p as a medium- 160
term target off the chart. As with all up trends, the assumption is that any 140
weakness will be short-lived and dips are buying opportunities. Only a
break below 200p would warn that the trend was flagging. J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream

Like most other shares, 2003 was a good year for the price of this FTSE 250 NORTHGATE
share price
transport company. But unlike some other areas, the Northgate strength 700
has continued. The major chart break was the move through the 600p 650
mark in April this year. Since 1998 this had proved to be a ceiling for the 600
share price and the sellers had moved back in but this time it is
different. Last Friday saw another move to multi-year highs suggesting
that the buyers are still happy to keep picking the shares up. Again, any
dips should not last too long and only a break below the 580p low from
April would suggest that sentiment is turning.
LAND SECURITIES GROUP (LAND) Source: Thomson Financial/Datastream

Despite the sluggishness of the index, there are still FTSE 100 companies
out there ploughing their own route higher. The 11.50/11.60 area was LAND SECURITIES
seen as a massive barrier for Land Securities back in 1998 this is where share price
the uptrend ran out of steam and the share price dropped over the next
two years. There has been some to-ing and fro-ing ahead of this area this
year but the past few weeks has seen a move through it. This represents a 1000
big shift in longer-term sentiment and points to further gains to come in 900
the months ahead. Prices rarely move in a straight line so there will be
pull-backs along the way, but as long as the 10.40 support remains intact,
the break out remains valid.
BSS GROUP (BTSM) Source: Thomson Financial/Datastream

The share price of this builders merchant has been recovering for the past
couple of years, but has stepped up the pace over the past few months
with a move through the 650p mark. This had proved to be the top for the share price

share price on three separate occasions since 1995 but not this time. The 750
next short-term target is 750p and this is another buy the dips chart. Any 650
weakness back to the 620p/650p area should bring the buyers back in. 600
Source: Thomson Financial/Datastream

24 June 2004 37
240604 p38 Market Moves 6/21/04 5:42 PM Page 38


by: David Jones


In a quiet week for the markets, significant position of Desire was much stronger now.
movements in share prices were thin on the The recovery in FTSE Fledgling electronics
Petroceltic 8.525 17.2 ground. Desire Petroleum (DES) moved out to company Xaar (XAR) resumed on Friday as
JKX Oil & Gas 101.5 13.4 new highs for the past 12 months on Friday, the price nudged through the 88p level that
Medical Marketing 60 13.2 extending the recovery that has been in place has been a problem all this year. The company
Landround 241 9.5 since last summer. Full-year results released at also commented that third-quarter trading
Securicor 122.25 5.4
Wolfson 272.5 4.0 the end of April showed that pre-tax losses continues to be firm.
reduced to 377,000, compared to 528,000 in FTSE 100 retailer GUS (GUS) further
the previous year. The company said that these extended its four-year uptrend. It will be an
RISERS/FALLER OF figures did not take into account proceeds from interesting one to watch in the months ahead
THE WEEK its placing and open offer and the financial as the 900p level has been an unbreakable
barrier for the last six years.
With the market sluggish, there were FRESH HEIGHTS:
not too many shares showing day- Name Epic Current Change DESIRE PETROLEUM
after-day constant movement. Oil & price (p) (%) share price
Gas company Petroceltic Desire Petroleum DES 21.25 8.9 28
International (PCI) had a good 26
Xaar XAR 88.5 7.9 24
week, pushing back up towards the JKX Oil & Gas JKX 101.5 5.1 22
highs for this year. On Friday, it was
Canary Wharf CWG 297.5 2.5 20
announced that fund management 18
company Gartmore now holds over GUS GUS 872 2.1
41 million shares, owning around Tesco TSCO 267.25 1.6 14
8% of the company. Northgate NTG 674 1.3 12
Laing (John) LNGO 225.5 1.1 10
Another resources company
surging higher was JKX Oil & Gas Fenner FENR 108.5 0.9 6
(JKX). Back in May it confirmed that Whitbread WTB 835.5 0.6 J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream
current trading was in line with
expectations and it continued to
look for new development NEW 52-WEEK LOWS
opportunities in the former Soviet
Union. Last weeks strength puts the A trading statement on Friday caused the share Engineering group Molins (MLIN) continued
share price at levels not seen since price of food processor Sygen International the slide that started when it announced in April
1997 and suggests there are even (SNI) to violently break down out of its sleepy that full-year earnings would be halved, due to a
more gains to come. sideways range. It said that the second-half significant deterioration in prospects for its
Media group Creston (CRE) performance has been below the level tobacco machinery division. A move back to the
released full-year results last week, anticipated in February 2004 this was when 130p area is suggested from the charts.
but the market did not seem first-half results were released. The company It was a similar story at games company
overwhelmed. Pre-tax profits said that its US business has not recovered as Eidos (EID). On Friday the company announced
increased to 2.09 million compared quickly as it expected. that it expects to report a break-even to small loss
to 0.91 million previously the SYGEN INTERNATIONAL for the full year to the end of June after delaying
figures include results from Nelson share price the release of one of its new titles until September
Bostock Communications which the 60 as the softness in the games market continues.
company acquired in October last 58
year. 56 FRESH LOWS:
Miner Aquarius Platinum (AQP) 52
Name Epic Current Change (%)
continued its slide towards last 50 price (p)
years low. The 200p level managed 48 Sygen Intl. SNI 39.25 -12.2
to stop the slide last time around 46 Energy Technique ETQ 4.25 -5.5
and it is worth keeping an eye on at 44 Molins MLIN 147.5 -4.8
current levels to see if the buyers 42
Eidos EID 104.75 -4.3
decide to step back in once more. 40
38 Medisys MDY 7.5 -3.2
Source: Thomson Financial/Datastream Charles Taylor CTR 255 -2.8


The list below shows the five most active stocks for the five Name Epic % Traded
days to last Friday. Most active is defined by the number of
Creston 131.5 -14.3 shares traded that week as a percentage of the companys Celltech CCH 17.3
ITM Power 46.5 -11.4 capitalisation. For example, Celltech was the most active
Tandem 19 -9.5 Xstrata XTA 15.9
Chesnara 99 -8.8
and saw a value of shares equivalent to 17% of its market
cap trade during the week. MFI Furniture MFI 15.6
Aquarius Platinum 236.5 -5.8
Photo-Me Intl. 87 -5.7 W H Smith SMWH 12.3
McCarthy & Stone 531.5 -3.7 Marks & Spencer MKS 10.5

240604 p39 oth 6/21/04 5:43 PM Page 39


HBOS: positive facts, negative opinions A desirable residence for investment

HBOS(HBOS) 706.5p, interims 28 July George Wimpey (WMPY) 369.25p, interims 28 July
Incorporating Halifax, the UKs largest mortgage lender, it would be It is currently fashionable to don dark attire and mutter a few
reasonable to assume HBOS has done well over the past six months. comforting words about house builders in anticipation of their
But the share price has fallen nearly 7% from the start of the year impending demise. The share price for the UK's second largest
despite strong earnings growth and an upbeat outlook. Investors builder reflects this, having fallen 20% from its peak earlier this
seem to believe the tabloids that insist the housing sector and year to stand broadly unchanged from a year ago. This scenario
financial stocks in general are going to hell in a hand cart. and the company's performance make uneasy bedfellows given
Fortunately, the rise in interest rates has already prompted the that in the past six years pre-tax profits have risen by 500%.
group to peg back its share of mortgage lending. Meanwhile margins Wimpey advocates the idea that house price inflation will
in the retail division encountered some pressure, but rising interest moderate, rather than the notion that values are heading for the
rates and cost cutting are expected to ensure that growth targets cliff edge. It is also fair to say price inflation on newly built
are met. properties is not as rampant as
The new corporate division has (m) 2004(e) 2005(e) in the secondary market. (m) 2004(e) 2005(e)
attracted increased activity, Turnover The superlatives that Wimpey Turnover 2972 3146
helping to underpin asset growth PTP 4460 4920 boasts are similar to those PTP 421 450
and associated fee income. EPS 78.3p 86.3p enjoyed by other house EPS 75.3p 80.6p
Investment product sales are DPS 32.6p 34.2p builders. Moreover, the forward DPS 14p 15.5p
running ahead of this time last order book shows little sign of
year as are general insurance share price moderating. Its Laing Homes share price
820 460
premiums. On the lending side 800 HIGH 812.00 18/6/03 subsidiary has enjoyed strong 440
there is no indication of any 780
LOW 676.00 13/11/03
LAST 706.50
growth while the US arm 420
deterioration in the quality of the 760 Morrison Homes is enjoying 400
lending book. (JC) 740 similar demand. (JC) 360
Shares says: Pressure on 720
Shares says: Under- 340
margins is easing and the 680
valued and misunderstood. 320 HIGH 456.50 2/4/04
LOW 284.00 27/6/03
mortgage market remains 660 The canny investor buys on 280 LAST 369.25
robust. Source: Thomson Financial/Datastream the dips. Source: Thomson Financial/Datastream

Turn on, tune in, find out North American strength boosts Hanson sales
Immedia Broadcasting (AIM:IME) 91p, interims 28 July Hanson (HNS) 410.75p, interims 28 July
Investors will be hoping Immedia Broadcasting finds the right frequency Management held its head high at the companys full-year results in
when it unveils maiden interim results next month. The company runs February and, despite an 8.7% slip in pre-tax profits, raised the full-year
in-store radio stations for retailers to encourage customer spending. dividend by 10%. The move signals healthy prospects for sales of its
The stations play music interspersed with adverts, either for third parties building products and investors should expect a return to growth in
or for the store itself. After floating in December at 110p, investors have 2004. In the six months since then, sales of building products in North
tuned out from the stock, sending the share price into a steep decline. America have gained strength, while the UK turnover has lagged.
It recently traded at just 91p, 17% down on the float price. At home, weakness in roads-related industry has affected sales in
News announcements since its listing have been relatively positive. Hansons aggregates business, although losses may be offset by
Immedia has so far secured six contracts, including Newsagents Radio, improving sales in building products.
which is broadcast to 2,300 stores including convenience chains SPAR The results should also benefit
and Londis. It also has contracts from a recovery in North
(m) 2004(e) 2005(e) with Iceland supermarkets, American sales and a cost-cutting
(m) 2003 2004
Turnover Turnover 3619.1 3983
electrical retailer Dixons and programme in the UK and the
Pretax profit PTP 137 403
pharmacy chain Lloyds. The US, forecast to save some 17
EPS EPS 40.4p 42.6p
company was set up in 1999 by million this year.
DPS DPS 16.95p 18.3p
former Radio 1 DJ Bruno Hansons products, which
Brookes and it raised around include bricks, ready-mix HANSON
share price
3.8 million from its stock market concrete, pipes, asphalt and tiles, share price
120 float resources that are are sold into four continents, 440
115 expected to be used to expand with the North American market 420
110 Immedias list of radio station accounting for around half of all 400
105 customers. Broker Teather & annual sales. 380
HIGH 121.00 8/1/04
LAST 91.00
Greenwood has yet to produce Shares says: Expect 360
HIGH 451.50 19/2/04
LOW 328.00 1/7/03
95 forecasts. (SF) asbestos litigation costs to 340 LAST 410.75
Shares says: The proof feature on the balance sheet 320
will be in the profits.
Source: Thomson Financial/Datastream
again this year. Source: Thomson Financial/Datastream

24 June 2004 39
240604 p40 DD 6/21/04 5:46 PM Page 40

by: John Marshall

Shareholders would only be

human if they wondered what
Big Bravo for
would happen next and will
Burberry CEO
Director have been reassured that two
directors Peter Owen and the
finance director James Morley
both acquired 20,000 shares
Although some commentators
concentrate upon the rewards for failure
that are given to departing directors,

share buying recently. Owen paid 65p and

perhaps reassuringly the
finance director paid
share options provide an opportunity for
directors of successful companies to
enjoy very substantial rewards.

brings calm marginally less acquiring a

parcel of 8,000 shares at 64p and
the balance at 65p.
Rosie Bravo, chief executive of
Burberry ( BRBY), made an overnight
gain of 688,200 by exercising an option

to Cox
The failure of the merger over 300,000 shares in GUS (GUS) at
with Highway was 613p and then selling all the shares at
disappointing as there was 842p.
scope for considerable She was granted these options before
synergies. Both have back GUS floated Burberry as a quoted
offices in the same town which company and her decision to sell may
would have helped their reflect the weakening of the umbilical
integration. At least one cord between these two companies.
cynical broker believes that Brokers are certainly unfazed by this
personal considerations may sale. Richard Ratner of Seymour Pierce

ox Insurance (COX) has enjoyed a have highjacked this deal, which initially looked rates GUS as his No.1 choice in the
chequered few months. The group as if it had been made in heaven. sector. He believes that it is a super
entered abortive takeover discussions Cox is a quoted motor syndicate which, to business and that there will be a total
with another motor insurer Highway (HWY) quote one broker, has in Lloyds terms done break-up in two years or so, with
which were discontinued after six weeks. The well but which suffers a cost disadvantage shareholders having a share in Argos
former chief executive Neil Utley resigned on 11 because of its Lloyds link. Retail and Experian.
June with immediate effect and no public Andrew Fisher comes from the CPP Group Bravo is not the only director to have
explanation. The executive chairman Peter and may be willing to consider other mergers. exercised an option and then sold all
Owen has also announced that once there has The shares have underperformed the market the shares. Directors should realise that
been an adequate induction programme for the by 32% over the past year. Until Fisher unveils by doing so they do not enhance the
new chief executive Andrew Fisher, he will his strategy others may be reluctant to follow confidence of investors.
become non- executive. the lead of messrs Owen and Morley. THE WRITER HOLDS SHARES IN GUS

Shrewd moves from Tomkins leads Top buys

Company Director Dealing Price Quantity Value Current
Date (P) () Share Price (P)
to optimism for brokers Man Stanley Fink 16-Jun-04 15.85 113,589 1,799,999 15.41
Engineering giant Tomkins (TOMK), once the darling of the market, fell under a Man Chris Chambers 16-Jun-04 15.85 56,795 900,008 15.41
cloud when there were enforced management changes with the shares falling to Man Kevin Roger Davis 16-Jun-04 15.85 53,639 849,996 15.41
a low of 138p in 2000. National Express David Ross 16-Jun-04 6.98 49,996 348,972 6.98
However, the chief executive Jim Nicol and the finance director Ken Lever Daily Mail & Gen P M Dacre 17-Jun-04 6.98 21,000 146,640 7.11
Burberry John Peace 15-Jun-04 3.93 34,000 133,633 3.97
have indicated their confidence in the future by buying 38,028 and 14,539
Cairn Energy Norman Murray 18-Jun-04 11.85 10,000 118,500 12.13
shares respectively at 263p. Tomkins James Nicol 15-Jun-04 2.63 38,028 100,097 2.62
When the company reported its first quarter results last month it was optimistic Man Jonathan Nicholls 16-Jun-04 15.85 5,000 79,233 15.41
about underlying profitability. But with 67% of profits earned in the US the group is Tomkins Ken Lever 15-Jun-04 2.63 14,539 38,270 2.62
not immune from the impact of the weak dollar upon reported profits. Cox Insurance Peter Owen 14-Jun-04 0.65 20,000 12,900 0.67
In the first quarter Tomkins was able to report underlying progress but Cox Insurance James Morley 14-Jun-04 0.65 12,000 7,750 o.67
Cox Insurance James Morley 14-Jun-04 0.64 8,000 5,135 0.67
suffered a modest fall in earnings from 4.3p to 4.2p due to the impact of
currency movements. Consensus forecasts indicate a fall this year from 265
million to 255 million, which will mask considerable underlying progress.
Man Harvey McGrath 16-Jun-04 15.85 300,712 4,765,263 15.41
Profits are then expected to grow to 289 million next year. Earnings are GUS Rose Bravo 15-Jun-04 8.42 300,000 2,526,300 8.67
forecast at 20.1p, rising to 22.9p in 2005. The dividend should rise to 12.4p Man Peter Lawrence Clarke 16-Jun-04 15.85 152,074 2,409,856 15.41
and then 12.9p. Man Stanley Fink 16-Jun-04 15.85 147,989 2,345,122 15.41
Despite the groups commitment to the US the shares have moved Signet Walker Boyd 16-Jun-04 1.13 1,582,702 1,784,497 1.17
Signet James McAdam 16-Jun-04 1.13 1,075,145 1,212,226 1.17
broadly in line with the market over the past year. The shares offer a
Man Stephen Nesbitt 16-Jun-04 15.85 75,000 1,188,495 15.41
reasonable yield 4.8% and are selling on an undemanding PE of 12.9. Man Kevin Roger Davis 16-Jun-04 15.85 69,009 1,093,558 15.41
Tomkins is now a much stronger business and others may decide to follow Johnston Press S R Paterson 17-Jun-04 5.58 93,650 522,099 5.51
the lead of these directors. Constellation Andrew Garner 18-Jun-04 n/a 100,000,000 250,000 0.03

240604 p41 Invest. Champ. 6/21/04 5:48 PM Page 41



A team effort
Charles Breese set up the Elektron Shareholder Group to give minority shareholders
more say in company affairs, not to cause trouble. Polly Fergusson reports

harles Breese is a firm believer that weeks and hopes to encourage him to prepare reduced, while management is considering
private investors can make a an investor presentation, which will then be paying a dividend out this year. The board
change to the way a company is put on the ESG website. Other ideas include cannot propose a dividend until Elektron has
run: Shareholders need to behave encouraging shareholders to email in with any positive revenue reserves. As at 31 January,
more like the owners of the companies that questions about the company which Breese 2004, the reserves stood at 568,000 negative.
they really are. They should be more can then put to management at the AGM. Goodwill releases and expected current year
proactive. He might be in a minority with this Questions and answers will then be posted on profits will create positive reserves, which will
outlook, but Breese is determined to back up the ESG site. allow the board to consider a dividend
his words with action and has personally set For shareholders who live far away, this payment this year, said chairman Girling in
up the Elektron Shareholder Group (ESG). offers a great way to keep in contact with the results statement. He then went on to
ESG exists to provide shareholders of AIM- management without having to trek over to praise his shareholders for supporting the
listed Elektron (AIM:EKT), an the meeting place. He will be appointing company and providing capital for the
electromechanical components Arcolectric acqusition, a point that
manufacturer, with a forum to liaise ELEKTRON VITAL STATS: Brsese is keen to emphasise.
share price
with management on issues they feel 14 Market value: This does demonstrate that private
are important. Breese himself has 12 9.55 million shareholders really can make a difference
250,000 shares in the company and a 10 Turnover for 2004: to the way a company is run. But they
personal interest in the way the 8 12 million have to work together and present a
company operates. ESG was set up last 6 PT: 1.61 million professional front. Shareholders were
HIGH 12.75 9/6/04
September and has attracted interest 4
LOW 2.00 27/6/03
PE: 4.43 contacted through ESG and support and
from approximately 12% of private 2 LAST 12.50 EPS: 2.82p capital for the acquisition was gathered
shareholders already. 0
J J A S O N D J F M A MJ Spread: 8% quickly, he says.
Source: Thomson Financial/Datastream
Last year I realised that as the Bulgin NMS: 1000 Breese has a background as a fund
family then held around 26% of the manager and is the controlling
shares and Girlings backers 22% of the shares, regional representatives to convey shareholder and director of Larpent Newton
there were still some 52% of shareholders information down the line to ESG members. Holdings, a boutique fund manager and
whose views were not being canvassed. While Investors in Elektron must be pretty stockbroker. He admits that many shareholders
I have followed that companys chairman confident right now. The shares were finally simply do not have the time or knowledge to
Adrian Girling for several years and fully boosted out of their stupor and leapt after chat to company directors, and hopes that ESG
support him, I thought we needed to have a strong results for 2003 were released in early offers a solution.
set-up for private shareholders and the June. They are now trading at 12.5p. It appears I can see this spreading out across lots of
management to liaise and make it easy for that management efforts to turn the business other AIM and smaller companies, enthuses
them to talk to each other. around are working, thanks to the sale of Breese. Finding other driven and practiced
The core difference between ESG and other Milmega, which makes microwave amplifiers, shareholders prepared to make this sort of
shareholder groups is that is it not an activist and the acquisition of Arcolectric, which effort might not be that easy, but it doesnt
group. ESG is not trying to kick out directors, makes appliance switches, indicator lights and make the effort any less laudable.
stop their pay packages or cancel options fuseholders, in December, 2003 for 352,000 Anyone interested in finding out more
payments. It instead aims to work together cash and 1.4 million lease finance debt. about ESG should visit the website, which can
with management for the better of investors. The negative balance on Elektrons profits be found at the investor section of the
Breese is meeting up with Girling in a few and loss account has been substantially Elektron site;

24 June 2004 41
240604 p42-43 brokers tips 6/21/04 5:50 PM Page 42


Media: Textbook Publishing

by: Emily Parkinson

Are gold stars a one-off?

Elsevier (REL). Goldman prefers Reed to Pearson as it believes
the former gives investors the chance to play the US education
system without overpaying.
Reed trades on a 2005 PE of 15 times, or a 6% discount to the
pan-European sector average. The company is often compared
to Pearson, though Goldman analysts think this comparison
unfair as the only similarity between the two is exposure to US
education. Reed trades at a 17% discount to the European media
sector, however this is closer to 7% when stripping out the
effect of differing gearing levels and tax rates. Analysts say:
While there is no great valuation differential between the two,
for investors who want exposure to an improvement in the US
school education market in 2005 we would prefer Reed Elsevier

owadays, with kids more likely to be computer literate before over Pearson.
theyve fully grasped their ABCs, the school textbook is a bit of Pearson trades on a 2005 PE of 18.2 a 25% premium to the European
an anachronism. Even so, if the size of the US school book sector. With little prospect of outperformance Goldman advises
market is anything to go by, the trusty textbook is still very much at the investors to look elsewhere for real value. While the stock does carry
heart of the education system. While the sector has certainly lost some exposure to the strengthening US education market, this is also
gloss over the years, analysts at Goldman Sachs are tipping that next partially offset by a slowdown in the US college market and lower
year should see some colour finally return. margins at Penguin. Even so, with a dividend yield of 4% one of the
The textbook market is characterised by highly transparent earnings highest in the sector the stock is still well-insulated against absolute
and, given that next years purchasing schedule is running at a three- downside.
year high, analysts are able to tip with some degree of certainty that Stocks like McGraw-Hill and Thompson are also trading at the upper
2005 should be a bumper year for book sales. Goldman expects the US end of historical valuations. McGraw-Hill currently trades at a 2005 PE of
market to grow in excess of 10% next year well ahead of current 19.8, making it the most expensive of those in the publishing sector.
consensus forecasts. However, Goldman is also quick to point out that The companys product mix includes testing and remediation products,
stocks should not be bought and sold on the basis of one exceptional which should grow ahead of the market for at least the next few years,
year of sales. but any upside to earnings is likely to be constrained by slowing growth
Some investors have already made this mistake and the valuation of in its Standard & Poors unit.
major publishing players like Pearson (PSON), McGraw-Hill (NYSE: Thompson differs from other stocks in the sector as it is more geared
MHP) and Thompson (NYSE:TOC) more than adequately reflect this to the higher-education market. This market is expected to grow at 3%
optimism. McGraw-Hill is currently trading at a 22% premium to the in 2004 and 4% in 2005 and generally offers steadier growth than the
S&P 500, Pearson at a 15% premium to other pan-European media peers, school sector as most books are student-funded, therefore not as
while Thompson is also at the upper end of its historical valuation. vulnerable to changes in government funding.
Goldman analyst Chris Collett writes: Thanks to the prospect of Even so, this means the company will not enjoy the cyclical upside
double-digit growth in the School market in 2005, the market appears to from the expected rebound in the school book market. Profitability has
be valuing stocks such as Pearson and, to an extent, McGraw-Hill, as if not been an issue at Thompson but sustaining growth in its non-
this growth rate were sustainable. However, part of the reason why 2005 education businesses will be, according to Goldman, which rates the
is a peak year is because 2004 is weak. stock a hold.
Their strategy is to assess stocks based on the value of growth over a So, for the opportunistic investor who wants to buy into the sector
number of years, not just a single, exceptional year. They remind for the upside offered by a bumper year of sales, Goldman says that
investors that beyond 2005 the market should return to more stable opportunity has been and gone. Instead, investors should buy a stock
growth rates of around 4% in 2006. But for as long as the market is like Reed Elsevier and at least that way, once next years reading list
pricing in 2005 growth, the prospect of fairly-valued stocks is slim. On finds the bottom of the dustbin, you can bank on a steady stream of
this basis, they reckon the only stock that offers any value is Reed repeat orders.

Brokers tips - Bullish Brokers tips - Bearish

Allied Domecq Deutsche Bank Buy 467.5 530 (from 500) Misys CSFB Underperform 210.5 190
Investec Bridgewell Overweight 104.5 n/a RBOS Williams de Broe Sell (from hold) 1660 n/a
Grainger Trust Seymour Pierce Buy 1675 n/a ITV Deutsche Bank Hold (from buy) 112.5 115 (from 150)
Standard Chartered UBS Neutral 897 1000 (from 975) MFI Furniture CSFB Underperform 161 135
Johnston Press Bridgewell Overweight 555.25 n/a Morgan Crucible CSFB Underperform 127 115
Dixons UBS Buy (from neutral) 156 180 (from 170) Laura Ashley Seymour Pierce Underperform 13.25 n/a
Vodafone DKW Buy 127.5 190 Stanley Leisure Seymour Pierce Sell 445 n/a
TDG CSFB Neutral (from underperform) 218.5 210 (from 200) Geest Numis Sell 573.5 450
Carnival CSFB Outperform 2520 3000 Rentokil Initial DKW Reduce 144.25 135
Oxford Biomedica Code Securities Buy 18.75 25 William Hill Seymour Pierce Sell 535.5 n/a

240604 p42-43 brokers tips 6/21/04 5:50 PM Page 43


The market is dark on Vodafone (VOD) for no good reason, according to
DKW. It maintains the full-year results were solid, cash returns are
improving and aside from the ongoing problems in Japan,
management is confident of the
groups prospects. Increasing scale Share price: 127.5p
benefits should see the group close 12-month hi/lo: 149.5/125p
the gap on its peers in the 3G market Next news: AGM, 27 July.
Share price: 467.5p and Japan has turnaround potential. EPS: 9.02p
12-month hi/lo: 474.5/405p DKW has a buy recommendation PE: 14.1
Next news: Annual report, 20 Oct. and a price target of 190p. Dividend yield: 1.6%
EPS: 33.5p Dividend cover: 4.4
PE: 14
Dividend cover: 2.4 Expect steady positive newsflow from Oxford Biomedica (OXB) in coming
months, according to Code Securities. Fresh data on the efficacy of its
FRANCHISES BOOST ALLIED GROWTH main cancer treatment programme is due in the second-half. The
Allied Domecq (ALLD) has a secret growth weapon up its sleeve in group's gene therapy platform is also
the form of its fast-growing franchising operations, according to showing promise, with tests proving Share price: 18.75p
Deutsche Bank. Store rollouts of Dunkin Donuts and improving it was effective in treating nerve 12-month hi/lo: 29/15.5p
sales at Baskin-Robbins suggest the businesses are capable of injury and degeneration. Further data Next news: Interims, 16 Sept.
supporting sustained double-digit growth. Further, analysts from both programmes is expected to EPS: -3.87p
think the company is undervalued by as much as 15% due to the drive the stock higher in the later part PE: -4.8
weak historical performance of its spirits business. Deutsche says of the year. Code says buy with a price No dividend
buy with a price target of 530p. target of 25p.

CSFB analysts have lowered their 2004 and 2005 full-year pre-tax THE REST
forecasts for MFI Furniture (MFI) by 8% to reflect concerns about Selling sofas does not
interest rate rises, capacity seem to be a problem at
constraints at its older Howden Share price: 161p Laura Ashley (ALY) but
stores and competitive pricing 12-month hi/lo: 162/136p selling clothes is another
from rivals. Analysts are also Next news: Interims, 22 July. matter entirely. Trading
sceptical about rumours of the EPS: 12.2p in its fashion business
possible spin-off of the Howden PE: 13.2 continues to be
business in the light of more Dividend yield: 2.4% challenging, according
pressing concerns. Sell with a Dividend cover: 3.5 to management, in spite
price target of 135p. of favourable press
coverage for the new
WEAK TRADING HITS RENTOKIL range. The company says
Expect poor set interim results from Rentokil Initial (RTO) on 26 the latest range is still in
August , says DKW. Weak trading from January to April will hit hard a transitional period and
at the bottom line and the analysts think this will fuel rumours earnings will take time to
about possible divestments. work through to the
With no quick-fix solution to Share price: 144.75p Share price: 13.25p bottom line. The stock
deteriorating trading, DKW says 12-month hi/lo: 208.75/142.25p 12-month hi/lo: 14.75/9.75p still carries recovery
reduce and dont consider Next news: Interims, 26 August. Next news: Interims, 30 Sept. potential although
buying again until there is EPS: 16.2p EPS: 0.14 Seymour Pierce thinks
greater solidity in margins, PE: 8.94 PE: 94.6 the market has largely
particularly in pest control and Dividend yield: 4.21 No dividend priced this in.
h4343ygiene. Dividend cover: 2.7 Underperform.

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

Numis says buy Daily Mail & General Trust (DMGT). Current levels Marks & Spencer (MKS) may generate impressive returns but
are good value with the Telegraph bid uncertainty behind the stock. Lehman Brothers says its not a growth story. Underweight.
The rally on British Airways (BAY) was premature, says JP Morgan, ITV (ITV) has lost share in the TV advertising market and Deutsche
which remains neutral ahead of more tightening in long-haul flying. Bank downgrades its recommendation from buy to hold accordingly.
Grafton (GFTU) is benefiting from strong macros and solid trading. After management talk of a difficult UK video games market,
Bridgwell is overweight on the stock. Bridgewell confirms its neutral stance on Game Group (GMG).

log on to for our daily news updates 24 June 2004 43

240604 p44 analysis watch 6/21/04 5:54 PM Page 44


To stick or to twist ROYAL BK.OF SCTL.

share price
Which analysts strategy rewards The table shows his moves, as 1500 Daviess reduce

investors most? Jeremy Lacey tackles the tracked by research firm StarMine. 1300
1400 recommendation
January 2004

question by looking at two different Looking at the chart, the March 1200 Crutchleys buy recommendation
September 2002
buy recommendation would have 1100 A O D F A J A O D F A J
responses to Royal Bank of Scotland served investors well enough,
Source: Thomson Financial/Datastream

ho delivers better value the analyst who decides what his although by then more or less everything was on its way up. Perhaps it
view is on a company and firmly sticks to it or the one who would have been better to go straight to a hold or sell after that and take
frequently switches from buy to sell and back again? On the profits, but then hindsight is a wonderful thing.
basis of this weeks table, in which we compare analysts ABN Amros January downgrade came at the same time it moved
recommendations on blue-chip banking stock Royal Bank of Scotland Barclays to sell from reduce and recommended a switch to HSBC. We
(RBS), the former approach has its merits. are concerned about the outlook for Barclays and RBS, the broker said.
John-Paul Crutchley of Merrill Lynch has had the firms top buy In 2004 we see pressure coming in key divisions and see consensus
rating on RBS since September 2002. The recommendation has stood forecasts as difficult to achieve. ABN was also worried about
for a marathon 632 days. At the time of the upgrade, the share price was acquisition risk increasing in 2004. But so far this year, RBS has held
13.97. Since then it has risen 19%, over twice the rise in the FTSE 100 pretty steady, if dull, with a low of 16.04 in February and a high of
index. 17.64 in March. Not much sign of a plunge.
Crutchley timed the autumn 2002 dip well: the share recovered to Meanwhile, Merrill Lynch which is corporate broker to RBS
16.50 territory by the end of that year, before in its acquisition of US bank Charter One
retreating to below its previous levels in the early 2003 Davies, ABN Amro reaffirmed its buy rating after the banks June
plunge. RBS then picked up more or less along with Rec Date RBS price (p) trading statement.
the rest of the market during last years recovery. Buy 07-Mar-03 1276.37 Perhaps the conclusion to be drawn is that long-
By comparison, Daniel Davies at ABN Amro has Add 19-Jun-03 1686.05 term recommendations are fine for long-term
been working his way down from buy to reduce in Hold 13-Oct-03 1615.20 investors, while short-term moves are great if the
easy stages since March last year. Reduce 20-Jan-04 1650.40 analyst gets it right. Take your pick.

Whos getting it right?

Shares tracks the analysts recommendations on FTSE 100 stocks and finds out invested in RBS would now be worth 124.58 while 100 invested in the index
who is winning. For each one, we take the movement in the share price and would be worth 118.89. The analyst has therefore beaten the index by 4.77%.
compare it with the change in the index and sector. These are rebased to 100. For buy or equivalent recommendations. the analyst is credited with all the
To take an example from this weeks table, Royal Bank of Scotland has performance difference, and for hold or equivalent with 50%. For sells, the
risen 24.58% since Michael Lever of Credit Suisse made his buy rating is multiplied by -1. Recommendations are as listed by research firm
recommendation while the FTSE 100 has risen 18.91%. In effect, 100 StarMine.


Analyst Firm Latest recommendation Date Price then Price 17-06-04 Change % FTSE 100 Bank sector Analyst performance: %
To From (p) (p) change % change % relative to relative to
FTSE 100 sector
John-Paul Crutchley Merrill Lynch Buy Strong buy 6/9/02 1396.89 1667 19.34 9.4 4.71 9.08 13.97
Mark Phin Cheuvreux Selected list New 8/4/03 1558.34 1667 6.97 0.08 12.74 6.89 -5.11
James Hamilton WestLB Buy Outperform 6/11/03 1522.85 1667 9.47 3.91 -2.38 5.35 12.14
Ivan Ranz BBVA Bolsa Buy New 6/11/03 1522.85 1667 9.47 3.91 -2.38 5.35 12.14
Michael Lever Credit Suisse Outpfm/overwt New 20/1/03 1338.05 1667 24.58 18.91 18.89 4.77 4.79
Evangelos Kavouriadis Bernstein Outperform Marketperform 5/11/03 1524.89 1667 9.32 4.41 -2.08 4.7 11.64
Michel Wiederkehr Bordier Plus New 13/11/03 1561.28 1667 6.77 2.75 -2.95 3.91 10.02
James Eden Commerzbank Overweight Buy 12/2/04 1573.72 1667 5.93 2.64 -2.2 3.2 8.31
Richard Staite SG Hold Buy 6/1/04 1631.82 1667 2.16 0.46 -5.3 0.85 3.94
Nic Clarke Charles Stanley Buy New 16/4/04 1671 1667 -0.24 -0.97 -0.12 0.74 -0.11
Martin Cross Teather & Greenwood Buy New 17/9/03 1587.31 1667 5.02 4.67 -0.63 0.34 5.69
Robert Law Lehman Overwt/neutral Overwt/postv 10/10/03 1597.11 1667 4.38 4.23 -2.96 0.14 7.56
Michael Trippitt HSBC Buy Add 15/4/04 1674.34 1667 -0.44 -0.27 -0.24 -0.17 -0.2
Sebastian Reuter Helaba Trust Underweight Equal weight 29/8/03 1533.68 1667 8.69 7.98 2.2 -0.66 -6.36
Daniel Davies ABN Amro Reduce Hold 20/1/04 1650.4 1667 1.01 -0.13 -5.9 -1.14 -7.33
Bruce Packard ING Buy New 19/2/04 1695.09 1667 -1.66 -0.49 -6.12 -1.17 4.75
Simon Price JP Morgan Neutral Overweight 7/8/03 1561.73 1667 6.74 9.71 2.1 -1.35 2.27
Ian Smillie UBS Buy 1 Buy 2 16/6/03 1699.1 1667 -1.89 0.05 1.56 -1.94 -3.39
Barrington Pitt-Miller UBS Buy 1 New 12/5/04 1670 1667 -0.18 1.82 1.1 -1.96 -1.26
James Leal Teather & Greenwood Buy New 4/5/04 1722 1667 -3.19 -1.19 -1.89 -2.03 -1.33
Patrick Barton Williams de Bro Hold Buy 11/6/03 1657.3 1667 0.59 8.27 2.85 -3.55 -1.1
Ian Poulter Cheuvreux Selected list New 19/5/03 1544.25 1667 7.95 14 10.06 -5.31 -1.92
Nick Lord Deutsche Buy New 10/7/03 1628.47 1667 2.37 11.53 3.62 -8.22 -1.21
David Van Der Zande Effectenbank Stroeve Buy Hold 25/6/03 1655.78 1667 0.68 10.46 3.69 -8.85 -2.9

240604 p45 Strategies 6/21/04 6:02 PM Page 45


The filter factor

This week: PEG analysis. Jeremy Lacey sifts through the data to discover
an effective guide to finding companies that are enjoying steady growth

or this weeks Strategies idea, I am LAING (JOHN)
share price
share price share price
grateful to Paul Basham at 230 320 170
220 300 160 HIGH 161.50 5/3/04
ShareScope for suggesting a 210
HIGH 223.00 23/4/04
LOW 153.50 20/6/03 280
150 LOW 66.50 11/7/03
140 LAST 113.00
framework for adapting Jim 200 LAST 220.00 260 130
190 120
Slaters classic Zulu/PEG analysis method. 180 220
PEG price-earnings growth factors relate 170 200 HIGH 315.75 14/11/03 90
160 LOW 166.50 20/6/03
PE ratios to recent or expected growth in 150
LAST 181.00
J J A S O N D J F M A MJ 160
profits earned. They work best as a guide to Source: Thomson Financial/Datastream
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream

companies with steady rather than slow or

erratic growth. the number of times its liabilities are covered (LMC) shares fell from
Generally a PEG below 1 the lower the by assets readily convertible into cash. In this their November high on concerns about the
better is a sign that the shares are relatively case we took a minimum of 1 times. tech bubble survivors growth story. In May,
cheap when considered against the companys So what do we have? The result after this Rachel Waring of Numis said that despite the
expected growth. session of data mining was 74 shares, of which second-quarter loss of 6.5 million the stock
The PEG is calculated by dividing the PE by we have listed the 15 with the lowest PEGs. looked good value given the big growth we
the expected growth in earnings per share. You might like to do the same type of exercise are experiencing in the online travel market
Screening produced a list of around 350 UK and add some extra filters of your own to and the positive demographics going
stocks with a PEG of 0.75 or lower. reduce the list even more. forward.
Then we added a few more filters aimed at Lets look at the first three in the list: And so to Canary Wharf (CWG). Well, forget
weeding out the stragglers: normal market Recruitment company Spring Group (SRG), about that one. The Songbird deal is done and
share of 5,000 or more, and a share price of at which in March announced a return to an dusted and this bird will soon have flown
least 1 to suggest a decent amount of operating profit for 2003, made some upbeat from the market. It just goes to show that data
liquidity. We looked for a good cash balance, noises at last weeks AGM. CEO Richard mining has its limitations and follow-up
taking the proportion of cash to shareholder Barfield said: Customer and market homework is always needed. Move on to
funds and setting a minimum of 20%. sentiment has continued to improve and the construction/support services organisation
Finally we added a liquidity measure known group is trading in line with market John Laing (LNGO), which has made a strong
as the Quick or Acid ratio: this shows a expectations of substantial revenue growth start to the year thanks largely to its
companys ability to repay creditors by using and operating profit improvement in 2004. involvement in the PFI/PPP market.

Alternative rolling PEG portfolio

Company EPIC Cap (m) Close Alternative Norm Most recent Most recent
rolling PEG market size cash % inc. quick ratio
Amstrad SRG 178.2 113 0.11 5 53.9 1.97
Autonomy LMC 592.4 181 0.14 75 116 1.15
Canary Wharf CWG 1736 296.8 0.21 75 67.7 3.36
Datamonitor LNGO 389.7 220 0.21 10 106 6.95
Evolution AMT 146.7 182 0.41 5 102 3.27
Fenner MOR 160.4 122.5 0.42 10 138 1.17
John Laing DTM 94.5 133.5 0.45 5 146 1.61 MCA 295.7 290 0.46 15 23 1.4
LogicaCMG EVG 335.3 135 0.47 10 58.4 2.58
McAlpine PAG 416.8 348 0.51 10 63.5 2.37
Michael Page Intl FENR 117.8 108.5 0.56 10 52.5 1.16
Morse SDR 1387.8 614 0.59 25 44.5 1.84
Paragon MPI 637.5 179.8 0.6 50 43.5 1.6
Schroders LOG 1357.2 181 0.61 100 30.3 1.73
Spring AU. 266.4 242.3 0.62 15 64.8 8.64

A SIPP in the right direction

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comdirect ltd is authorised and regulated by the Financial Services Authority and a member of the London Stock Exchange
240604 p46 esignal 6/21/04 4:43 PM Page 52
240604 p47-50 adft forex 6/21/04 6:19 PM Page 47


the flow
Money may not grow on trees but
its liquidity creates the kind of
rivers that can offer the most
lucrative catches in the financial
world. Christopher Lockhart casts
for goldfish

re you looking for an area of investment
where the markets are always open? Or one
which moves so quickly that trading even the
smallest amounts can lead to big profits?
Quite simply the interaction of one countrys
currency with another is by far the largest and best of all the
markets to play. Forex jargon buster
Foreign currency exchanges (FX or forex) are open 24
hours a day, opening on Sunday evening, closing Friday Would you know to straddle your
night and trading $1,500 billion a day, making forex the plain vanilla swissy or strangle it
biggest market in the world bar none. Currencies trading naked? Here is a jargon buster to
should be seriously considered as a valuable addition to help you get to grips with your
any active traders or investors portfolio of markets. stockys, kappas and cables.
Almost everyone has already had some kind of exposure
to foreign currency exchange, even if it is just trading your American option: An option which
pounds for euros for a trip abroad. may be exercised at any valid
Importers, exporters, hedge funds, pension funds, business date during the life of the
option-related trades and speculators all trade in this very option.
liquid market. Because the trading is so fluid it is easy to Arbitrage: A rare risk-free type of
make a profit. It is also easier and quicker to recover from a trading where the same instrument
loss as long as you know what you are doing. As there is is bought and sold simultaneously
always someone trading you are not going to get caught in two different markets in order to
out by very fast and dramatic changes and find that you cash in on the difference in these
cannot get out of the market when you want to. markets.

24 June 2004 47
240604 p47-50 adft forex 6/21/04 6:19 PM Page 48


exporters, hedge
Around: Used in quoting forward
funds, pension
premium/discount. Five-five
around would mean five points on funds, option-related
either side of the present spot value.
Average rate option / Asian
option: A contract where the
trades and
exercise price is based on the
difference between the strike price speculators all
and the average spot rate over the
contract period.
Base price: One hundredth of a
trade in this very
percentage point. 50 basis points
[50bp] is half a percentage point.
liquid market.
Bear call spread: A spread
designed to exploit falling exchange Because the trading
rates by purchasing a call option
with a high exercise price and
selling one with a low exercise
is so fluid it is easy
Bear put spread: A spread to make a profit
designed to exploit falling exchange
rates by purchasing a put option There are numerous reasons for trading forex. The
with a high exercise price and currency exchanges are immediately reflective of
selling one with a low exercise worldwide and economic events and are usually where the
price. first moves occur of all the major markets, making it the
Broken dates: Deals that are litmus test of the investment world.
undertaken for value dates that are Forex also has an incredibly transparent nature to it,
not standard periods, for example meaning that everybody can find out how the euro and the
one month. The standard periods dollar are behaving by logging on, or even by turning on a
are one week, two weeks, one, two, television.
three, six, and 12 months. Terms In the UK we have been used to trading in different
also used are odd dates, or cock currencies for hundreds of years. Up until the arrival of the
dates or broken period. euro we were trading 16 currencies in Europe alone.
Cable/sterling: A term used in the Though they have now all become one currency it has not
foreign exchange market for the resulted in a loss of trading options and because there are
dollar/pound rate. a lot fewer currencies to keep track of, it means that forex
Calendar spread: An option trading is seen by many as being an easy area for a
position comprised of purchase and beginner to add to an existing portfolio.
sale of two option contracts of the Geoff Langham, head of trading at CMC Deal4Free, says
same type with different expiration that its probably not the best idea to switch completely
dates at the same exercise price. from shares to trading currencies but that instead you
Delta: The change in the value of should use forex as an addition to your current portfolio.
the option premium made fully paid Currency trading is not as difficult as one may assume,
by the capitalisation of reserves and simply because there is a lot of information available on
given relative to the instantaneous currencies and everyone can grasp the concept. There are
change in the value of the also far fewer areas to focus on with foreign exchange
underlying instrument, expressed as meaning you can easily read a page on foreign exchange
a coefficient. each day rather then 10 pages on stocks.
Durable goods order: An If you are trading the FTSE 350 it can be difficult to keep
economic indicator which measures focus of 350 stocks. Langham adds, with FX there are really
the changes in sales of products only a dozen currencies that are considered the majors to
with a life span in excess of three properly focus on and there is plenty of targeted
years. information about them.
Forward outright: Foreign Charles De Roeper, head of Broking at Berkeley Futures
exchange deal which matures on says: I believe this is one of the easier markets to trade.
any day past the spot delivery date. What he likes most about trading FX is that it trends so
Good until cancelled: An well. Compared to shares, the currency market goes in
instruction to a broker when, unlike swings. This is forced because when a currency becomes
normal practice, the order does not popular or unpopular, everyone from pension fund
expire at the end of the trading day, managers to hedge funds and importers and exporters

240604 p49 FXCM ad 6/22/04 10:22 AM Page 1
240604 p47-50 adft forex 6/21/04 6:19 PM Page 49


although it normally terminates at swaps currency positions from dollar to euro, euro to
the end of the trading month. dollar.
Kappa: A measure of the sensitivity Normally a currency will have a two to three-year swing
of the price of an option to a of up to 30% and you therefore can trade as a long-term
change in its implied volatility. investor and look for very big gains or you can trade within
Kiwi: Slang for the New Zealand the general trend. You tend not to get as many shocks in
dollar. the FX market as occur in individual shares
Knock in: A process where an Many companies will offer forex trading using methods
option becomes active as the familiar to many current investors, namely options,
underlying spot price is in the futures and spread betting. Anyone familiar with the
money. concept of spread betting should find it easy to move into
M1: Cash in circulation plus forex trading by betting on currency changes, benefiting
demand deposits at commercial from the fact that all your profits are exempt from capital
banks. There are variations between gains tax. Though the arguments for spread betting in
the precise definitions used by forex trading are obvious because of this tax-free benefit,
national financial authorities. you must remember this also means you cannot offset any
M2: Includes demand deposits time losses against spread bets as you can with other forms of
deposits and money market mutual investment.
funds excluding large CDs. Nor is spread betting the only option. FX Capital Markets
M3: In the UK it is M1 plus public dont offer spread betting as a tool to trade on the forex
and private sector time deposits market. Managing Director Colin Geiger says The difference
and sight deposits held by the between a bet and an investment decision is how the FSA
public sector. defines the two. A bet has an outcome you are either going
OTC: A market conducted directly to win or lose. Trading FX as an investment tool is more
between dealers and principals via than just a bet, you can wait and see what happens to it
a telephone and computer network before the bet is finalised. We feel that the spreads we offer
rather than a regulated exchange would be better maybe than the spread betting companies.
trading floor. There are other ways of trading FX as Charles De Roeper
Random walk theory: An efficient points out Currency futures are exchange-dealt contracts
market hypothesis, stating that dealing with fixed amounts of money in the market. So a
prices move randomly versus their customer can actually trade futures or options on
intrinsic value. Therefore, no one currencies. To do this you need to be confident with dealing
can forecast market activity based in futures and options first.
on the available information. De Roeper adds to deal in foreign exchange you need to
Rollover: An overnight swap, be an intermediate customer, which means you have to
specifically the next business day have previous experience in dealing margin products.
against the following business day Currencies are often traded on margin, as are futures and
(also called tomorrow next, options which those who deal in these types of investment
abbreviated to tom-next). will already understand. Because the currency market is the
Spot: (1) The most common foreign most liquid market of them all it usually offers the most
exchange transaction, (2) Spot or generous margins.
spot date refers to the spot Geoff Langham of CMC explains Deal 4 Frees margin
transaction value date that requires system. We have a 1% margin requirement which means
settlement within two business that if you wanted to buy 1,000-worth of currency then you
days, subject to value date would need just 10 to do that, or to put it another way
calculation. 1,000 buys you 100,000 and so on. If you are paying 1% for
Stocky: Market slang for Swedish 100% of the product then a 1% move in the underlying price
Krona. will basically double your money, or of course, you could
Straddle: The simultaneous lose it all.
purchase(long)/sale(short) of both De Roeper of Berkley Futures puts a sobering and very
call and put options on the same sensible view on trading using margins. The main thing
currency pair, with the same strike that investors should consider is the amount of money they
price and expiry date. actually trade, as opposed to the amount of money they are
Swissy: Market slang for Swiss trading with. So dont think Ive got 5,000 so I can buy
Franc. 500,000! Actually think that you are investing 500,000. If
Vanilla: A simple option where you think that way round and the currency moves down a
terms and conditions do not include few ticks then a 1,000 loss from 500,000 doesnt seem
any provisions other than exercise that much, but 1,000 from a 5,000 deposit at 20% seems
style, expiry and strike. To compare that much greater.
with exotic options which have Margin is a wonderful thing for people who trade
additional terms. sensibly and a terrible thing for people who are not
SOURCE DEAL4FREE.COM disciplined or who trade badly.

3104 FX_SB SM_A 14/5/04 12:09 pm Page 1




Spreads shown include market spread

USD/JPY 3pts > EUR/USD 3pts > GBP/USD 4pts > EUR/GBP 3pts
FX Spread Bet the better way to trade FX Spread Betting carries a high level of risk to
your capital. Only speculate with money you
Thanks to our unique Rolling Cash FX Spread Bets, we can can afford to lose. Spread Betting may not be
now consistently give you spreads on 40 currency pairs that are suitable for all investors, therefore ensure
typically offered by institutional FX market makers. And with no you fully understand the risks involved and
tax levied on any profits made, nows the time to open your eyes seek independent advice if necessary. Tax
to the benefits of FX Spread Betting. law can change. Historic achievements do
not guarantee future performance.

Want to see what youre missing?

Log on or call 0800 0933 633
Best Spread Betting Service
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Telephone calls may be recorded. CMC Spreadbet Plc is authorised and regulated by the Financial Services Authority. Spreads tradeable 11.05.04. FX/SBSMSA110504_A
240604 p52 Lrg Caps 6/21/04 6:22 PM Page 52


Key to Shares opinion on stock + Positive / Neutral - Negative

Gloomy news from Misys as it warns of challenging conditions

by: Steven Frazer

If investors were hoping for an improving into a minor tailspin. The stock fell almost 8% Making half its sales in the US does the
outlook for the banking IT sector they will be to 197p. The company is managing to win company no favours either given that the
sadly disappointed. Misys (MSY), which sells some new business but the victories tend to dollar continues to lose value against the
software packages to investment banks, be on smaller contracts: the big IT projects on pound, hitting what should be decent
warned that conditions in its core banking which the company is able to earn huge profit numbers at its fast-growing healthcare IT arm.
and securities industry markets remain margins remain few and far between. As for the shares, they currently trade on a
challenging. The company also confirmed Analysts at Barclays Private Clients remain mid-teens PE against earnings growth of high
that sales for the year to the end of May fairly cautious. Barclays has placed a 200p a single-digits. The dividend remains well-
would be 10% below the previous year. share fair value rating on the stock, which covered and yields 3.3%.
Such gloomy news was clearly not leaves little room for headway from current Shares says: Difficult to make a
anticipated by investors, sending the shares levels. positive argument for the shares.


ALBA (ABA) - 807.5P + GRAINGER TRUST (GRI) - 16.55P +
The electronics group unveiled ALBA Grainger Trust, the UKs largest GRAINGER TRUST
share price
share price
record consumer electronics 900 quoted residential property 2000
HIGH 878.00 23/2/04 1900 HIGH 1955.00 2/4/04
turnover in the UK for Alba, LOW 496.00 23/6/03
investor, enjoyed a 9 million 1800 LOW 1076.00 24/6/03
800 LAST 1675.00
Goodman and Bush. Turnover 750
LAST 807.50 boost in interim profits and a 61% 1700
rose 17% to 618 million and pre- 700 boost to earnings per share. 1500
tax profits also jumped 17% to 600
During the period, Grainger 1400
31.1 million. 550 disposed of its entire commercial 1200
Appliances also achieved portfolio for 19 million and sold 1100
450 1000
record turnover. During the Source: Thomson Financial/Datastream 676 residential properties for 73.6 J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream

period Alba snapped up Grundig million.

for 80 million in a joint venture and digital radios sold well. Because of the size of the first- Regarding current media
with Turkish company Beko The telecoms division saw half sales programme, this level speculation of a cooling housing
giving it a worldwide brand. sales rise but growth was not as of trading is not expected to market, Grainger is defiant. The
The acquisition was approved strong as it was at the consumer continue to the year end. The geographic spread of our
by the European Commission. electronics businesses. Hinari group has taken advantage of the portfolio, our low exposure to
Bush radio posted record sales of performed well and there were strong first half by repaying most volatility, high sale margins and
175 million and sales at strong sales of Breville products of its expensive fixed rate debt. strong demand for our un-
Goodmans were almost 100 including the Antony Worrall Grainger is looking towards the modernised, below-average
million. Turnover was boosted by Thompson and Nicky Clarke prospect of property investment property, leaves us well-
strong sales of LCD TV and brands. (PT) funds with optimism, hoping to positioned to continue to
TV/DVD combinations. Alba is Shares says: Impressive be at the forefront of any perform well. (CB)
soon to launch large screen LCD results and further growth initiative which will facilitate Shares says: Grainger
TVs, rear projection TV and DVD is likely through Grundig investment in the private rented has an enviable position in
recorders. Digital cameras, MP3s acquisition. sector. a robust market.
Tover Fin EPS Fin Total Div Div Market Tover Int EPS Int Total Div Div Market
PTP Div Div Yield Cover Cap PTP Div Div Yield Cover Cap
2004 618 31.1 47.8 8.75 11.0 1.5 4.3 401 2004 121 31.4 85.8 4.04 1.1 21.2 413
2003 528 29.4 47.0 7.75 9.8 2.0 4.8 248 2003 83.5 22.4 53.3 3.51 1.4 15.2 269
Div. Payable: 25.10.04 xd date: 22.09.04 Div. Payable: 23.07.04 xd date: 23.06.04

240604 p53-57 tables 6/22/04 11:52 AM Page 53


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) % %
ALVIS ALV 351.61 317.00 318 165.50 1620.80 2330.80 *22601 40.16 *20350 103.01 18.60 17 *2.5 -32.43 0.88 45.33 27.90 61.62
BAE SYSTEMS BA. 6288.47 205.50 225.50 134.75 1567.90 694.70 *309000 -167.17 *-61000 -91.06 16.60 1.15 3.96 12.40 179 51.90 *5.5 0 4.97 55.52 31.08 -0.28
COBHAM COB 1525.85 1375 1425 1120 1219.70 1225.30 *64300 -40.19 *16600 -75.91 93.50 82.82 92.91 14.70 16.60 14.80 *8.36 10 2.28 205.55 36.32 5.09
MEGGITT MGGT 727.80 246 269.75 198 1219.40 1078.40 *51038 5.88 *20898 15.20 18.30 11.89 13.94 13.40 20.70 17.60 *2.4 6.67 3.39 18.02 37.90 8.13
ROLLS-ROYCE GROUP RR. 3954.10 235.50 243.25 121.29 1859.50 1194.50 *244000 45.24 *98000 216.13 12.20 10.07 12.84 19.30 23.40 18.30 *3.11 -0 1.50 104.23 37.59 5.71
SMITHS GROUP SMIN 3956.09 705 770 606 1053.80 950.80 *265800 -24.79 *112300 -41.69 44.20 35.66 40.37 16 19.80 17.50 *8.75 0 4.10 99.37 47.84 11.26
ULTRA ELECTRONICS ULE 389.77 585 605 470 1155.60 1425.30 *32742 10.16 *20406 13.71 38.20 33.62 36.69 15.30 17.40 15.90 *8.2 9.33 2.34 28.77 43.30 37.35
VT GROUP VTG 456.75 267.50 280 220 1160.10 1079.20 *9481 0 *-2297 0 18.13 14.54 16.64 14.80 18.40 16.10 *2.57 7.08 3.74 92.36 40.46 1.81
GKN GKN 1816.93 247.50 296.25 205 1111.50 983.60 *112000 -14.50 *0 -100 22.80 17.02 20.68 10.80 14.50 11.90 *7.8 2.63 5.22 181.03 49.52 10.63
INCHCAPE INCH 1330.14 1685 1699 950 1841 4337.20 *170000 54.26 *120000 64.61 132.40 131.69 139.35 12.70 12.80 12.10 *26 23.81 2.51 345.70 4.69 32.80
PENDRAGON PDG 427.56 326 425 157.20 2109.10 4026.70 *57001 15.28 *30490 27.17 24.50 21.69 26.21 13.40 15.10 12.50 *3.8 -17.39 2.58 122.80 41.48 21.67
VARDY (REG) VDY 322.95 545.50 618 413 1357.80 1761 *43514 0 *28124 0 58.20 52.40 52.97 9.40 10.40 10.30 *5.2 20.93 3.09 261.45 32.60 18.86
ABBEY NATIONAL ANL 7072.89 479.50 603 414 1056.50 447.70 *-380000 -40.25 *-651000 -43.29 0 28.29 39.34 17 12.20 *16.67 126.80 5.79 18.17 90.77 -13.55
ALLIANCE & LEIC. AL. 3819.47 836 917 798 1077.30 1190.80 *577600 12.29 *379200 11.43 79 88.33 92.61 10.60 9.50 9 *29.6 10.04 5.83 143.50 92.52 21.98
BARCLAYS BARC 31223.98 484.75 539.25 432 1104.10 990.60 *5695000 8.62 *2742000 21.38 42.30 45.66 49.98 11.40 10.60 9.70 *13.45 12.08 4.71 27.79 88.55 18.11
BRADFORD & BING. BB. 1727.65 272.25 343.25 264.50 861.70 1039.70 N/A N/A *213700 20.46 28.70 27.65 30.33 9.50 9.80 9 *11 11.11 6.73 21.91 90.27 16.44
EGG EGG 1314.34 159.50 197.50 115.25 1325 984.50 *37900 0 *-18800 0 0 8.96 12.62 17.80 12.60 N/A N/A 0 8.99 78.89 -3.97
HBOS HBOS 27118.63 697 815 669.50 912.10 1001.40 *4356000 28.42 *2645000 28.65 68.50 74.95 83.99 10.20 9.30 8.30 *20.6 5.10 4.92 120.73 89.56 18.09
HSBC HDG. HSBA 88570 803.50 919 696 1158.80 1113.80 *8330292 20.42 *5840989 25.58 53.35 53.62 59.11 15.10 15 13.60 *0.24 -26.15 4.63 80 75.36 16.55
LLOYDS TSB GP. LLOY 24081.03 430.50 486 391.50 1039.20 758.90 *4992000 58.23 *3338000 79.85 58.30 42.04 43.88 7.40 10.20 9.80 *23.5 0 8.83 70.04 85.48 40.91
NORTHERN ROCK NRK 3062.12 727 794 658 1054.90 1411.70 *477500 19.35 *274600 19.55 66.30 74.02 80.95 10.90 9.80 8.90 *15.8 15.33 3.58 42.52 92.33 23.95
RYL.BK.OF SCTL. RBS 51330.09 1637 1794 1522 976.50 1068.60 *6698000 23.58 *4239000 32.18 159.30 145.52 159.67 10.30 11.20 10.30 *35.7 15.16 3.41 443.88 80.58 9.83
STD.CHARTERED STAN 10403.65 884 985 712.50 1195.60 1059.60 *1196640 6.87 *636304 9.76 47.42 54.46 62.70 18.60 16.20 14.10 *0.3649-98.24 3.60 42.06 71.02 14.08
ALLIED DOMECQ ALLD 5347.49 483.25 484.75 326 1387 1168.30 *597000 -13.98 *342000 -13.85 34.60 31.44 34.91 14 15.40 13.80 *8.7 7.41 3.34 87.30 74.94 55.46
DIAGEO DGE 22681.55 742 783 612 1110.40 1074.70 *791000 0 *-80000 0 50.43 48.97 53.26 14.70 15.20 13.90 *10.6 7.07 3.94 64.58 55.61 1.31
SABMILLER SAB 6907.37 690 695.50 395.50 1673.30 1404.70 *540839 0 *222509 0 0.78 32.31 37.37 16.20 21.30 18.50 *0.075 15.38 2.73 205.13 33.58 11.76
SCOT.& NEWCASTLE SCTN 3907.36 437.25 447 335.75 1214.60 988.60 *198000 -54.21 *-21000 -109.45 39 11.18 13.57 11.20 39.10 32.20 *13.41 31.73 3.41 129.36 41.51 2.07
BOC GROUP BOC 4624.78 929 979 762 1215.30 1015.90 *374500 -3.23 *202900 9.38 51 60.80 66.84 18.20 15.30 13.90 *15.5 0 4.79 585.23 43.68 13.35
BRITISH VITA BVIT 509.08 267.50 285 235 1029.30 1796.70 *48300 -53.38 *28200 -64.75 20.60 19.77 22.08 13 13.50 12.10 *6 4.35 4.88 138.14 20.08 8.95
CRODA INTL. CRDA 390.75 286.75 310.50 239 1133.30 1251.30 *47500 370.30 *29300 -1431.82 19.20 19.94 21.73 14.90 14.40 13.20 *4.02 2.81 4.59 97.53 25.77 20.03
IMP.CHM.INDS. ICI 2686.15 225.50 252 118.75 1772.20 720.40 *257000 -54.83 *42000 -80.47 19.40 18.78 21.69 11.60 12 10.40 *3.5 -22.22 3.08 150.60 78.72 4.32
JOHNSON MATTHEY JMAT 2016.18 901 1065 820 1012 943.80 *198200 0 *121600 0 64 58.49 63.96 14.10 15.40 14.10 *8.2 5.13 3.26 268.47 35.68 14.99
YULE CATTO YULC 379.39 262 385 216 750.20 1567.30 *61234 26.62 *27747 55.38 27.60 5.30 5.96 9.50 49.40 44 *5.3 3.92 5.51 120.90 49.55 15.42
AGGREGATE INDUST. AGG 1073.48 83.75 95 78 1052.90 1034.20 *166100 -1.66 *96500 6.51 7.10 7.36 7.90 11.80 11.40 10.60 *1.13 9.71 3.71 99.11 35.82 10.84
AMEC AMEC 820.46 274.50 323 249 1056.30 631.60 *135600 281.97 *59100 -642.20 25.80 20.78 24.02 10.60 13.20 11.40 *3.6 5.88 4.25 69.19 68.46 24.23


BALFOUR BEATTY BBY 1093.58 260.25 275 171.25 1390 1454.80 *84000 18.31 *58000 75.76 20.60 19.27 21.28 12.60 13.50 12.20 *2.6 10.64 2.56 37.60 25.66 246.67
BARRATT DEVELOP.S BDEV 1364.10 569.50 649 428 1282.40 1855.10 *299300 0 *206400 0 100.50 106.25 115.71 5.70 5.40 4.90 *6.9 39.68 3.75 4.59 4.20 27.82
BELLWAY BWY 810.16 733 834.50 556 1273 2252.50 *176328 31.86 *118347 34.40 118.30 120.09 130.80 6.20 6.10 5.60 *13.8 23.21 3.49 14.74 18.92 26.60
BERKELEY GROUP BKL 1090.46 902.50 1068 695 1258 1318.30 *218059 0 *145283 0 122.90 129.52 139.34 7.30 7 6.50 *5.8 20.83 2.49 15.30 16.91 15.98
BOVIS HOMES GROUP BVS 585.59 510 607 405 1227.60 1734.20 *129378 17.19 *86513 17.70 74.20 85.17 95.21 6.90 6 5.40 *11.1 18.09 3.58 7.17 13.92 21.85
BPB BPB 1959.63 397 409.50 294 1299.60 1863.90 *209900 158.18 *113300 5565 23.40 30.40 33.97 17 13.10 11.70 *4.8 3.23 3.98 222.77 40.35 14.75
CARILLION CLLN 393.69 184 200 129.50 1156.10 1136.20 *21000 -45.31 *4600 -79.19 16.80 16.88 17.82 11 10.90 10.30 *1.575 5 3.05 31.83 30.93 5.87
CREST NICHOLSON CRST 385.27 346 367 226.50 1555.30 1937.70 *88300 19.81 *52100 22.01 45.20 48.64 53.13 7.70 7.10 6.50 *7.5 15.38 3.53 1.89 32.44 23.74
HANSON HNS 3004.99 407.75 457.75 327 1146.80 929.60 *199800 -42.17 *152400 -4.69 40.40 33.85 37.69 10.10 12 10.80 *11.95 10.14 4.62 347.79 47.48 6.79
MARSHALLS MSLH 480.74 287.25 303 233 1168.30 1366 *53190 1.07 *34501 2.56 21.46 23 25.52 13.40 12.50 11.30 *3.65 10.61 4.25 123.48 8.83 17.08
MCALPINE(ALFRED) MCA 295.37 292.50 322.50 254.50 1104.10 993.60 *26500 33.03 *18700 61.49 28.60 25.01 28.67 10.20 11.70 10.20 *6.5 10.17 4.18 52.39 3.22 7.36
MCCARTHY & STONE MCTY 549.34 529.50 615 441.50 1078.30 2181.20 *117400 51.48 *81200 54.08 77.40 85.12 91.91 6.80 6.20 5.80 *4.8 23.08 3.06 24.19 4.81 37.17
NOVAR NVR 547.33 127 149 118 1099.30 1091.70 *-27500 -132.51 *-67100 -291.17 11.20 6.18 7.86 11.30 20.50 16.10 *6.6 0 8.31 53.92 50.37 -25.13
PERSIMMON PSN 1721.80 599 725.50 430 1274.60 2016.80 *372000 28.54 *234200 32.69 86.80 99.59 106.65 6.90 6 5.60 *11.3 8.65 3.39 8.38 21.92 24.99
PILKINGTON PILK 1162.68 91.25 100.75 65 1375 1103.70 *176000 0 *73000 0 7.40 7.46 8.53 12.40 12.30 10.70 *1.75 0 6.07 119.29 54.67 9.69
REDROW RDW 526.47 332 406 282.50 1102 1657.50 *115000 0 *74900 0 49.20 53.46 59.50 6.70 6.20 5.60 *3 20 2.68 10.41 24.83 31.14

Shares tables are among the most comprehensive 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
published in Britain. They provide information about prices currently in the market. forecasts supplied by analysts for the next percentage change in the dividend in the latest

the Top 350 companies as well as any public PRICE HIGH: The highest price achieved in the financial year of the company, defined as that 12 month period.

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

24 June 2004 53
240604 p53-57 tables 6/22/04 11:52 AM Page 54


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 1566.80 588.50 744.50 448 1328.20 1144.70 *-66200 -131.27 *-137400 -250.49 37.10 35.22 48.44 15.90 16.70 12.20 *21.8 0 5.89 888.98 39.22 -9.10
SIG SHI 472.54 392 404 252.50 1570 1968.20 *62720 14.40 *34705 9.47 32.50 30.57 33.46 12.10 12.80 11.70 *8.3 7.79 3.51 57.40 39.74 17.65
TAYLOR WOODROW TWOD 1442.36 250.75 307.75 191.75 1258.10 1471.20 *348200 28.82 *202500 28 39 45.13 50.17 6.40 5.60 5 *2.4 9.09 3.94 33.12 34.42 14.43
TRAVIS PERKINS TPK 1551.61 1368 1463 1162 1179 2019.60 *172400 17.12 *108900 18.63 110 107.39 115.42 12.40 12.70 11.80 *16.8 25.37 1.99 254.80 25.40 27.54
WESTBURY WBY 470.44 412 514 353.75 1070.10 1783.30 *129634 25.85 *72151 26.80 71.70 73.98 82.40 5.70 5.60 5 *4.45 15.58 3.78 17.10 37.50 19.50
WILSON BOWDEN WLB 966.10 1028 1205 925 1103.10 1575.20 *240800 26.07 *155200 23.08 165.50 188.70 200.53 6.20 5.40 5.10 *25.5 24.39 3.57 22.66 22.18 23.88
WIMPEY (GEORGE) WMPY 1412.80 363 458 282 1232.50 2131.30 *433100 32.28 *260900 36.17 68.54 75.25 80.47 5.30 4.80 4.50 *8.45 43.22 3.75 5.45 32.12 27.67
WOLSELEY WOS 4924.34 845 865 642 1268.40 1868.90 *462200 -3.97 *298400 3.54 62.08 59.45 64.44 13.60 14.20 13.10 *7.8 -43.88 3.08 122.97 40.86 18.65
INTERNATIONAL PWR IPR 1591.95 143.75 162.25 103 1110.90 472.30 *-193000 -195.54 *-323000-1445.83 10.20 8.35 9.84 14.10 17.20 14.60 *6.340 0 0 184.93 47.79 -12.59
SCOT. & SOUTHERN SSE 5912.07 689.50 710 599.50 1135.70 1251.80 *658100 0 *417800 0 54.10 55.07 58.19 12.70 12.50 11.80 *11.3 7.62 6.08 438.26 45.34 26.15
SCOTTISH POWER SPW 7317.28 393.50 400.75 341.75 1148.20 990.30 *1039000 0 *480200 0 36.40 31.46 31.80 10.80 12.50 12.40 *4.75 -33.82 5.78 485.53 51.93 10.36
VIRIDIAN GROUP VRD 832.51 625 625 518.50 1225.90 1104.40 *113100 0 *58800 0 55.90 52.13 49.16 11.20 12 12.70 *9.46 3.50 5.98 817.56 64.70 22.15
INVENSYS ISYS 981.07 17.25 38.54 14.45 840.10 139.80 *-1262000 *-1448000 0 0.12 0.04 0.86 143.8 442.3 20 *0.96 0 0 15.47 95.86 -1001.39
LAIRD GROUP LARD 416.63 291 332 193.50 1516.30 1643.10 *26500 -155.44 *23800 -139.53 4.10 14.98 18.93 71 19.40 15.40 *5.6 3.70 3.28 43.10 32.66 11.91
RENISHAW RSW 357.39 491 591 416.50 1228.10 961.10 *17847 0 *14345 0 19.88 23.43 29.67 24.70 21 16.50 *5.61 5.06 3.84 69.90 0 13.32
SPECTRIS SXS 601.29 484.25 507 382.50 1206.90 1055.90 *47400 45.85 *26000 69.93 32.10 23.68 27.38 15.10 20.40 17.70 *9.3 5.08 3.06 74.41 50.74 14.99
AGA FOODSERVICE AGA 296.32 235 265 191.50 1161.50 1069.50 *28700 2.50 *22300 13.78 23.30 15.75 16.62 10.10 14.90 14.10 *5 21.95 3.40 58.05 7.35 8.20
BODYCOTE INTL. BOY 481.98 150.25 170.94 104.52 1417.70 707.20 *2100 -91.80 *-17300 -370.31 9.01 7.05 10.36 16.70 21.30 14.50 *2.09 0 4.51 149.23 39.77 -4.46
COOKSON GROUP CKSN 770.94 40.75 50 23 1537.70 439.60 *-157000 246.58 *-202900 108.53 0.05 1.17 2.09 893.60 34.90 19.50 *3.129 0 0 18.54 39.85 -57.14
ENODIS ENO 358.95 89.50 98 38.50 2034.10 781.10 *39500 -173.42 *9500 -110.94 4.20 4.49 5.82 21.30 19.90 15.40 *1.619 0 0 20.35 56.59 6.03
FKI FKI 692.18 119 126.50 74 1476.80 528.50 *62500 0 *12600 0 8.70 4.61 6.62 13.70 25.80 18 *1.5 -64.29 4.20 61.41 57.52 2.67
HALMA HLMA 585.09 160 164 132 1219.30 1155.40 *44085 0 *28359 0 9.17 8.47 9.08 17.40 18.90 17.60 *2.44 6.78 4.14 13.64 14.48 18
IMI IMI 1347.11 381.25 388 280.75 1358 1865 *134400 38.70 *72000 26.98 26.80 23.14 26.16 14.20 16.40 14.50 *9.5 0 4.53 82.81 28.61 13.45
KIDDE KID 1011.79 120.25 122 82 1463.30 1543 *93400 14.18 *48800 26.75 8.80 7.81 8.53 13.70 15.40 14.10 *1.81 6.47 2.49 11.50 80.99 159.25
MORGAN CRUCIBLE MGCR 395.98 136.50 150 70.33 1870.60 483.10 *-60800 39.13 *-75600 29.90 9.12 9 10.18 15 15.20 13.40 *7.032 0 0 133.16 54.12 -25.30
ROTORK ROR 338.42 394.25 402 300 1323.10 1298.70 *28151 7.23 *18632 7.74 23.20 23.18 25.42 17 17 15.50 *15.35 72.47 4.16 15.89 0.48 26.35
SPIRAX-SARCO SPX 422.54 565 605 466 1245.40 1348.50 *46861 7.92 *29426 9.77 38.50 40.21 43.99 14.70 14.10 12.80 *14.1 4.44 3.95 117.79 25.99 19.57
TOMKINS TOMK 2016.49 261 295 220 1172.70 1749.50 *150400 -41.67 *179300 -3.37 18.78 17.83 21.28 13.90 14.70 12.30 *7.4 -7.50 5.10 102.73 36.36 45.25
WEIR GROUP WEIR 610.44 298 310 230.50 1285.80 1206.70 *49822 -15.28 *35642 -17.95 21.40 19.83 22.02 13.90 15 13.50 *9.05 3.43 4.62 50.07 33.33 23.81
ARLA FOODS ARU 362.70 59.50 63.50 35.25 2024.10 2138 *21500 0 *7600 0 6.50 0.96 3.62 9.20 62 16.40 *0.5 25 2.05 21.83 73.86 24.36
ASSD.BRIT.FOODS ABF 5098.38 644 648 507.50 1202.20 1523.30 *480000 10.34 *324000 1.25 44.70 41.34 44.08 14.40 15.60 14.60 *9.85 9.44 2.61 177.60 12.60 11.14
CADBURY SCHWPS. CBRY 9705.61 470.25 474.75 335.25 1297.80 1053.70 *749000 -19.38 *364000 -33.46 32 23.23 28.67 14.70 20.20 16.40 *8.35 4.38 2.84 79.12 60.91 13.10
DAIRY CREST DCG 508.51 412 495 348 964.10 1265.50 *63100 0 *33300 0 50 39.95 42.61 8.20 10.30 9.70 *5.5 7.84 5.10 279.60 60.07 18.27
GEEST GET 432.85 580.50 590 424.50 1303.90 974.50 *39200 -16.95 *27100 -14.51 46.80 40.88 45.21 12.40 14.20 12.80 *8 10.34 4 359.29 35.18 16.51
NORTHERN FOODS NFDS 823.54 164 175 130 1058.10 1199.80 *124300 0 *99800 0 13.77 13.53 14.83 11.90 12.10 11.10 *3.3 1.54 6.03 133.54 50.52 35.89
TATE & LYLE TATE 1605.28 332.75 369 269.25 1015.70 1362.80 *209000 0 *104000 0 32.70 30.68 28.96 10.20 10.90 11.50 *5.6 1.82 6.27 243.77 38.76 12.84
UNILEVER (UK) ULVR 15619.97 536.50 582.50 473 1002.40 1006.40 *3895603 10.79 *2062541 30.91 27.13 30.06 34.95 19.80 17.80 15.30 *11.92 10.06 3.74 161.77 71.43 69.74
BIG FOOD GROUP BFP 371 108 183.75 80 1224.60 643.50 *54100 28.81 *27600 135.90 15.20 6.13 9.48 7.10 17.60 11.40 *1.1 10 3.09 143.49 43.82 6.95
GREGGS GRG 400.18 3300 3475 2992.501154.40 1083.60 *40480 10.31 *27237 10.33 230.50 245.12 265.94 14.30 13.50 12.40 *54.5 11.22 2.69 1325.21 0 23.40
MORRISON SPMKTS. MRW 6300.75 237.50 259.75 180 1255.60 1190.90 *320359 15.47 *197635 8.49 12.59 13.47 15.03 18.90 17.60 15.80 *2.7 20 1.53 65.54 7.63 15.82
SAINSBURY (J) SBRY 5533.05 284.75 315.50 246 1163.80 792.20 *695000 -9.97 *404000 -12.36 23.40 20.93 21.94 12.20 13.60 13 *4.33 2.61 6.12 422.72 33.76 8.05
SOMERFIELD SOF 735.49 146.75 174 115 1226.80 1092.50 *40500 0 *39800 0 8.10 8.88 11.74 18.10 16.60 12.50 *0.6 50 1.40 202.30 14.22 5.48
TESCO TSCO 20525.22 267.25 269 207 1319.10 1113.60 *1773000 15.58 *1043000 14.74 16.45 17.17 19.03 16.20 15.60 14 *2.07 10.70 2.84 183.51 39.46 17.02
SMITH (DS) SMDS 671.94 173.50 188 138.96 1137.40 1525.40 *83100 0 *47400 0 15.57 13.62 13.60 11.10 12.70 12.80 *2.611 0 5.64 144.83 34.85 10.76
SMITH & NEPHEW SN. 5489.75 587 600.50 340.50 1617.80 1733.90 *222300 26.81 *132800 34.41 18.49 19.41 22.96 31.70 30.20 25.50 *3.1 3.33 0.94 27.54 23.47 28.82
SSL INTERNATIONAL SSL 552.92 292 345 267.50 1075.90 610.80 *58600 0 *21800 0 25.10 27.17 24.64 11.60 10.70 11.90 *3.9 0 3.08 83.55 79.79 28.41
ALBA ABA 408.85 807 880 495 1647.20 2867.60 *31200 0 *23400 0 47.80 49.70 57.23 16.90 16.20 14.10 *2.25 9.76 1.51 29.61 26.03 40.92
HEADLAM GROUP HEAD 345.80 405 417 274 1453.30 2117.90 *33469 6.86 *22129 7.73 27.30 29.95 32.85 14.80 13.50 12.30 *3.6 10.77 3.80 75.23 3.32 22.72
ARM HOLDINGS ARM 1189.64 116.25 147 65 1716.50 440.40 *23240 -48.93 *15263 -52.99 2.10 2.85 4.30 55.40 40.70 27.10 *0.6 N/A 0.57 1.62 0 8.81
CSR CSR 472.30 393 395 225 *-746.91 N/A *1777.03 N/A N/A N/A 0 4.01 0.57

MARCONI CORP. MONI 1271.13 635.50 747 292.50 1937.60 *80000 -110.40 *-141000 -86.55 0 -64.52 -35.45 N/A N/A 0 73.99 46.42
SPIRENT SPT 616.45 65 92 23.50 2388.90 449.70 *7900 -100.76 *-2900 -99.73 2.31 1.72 3.24 28.10 37.80 20.10 *1.35 0 0 9.51 43.78 -0.36
ALEA GP.HDG. ALEA 384.13 220 275 210 *58621 0 *54123 0 23.31 33.40 31.43 9.40 6.60 7 N/A N/A 0 7.52 26.79
AMLIN AML 598.49 152.50 175 122 1170.10 1364.90 *120700 114.77 *83300 88.46 21.60 22.38 22.96 7.10 6.80 6.70 *1.65 32 1.82 1.63 2.67 27.15
BENFIELD GP. BFD 605.43 250 306 235 950.30 *40805 39.53 *18017 139.49 21.60 21.87 19.95 11.60 11.40 12.50 *6 N/A 2.67 7.32 22.16 120.12
BRIT INSURANCE BRE 806.24 82.75 91 66.75 1046.50 790.10 *81938 397.74 *57035 557.99 6.58 9.36 9.65 12.60 8.80 8.60 *2 -0.85 2.69 0.49 7.69 12.10
CATLIN GROUP CGL 566.98 368 390 336.50 N/A N/A N/A N/A 64.20 69.87 5.70 5.30 N/A N/A 0
HISCOX HSX 458.79 157.50 181 135 1007.10 911.10 *85373 292 *60491 332.85 19.30 22.51 22.84 8.20 7 6.90 *1.3 13.75 2.96 2.52 0.22 21.58
JARDINE L THOMPSONJLT 970.70 481.75 608 450 823 1120.70 *106738 9.92 *75443 12.94 38.80 37.16 37.33 12.40 13 12.90 *12 9.09 4.73 14.17 3.71 50.10
ROYAL & SUN ALL.IN. RSA 2419.67 83.75 132.06 72.50 805.80 245.90 *-23000 -97.62 *-375000 -60.40 0 12.49 11.79 6.70 7.10 *2.9 79.52 6.50 16.65 18.11 -13.47
WELLINGTON UWRTG WUN 424.76 86.75 102.50 74 874.80 594.60 *97200 212.65 *67000 243.96 17 12.08 12.23 5.10 7.20 7.10 *0.35 -67.84 2.56 0.92 0 28.96
CARNIVAL CCL 5489.33 2593 2672 1650 1460.90 2277.40 *869503 328.86 *732149 429.22 1.91 116.35 138.90 24.90 22.30 18.70 *0.125 19.05 1.12 4808.87 34.93 41.94

240604 p53-57 tables 6/22/04 11:52 AM Page 55


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) % %
DE VERE GROUP DVR 500.08 436 467.75 335 1277.40 1452.20 *45798 -13.39 *25678 -5.10 27.16 27.02 28.23 16.10 16.10 15.40 *4.28 -41.77 3.05 749.03 27.83 4.56
ENTERPRISE INNS ETI 1953.04 559 663.50 390.75 1385.60 2666.70 *264200 49.94 *116500 73.62 38.60 44.71 56.54 14.50 12.50 9.90 *5.7 21.28 1.85 722.65 56.57 17.99
FIRST CHOICE HOLS. FCD 638.32 121 152.75 110 1081.90 961.60 *55500 9.04 *32500 24.52 8.40 7.33 8.75 14.40 16.50 13.80 *3.4 13.33 4.73 55.64 17.80 6.49
GREENE KING GNK 672.28 933 978 778 1233.70 1600 *97900 0 *47200 0 75.80 68.07 72.35 12.30 13.70 12.90 *9.5 10.47 3.67 1193.94 49.36 10.41
HILTON GROUP HG. 4256.64 269 275.50 174.25 1504.80 1362.20 *260500 10.76 *103700 16.65 13.40 12.61 15.29 20.10 21.40 17.60 *5.52 0 3.68 162.32 41.67 4.53
ICTL.HTLS.GP. IHG 3899.52 550 583 416.50 1302.80 *149600 -78.93 *42400 -91.20 20.80 28.72 34.25 26.40 19.10 16 *9.45 N/A 2.73 557.26 26.92 0.28
LUMINAR LMR 336.60 460 512 390 991.30 551 *68700 0 *31000 0 60.40 39.05 43.19 7.60 11.80 10.70 *3.67 9.88 3.03 776.08 33.13 6.49
MANCHESTER UTD. MNU 637.76 243.25 290 140 1684.70 1637.30 *39537 20.50 *29781 18.94 16 5.92 4.80 15.20 41.10 50.70 *1.25 86.57 1.41 47.88 0 21.67
MNIUM & CTHORNE MLC 933.06 327.75 344 235 1322.80 982.90 *57800 -45.27 *14800 -63.73 3.90 12.58 16.41 84 26 20 *2.05 -75.30 2.12 738.70 33.93 0.82
MITCHELLS & BUT. MAB 1402.21 268.50 272.50 215 1167.10 *222000 -23.18 *125000 -23.78 19.80 20.30 22.48 13.60 13.20 11.90 *5.65 N/A 3.52 674.40 37.44 5.13
PUNCH TAVERNS PUB 1228.06 494.50 575 263 1837.30 *237300 279.68 *97600 -178.65 42.90 41.85 54.59 11.50 11.80 9.10 *4.4 N/A 1.64 894.48 71.13 19.74
RANK GROUP RNK 1739.16 291 340.75 242.75 1229.90 1501.30 *173700 -22.11 *101000 -23.25 20.10 20.79 22.58 14.50 14 12.90 *9.3 5.68 5.31 134.39 61.94 16.52
STANLEY LEISURE SLY 552.76 436 510 312.50 1332.30 1642.10 *50813 0 *29175 0 21.70 19.70 25.63 20.10 22.10 17 *2.75 10 2.26 599.14 25.92 10.17
WETHERSPOON (JD) JDW 547.88 284 324 224 1123.60 814.70 *72105 1.79 *34044 -3.87 18.20 18.56 20.77 15.60 15.30 13.70 *1.33 9.92 1.43 401.12 50.42 10.98
WHITBREAD WTB 2493.01 838 860 659.50 1277.30 1380.10 *223800 -3.41 *137400 -2 58.22 62.58 69.81 14.40 13.40 12 *6.15 10.41 2.96 1004.96 29.10 8.32
WILLIAM HILL WMH 2226.89 533.50 567.25 272 1930.50 *198700 98.70 *123600 547.12 30 36.30 40.28 17.80 14.70 13.20 *9 55.17 2.60 24.20 56.51 51.29
WOLV.&.DUDLEY WOLV 623.03 860 880.50 671.50 1330.80 2035.80 *94800 0.53 *38500 -7.67 71 62.44 68.10 12.10 13.80 12.60 *21.2 10.13 4.29 1228.38 51.22 8.65
AVIVA AV. 12910.26 572 597 414.50 1338.90 710.90 *1985000 -678.72 *961000 -276.98 44 55.02 61.79 13 10.40 9.30 *15.15 6.32 4.69 32.12 23.75 9.99
BRITANNIC GROUP BRT 705.21 358.75 373 236 1437.80 448.40 N/A N/A *47300 -118.94 25.30 29.59 30.39 14.20 12.10 11.80 *10 -45.95 3.10 34.13 14.11 6.29
FRIENDS PROVIDENT FP. 2525.56 146.50 159 110.50 1251.30 *279000 -444.44 *188000 -368.57 10.40 11.79 12.86 14.10 12.40 11.40 *4.9 2.08 5.61 4.41 26.22 10.21
LEGAL & GENERAL LGEN 5983.55 92 110 81.75 1086.80 743.80 *683000 -388.19 *404000 -324.44 13.24 9.19 10.03 6.90 10 9.20 *3.33 2.46 5.92 1 23.71 12.74
OLD MUTUAL OML 3865.67 100.75 108 86 1158.50 748.20 *2263000 36.41 *202000 0.50 10 10.16 11.10 10.10 9.90 9.10 *3.1 0 5.29 2.11 15.56 10.22
PRUDENTIAL PRU 9279.45 458.75 534.75 352.25 1226.60 639.10 *1907000 344.52 *206000 -53.18 12.90 37.10 44.27 35.60 12.40 10.40 *10.7 -37.43 3.87 18.04 33.91 5.72
ST.JAMESS PLACE STJ 765.82 176.25 197 104 1326.20 451 *12300 -166.13 *4200 -125.15 1.50 14.62 16.70 117.50 12.10 10.60 *1.5 0 1.73 1.33 22.98 3.50
AEGIS GROUP AGS 992.81 89.25 116.50 75 1116.70 831.40 *58900 24.79 *23000 48.39 4.90 3.01 3.65 18.20 29.60 24.40 *0.52 4 1.64 4.85 72.79 17.87
BRIT.SKY BCAST. BSY 12006.48 619 786 582 917 931.30 *242100 0 *188800 0 13.10 13.86 24.39 47.30 44.70 25.40 *2.75 0 0.49 17.86 113.87
CAPITAL RADIO CAP 422.85 495 574 430 994.60 703.10 *12650 -16.90 *4888 -23.47 19.30 9.24 12.49 25.60 53.50 39.60 *12.5 0 0.42 19.73 17.27 4.50
CHRYSALIS GROUP CHS 327.23 195 263.75 175 941.30 834.90 *30169 138.96 *22697 240.64 9.43 3.70 5.71 20.70 52.60 34.20 *1 53.85 0.57 11.53 50.47 122.77
DAILY MAIL A DMGT 2709.74 710.50 733.50 524.75 1204.40 1001.80 *176400 1.26 *60900 -28.60 37.30 18.39 22.36 19 38.60 31.80 *6.85 9.60 1.61 131.94 75.61 22.50
EMAP EMA 2005.72 772.50 965 735.50 905.60 1119.10 *165000 5.77 *97000 0 55.80 38.80 44.02 13.80 19.90 17.60 *7.6 8.57 3.38 11.94 52.04 38.27
EMI GROUP EMI 1821.66 231.75 282 113 1943.60 665.80 *400400 0 *236600 0 15.80 11.56 11.62 14.70 20 19.90 *2 0 3.84 36.70 244.40
EMONEY INSTL.INV. ERM 329.39 374.50 460 267.50 1475.10 1116.20 *11496 -54.13 *3985 -82.79 22.34 14.99 18.16 16.80 25 20.60 *9.75 0 4.38 9.85 -783.52
GWR GROUP GWG 329.88 252 330 200 1227.80 776.40 *-7979 0 *-15916 0 8 7.59 7.51 31.50 33.20 33.60 *2.3 0 2.78 17.05 60.21 -20.23
HIT ENTERTAINMENT HTE 344.77 218 341 207 871.80 619.90 *30344 53.50 *15346 38.84 16.50 6.67 8.19 13.30 32.80 26.70 *0.636 100 0.49 6.77 34.82 6.59
ITV ITV 4555.43 111.75 150 78.97 1422.70 855.90 N/A N/A N/A N/A 4.80 2.43 5.44 23.30 45.90 20.50 *0.94577 0 1.99 7.33 0
JOHNSTON PRESS JPR 1557.71 548 572.25 417 1266.10 2146.40 *160970 29.54 *89233 36.02 32.36 34.79 37.84 16.90 15.80 14.50 *4 11.11 1.22 55.22 40.55 15.99
PEARSON PSON 5231.57 652 697.25 546.50 1159.70 642.50 *237000 196.25 *74000 -187.06 32 -0.02 6.56 20.40 99.40 *14.8 3.50 4.12 58.33 38.27 1.67
PHOTO-ME INTL. PHTM 330.61 91 145.75 49.50 1705.90 1198.10 *-421 0 *-3882 0 1.32 3.70 5.80 68.90 24.60 15.70 *0.3 0 0 21.65 41.92 -7.34
REED ELSEVIER REL 6794.09 534.50 542.75 441 1046.70 937.90 *2000 0 *1000 0 31.20 11.56 15.47 17.10 46.20 34.60 *8.7 8.75 2.49 2.72 12.01
REUTERS GP. RTR 5370.99 374.50 445 168 2051.60 487.20 *119000 -131.40 *57000 -112.81 3.10 3.43 12.02 120.90 109.1 31.20 *6.15 0 2.97 33.56 65.45 10.05
SCOT.RADIO HDG. SRH 319.10 887.50 988 772.50 1071.50 1003.60 *14400 -222.03 *7300 -144.24 39.70 20.64 25.07 22.40 43 35.40 *13 8.33 2.50 47.28 36.48 6.62
SMG SMG 358.25 114 137 71.50 1412.40 617.20 *18600 186.15 *-900 -96.09 5 0.39 1.13 22.80 295.3 101 *2.5 66.67 2.44 11.07 78.39 6.34
ST.IVES SIV 396.71 384 430 355 1021.80 1044.60 *35209 38.89 *22483 42.05 10.77 23.99 27.67 35.70 16 13.90 *5 0 4.96 179.36 9.28 9.57
T&F INFORMA TFI 1123.64 376.50 390 207.50 1541.20 1052.10 *14978 -26.19 *943 -80.46 17.23 11.14 16.13 21.90 33.80 23.30 *4.94 0 2.24 9.13 71.21 3.80
TAYLOR NELSON TNN 947.02 212.50 230 162 1302.80 990.60 *46300 18.41 *11400 -5 10.50 5.65 8.04 20.20 37.60 26.40 *0.95 5.56 1.57 18.22 83.91 44.79
TRINITY MIRROR TNI 1909.75 650 683.50 427 1502.30 1779.20 *99900 41.90 *13700 -172.11 41.10 44.49 50.64 15.80 14.60 12.80 *12.8 4.07 3.13 136.48 38.31 1.18
UNITED BUSINESS UBM 1653.58 493 576.50 283.25 1564 857.60 *-1000 -99.49 *-44200 -81.57 24 -7.46 -1.61 20.50 *5.7 42.50 2.03 16.25 81.91 -20.23
WPP GROUP WPP 6523.69 556 648.50 453.25 1205.60 884.40 *415300 41.26 *204400 147.16 29.80 28.57 31.71 18.70 19.50 17.50 *2.08 20.23 1.29 29.37 32.15 6.20
YELL GROUP YELL 2398.70 343.75 348.50 276 *94200 -49.30 *-51100 25.86 20.90 12.87 14.54 16.40 26.70 23.60 *3 N/A 2.91 6.58 58.26
ANGLO AMERICAN AAL 16667.45 1116 1425 910 1198.90 1176.10 *1332850 -24.97 *734440 -30.37 1.20 1.85 2 17 11.10 10.20 *0.39 8.33 2.85 914.93 31.61 10
ANTOFAGASTA ANTO 1812 919 1283 600 1489.90 2208.30 *237626 60.54 *177946 82.82 49.80 112.17 94.39 18.50 8.20 9.70 *12.84 12.81 2.39 529.18 40.71 18.45
BHP BILLITON BLT 11452.18 464 527 310 1454.70 1561.30 *1929936 0 *1127941 0 0.35 28.40 39.68 24.80 16.30 11.70 *0.085 21.43 2.14 484.76 37.21 14.80
LONMIN LMI 1399.29 989 1255 736 1301.80 1118.10 *199832 -12.48 *67233 -61.39 28.50 69.23 74.20 34.70 14.30 13.30 *22.7 -11.78 4.46 417.56 23.10 10.76
RANDGOLD RESCES RRS 274 468 835 336 860.70 2528.70 *29822 -34.95 *28670 -33.95 0.01 1024.9 *0.025 0 0 69.65 15.24 39.09
RIO TINTO RIO 13737.95 1287 1585 1123 1109.50 1189.40 *940782 72.94 *639950 699.94 53.40 86.41 108.73 24.10 14.90 11.80 *18.68 0.43 3.21 797.21 35.37 19.68
VEDANTA RESOURCES VED 767.91 268.50 400 266 N/A N/A N/A N/A 13.38 16.61 29.51 20.10 16.20 9.10 N/A N/A 1.24 214.49 18.86
XSTRATA XTA 4344.73 688 767.50 374.75 1660.40 *269654 82.99 *187062 90.63 0.76 70.93 77.66 14.50 9.70 8.90 *0.133 0.23 1.71 675.26 25.86 7.65
ABBOT GROUP ABG 326.18 185.50 197.50 136 1106.30 1105.30 *24128 -58.86 *12512 -72.70 11.80 9.90 15.70 18.70 *3.1 12.73 2.70 75.76 21.07 8.91
BG GROUP BG. 12330.39 349 360 252.25 1288 1244.10 *1201000 63.40 *641000 112.25 19.40 20.81 20.80 18 16.80 16.80 *1.86 20 1.10 113.78 20.89 23.10
BP BP. 106468.81 487.75 508.25 402 1174.60 891.40 *9615662 25.36 *5686623 34.97 26.44 29.86 26.32 18.50 16.30 18.50 *3.807 -3.55 3.50 235.79 22.48 14.51

BURREN ENERGY BUR 405.64 296 297.25 129 *20156 N/A *16215 N/A 16.84 19.37 21.59 17.60 15.30 13.70 N/A N/A 0 72.14 2.83 51.53

CAIRN ENERGY CNE 1837.02 1220 1220 291 3814.20 3931.80 *70888 51.51 *46303 74.83 31.52 27.16 24.12 38.70 44.90 50.60 N/A N/A 0 261.23 0 14.39
PALADIN RESOURCES PLR 407.81 126.50 131 76.25 1636.80 2331.90 *91762 30.81 *28446 41.18 8.92 9.92 11.32 14.20 12.80 11.20 *1.05 5 1.38 90.25 42.98 26.87
PREMIER OIL PMO 444.96 540 3475 300 1642.70 2195.90 *52900 -22.32 *9900 3.12 30 35.99 27.57 18 15 19.60 *6.05 0 0 249.63 20.38 13.06
SHELL TPORT & TRD. SHEL 39375.9 407.5 419 346.25 1039.40 766.70 *4199898 0 *2204768 029.80 33.48 30.27 13.70 12.20 13.50 *9.65 3.76 4.29 204.09 23.63 16.18
TULLOW OIL TLW 712.71 109.25 114 70.50 1440.20 1176.30 N/A N/A N/A N/A 2.92 4.58 4.66 37.40 23.80 23.40 *1 N/A 2.03
WOOD GROUP (JOHN) WG. 666.06 138 192.25 121.75 753.20 *40962 -37.55 *12763 -59.53 0.15 7.19 8.80 16.50 19.20 15.70 *0.022 10 1.44 20.21 31.18 7.98
PZ CUSSONS PZC 235.60 1101 1190 830 1349.40 2436 *54374 0 *34311 0 84.05 13.10 *8.05 7.33 2.98 700.65 4.97 11.76
PZ CUSSONS A PZCA 209.36 988 1080 732.50 1388.80 2600.60 *54374 0 *34311 0 71.90 13.70 *8.05 7.33 3.32 707.56 4.97 11.76
RECKITT BENCKISER RB. 10799.21 1550 1568 1065 1351.30 1693.90 *703000 17.76 *489000 19.85 72.40 75.34 84.03 21.40 20.60 18.40 *14 9.38 2.01 72.05 24.99 40.89
ACAMBIS ACM 360.75 341.50 401.50 257 940.80 2511 *40400 274.46 *35500 270.76 34.50 23.17 14.30 9.90 14.70 23.90 N/A N/A 0 19.88 16.02 78.10
ALLIANCE UNICHEM AUN 2263.09 635.50 653.50 470.50 1293.90 1305.90 *225300 9.80 *106800 8.87 41.60 43.20 47.53 15.30 14.70 13.40 *11 8.91 2.92 85.62 50.11 15.29

24 June 2004 55
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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) % %
ASTRAZENECA AZN 43260.68 2580 2894 2360 1023.20 794.80 *2569524 -5.96 *1859076 -1.89 98.15 114.28 135.53 26.30 22.60 19 *0.54 14.89 1.89 251.78 3.32 26.59
CELLTECH GROUP CCH 1524.26 547.50 549 300 1599.70 454.40 *-79800 94.63 *-53900 17.69 16 -19.20 -21.17 34.30 N/A N/A 0 31.36 0.20 -9.67
GALEN HOLDINGS GAL 1263.92 688 874 515 1220.50 804.30 *79544 -34.75 *58540 -36.40 40.72 0.65 0.78 16.90 19.50 16.10 *2.4 20 0.62 20.31 23.29 8.71
GLAXOSMITHKLINE GSK 68154.56 1154 1395 1044 961.10 637.80 *6452000 14.42 *4539000 13.31 79.80 78.15 83.17 14.50 14.80 13.90 *14 7.69 4.04 108.97 47.28 119.41
SHIRE PHARM. SHP 2344.47 489 579.50 363.75 1160.60 398.60 *-288878 -44.26 *-363355 -38.25 33.27 33.04 39.61 14.70 14.80 12.30 N/A N/A 0 20.24 8.23 -13.22
SKYEPHARMA SKP 408.61 65.50 81 49.50 956.20 779.80 *-38490 -763.96 *-43223 -3997.48 0 0.56 0.92 116.3 71 *7.904 0 0 6.83 46.15 -38.62
BRITISH LAND BLND 3291.90 675 695 467.50 1394.50 1480.30 *426600 0 *122900 0 37 28.19 30.63 18.30 24 22.10 *4.43 8.05 2.39 1657.86 52.10 3.39
BRIXTON BXTN 769.82 286.75 306 212.50 1267.50 1493.30 *86600 9.34 *39000 24.60 15 13.56 14.64 19.10 21.10 19.60 *3.95 2.60 4.34 547.79 48.60 5.25
CAPITAL & REGIONAL CAL 321.87 510 543 302.50 1731.30 2298 *17931 -859.14 *3678 -126.17 31.40 24.27 28.86 16.20 21 17.70 *5 25 1.96 101.03 26.82 7.18
CLS HOLDINGS CLI 276.08 315 351 228.50 1354.80 1375.50 *49230 4.76 *17389 16.53 20 18.05 20.72 15.80 17.50 15.20 *2.4 0 0 1014.66 58.40 5.05
COUNTRYWIDE CWD 488.78 289 289 273 N/A N/A N/A N/A N/A N/A 0
DERWENT VALLEY DWV 454.84 855.50 876 563 1472.20 1211.50 *35800 6.55 *14800 28.70 26.62 27.08 28.04 32.10 31.60 30.50 *8.1 10.20 1.48 1518.04 39.07 2.89
GRAINGER TRUST GRI 409.81 1640 1955 1072.501491.70 2121.90 *52300 15.37 *25800 42.26 151 109.76 72.49 10.90 14.90 22.60 *12.8 15 1.14 436.60 75.73 24.57
GT.PORTLAND EST. GPOR 529.06 260.50 272 221 1116.40 1028.10 *-9300 0 *-20500 0 12.80 9.89 10.36 20.40 26.30 25.20 *3.5 2.34 4.48 383.76 33.59 -2.92
HAMMERSON HMSO 1912.84 692 718 478.50 1296.60 1547.90 *155700 -8.89 *52300 -32.34 29.80 28.37 31.12 23.20 24.30 22.20 *11.71 6.55 2.71 1431.44 44.54 2.47
LAND SECURITIES LAND 5569.67 1193 1201 767 1526.30 1534.10 *449000 0 *216900 0 47.86 55.83 59.11 24.90 21.40 20.20 *9.9 4.21 3.45 1804.13 32.58 3.80
LIBERTY INTL. LII 2469.82 746.50 782 608 1215.50 1591.20 *236000 1.24 *75800 -2.82 27.45 27.53 30.53 27.20 27.10 24.50 *13.25 6 3.72 1398.17 41.72 3.03
LDN.MER.SECS. LMSO 426.36 175 183 127.50 1315.50 1293.70 *9251 0 *-23219 0 4.18 4.38 4.05 41.90 40 43.20 *2 0 4.06 337.59 32.34 -3.54
LONDON MER.DFD. LMSD 145.64 173.50 179.50 119 1319.40 1319.40 *9251 0 *-23219 0 0 *10.5 0 0 979.83 32.34 -3.54
MINERVA MNR 419.53 261 261 173.50 1465.50 866.30 *45636 0 *-647 0 0 -1.65 0.80 327.50 *1.07 1.90 1.35 659.96 56.72 -0.84
NHP NHP 400.11 196.50 201.50 110.50 1754.90 6590.60 *67408 9.46 *25289 52.15 13.90 12.99 12.63 14.10 15.10 15.60 *2.25 -24.53 2.97 363.42 63.99 12.18
PILLAR PR. PLL 627.50 578 588 421.50 1350.30 1705.30 *31700 0 *14600 0 19.10 6.36 10.53 30.30 90.90 54.90 *2.4 4.35 1.63 439.37 42.79 2.35
QUINTAIN ESTS & DEV. QED 557.71 433 443.75 296.50 1417.80 2453.40 *30659 0 *12321 0 12.40 8.31 10.33 34.90 52.10 41.90 *2.75 0 2.25 561.31 40.13 3.05
SHAFTESBURY SHB 347.85 263.50 290 199.50 1286.40 907.60 *32945 1.19 *8238 -15.19 10.25 7.97 9.28 25.70 33 28.40 *2.54 9.96 1.71 551.77 45.46 2.19
SLOUGH ESTATES SLOU 1863.27 446 484.50 321.75 1276.40 1484 *181100 -13.88 *79100 -9.29 27.60 25.27 27.77 16.20 17.70 16.10 *9.2 7.60 3.74 863.08 43.07 3.88
ST MODWEN PROPS. SMP 362.32 300 331 182.50 1689.50 2894.40 *39927 35.51 *20912 56.09 20.10 23.71 26.11 14.90 12.70 11.50 *4.4 15.79 2.44 222.75 37.29 12.43
BOOTS GROUP BOOT 5079.88 664 756.50 591 1136.40 1292.60 *541200 0 *314200 0 48.20 48.23 56.20 13.80 13.80 11.80 *8.8 4.76 4.99 198.22 22.25 15.76
BROWN (N) GROUP BWNG 305.66 103.50 159.50 98.50 844.10 423.60 *38000 -36.19 *18400 -52.41 6.11 11.59 12.25 16.90 8.90 8.50 *1.74 0 6.27 28.10 41.37 7.37
BURBERRY GROUP BRBY 1983.27 396.75 411.75 240 1564.50 *87800 0 *52200 0 19.50 20.61 22.91 20.30 19.20 17.30 *1.5 50 1.26 32.27 1.78 18.48
CARPETRIGHT CPR 661.45 950 1059 604 1646 1860.70 *52957 0 *36714 0 65.50 63.37 67.22 14.50 15 14.10 *17 13.33 4.56 201.29 45.45 69.96
CARPHONE WHSE.GP. CPW 1254.51 143.50 155.75 86 1582.80 968.40 *41993 0 *22069 0 6.81 5.06 6.20 21.10 28.30 23.10 *0.4 N/A 1.01 15.22 8.84 5.47
DFS FURNITURE CO. DFS 461.34 429 447 354 1135.20 1258.20 *56427 -20.57 *38147 -24.51 34.50 33.22 33.50 12.40 12.90 12.80 *7 0 6.22 103.43 0 74.48
DIXONS GP. DXNS 3190.84 163.75 165.50 121.75 1490 818.40 *310400 0 *209200 0 11.50 11.84 12.86 14.20 13.80 12.70 *1.66 9.93 4.62 31.88 28.64 13.16
FINDEL FDL 345.98 414 416.75 255 1635.20 1649.60 *48508 38.46 *28205 51.88 33.40 12.40 *3.1 10.71 3.89 65.60 52.41 30.88
FRENCH CONNECTN. FCCN 461.29 483.75 502 244 1898.10 3003.20 *38400 27.15 *26400 29.41 28.40 31.15 34.02 17 15.50 14.20 *1 66.67 1.67 33.35 6.35 33.04
GUS GUS 8746.80 862.50 875 650 1357.30 1620.90 *417000 0 *218000 0 60.70 45.72 52.34 14.20 18.90 16.50 *8 15.94 3.48 102.85 48.42 10.52
HMV GROUP HMV 969.27 239.75 258 125.50 1933.80 *83715 0 *47026 0 18.80 19.96 21.89 12.80 12 11 *1.3 18.18 2.18 36.63 206.93
JJB SPORTS JJB 642.94 273.25 328 175 1319.90 763.60 *88589 0 *49768 0 26.99 20 21.24 10.10 13.70 12.90 *3 33.33 4.07 84.45 45.22 15.71
KESA ELECTRICALS KESA 1546.43 292 317 186 *197800 11.69 *105600 12.94 21.40 23.20 25.80 13.60 12.60 11.30 *2.5 N/A 3.81 98.68 65.25 17.90
KINGFISHER KGF 6836.15 293 320 257 1141.10 1099.90 *606000 9.25 *446400 75.20 17.80 20.33 22.61 16.50 14.40 13 *6.15 3.99 3.64 119.20 18.67 5.30
LASTMINUTE.COM LMC 595.63 182 318 154 1075.10 5188.40 *-46485 22.29 *-47645 25.11 0 -9.44 -0.60 N/A N/A 0 6.67 42.34 -45.56
MARKS & SPENCER MKS 8208.39 360.50 370.50 260.50 1221.30 1678.10 *814500 0 *480100 0 24.70 24.18 26.59 14.60 14.90 13.60 *4.4 10 3.54 150.97 43.13 16.90
MATALAN MTN 854.55 203.25 268 150.75 1176.60 490.70 *63900 -46.21 *43400 -49.94 10.60 13.80 15.53 19.20 14.70 13.10 *2.7 0 4.43 48.38 29.57 22.31
MFI FURNITURE MFI 991 159.50 190 131 1011 1476 *119100 46.86 *86800 51.22 12.90 12.57 15.37 12.40 12.70 10.40 *2 25 2.65 62.29 10.06 22.72
NEXT NXT 3782.60 1444 1463 1004 1468.40 1682 *368900 22.97 *243400 17.08 68.70 104.68 116.60 21 13.80 12.40 *11 10 2.70 135.79 70.42 107.50
SIGNET GROUP SIG 2006.82 116.25 123 88 1307 1566.90 *224600 3.36 *137200 6.44 8 8.43 9.11 14.50 13.80 12.80 *0.341 10 2.39 11.75 22.22 19.70
SMITH(WH) SMWH 809.25 323 410 220.50 983.40 706.30 *54000 -41.30 *23000 -55.77 21 18.11 23.22 15.40 17.80 13.90 *13 0 5.85 108.56 5.10 3.88
TOPPS TILES TPT 387.92 172 176 72.30 2381.60 3146.80 *17625 50.42 *12258 52.48 8.42 8.43 9.67 20.50 20.50 17.90 *3.08 359.70 11.18 10.19 9.99 51.58
WOOLWORTHS GROUPWLW 643.29 45.50 49.75 35.75 1253.60 *77500 48.47 *45400 60.42 3.50 3.69 4.38 13 12.30 10.40 *0.36 10.77 3.66 22.90 18.28 10.68
COMPUTACENTER CCC 731.92 387.50 500.50 345 1083.80 1216 *69187 7.44 *45982 21.16 25 26.57 28.74 15.50 14.60 13.50 *5 -13.79 2.01 53.23 14.24 19.08
DIMENSION DATA HDG.DDT 392.65 29.25 52 20.75 1258.10 99.80 *-243789 -85.79 *-266436 -84.60 0 0.60 1.42 49 20.50 N/A N/A 0 4.47 24.09 -64.17
ISOFT GROUP IOT 885.79 391 429.50 258.50 1393.20 1520.50 *21278 0 *13396 0 5.89 6.20 11.01 66.40 63.10 35.50 *0.7 16.67 0.54 0.78 39.66 27.23
LOGICACMG LOG 1349.72 180 337 133.75 1265.10 220.40 *-16100 -98.16 *-43700 -95.23 9.20 7.90 10.59 19.50 22.70 17 *3.4 13.33 3.54 11.22 42.53 -8.92
MISYS MSY 1031.12 193.75 318.50 189 802.50 433.50 *71700 0 *43800 0 17.30 4.43 6.25 11.20 43.70 31 *2.44 15.09 3.43 5.09 190.67
NGATE INFO.SLTN. NIS 292.01 59 73 27.25 2088.50 1235.60 *28155 0 *29746 0 2.12 -0.63 1.98 27.80 29.80 *0.359 0 0 1.02 0.26 195.75
SAGE GROUP SGE 2324.29 181.50 210.50 155 1089.70 733.20 *157300 13 *104216 16.94 8.82 9.56 10.74 20.60 19 16.90 *0.611 10.09 1.04 7.75 22.50 16.75
XANSA XAN 286.39 84.25 127 76.75 868.10 307.60 *-155200 0 *-158900 0 4.26 -1.98 3.26 19.80 25.80 *1.08 0 4.27 7.77 16.27 -62.53
AMVESCAP AVZ 3011.18 372 570 331 913.60 339.20 *84665 -45.31 *-17281 -202.30 23.40 9.03 11.64 15.90 41.20 32 *6.5 0 3.43 21.08 25.88 -0.81
CATTLES CTT 1069.16 326 367 308.50 1055.20 1272.30 *175247 20.83 *82915 24.40 26.37 29.37 34.10 12.40 11.10 9.60 *8.15 16.43 4.12 11.74 72.62 24.25
CLOSE BROTHERS CBG 1111.93 771 902 622.50 1244.50 932.80 N/A N/A *52590 12.90 49.40 47.13 58.35 15.60 16.40 13.20 *9 0 3.75 16.54 65.18 10.82
COLLINS STEW.TUL. CSTL 831.77 439.75 496 353.50 1071.20 1225.80 *73500 161.43 *40900 155.50 28.80 15.30 *5.25 16.67 1.96 13.53 15.20 37.42

EVOLUTION GROUP EVG 340.27 137 149.75 56 2064.10 2095.60 *17920 -175.44 *16048 -167.18 6.70 20.40 *0.25 N/A 0.20 0.61 0 22.64
HHG HHG 1253.47 46.25 53.25 37 *-652000 60.20 *-847000 178.62 0 -1.57 0 23125 N/A N/A 0 2.32 21.09 -111.14
ICAP IAP 1597.72 277 331.40 221.20 1266.40 2602.90 *124600 10.85 *82600 9.55 18.40 14.34 16 15.10 19.30 17.30 *1.7 21.43 2.97 11.22 0.60 33.45
INTM.CAPITAL GROUP ICP 757.78 1117 1235 944.38 1232.50 1685.40 *92400 18.61 *43600 24.22 70.40 74.16 74.74 15.90 15.10 14.90 *24 12.94 3.43 2.06 71.19 20.17
INVESTEC INVP 801.57 1074 1200 785 1373 73436 N/A *-71658 0 103.70 10.40 *28 7.69 6 119.59 84.26 -8.95
ISIS ASSET MAN. ISIS 293 195 260 172 968.90 631.70 *4507 -164.92 *-11821 -10.12 11.98 1.39 2.97 16.30 140.4 65.60 *7 0 6.27 5.71 60.18 -7.54
LONDON STOCK EX. LSE 1090.73 367.25 391 313 1051.60 1048.60 *89600 12.99 *62400 20 21.30 20.97 23.58 17.20 17.50 15.60 *1.4 7.69 1.45 56.67 1.32 20.43
MAN GROUP EMG 4759.50 1534 1860 1163 1273.80 1689.20 *438300 41.94 *325200 43.07 129.60 99.89 119.81 11.80 15.40 12.80 *11.4 25.27 2.17 12.05 34.93 36.27
PARAGON GP.OF COS. PAG 424 354 405 273 1239.30 1517.30 *214000 5.37 *40300 10.11 41.80 8.50 *3.7 23.33 2.39 3.51 92.82 21.04
PROVIDENT FINL. PFG 1600.17 629 773.50 586.50 1017.90 965 *252800 19.68 *141100 18.99 57.54 58.76 62.70 10.90 10.70 10 *19.9 7.92 5.82 18.91 64.60 36.01
SCHRODERS SDR 1383.26 612 809.50 576.50 967.20 776 *65600 247.09 *49200 84.96 16.70 27.44 36.29 36.60 22.30 16.90 *13 0 3.36 4.47 33.18 4.68
SCHRODERS NV SDRC 395.23 562.50 718.50 513 980.60 713.70 *65600 247.09 *49200 84.96 16.70 33.70 *13 0 3.65 14.37 33.18 4.68
SINGER &.FRIED.GP. SFL 400.04 232 254.92 141.01 1701.70 1028.60 116956 N/A *95267 267.74 12.13 10.35 11.36 19.10 22.40 20.40 *29.5 434.43 6.73 79.69 57.21 30.57

240604 p53-57 tables 6/22/04 11:52 AM Page 57


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) % %
CORUS GROUP CS. 1640.86 37 46.75 12.63 2428 631.70 *-150000 -52.23 *-313000 -34.52 0 -0.62 2.45 15.10 *0.971 0 0 61.54 32.57 -11.20
AGGREKO AGK 436.62 163 177.50 120.25 1269.10 365 *45300 -26.94 *27300 -22 10.17 10.12 10.44 16.10 16.20 15.70 *3.45 2.99 3.83 105.43 36.42 15.73
ATKINS(WS) ATK 606.79 581 622 254.50 2331 759.50 *-62500 0 *-59200 0 39.10 28.67 30.93 14.90 20.30 18.80 *2 -73.54 0.96 62.62 63.93 -62.85
BRAMBLES INDUST. BI. 1559.66 215.50 228 158 1335.70 *267000 0 *111000 0 11.20 8.66 11.23 19.20 24.90 19.20 *4.155 10.59 4.23 330.50 58.13 10.36
BUNZL BNZL 2075.92 462.50 494 399.75 1089.40 1065.80 *216800 5.09 *125600 -0.08 31.30 27.57 30.07 14.80 16.80 15.40 *3.85 5.48 2.91 43.78 36.99 23.74
CAPITA GROUP CPI 2118.12 317.75 319 208.25 1345.60 707 *104500 19.63 *59400 24.15 13.04 11.09 13.40 24.30 28.60 23.70 *2.7 35 1.40 16.76 31.60 18.70
COMPASS GROUP CPG 7136.74 331.25 387.75 321 1001 657 *495000 -8.16 *206000 -13.08 21.20 9.77 12.24 15.70 34 27.10 *5.7 14 2.95 80.48 49.77 6.50
DAVIS SER.GP. DVSG 737.18 366 417.50 330 964.70 1281.50 *53290 -40.86 *10372 -78.17 30.01 22.26 25.48 12.20 16.40 14.40 *10.6 4.95 4.74 278.55 49.38 2.35
DE LA RUE DLAR 600.59 328 344 235 1476.10 744.10 *-12300 0 *-14100 0 24.20 23.05 17.79 13.60 14.20 18.40 *4.4 0 4.81 89.24 15.79 -2.70
ELECTROCOMP. ECM 1631.12 374 391.25 310.75 1130 769.10 *99600 7.33 *65700 8.96 17.50 16.67 18.43 21.40 22.40 20.30 *5.6 6.67 5.41 37.44 23.58 16.99
HAYS HAS 2191.20 126.25 147 93.50 1391.90 735.90 *-460200 0 *-523200 0 6.88 5.22 6.85 18.40 24.20 18.50 *1 -42.86 4.07 18.78 100.65 -123.50
HOMESERVE HSV 418.35 669 677 458.94 1405.50 1339.50 *44740 0 *25767 0 51 29.29 35.31 13.10 22.80 18.90 *6.08 8.93 2.52 273.65 46.74 21.42
INTERSERVE IRV 303.73 267 304.75 227 1136.90 608.10 *-5100 -112.23 *-7300 -129.67 16.70 17.03 20.80 16 15.70 12.80 *9.3 132.50 5.62 79.20 23.69 -3.88
INTERTEK GROUP ITRK 836.53 542 547 417.50 1232.90 *79000 2.20 *51000 36.73 29.10 31.13 35.19 18.60 17.40 15.40 *5.9 13.46 1.80 50.41 120.19
LAING (JOHN) LNGO 388.68 220 228 146.50 1479.20 537.90 *36000 291.30 *1600 -104.55 3.10 3.82 4.53 71 57.60 48.60 *2 0 1.52 17.66 74.28 2.92
MICHAEL PAGE INTL. MPI 633.96 178.75 202 107.50 1598.20 978.60 *22487 -31.78 *13745 -35.02 4.10 6.50 8.75 43.60 27.50 20.40 *2.3 0 2.11 6.51 1.44 28.13
MITIE GROUP MTO 415.36 134.25 138 111.25 1099.4 947.70 *31843 0 *21601 0 8.30 8.55 9.57 16.20 15.70 14 *1.1 37.50 2.07 12.05 0.04 26.15
PHS GROUP PHY 399.43 77.25 96.50 72 971 *41216 0 *25402 0 5.87 6.47 7.08 13.20 11.90 10.90 *0.22 29.41 2.45 6.16 26.05 10.41
PREMIER FARNELL PFL 911.91 251.25 282.50 197 1223.5 1045.80 *69300 -8.94 *39000 -6.25 10.10 10.80 12.85 24.90 23.30 19.50 *4 0 3.98 29.54 67.57
RAC RAC 830.09 703 730 531.50 1330.3 1452.50 *10300 -14.17 *-9900 45.59 54.40 50.71 53.76 12.90 13.90 13.10 *14.6 5.80 3.84 150.07 32.99 2.36
REGUS GROUP RGU 492.40 62.50 82 28.35 1987.6 436.90 *-20102 -82.03 *-22854 -81.65 0 0.27 231.50 N/A N/A 0 8.52 93.46
RENTOKIL INITIAL RTO 2689.51 148.25 232.75 140.50 800.50 664.80 *494700 1.31 *289700 2.04 16.47 14.79 15.16 9 10 9.80 *4.35 10.13 4.57 36.53 172.96
REXAM REX 2426.27 441.25 471 347.77 1274.8 1731 *90000 7.14 *-41000 -66.39 38.10 23.45 27.49 11.60 18.80 16 *9.58 5.36 4.25 229.51 60.26 -5.41
SECURICOR SCR 650.49 122 135 68.75 1677.9 787.50 *55800 -408.29 *39200 -180.82 8.70 7.21 8.11 14 16.90 15 *1.62 18.47 2.26 33.22 41.29 16.67
SERCO GROUP SRP 913.25 210 234.75 146.50 1225.4 540.60 *44446 42.25 *17513 11.36 11.03 8.17 9.86 19 25.70 21.30 *1.62 12.50 1.24 17.80 66.21 13.34
BT GROUP BT.A 16516.84 192.50 210.25 166.25 1013 636.40 *3079000 -28.58 *1409000 -46.16 16.90 18.49 19.72 11.40 10.40 9.70 *3.2 42.22 4.91 180.50 81.79 55.70
CABLE & WIRELESS CW. 3023.58 127 155.50 100.50 1206.2 367.90 *-6361000 0 *-6470000 0 0 4.63 8.71 27.40 14.60 *1.6 0 0 81.20 38.27 -73.40
COLT TELECOM CTM 1269.11 84 131 58.25 1321.7 181.40 *-36352 -94.16 *-124647 -82.65 0 -4.86 -0.97 N/A N/A 0 88.98 57.02 -13.05
MMO2 OOM 8176.18 94.25 117.75 51 1640.7 *-10123000 0 *-10151000 0 1.90 2.40 3.26 49.60 39.30 28.90 N/A N/A 0 44.67 12.71 -53.89
THUS GROUP THUS 350.64 26 39 17.25 1313.10 565.20 *-19357 -62.43 *-25221 -57.24 0 -0.65 0.34 76.90 N/A N/A 0 30.61 13.40 -6.22
VODAFONE GROUP VOD 82981.81 123.50 150.25 112 1038.10 857.90 *-3956000 -22.20 *-8201000 -10.51 9.10 -13.14 -12.36 13.60 *0.953520 1.83 26.91 11.05 -7.01
BRIT. AMERICAN TOB. BATS 16924.88 828.50 873.50 615 1312.40 1828.60 *1832000 -21.34 *772000 -36.88 26.93 52.19 58.12 30.80 15.90 14.30 *27 10.20 5.20 126.20 62.73 13.46
GALLAHER GROUP GLH 4508.10 689.50 697 544 1202.80 1767.40 *504000 -2.70 *243000 -6.18 55.50 45.56 50.96 12.40 15.10 13.50 *20.15 7.47 4.77 91 112.43
IMPERIAL TOBACCO IMT 8896.25 1220 1295 955.50 1170.60 1989.40 *914000 54.65 *424000 49.82 97.90 71.78 83.99 12.50 17 14.50 *30 30.43 4.10 97.92 98.56
ARRIVA ARI 773.66 399 418.25 330 1242.90 1427.30 *100800 3.17 *57800 -26.84 36 28.46 30.20 11.10 14 13.20 *13.4 4.69 5.01 392.73 45.09 12.20
ASSD.BRIT.PORTS ABP 1299.74 410 498 375.50 1105.80 1152.50 *169100 1.26 *96700 2.44 31 31.27 33.19 13.20 13.10 12.40 *8.5 3.03 4.13 454.81 29.07 10.34
AVIS EUROPE AVE 584.32 99.75 117.75 87.50 1099.80 840.60 *13209 -87.66 *-35528 -169.68 5.40 5.05 8.50 18.50 19.70 11.70 *2.6 -31.58 4.34 169.53 98.69 -114.46
BAA BAA 5874.63 548.50 560.50 441.75 1168.70 969.20 *673000 -4.67 *377000 0.27 35.50 37.98 42.41 15.40 14.40 12.90 *6.6 4.76 4.06 847.22 42.35 8.32
BBA GROUP BBA 1151.56 255.25 281.25 200.50 1273.50 1152.10 *83700 -10.86 *19700 -39.76 19.60 16.29 17.71 13.10 15.70 14.50 *7.6 2.70 4.69 170.74 47.44 3.63
BRITISH AIRWAYS BAY 2801.75 258.75 343 140.25 1648.90 819.30 *435000 5.07 *114000 65.22 0 19.77 28.72 13.10 9 *12.8 0 0 797.65 70.86 6.41
EASYJET EZJ 628.35 157.25 389 152.50 754.40 421.10 *53072 -30.90 *32402 -33.89 0 11.38 13.66 13.80 11.50 N/A N/A 0 80.28 8.76 4.45
ETUNNEL SA UNITS ETL 591.87 23.25 73.50 22 550.30 325.20 *-974711 -257.34 *-1334225-541.09 0 -3.40 -2.94 N/A N/A 0 291.74 84.09 -55.15
EXEL EXL 2152.90 722 792 614 1155.30 1092.90 *168100 -15.61 *98200 -18.30 34.07 35.63 40.69 21.10 20.20 17.70 *16.8 9.80 3.81 183.58 26.29 11
FIRST GROUP FGP 1137.56 282.75 307.50 249 1103 931.90 *168000 -12.64 *92200 -5.53 27.30 21.87 23.33 10.40 12.90 12.10 *3.75 5.63 4.58 198.25 68.04 22.77
FORTH PORTS FPT 533.44 1170 1260 885 1350.10 1744.10 *59400 18.36 *40400 20.93 70.40 73.53 79.63 16.60 15.90 14.70 *24.2 10 3.45 631.46 30.54 18.61
GO-AHEAD GROUP GOG 578.71 1142 1300 735 1582.70 1331.60 *42100 0 *19300 0 97.50 97.01 108.12 11.70 11.80 10.60 *11 57.14 2.82 407.70 41.97 9.67
MERSEY DOCKS MDK 539.65 690 713 536 1281.80 1373.80 *65900 4.77 *36800 -0.27 46.90 50.15 53.68 14.70 13.80 12.90 *16 8.84 3.72 821.25 38.27 9
NATIONAL EXPRESS NEX 958.63 700 749.50 549.25 1299 796.60 *87100 -248.89 *42000 -139.66 61.40 30.14 37.61 11.40 23.20 18.60 *17.5 6.71 4.13 296.17 58.99 17.06
NORTHGATE NTG 429.03 670 695 472.50 1399.40 1683.80 *50121 0 *23827 0 45.20 45.95 51.67 14.80 14.60 13 *7 42.86 3 606.78 66.23 18.43
PEN.&.ORNTL.DFD. PO. 1584.17 214.75 288.25 208 987.80 1041.10 *126000 452.63 *19900 -119.74 12.40 11.45 13.63 17.30 18.80 15.80 *9 0 6.98 227.47 53.81 3.86
STAGECOACH GP. SGC 1142.62 86.50 97 58 1600 1365.80 *-452800 0 *-525600 0 5.20 5.92 4.87 16.60 14.60 17.80 *0.9 12.50 3.47 64.47 69.56 -57.77
TBI TBI 363.28 65 73.75 53 1253.90 840.70 *22479 0 *6204 0 2.66 1.78 2.28 24.40 36.50 28.40 *0.7 0 3.93 63.15 36.83 1.54
AWG AWG 862.15 601.50 620 439.92 1220.60 1488.50 *197600 0 *-50000 0 50.60 37.98 41.63 11.90 15.80 14.40 *18.94 0 0 2871.84 76.51 -3.90
CENTRICA CNA 9590.20 224.75 236.50 168.25 1245.50 1023.30 *817000 7.93 *474000 6.04 16.80 16.51 19.13 13.40 13.60 11.80 *3.7 42.31 2.67 63.98 28.28 22.46
KELDA GROUP KEL 1865.15 495.25 510 396 1240.40 1584.80 *270300 0 *127300 0 46.20 40.54 40.45 10.70 12.20 12.20 *8.1 3.05 6.02 960.10 52.52 7.57
NTNAL GRID TRANS. NGT 13345.77 433.50 441.25 370 1125 924.50 *1568000 0 *362000 0 34.70 33.83 34.99 12.50 12.80 12.40 *7.91 15.31 5.07 547.23 92.36 12.41
NBRIAN WATER GRP NWG 710.51 137 138.75 101.25 1225.60 *182500 0 *89400 0 12.20 10.53 14.61 11.20 13 9.40 *2.32 N/A 5.64 493.50 57.98


PENNON GROUP PNN 984.94 787 787 565 1221.20 1618.90 *136300 0 *57100 0 57.70 53.25 58.91 13.60 14.80 13.40 *13.2 4.76 5.79 1635.14 57.03 5.86
SEVERN TRENT SVT 2780.99 806 840 635 1228.20 1367.40 *335000 0 *98200 0 61.40 52.83 62.40 13.10 15.30 12.90 *17.77 2.48 6.48 1463.21 53.77 4.33
UNITED UTILITIES UU. 3054.65 548.50 569.50 448.73 1109.50 1204.40 *569200 0 *277500 0 54.70 50.47 48.92 10 10.90 11.20 *14.43 7.68 8.98 1272.61 58.89 10.95
UNITED UTILITIES A UU.A 1077.86 348.50 371.25 259 *569200 0 *277500 0 *7.215 N/A 7.06 2291.49 58.89 10.95

24 June 2004 57
240604 p58-62 sml caps 6/22/04 10:49 AM Page 58



The plastic materials technology developer saw
- 107.5P / - 112.5P /
Innovision is a technical solutions provider, Fluid handling firm Pursuit Dynamics
shares plunge 21% on the results day, despite the concentrating on radio frequency identification disappointed investors slightly with this set of
fact pre-tax losses fell to 1.4 million from 8.99 products used in tracking and tagging. A results for the six months to March largely
million in 2002. The company raised 5.4 million significant rise in turnover and a reduced cost because there was no news on any one big
from the conversion of warrants and says it has base helped to cut losses significantly. The new product test that might lead to overnight
received its first licensing revenues. 3DM says it is trading year has started well enough although profitability. What the results did show was a pre-
changing its business model for PIM from being contract wins are currently taking a little longer tax loss of 818,000, and little else. Beyond that,
focused in the US to focusing more on Europe. As than expected to come through. Still the group the company is involved in a number of trials and
such the US office has been closed and activities has several exciting designs under development, is also positive that it does not need one big
licensed out. For new product areas the 3DM will and with 3.75 million in cash should be able to contract and would prefer to win a series of
now take a 10% royalty and a minority stake in the continue until such times as the license revenue smaller contracts, so being less reliant. It has
licensee company. (PT) stream really starts to flow. There is no dividend enough cash to last out, and investors must sit
payment proposed. (JC) tight and be patient. No dividend is payable. (JQ)

Shares says: Normal market size: Shares says: An Normal market size: Shares says: PDX Normal market size:
Losses are falling but 2,500 exciting prospect but 5,000 needs to bring home 10,000
key revenues not % spread: 10.7 its size makes it % spread: 4.54 the bacon soon. % spread: 2.56
expected until 2005. vulnerable.

2004 2003 3DM WORLDWIDE

share price
share price
share price
200 140 180
180 130
Tover m 0.25 0.40 160 Tover m 2.2 0.80 120 Tover m 0.109 - 160
140 110
120 100 120
Fin PTP (m) -1.44 -8.99 100
Fin PTP (m) -1.32 -3.57 90
Int PTP (m) -0.818 -0.84 100
60 70 80
EPS (p) -2.39 -15.5 40
20 EPS (p) -3.03 -8.72 50 EPS (p) -1.84 -2.2 60
0 40
J J A S O N D J F M A MJ 30 20
Mkt cap (m) 55.3 10.8 Mkt cap (m) 43.8 16.8 Mkt cap (m) 53.5 12.7
Source: Thomson Financial/Datastream
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream


- 850P + - 150P / The results from furniture retailer Courts
The results were very satisfactory with Cumbrian-based paper and specialised fibre
demonstrated the failures of the previous
underlying earnings up by 22% and the dividend business James Cropper is not having a happy
management team there had been no full stock
increased by 50% to 16.5p with a final of 12p. There time at the moment, with profits halving in the
take in the UK for fires years. The red ink caused
is to be a 4 for 1 share split to improve liquidity. year to March. The problems seemed to hit across
by large UK losses meant that the final dividend
The group opened 10 stores last year, currently all areas. Its core paper division isthe worst hit,
was passed the total for the year was 1.1p. The
has 115 and hopes to have some 122-124 at the with operating profit down 62% due to higher raw
group is seeking to securitise the lending of its
year end. Eventually Majestic will have some 175- material costs and depressed European sales.
overseas businesses so that they are no longer
200 stores. Like-for-like sales are so far up by 8%. Technical fibre products were hit by the weaker
funded from London. The UK businesses have
Net margins should grow this year. David US$ but business here looks promising thanks to
sales of 286 million which might excite a bid
Stoddart of house broker Teather & Greenwood is a new joint-venture, while its converting
once the VAT case is settled later this year. There
forecasting profits of 12 million, earnings of business was hit by the dollar and by increasing
could be a substantial turn round over the next
51.4p and a 20.5p dividend. (JM) competition. A final dividend of 5.9p is to be paid
two years. (JM)

Shares says: The Normal market size: Shares says: No Normal market size: Shares says: As a Normal market size:
prospect of substantial 1,000 quick fixes at James 2,500 bid is possible the 3,000
profits growth makes % spread: 1.68 Cropper. % spread: 6.25 shares are a % spread: 2.78
the shares attractive. speculative buy.


share price
2004 2003 CROPPER (JAMES)
share price
2004 2003 COURTS
share price
950 200 340
Tover m 148 125 900 Tover m 56.6 55.0 190
Tover m 686 631 300
850 180
Fin PTP (m) 10.7 7.97 800
Fin PTP (m) 0.78 1.87 160
Fin PTP (m) -34.4 11.5 260
700 150
EPS (p) 47.1 35.8 650
EPS (p) 7.6 7.5 140
EPS (p) -83.7 -17.5 200
600 130 160
Mkt cap (m) 132 90.1 Source: Thomson Financial/Datastream Mkt cap (m) 12.1 15.1 Source: Thomson Financial/Datastream Mkt cap (m) 117 147 Source: Thomson Financial/Datastream

240604 p58-62 sml caps 6/22/04 10:49 AM Page 59




- 16P - - 10.25
Industrial products manufacturer Chapelthorpe
The dentistry operator saw turnover jump 58% to Fine china manufacturer Waterford Wedgewood
had a positive year to March, with profit before tax
73.9 million from 46.9 million in 2003 but pre- blamed the Iraq war and SARS virus as it plunged
rising 137% to 5.45 million. The firm focuses on the
tax losses rose from 2.3 million last year to 3.4 into the red and axed the dividend. The Irish
fibres, wall coverings and umbrella frame markets,
million. The company is currently without a chief company, which has also been afflicted by the
and each area seems to have its own pluses and
executive following the departure of Malcolm falling dollar, saw the previous years 7.2 million
minuses for the year ahead. That said, borrowings
Hughes at the end of April, however chairman profit turn into a 44.9 million deficit. In a
are down to 22.7 million from 43.3 million in
Ron Trenter says he hopes to recruit a new chief troubled year it axed 1,000 jobs and sold its
September 2001, and it is on track to get it below
executive shortly. Oasis has expanded to successful US kitchen-wear business, All-Clad, to
20 million by March 2005. Added to that, three
operating 127 practices but this growth has come pay down debts, which stood at 382.9 million. It
directors all bought shares following the release of
with a price. Net debt currently stands at 40.1 is hoping the appointment of management
the results, suggesting that they are confident of
million, up from 39.6 million last year, although consultancy Accenture will help spark a much
its continued performance. A 40% increase on the
the company says it plans to cut borrowings needed recovery, while it has also invested in
final dividend brings it to 0.7p, to be paid on 10
substantially this year. (PT) new computer systems and restructuring. (SF)
August based on 19 Junes share register. (JQ)
Shares says: Debt Normal market size: Shares says: Normal market size: Shares says: Normal market size:
looks high and no 10,000 Chapelthorpe 50,000 Investors should not 25,000
chief executive at the % spread: 8.82 continues its cautious % spread: 2.53 expect a speedy % spread: 7.0
helm. recovery. turnaround.


share price
share price
share price
32 21 22
30 20
Tover m 73.9 46.9 28 Tover m 121 121 19 Tover Em 831 951 20
26 18
17 18
Fin PTP (m) -3.4 -2.27 22 Fin PTP (m) 5.45 2.3 16
Fin PTP (Em) -44.9 7.2 16
20 14 14
18 13
EPS (p) -4.14 -2.47 16 EPS (p) 1.82 0.08 12 EPS (c) -5.63 0.22 12
14 11
12 10 10
Mkt cap (m) 13.06 20.0 Source: Thomson Financial/Datastream Mkt cap (m) 36.7 20.9 Source: Thomson Financial/Datastream Mkt cap (Em) - Source: Thomson Financial/Datastream


- 344P - - 18.75P + Hefty restructuring and redundancy payments
One of the handful of companies to prove Acquisitive marketing services business Media pushed media minnow SPG Media further into
dot.bomb-proof, Radstone Technology has Square is really starting to go places. The growth the red over the past year, and a reduction in
survived and prospered making computer comes through acquisition with two completed advertising revenues on the print side did not help
components that go into tanks and ships. The in this period but also through organic growth. matters. This was slightly offset by an improving
company remains upbeat in spite of plant closure More growth is coming from its retail marketing performance in the internet and events
costs halving headline pre-tax profits to 3.06 services agencies, while its communications businesses but the outlook is still uncertain. The
million last year. Our book ended the year at a business, which produces catalogues for mail number of events has increased from three last
record level [79.3 million], says chief executive order companies, is still profitable but shows less year to eight and the division contributed 2.1
Jeff Perrin, although this was in part thanks to growth potential. One sign that the firm thinks it million to revenues while the internet business
last years 21 million acquisition of Canadian is entering the big time comes in the now has 22 portals. New management has spent
rival ICS, which weighed in with 4.3 million appointment of masters of the dark arts the last six months reshaping the business and
towards profits. The shares drifted to 344p, Brunswick to handle its financial PR. No dividend exceptionals relating to this totalled 1.5 million.
suggesting some profit-taking. (SF) is payable. (JQ) No dividend will be paid. (PF)
Shares says: Normal market size: Shares says: From Normal market size: Shares says: Better Normal market size:
Modest prospects do 5,000 nowhere to this in 10,000 media plays out there. 15,000
not support a 17 times % spread: 2.30 three years is quite % spread: 5.19 % spread: 6.0
PE. Take profits. remarkable.

2004 2003 RADSTONE TECH.

share price
2004 2003 MEDIA SQUARE 2004 2003 SPG MEDIA GROUP
share price
share price
440 26 17
Tover m 43.7 48.5 400 Tover m 6.64 3.71 24
Tover m 24.0 24.7 16
380 20 14
360 18
Fin PTP (m) 3.06 6.13 340 Int PTP (m) 0.40 0.12 16 Fin PTP (m) -1.48 -1.17 13
320 14
300 12 11
EPS (p) 5.0 17.9 280 EPS (p) 0.53 0.4 10 EPS (p) -1.76 -2.16 10
260 8 9
240 6 8
Mkt cap (m) 100 65.2 J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream Mkt cap (m) 25.3 2.79 Source: Thomson Financial/Datastream
Mkt cap (m) 9.23 9.42 Source: Thomson Financial/Datastream

24 June 2004 59
240604 p58-62 sml caps 6/22/04 10:49 AM Page 60


(WDSW) - 122P / - 312.5P + The pharmaceuticals distributor and marketing
The printing group had a tough year encompassing Victory concentrates on selling the Virgin
company looks to be on the road to recovery after
bad debt write-offs and restructuring costs but Cosmetics range and reported a maiden profit. The
a tough two years, which has seen it operating
believes it is seeing light at the end of the tunnel. main emphasis is upon direct selling through
under the cloud of a Serious Fraud Office
Pre-tax profits fell to 2.6 million from 6.1 million consultants. By the year-end there were 9,706
investigation and litigation from the Department
and turnover remained flat at 123.6 million. consultants and the group expects to recruit
of Health. While the company provided no
However, gearing fell to 55% from 78% and the another 2,500. By the end of 2004/05 it hopes to
update on the SFO inquiry bank debts were
company had an improved performance in the launch into another product area which could lead
slashed to 5.5 million from 13.7 million and the
second half, with turnover rising 8% to 64.1 million to substantial growth over the next two to three
dividend was hiked by 21% to 2.5p. Pre-tax profits
despite a tough trading backdrop. The acquisition years. In the long-term Victory hopes to increase
fell to 3.3 million from 3.5 million in 2003 and
of Graphic Facilities Group makes Wyndeham the the importance of licensing income. House broker
revenues also fell. Almost all Goldshields
leading UK pre-press business and is earnings Seymour Pierce is forecasting 2004/05 earnings of
support operations were moved to India in the
enhancing. The outlook is challenging and direct 39.9p rising to 66.4p in 2005/06. (JM)
restructuring programme. (PT)
mail continues to be tough. (PT) THE WRITER HOLDS SHARES IN THIS COMPANY

Shares says: Normal market size: Shares says: The Normal market size: Shares says: No Normal market size:
Trading conditions 5,000 prospects are 1,000 update on litigation 2,000
remain harsh. % spread: 5.74 encouraging and the % spread: 2.74 but focus on India % spread: 3.85
rating undemanding. looks promising.


share price
2004 2003 VICTORY
share price
share price
160 450 280

Tover m 123 123 150

Tover m 64.3 57.6 400 Tover m 87.1 105 260
140 240
130 220
Fin PTP (m) 2.62 6.12 120
Fin PTP (m) 2.11 -7.94 300 Fin PTP (m) 3.32 3.53 200
110 250
EPS (p) 3.3 9.1 100
EPS (p) 38.7 -153 200 EPS (p) -1.6 -3.9 160
90 150 120
Mkt cap (m) 55.5 59.5 Source: Thomson Financial/Datastream
Mkt cap (m) 23.0 15.4 Source: Thomson Financial/Datastream Mkt cap (m) 96.2 75.6 Source: Thomson Financial/Datastream


- 225P / Safeland is anything but safe, judging from these
- 317.5P +
A rather non-eventful year for the property Tops Estates reporting a strong set of results this
developer and investor has yielded a rather non- depressing results. The tiny real estate trading week. The shopping centre investor saw net asset
eventful set of results. Pre-tax profits have fallen group has sunk back into the red after a difficult value leap by 15%, slightly ahead of City forecasts,
slightly due to the reduced sales programme 12 months. Its stake in loss-making tech group while pre-tax profits grew by 29%. The majority of
which fluctuates from year to year. Shareholders Tecc-IS has dented the P&L by 1.3 million, while capital growth came from rental value growth
are somewhat compensated by the small increase the groups Italian self-storage companies have and development activity, especially at
in dividend to 5.9p and the 6.9% increase in net also suffered losses. A year of less profitable Worcester and Stafford where Tops intensive
asset value. Despite low levels of tenant demand, transactions has reduced turnover by around 7 asset management has added significant value.
McKay has recently let a number of properties million. Good news is in short supply, and The current year should see further progress in
which are expected to add half a million to rental management is not sounding overly confident: Corby town centre, where the company is part of
income. The extent of future growth will largely In the event that favourable conditions do a major town centre shopping regeneration
depend on how quickly the group can let its present themselves, we are in a very good project. Tops also benefits from strong cash
current developments. (CB) position to take advantage of them, it says. (CB) flows and well-covered debt. (CB)

Shares says: Large Normal market size: Shares says: Steer Normal market size: Shares says: One Normal market size:
exposure to offices 1,000 clear of this sinking 5,000 of the most 2,500
means recovery will % spread: 4.35 dinghy. % spread: 5.56 undervalued shares in % spread: 3.12
take time its sector.

2004 2003 MCKAY SECS.

share price
2004 2003 SAFELAND
share price
2004 2003 TOPS ESTATES
share price
225 60 340
Tover m 17.4 16.7 215 Tover m 20.8 30.5 58
Tover m 29.6 28.9 320
210 56
205 280
Fin PTP (m) 7.46 8.4 200
Fin PTP (m) -1.04 3.52 54
Fin PTP (m) 8.68 6.73 260
190 240
185 50
EPS (p) 13.0 14.9 180 EPS (p) -5.37 10.3 48
EPS (p) 15.8 11.5 220
170 46 180
Mkt cap (m) 110 88.2 Source: Thomson Financial/Datastream Mkt cap (m) 10.6 10.4 Source: Thomson Financial/Datastream Mkt cap (m) 144 95.3 Source: Thomson Financial/Datastream

240604 p58-62 sml caps 6/22/04 10:49 AM Page 61


Diluted NAV rose twice as much as expected Customer management software specialist AIT
- 11.25P
Software supplier Workplace Systems maintains
10% to 1772p driven by an average 9.6% valuation Group came full circle after posting a return to its caution on future prospects in spite of
increase on property and benefiting from Stamp profit for the full year. Registering a 2 million scrapping a 300,000 operating profit. Significant
Duty exemption and the yield re-rating of profit, at a pre-tax level, marks an incredible customers such as Gallaher, Severn Trent and
commercial property throughout the year. Pre- turnaround for a company which ran up a 39.3 John Menzies have been bought on board but the
tax profits included 1 million profit from the million deficit the year before and nearly went to company believes that market recovery remains
disposal of properties. The dividend was raised the wall in 2002. Sales increased 11% to 19.6% in fragile. At a pre-tax level Workplace remains in
10.3% to 31p (03: 28.1p). Rents are up slightly to the year to March, aided by 11 million from new the red, chalking up a 7.4 million deficit
8.37 per sq ft, depressed by a relatively tough licences and maintenance revenues. We are now compared to the 3.55 million last year, but the
letting environment in all but the last quarter. poised to expand, chief executive Nick Randall company has now disposed of its loss-making
Like-for like occupancy was 88% (89% last time) predicted, although the companys markets were Teleware business, securing a 1 million profit on
further evidence of a fairly tough year. However, said to be still challenging. (SF) the sale. Workplace is also paying its first
the outlook statement is positive. (PF) dividend for three years, 0.2p a share. (SF)

Shares says: Normal market size: Shares says: AIT is Normal market size: Shares says: Little Normal market size:
Expect investors to 2,000 heading in the right 10,000 visibility to future 25,000
stick with this solid % spread: 0.55 direction but shares % spread: 6.58 earnings makes % spread: 12.5
asset play. remain speculative. shares speculative.


share price 2004 2003 AIT GROUP
share price
share price
1900 100 14
Tover m 51.1 45.0 1700 Tover m 19.6 17.6 90
Tover m 10.7 14.2 13

1600 12
Fin PTP (m) 15.1 13.4 1500
Fin PTP (m) 2.02 -39.3 60 Fin PTP (m) -7.4 -3.5 10
1300 50
EPS (p) 65.7 64.3 1200 EPS (p) 8.06 -291 40
EPS (p) -4.80 -1.52 8
1000 20 7
Mkt cap (m) 288 188 Source: Thomson Financial/Datastream Mkt cap (m) 34.2 7.89 Source: Thomson Financial/Datastream Mkt cap (m) 20.3 14.9 Source: Thomson Financial/Datastream


HELPHIRE (HHR) - 206P + LATCHWAYS (LTC) - 345P + VP (VP.) - 127.5P -
Helphire specialises in vehicle hire and accident Latchways, which designs, manufactures and A mixed performance from VP, with strong
management services and saw turnover boosted sells fall arrest safety systems, has spent the last results from Ground Force (provides excavation
by 35% helped by a number of new contracts with year cutting out lower margin contracting support systems for water and civil engineering)
various brokers and insurers. There is a growing business and increasing purchasing efficiencies, and profits at 5.3 million (2.3 million in 2003)
demand for its service which basically handles resulting in profits up 20%. Turnover was up just with strong organic growth. Groundforce had the
insurance claims for those who maintain that 6%, but without the impact of closures at HCL, it benefit of high rentals to CTRL and T5 work in
they are innocent victims in an accident. would have improved 11%. European sales have 2004, but 2005 has last years 6.5 million of
Borrowing increased to 23.8 million from 16.8 been strong and were up 59%, while back at home acquisitions. Hire Station, the tool-hire division,
million reflecting further infrastructure things were not so good. UK sales were down 7% was hit by a 500,000 reorganisation charge but
investment. The outlook for the current year is and restructuring has taken place at HCL and the saw a slowly improving underlying performance.
seen as encouraging. A final dividend of 2.5p safety installation arm, with a new managing VP could be tempted to sell it. The healthy debt
against 1.5p has been proposed, making a total director in place. The newly acquired Wingrip and good cash position gives VP plenty of
for the year of 4.5p against 1.5p. (JC) business is performing ahead of expectations. opportunity to make further acquisitions. It paid
The dividend is up 5% at 9.78p. (PF) out a 5p dividend. (PF)
Shares says: Helphire Normal market size: Shares says: Normal market size: Shares says: Lowly Normal market size:
has found a niche 10,000 Restructuring should 500 rated compared to 5,000
market that is growing % spread: 1.89 pay off this year. % spread: 2.86 peers. Switch to % spread: 3.85
all the time. Speedy Hire.


share price
2004 2003 LATCHWAYS
share price
2004 2003 VP
share price
230 360 150
350 145
Tover m 75.3 55.8 220
Tover m 19.5 18.4 340 Tover m 83.5 75.5 140
210 330 135
320 130
Fin PTP (m) 7.08 5.25 200
Fin PTP (m) 3.31 2.75 310
Fin PTP (m) 8.87 7.51 125
180 115
EPS (p) 6.97 6.33 170
EPS (p) 21.2 18.1 280
270 EPS (p) 14.5 12.3 110
260 105
160 250 100
Mkt cap (m) 247 257 Source: Thomson Financial/Datastream Mkt cap (m) 37.7 28.9 J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream Mkt cap (m) 61.2 50.3 Source: Thomson Financial/Datastream

24 June 2004 61
240604 p58-62 sml caps 6/22/04 10:49 AM Page 62



- 265.5P / Shares says: The group supplies promotional
goods and services, corporate entertainment and
Shares says: Profits have improved on better
margins and a strong performance by its latest
A look behind the headlines at recruitment
related services. It is currently looking to expand acquisition Argen. Furthermore, this audit,
company Whitehead Mann shows that it is its positions as preferred supplier to Pepsi Cola stocktaking, commercial research and
making progress. The cost base is lower, a Beverages International. investigation services provider has also paid a
0.75p per share dividend, up from 0.73p.
number of property issues have been resolved
and the saga over Anna Manns departure has 2004 2003 2004 2003
been resolved. Net debt is 6.1 million, aided by 52-week high/low 11p/9.25p 52-week high/low 63.5p/43.5p
Turnover m 2.24 - Turnover m 3.72 3.34
cost control and a 3.8 million placing in Interim pre-tax profits (m) 0.11 - Interim pre-tax profits (m) 0.114 0.03
November. Executive recruitment remains the Earnings per share (p) 0.92 - Earnings per share (p) 0.5 0.1
cornerstone of the business, accounting for 82% Market cap (m) 3.09 - Market cap (m) 4.82 5.7
Normal market size 10,000 Normal market size 2,500
of revenues, with the assessment and coaching % spread 19.0 % spread 6.0
arms growing. Shareholders will receive a 7p
dividend, flat on last year. Management is
cautious about the outlook for the future. (PF)
(AIM:CIC) 87.5P (AIM:DSL) 33.5P
Shares says: Conygar specialises in acquiring Shares says: This group runs two undersea
Shares says: Better Normal market size:
property assets with development and investment marine exhibitions. Turnover rose and last year's
base to work from but 5,000
potential. It arrived on AIM last October and has interim loss was replaced with a profit. However,
uncertain markets. % spread: 2.69
not yet traded. More cash was raised in February the group admitted that the season has begun on
through a 522,000 share placing and cash as at a softer than expected note but expects to see
31 March stood at 4.9 million. momentum regained by the year end.
share price
2004 2003 2004 2003
Tover m 61.2 65.0 350
52-week high/low 106.5p/53.5p 52-week high/low 33.5p/39.5p
Fin PTP (m) 3.83 -20.4
Turnover m - - Turnover m 2.86 2.45
Interim pre-tax profits (m) -0.002 - Interim pre-tax profits (m) 0.26 -0.02
EPS (p) 7.57 -87.1 200 Earnings per share (p) -0.03 - Earnings per share (p) 0.92 -0.001
Market cap (m) 8.51 - Market cap (m) 6.43 6.05
Mkt cap (m) 74.4 41.1 Source: Thomson Financial/Datastream
Normal market size 5,000 Normal market size 1,000
% spread 4.60 % spread 18.9

(HOH) 5.25P (AIM:LOD) 267.5P
IDN TELECOM (IDN) - 3P + Shares says: Howle manufactures engineers' Shares says: A return to profitability came
cutting tools and is currently going through the mainly as a result of a 450,000 disposal
An encouraging six months for the telecoms early stages of a restructuring. This will take time windfall. Given the fact that the spread on the
service provider has seen revenues leap by 38%. and cost money. One of the principal objectives share price is 220-315p in 200 shares, there is
is to reduce debt levels currently standing 5.75 unlikely to be much interest in this motor,
Pre-tax profits continue to climb steadily as the million. aerospace and defence engineering group.
AIM-listed groups client base approaches 1,000.
2004 2003 2004 2003
IDN analyses clients land line and mobile call
52-week high/low 10p/5.25p 52-week high/low 350p/50p
patterns before recommending cost-effective Turnover m 1.49 3.46
Turnover m 5.45 5.93
telecoms solutions. Its line rental product has Interim pre-tax profits (m) 0.004 -0.14 Interim pre-tax profits (m) 0.09 -0.56
Earnings per share (p) -0.2 -0.6 Earnings per share (p) 4.99 -28.2
been particularly well received, along with a
Market cap (m) 1.52 2.61 Market cap (m) 4.84 1.75
mobile offering launched in the autumn. Normal market size 200
Normal market size 5,000
Revenues for the coming year are forecast to % spread 25.0 % spread 30.2
come from deploying new services into the
existing client base. The group continues to
invest in new employees, facilities and systems.
(AIM:MKP) 22P (AIM:SOP) 7.125P
No dividend was recommended.(CB) Shares says: This cash shell is still looking for Shares says: The results for the sports
Shares says: The Normal market size: a suitable reverse takeover, preferably in the management company are largely irrelevant, as it
next six months 100,000 property sector. It has 2.57 million in cash and remains suspended pending purchase of the
should continue to % spread: 1.63 not a lot else. majority stake in Frank Warren's Sports Network.
impress. The purchase will be a reverse take-over under
AIM rules. Confirmation is expected shortly.
2004 2003 IDN TELECOM
share price
4.50 2004 2003 2003 2002
Tover m 6.02 4.35 4.00 52-week high/low 26p/19p 52-week high/low 8.875p/3.25p
Turnover m - - Turnover m 2.40 2.37
Int PTP (m) 0.28 0.005 2.50 Interim pre-tax profits (m) -0.023 -0.07 Final pre-tax profits (m) -0.42 0.16
Earnings per share (p) -0.22 -0.69 Earnings per share (p) -1.03 0.45
EPS (p) - - 1.50
Market cap (m) 2.22 2.05 Market cap (m) 2.41 2.75
0.50 Normal market size 5,000 Normal market size Suspended
Mkt cap (m) 9.36 2.72 J J A S O N D J F M A MJ
Source: Thomson Financial/Datastream
% spread 8.70 % spread -

240604 p63 next week 6/22/04 3:06 PM Page 63

by: Chris Bourke

This weeks upcoming events
Monday 28 June Finals Northgate Information
Interims Beale In May Northgate announced results COMPANY WHAT'S COMPANY WHAT'S
Near the end of March, the retailer NAME DATE ON NAME DATE ON
were expected to exceed market
announced sales for the first 20 weeks forecasts. The software outsourcers BEALE 28 JUN I ASOS 30 JUN F
were 5.1% below the previous year, Rebus HR Group acquisition has HONEYCOMBE LEISURE 28 JUN F CITY LOFTS GROUP 30 JUN G
and that all indications were that the performed better than expected, and INDEPT NEW & MEDIA 28 JUN G HMV GROUP 30 JUN F
rest of 2004 would remain the group should meet consensus NORTHGATE INFO SOL 28 JUN F IFG GROUP 30 JUN G
challenging. High costs and low retail pre-tax profits of around 43 million. SHELL TRANSPORT 28 JUN G INVESCO INC GRTH TST 30 JUN G
inflation are to blame.

Tuesday 29 June Finals International Greetings

In June the greetings products
29 JUN
29 JUN
Finals Carpetright manufacturer acquired Krakajack, one FIRST TECHNOLOGY 29 JUN F VIRIDIAN GROUP 2 JUL G
The second half of the carpet retailers of the leading suppliers of crackers to INTERNATIONAL GREETINGS 29 JUN F VITESSE MEDIA 2 JUL G
financial year saw a sales increase of the Irish market. The deal is forecast M.L. LABORATORIES 29 JUN I
8.6% compared with the same period to contribute 2 million to turnover PORVAIR 29 JUN I
last year. Like-for-like sales increased and facilitate IGs entry into the RENBURG 29 JUN I
by 4.2%. Carpetright is now trading lucrative catering market. Expect news STYLO 29 JUN G
from 364 stores, as well as the 38 carpet on further acquisition plans today. WATERMARK 29 JUN G
concessions within Allders, the rollout
of which was completed in March. * see comments for companies marked with asterisk. G - annual general meeting. E -
extraordinary general meeting. F - final results to be announced.
I - interim results to be announced

Wednesday 30 June Ex-dividend Workspace Group

A year of strong growth saw the
Finals HMV flexible accommodation provider
The music retailer enjoyed a strong raise its total dividend by 10.3% to 31p.
Ex-Dividend - 30 June 2004
Christmas, which continued through The groups focus on managed COMPANY PAY DIVIDEND COMPANY PAY DIVIDEND
to its April year-end. Management workspace properties has continued NAME DATE (p) TYPE NAME DATE (p) TYPE
expects profits to be at the top end of to generate capital growth, with net ALLIED DOMECQ 30/Jul/04 5.83 INT EXPRO INTL. 30/Jul/04 7.10 FIN
expectations, the market consensus asset per share rising by a healthy AVEVA GROUP 02/Aug/04 4.00 FIN FERRARIS GROU 28/Jul/04 2.20 INT
being 117 million. Cash generation 22.1%. Pre-tax profits rose 12.7% to BELHAVEN GROU 02/Aug/04 7.25 FIN FORMINSTER 30/Jul/04 1.00 FIN
has been stronger and net borrowings 15.1 million. BOC GROUP 02/Aug/04 24.50 INT GB GROUP 30/Jul/04 0.50 FIN
should be better than forecast. BRAEMAR SEASC 30/Jul/04 8.00 FIN HARDYS & HANS 02/Aug/04 7.20 INT
BUSINESS POST 22/Jul/04 12.05 FIN MAJESTIC WINE 06/Aug/04 12.00 FIN
CHAMBERLIN &. 30/Jul/04 8.00 FIN PARAGON GP.OF 30/Jul/04 3.90 INT
CHLORIDE GROU 27/Jul/04 0.85 FIN SCHRODER INCO 30/Jul/04 1.30 INT
Thursday 1 July Economics - Productivity Q1
Just how hard do we work in the UK? CML MICROSYST 30/Jul/04 10.50 YR TR PROPERTY I 30/Jul/04 1.40 FIN
AGM - Scottish Mortgage Inv.Trust These ONS statistics give details of
COMINO GROUP 23/Jul/04 4.40 FIN UNITED UTILIT 27/Aug/04 29.88 FIN
The trusts net asset value grew by output per job, output per hour and
CRESTON 02/Aug/04 1.20 FIN UNITED UTILIT 27/Aug/04 14.94 FIN
33.6% in 2003/04 after increasing its DEE VALLEY GR 26/Jul/04 29.50 FIN VISLINK 23/Jul/04 0.20 FIN
unit wage costs for the whole ELDRIDGE POPE 30/Jul/04 1.47 INT WATERMARK GRO 27/Jul/04 1.78 FIN
exposure to Emerging Markets and economy of the UK. Read the report at ELT.DATA PROC 02/Aug/04 0.713 INT WIDNEY 30/Jul/04 0.50 INT
Asia. SMIT has assets of 1.4 billion EMAP 02/Aug/04 15.90 FIN WORKSPACE GRO 02/Aug/04 20.70 FIN
and aims to maximise return and ENSOR HOLDING 13/Aug/04 0.50 FIN
dividend growth through investment ERINACEOUS 29/Jul/04 1.75 FIN
F - final. I - interim
in UK and international markets.
Mon 28 Jun (ONS)
Friday 2 July AGM - Vitesse Media
The aim-quoted print and on-line Price index numbers for current Quarterly National Accounts Q1
AGM - Incepta publisher reported some encouraging cost accounting (ONS) (ONS)
Inceptas May results reported a results in April. Operating losses fell Motor vehicle production May
greater sense of optimism among from 263,000 to 57,000 in Tue 29 Jun (ONS)
clients, but can the same be said for exceptionally difficult market Investment in insurance, pension
its shareholders? The PR group conditions. Analysts forecast pre-tax funds and trusts Q1 (ONS) Thu 1 Jul
suffered a 33% dive in pre-tax profits profits of 100,000 this year. The Index of Production and
and admitted recovery would be group has cash in the bank and is on Wed 30 Jun Construction: Q1, 2004 (NAW)
patchy. Expect some positive the acquisition trail. Farm Practices Survey (DEFRA) Productivity Q1 (ONS)
forecasting combined with hard facts. Public sector accounts Q1

24June 2004 63
240604 p64-65 derivatives 6/22/04 5:08 PM Page 64



The latest thing? Dow: 10,371.24

We are really in the summer season as far
as price action is concerned, with the Dow
Trading relies on second guessing where the cash will hardly moving at all from week to week in
flow from one minute to the next, but be wary of the June.
new for news sake And it is perhaps not too surprising that
this is what happened in the sense that

know Im supposed to talk about share trading here, but sometimes a change is as after rising some 500 points from May lows
essential as a rest. Or putting it another way, I dont want to be short of chairs when the near 9,900, the US average has a very
music stops. My recent meanderings into indices, currencies and commodities are threatening looking resistance line running
simply an attempt to align the Pitbull book with the banks and hedge funds who play the same through 10,430 a line of resistance that
game. appeared to have been broken only for
So whether its crude oil in New York or the Hang Seng in Hong Kong the dominating factor is another retreat below 10,400 to be seen
the most efficient use of the available margin. Trading is really the business of guessing where again. Therefore, we are in a position
the moneys going to flow next. By the time you see the new thing in the media its likely the where the Dow looks negative with an end-
capital has already flowed with impunity and is now the old thing. This makes your contribution of-day close below 10,430.
to whatever cause extremely valuable to the so-called smart money who want to leave that Further weakness from here and a
party and head onto the next happening thing. break below 10,300 should set up a fall
So where does this leave us regarding the current hot topic of inflation? Pitbull has been trying back to early June lows around the 10,200
to stay short of Eurobunds for a month or so. Judging by the media frenzy, you could be fooled area.
into thinking its better to steer clear. Bond yields have been rising since way back in the middle With the technical picture like it is at the
of March, so its hardly hot news. Meanwhile, Consumer Price Index figures from the States out moment and the recent rally looking
last week emphasised rising prices. But these worse-than-expected figures implying even higher overbought, an eventual move back to the
bond yields, and correspondingly lower bond prices caught many traders out. Instead of further May lows sub-10,000 does not look
price falls, bonds across the board rallied hard. Oops. impossible.
This is really a long-winded way of explaining that time is still more important than price and
our short bund position didnt do so well. Thats the tricky bit, but interest rate futures will be
where theres considerable action for the foreseeable future. US10-year notes, their UK
counterpart Gilts, or nearer-term products like Short Sterling and Eurodollars are huge markets.
The latter are particularly attractive to punters seeking lower risk, slower moving products,
offering a readily available information stream to work from.
This should keep everyone pretty busy until the US trade balance comes out of hiding. Right
now that scenario reminds me of a pantomime complete with frenzied wee bairns in the front CFDs
row screaming themselves silly yelling Behind you to our hero, who seems to be deaf. Our hero
in this instance is the venerable Dr Greenspan who will be 82, assuming he serves a fifth full
term. Now, its not for me to comment on the Drs hearing, but as no-one else seems to be
wondering out loud about his tenure Im left asking if hes stretching the elastic a bit here?
The glass ceiling
Meanwhile, the spreadbetting companies have a quarter point hike nailed on (as one dealer by: Chris Bourke
put it to me on Monday) with prices to match. The FOMC meet next week so stay tuned.

Eurodollar futures reckon theres a punchy 1.25% in Federal Reserve hikes to come before FD traders experienced varying
Christmas. Short Sterling, which prices Bank of England MPC expectations are not as aggressive, emotions last week, as the FTSE
but still suggest another 7/8ths of a point at least. I hope youve all locked in your fixed rate kicked off with a nervous nosedive,
mortgages. This shifting focus has pushed Oil out of the frame for the moment at least, with only to close the week in range-bound
many players now favouring the short side. Thats until the next supply disruption, terrorist boredom. Despite volumes being low
outrage or Middle East development, but with its inflammatory effect on inflation it pays to keep however, the index still managed to make a
informed and up-to-date. few waves on the trading floor.
Im still mildly bullish of equities in general, and the FTSE in particular if England do well On Monday, the market witnessed a sharp
against Portugal. Theres heaps of data out in the next few days and good figures in the US sell due to interest concerns in both the US
combined with a Rooneyfest in Lisbon could push FTSE through the 4530s and beyond. Ive and UK. Economic doom merchants have
already suggested the idea that George Ws cronies will chip in been bringing forward the prospect of
Stateside to the same effect, so stops in place and all aboard. increases in US interest rates, and it now
Position wise, MFI joins Easyscreen, Corus and British Energy on appears to be a case of when, not if. You
the shares front longs. Im itching to get long gold, and stay short US could perhaps take a punt on the end of this
dollars, even though the /$ position was stopped out. Long Yen also month.
seems the way to go, so sells in /Yen or Euro/Yen are next, which with Fears began to ease on Tuesday and,
our affection for the Nikkei leaves me turning Japanese. Finally, I think come Wednesday, the index was heading
a bit of research into long Airbus/short Boeing could have potential. back up to test the strong resistance level at

240604 p64-65 derivatives 6/22/04 5:08 PM Page 65



FTSE 100: 4,488.4

Just when it seemed safe to suggest the
FTSE 100 is in a 4,400 to 4,500 range, it
managed to end the week above the latter
level and was threatening to push higher.
Although most stocks and most sectors
are in summer mode and not really going
anywhere, an end-of-week spike for oil fed
through to oil majors BP and Shell, with the
latter making significant gains above 400p.
This suggests that at the very worst the
FTSE 100 will stay around 4,500, with the
possibility of the long-promised move to the
top of the 2004 ascending price channel at
4,650 becoming a bit more likely. The bulls
seem to be in favour until an end-of-day
close below the March support line at
But any progress is probably going to be Rolls-Royce flying high
hard won. In the short term, 4500/4520 has Interestingly, Rolls-Royce has decreased its turnover compared with last year but
held the market back earlier this week but increased its pre-tax profit by 75 million.
dips back below here are still viewed as The share price is currently around 233.25p, its closing price on 21 June. Its value
short-term buying opportunities. has risen by nearly four times since March 2003 and by 21p in the last month. This is
A break through 4520 would set up the due to the fact that many aerospace companies have chosen Rolls engines in recent
next interim resistance at 4573, the highest months, including Boeing and Cathay Pacific. In May, Rolls-Royce released its AGM
level reached by the index during May. statement with good figures.
The chart is showing a healthy wedge-like formation and bullish investors should
consider options like the September 220 Calls should the price look to break its
current resistance.

g holds at 4500 significant indicator. We also saw continued

buying of Matalan as it approached the 200p
level. This has to be down to the spate of
level, looking for a 10% return. Geo-political
and world events such as oil prices and
interest rates continue to weigh heavily on
takeover rumours doing the rounds. the minds of traders, so new positions have
4500. Traders at Blue Index didnt hang Companies outside the FTSE 350 are also been small with tight stop losses.
around: Our most successful play last week attracting interest as they continue to creep
was shorting the FTSE 100 between 4500 and higher. Stocks such as Peacock, Gooch and
4480, said Harpreet Kondal. It hasnt Housego and Blacks Leisure have all seen Every time the index hit
managed to break out of that strong area, decent volume on the buy side.
trading in a tight range for the past few days Media group Aegis caught the eye of 4500, we sold it short
now. Every time the index hit 4500, we sold it Warren Firth at IG Markets. The fall in share
short and took our profits at 4480. Not a price since February seems finally to have and took our profits at
massive range, but one of the best trading exhausted itself. We are now seeing additional
strategies around right now. Sure its support at 87p, and expectation should be 4480... Sure its
predictable and somewhat boring, but were centred on an initial move towards 93p.
making money from it. Discipline appears to be the name of the predictable and
Manoj Ladwa at TradIndex, meanwhile, game, as punters take a cautious view. Stavros
was watching some popular FTSE 350 Loizou of SFS International Securities said: somewhat boring, but
players going through the motions: Of the Clients have been treading water this week
stocks that moved last week, Dixons was the amid difficult market conditions. We have seen were making money
best performer after bid rumours pushed it buying of ICI with the view of the stock
higher. With BT, we saw a technical breakout breaking out at the recent high of 231p. We from it
above 190p on increased volume a have also seen buyers of Cookson at the 40.5p

24 June 2004 65
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Over to you...
been shorted simultaneously keeping them for life seems to
with a website publishing have a better chance of success. Or
allegations which have am I expecting too much?
independently been shown to be JAMES O'NEILL
absolutely false.
Yield sinks like sun in dividends will be paid as dollars
into the multi-currency account NICK PHILLIPS

the west and can then be converted to VIA EMAIL Editor replies: Its horses for
As a regular reader of your sterling without incurring a courses, I guess some people
interesting and useful commission charge. Opening an The Editor replies: We are aware of want to run a mainstream portfolio
publication, I thought you might account and registering the stock the situation and are looking into it. of UK blue-chip stocks, some want
be interested in the proposition of should take no more than a week However, with so many rumours a bit more spice further down the
negative yield. or so, and he and his wife can flying around getting to the truth is market; some people are short-
In 1987 my wife and I purchased choose a joint account for these not easy. We understand that term traders, others long-term
separate holdings of 1000 shares shareholdings rather than two Griffin Mining has contacted the investors. Shares aims to cater for
each in Hawley Group. In 1988, individual accounts if they wish to. Berlin stock exchange and asked all tastes.
these became shares in ADT Ltd If he still wishes to dispose of the for its listing, which it had not
and in 1997 as 252 shares in Tyco shares, the sale can be completed asked for, to be deleted. Perhaps
International Ltd (NYSE:TYC). T+3 once they are registered in readers with more information on Spreading the wealth
Due to the financial the nominee account. There are the subject would like to contact I thought your magazine was
irregularities at Tyco, the share no additional charges for holding us. called Shares? In which case, I
price dropped substantially and or selling an international stock. really dont see the point in your
derivatives page and your endless
the London Stock Exchange Horses for courses? banging on about spreadbetting.
quotation has been terminated,
although the Wall Street
Dont mention the I read with interest Chris Bourkes Surely, if I wanted to read about
article The Master Portfolio in
quotation continues. listing last weeks issue about sector
these (apparently very risky)
Dividends are payable four Is Shares magazine campaigning products, I would buy a
selection within a portfolio. While derivatives magazine? How many
times a year of approximately 2 to get the LSE to clampdown on I appreciate the point that
per holding, ie 8 per annum. The the activities of the Berlin Stock of your readers actually do trade
diversifying across market sectors CFDs or even know what an
current value of each holding is Exchange, which appears to be reduces risk in the portfolio and is
4435 (252@ $31.68). allowing listings of companies option does? Stick to what you are
a practice followed by many, if not good at your excellent coverage
The latest dividends in May without their consent having most, professional investors, I
were received without warning in been sought, and then for of the stock market and stop
wonder whether it is really the trying to be a jack of all trades (if
dollars: $3.15, which at an German broker firms to set up most suitable strategy for a
exchange rate of $1.80: 1 equals large short positions in those you will excuse the pun).
private investor such as myself?
1.75. The minimum bank charge companies? Like many investors, I suspect, I
to process this cheque would be A number of companies you have a substantial amount of VIA EMAIL
5. have reckoned worth buying have money in collective investment
Gross dividend 8 minus bank subsequently been shorted. funds, including ISAs and Chris Bourke replies: Derivatives
charge 20 equals a loss of 12 ie Whether it is coincidence, some of pension funds. When it comes to are very relevant to Shares
a 0.27% negative yield on 4435. the same companies then appear my direct stock market magazine, as their movements are
We will be selling our holdings. to be systematically rubbished investments, Im looking for entirely driven by the stockmarket.
JOHN NEILSON on various web sites. something a bit more interesting, Whether a CFD or option rises or
EDINBURGH The LSE appears to be looking which is why I tend to avoid the falls in value, that is usually down
into this problem but the more FTSE 100 shares and look for to stock market newsflow, and its
The Editor replies: This looks a readers who complain to its smaller companies with growth effect on the underlying share
sorry situation, Mr Neilson, but market corporate compliance potential. price.
fortunately there are brokers who section the more is likely to get It seems to me that asset Regarding spreadbetting, this is
can help with your negative yield done about it quickly. allocation across market sectors, even more relevant to our
problem. I asked one firm, TD As examples, companies like unless you are really going to go magazine, especially as we only
Waterhouse, what could be done Bioprogress (BPRG) and Oystertec overboard, will rarely produce a focus on share-price betting.
and this is the answer: (OYS) have been affected. In the return significantly different from Thousands of investors are
By opening an account with TD case of another, the Griffin that of a consensus fund or index discovering spreadbetting as a
Waterhouse, and transferring his Mining (GFM) chairman recently tracker. fun, cost-effective way to trade
Tyco shares into it, Mr Neilson can discovered that 4% of the shares in Even the Warren Buffett buy- short-term, and it would be foolish
have his dividends paid directly the company (8% if you exclude and-hold philosophy of picking not to cover this increasingly
into his nominee account. The the 50% held by institutions) had just a handful of companies and popular subject.

Send your comments to: The Editor, Shares Magazine, Thames House, 18 Park Street, London, SE1 9ER. . . or email us at:
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.

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miniCFDs Concepts 18.05.04 mini 21/6/2004 4:42 PM Page 1

Introducing miniCFDs CFDs (Contracts For Differences) were for a

long time, the exclusive preserve of City
from Finspreads professionals and hedge funds.

In recent years their popularity has

increased - indeed, over 25% of all London
share volume is now CFD-related.
The perfect way to
With the launch of Finspreads miniCFDs
try CFD trading now any investor can benefit from the
with controlled risk unique advantages of CFDs.

A miniCFD in a share mirrors, exactly, the

underlying price of the share, so with a
miniCFD you are trading the movement of
the share price, without having to purchase
the actual share itself.

It means that miniCFDs are a powerful,

flexible alternative to owning shares...

You don't pay stamp duty

(which is a 0.5% tax on UK shares).

You don't pay the full price of the

shares, just a deposit, known as
"margin" (at least 10% of the share cost).

And you can sell shares you don't
own, then buy them back later to profit
from a falling share price, (known as
"shorting a stock").

Why not try miniCFDs today, with controlled

risk, through our unique 5 week miniCFD
Trading Academy.

With a minimum deal size of 1 share and low

commissions, our miniCFD Trading Academy is
the perfect introduction to CFD trading.

miniCOOPER Visit or call 020 7150 0505
Terms & conditions apply - See site for full details

Finspreads, a Division of IFX Markets Ltd., authorised and regulated by the Financial Services Authority. miniCFDs carry a high level of risk to your capital. Only speculate with money you can afford to lose.
miniCFDs may not be suitable for all investors, so ensure you fully understand the risks involved and seek advice if necessary.