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221204 p03 contents 12/20/04 1:39 PM Page 3

22.12.2004 CONTENTS

...from
the editors desk

I
06 COVER STORY ts been a good
Our Tips for week for told-
2005 you-so types.
The Shares team place Lack of news
their bets for the coming
year with 19 top tips. from Cairn Energy about
WIN 1,000 in our readers any new discoveries in
stock-picking competition. Rajasthan. AstraZenecas
admission that its lung
cancer drug doesnt do much to keep patients
alive. And a report that the Iraqi oilfield
contracts Petrel Resources was hoping for
had gone to the Turks. I can see those wise
old heads nodding now.
Oil exploration and drug development have
a lot in common: always a good story and bags
of optimism. Quite often an enthusiastic band
6 17
of shareholders, too, who bombard the
bulletin boards with evangelical zeal.
9 20 21 22
Take Petrel, for example. Heres a small Irish
company that listed on AIM in 2000. Its
managing director, David Horgan, has plenty
7 28 29 of admirers for the work he has put in since the
fall of Saddam Hussein on fresh oil field
22 CHRISTMAS CROSSWORD 35 DIRECTORS DEALINGS possibilities in northern Iraq. Its been put
Prizes galore! Mixed messages about by some of Petrels followers that Iraqis
Give the brain some exercise over the It sounds counterintuitive but sometimes
festive break complete our entertaining when a director buys shares in his love the Irish in a fellow-victims-of-
Christmas Crossword and you could win company this should be regarded as a imperialist-aggression sort of way, and that it
one of the great prizes presented by some strong sell signal. Why? John Marshall was therefore a dead cert to stitch up a deal to
of our favourite companies. explains and looks at some of the develop the Khurmala Dome. At the time of
interesting deals by directors in 2004. writing, it is still not certain that it wont: the
company said it was seeking immediate
clarification from the Iraqi oil ministry.
And then theres Cairn, which rode into the
FTSE 100 partly through picking up a share of
the Rajasthan field from Shell, supposedly at a
steal of a price. Since the overstated oil
reserves debacle, it has been easy to believe
anything that makes Shell look dumb and in
this case Cairn look clever.
Both Petrel and Cairn were good stories. But
when youre being told some story about a
share that will rise because this, that or the
48 TRADING: WARRANTS 51 TRADING: TACTICS other is going to happen, stop and ask: What
Certificates of merit Science of CFD if it doesnt?. It reminds me of taking the kids
Whats the difference between a covered trading to the races: inevitably they want to put their
warrant and a certificate and how much They are one of the most sophisticated pound on a 100-1 outsider because if it wins Ill
does it matter? Shares spots the and flexible of derivative products, but
differences between the two products and the key to success for traders using get a hundred pounds!. But what if it doesnt?
analyses the pros and cons. CFDs is to build a strategy based on These stocks can be exciting and sometimes
your specific needs and attitude to risk. highly profitable, but go in with your eyes
Shares looks at how to go about it. open and dont swallow the rhetoric without a
big pinch of salt.
Jeremy Lacey
Companies, regular features: more contents on page 4

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

22 December 2004 3
221204 p4 contents 12/20/04 3:22 PM Page 4

CONTENTS

COMPANIES REGULARS
e-mail: editorial@shares.msm.co.uk
tel: 020 7378 7131
fax: 020 7378 6605
18 18 Shares Uncovered
Delivery enquiries: Cash back
delivery@shares.msm.co.uk Holding TDG shares? Breathe a sigh of relief Latest stock opportunities & news
Subscription/back issues that it decided not to buy Christian Salvesen,
tel: 01444 475 661 because you could be in for a cash windfall 24 Brokers Tips
www.moneyam.com with a special dividend or share buyback now
moneyam helpline: 0870 770 8300 on the cards. Shares tracks the analysts ideas
EDITORIAL
Editor 28 Small Shares
Jeremy Lacey News, views and profiles
Deputy Editor
Polly Fergusson
18
Investment Editor
Going down 32 Upcoming floats
Timon Day At 5p could MyTravel go any lower?
Companies Editor According to our chartist the answer is yes, Focus on the IPOs
Steven Frazer and it would be a brave person who picks the
Senior Reporters
Jonas Crosland John Marshall
bottom of this five-year downtrend. Cheap 33 Special Situations
Reporters
shares have a habit of getting cheaper. Takeovers & rights issues
Emily Parkinson Chris Bourke
Susanna Twidale
Small Companies Reporter 34 Directors Dealings
Simon Keane
Technical Analyst 24 Inside track on board buys and sells
David Jones Greed and fear in the
Head of Production housing market 36 The Chartist
John Perkins The madness of crowds was justified last
Designers week when housing stocks showed big David Jones spots the key signals
Quentin Radburn Jeff Duncan
Chief Sub-Editor gains. House-building stocks are not about to
Alex Poole collapse despite tougher market conditions, 38 Market Moves
Sub-Editor argues analyst Stephen Rawlinson at Ups & downs, highs & lows
Nick Eisen Arbuthnot.
Publisher
COMMERCIAL 28 40 Prospector
Mark Van de Weyer Champions league Focus on mining and drilling
Marketing Manager AIM could be divided into premier leagues
Michael Shannon
Group Advertising Manager and a new All-Share index launched thanks to 41 Big Picture
Paul Jacobs plans to attract more investors into the small
Advertising Representatives caps market. Simon Keane reports. Timon Day on the economic scene
Nicole Piesse
Tim Bosworth
Advertising Director
42 Long-Term Investor
David Motum Peter Webb explains how he does it

32 43 Trading Section
Managing Director Anker anchors down
Christmas shopping at Harrods? Then you Strategies, ideas & bets
Mike Boydell
City Editor could be using products by Anker, the last
Alan English
Advertising Representatives
AIM float of this year. It provides electronic 63 Results & Tables
payment systems and will be busy replacing
Jonathan Martin David Evans
outdated pre-Y2K software in 2005.
Developers
Geoff Drummond
82 Letters
Justin Rutherford James Puddy
Customer Support Manager
Ian Taylor
Systems Administrator Subscription/Back issue enquiries/Delivery enquiries SEARCH OUR ARCHIVE!
Jonathan Tullett ONLINE IN
Quadrant Subscription Services UK Subscription rates (1st Class Mail): THE SHARES
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Shares magazine (ISSN: 1468-1102) is Guidelines for share ownership


published weekly every Thursday (51 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
times per year) by MSM Magazines Ltd, 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
Thames House, 18 Park Street, London to write about any securities, at the end of the story. Holdings they transact shares, derivatives hold a full personal interest mentions such interest.
SE1 9ER. Company Registration No: derivatives or positions with by third parties including or spread betting positions. register. The whereabouts of Reporters who have an interest
3733852. ISDN: 020 740 3423. Member, spread betting organisations families, trusts, self-select This will overcome situations this register should be revealed in a company they have written
that they have an interest in pension funds, self select ISAs when the interests they are to the editor. about should not transact the
Audit Bureau of Circulations Ltd. should first clear their writing and PEPs and nominee considering might conflict with 4 A reporter should not have shares within one month after
All Shares material is copyright. 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
Reproduction in whole or part is not agrees that the reporter can interests. magazine. This notification derivatives or spread betting magazine.
permitted without written permission
from the editor. Disclaimer
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
12,673 Jul 03-Jun 04 Average interest. Information and tips included in Shares magazine are general information only and are not intended to be relied upon by individual readers in making (or not
Net Circulation making) specific investment decisions. Appropriate independent advice should be obtained before making any such decision. Shares magazine, its staff and MSM
Magazines Ltd do not accept any liability for any loss suffered by any reader as a result of any such decision.

4 Shares
221204 p05 Cos Index 12/20/04 2:20 PM Page 5

COMPANIES INDEX

124 COMPANIES
IN THIS ISSUE
+ Positive / Neutral - Negative
Number given indicates the page on
which the company is mentioned
The Shares index shows you whether the reporters comments on companies are broadly positive, neutral or
negative. They do not necessarily correspond with opinion that the companys shares are good value or poor
value. In some cases companies may appear more than once in the magazine with apparently conflicting opinion,
which can be the result of reporters writing about the same company from different standpoints.
AB Foods ABF + 37 GUS GUS + 20 Premier Farnell PFL + 25
Adv. Power Comp. APC / 73 Halfords HFD + 15 Premier Oil PMO + 40
AEA Technology AAT / 72 Hamworthy HMY + 11 Private & Comm. PCF - 25
Airsprung Furn.e APG - 34 Hardys & Hansons HDYS / 71 Pure Wafer PUR + 18
Allied Domecq ALLD + 37 Hereward Vent. HEV / 73 Ragusa Capital USA / 73
Artisan ART - 69 Hornby HRN + 25 Rank RNK - 25
ATH Resources ATH / 71 ICM Computer ICM + 30 RMC RMC + 34
Avis Europe AVE - 36 Ideal Shopping D. IDS + 10 Royal Doulton RDN - 34
Ben Bailey BBC + 12 Idox IDOX / 13, 72 Scottish & Sthn SSE + 17
Big Yellow Group BYG + 34 Imprint Search IMP / 29 SkyePharma SKP + 17
Bizspace BIZ / 29 Indigovision IND + 34 Stanley Leisure SLY - 25
Body Shop Intl BOS + 37 Inter Link Foods ITF + 30 Stewart & Wight STE / 73
Bristol Water BWG / 72 iSOFT Group IOT + 36 Stream Group SEA + 16
Broker Network BNH + 9 iTrain IRN - 28 Talent TTV / 73
Burren Energy BUR / 36, 40 IWP IWP - 70 TDG TDG / 18
Cairn Energy CNE - 40 Jarvis JRVS - 34 Techcreation TCH / 73
Carnival CCL + 37 JD Wetherspooon JDW - 18 Telecom Plus TEP - 72
Carpetright CPR + 36 Jennings Brothers JBC + 30 Television Corp. TCP + 18
Carphone W. CPW / 34 Jessops JSP + 15 THB THB - 70
Civica
Cluff Gold
CIV
CLF
+
+
71
32
Kingspan
Kleeneze
KGP
KLZ
+
/ 70
9 Titon Holdings
Torex Retail
TON
TRX
/ 69
+ 12
Who else
Colt Telecom
Compact Power
ComputerLand
CTM
CPO
CPU
+
/ 73
+
34

72
London Clubs
McCarthy & Stone
Maisha
LCI
MCTY
MSA
+
+
/ 73
25
24
UA Group
Ultra Electronics
Ultraframe
UAS
ULE
UTF
-
+
-
34
14
34
can offer
Cradley Group
Dana Petroleum
CDLY
DNX
/ 71
- 40
Majestic Wine
McKay Securities
MJW
MCKS
+
/ 71
34 Uruguay Mineral
Vanco
UGY
VAN
/ 32
+ 8
you up to
Deltron Electronics
DX Services
DET
DXS
-
+
69
11
Mediasurface
MG Capital
MSR
MAP
/ 73
/ 73
Vantis
Whitehead Mann
VTS
WHT
+
+
72
33, 34 25 days
settle your
Dyson Group DYS / 69 Mitchells & B. MAB / 18 Wimpey WMPY / 24
Eckoh Technologies ECK / 71 MKM MKM / 73 Windsor WNDR + 70
Edinburgh Oil & G. EDG + 30 Mulberry MUL - 70 XN Checkout XNC + 31
Ensor Holdings
Euro Capital Proj.
ESR
ECR
+
/ 73
69 MyTravel
Napier Brown
MT.
NBF
-
+
18, 34
30
Zytronic ZYT / 70
trades?
European Mins. EUM - 40 Ocean Wilsons OCN + 10 TRADING PLAYS
Falkland Gold FGML - 40 P&C Finance PCF - 25 3i III 54
Filtronic FTC - 20 Pennon PNN / 63 Brewin Dolphin BRW 52
Finsbury Food
First Choice
FIF
FCD
+
+
34
63
Persimmon
Petra Diamonds
PSN
PDL
+
+
24
16
Dixons
Mmo2
DXNS
OOM
53
52 0800 328 3837
First Technology FRS / 69 Petrel Resources PET - 40 Pendragon PDG 53
Please quote code AM080
GKN GKN + 25 Photo-Me Intl PHTM + 63 Rio Tinto RIO 54
Glisten GLI + 13 Pixology PIX + 8 TESCO TSCO 52
Lines are open
Greene King GNK + 63 Portmeirion PMP - 34 Virgin Mobile VMOB 52
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in England and Wales under branch registration number BR006780.
xx xxxxxxxx 2004 5
221204 p06-17 tips preview 12/21/04 11:34 AM Page 6

6 Shares
221204 p06-17 tips preview 12/21/04 11:34 AM Page 7

COVER STORY

Whats hot as we hurtle through the festive

Tips for season? First Polly Fergusson looks at the major


forces shaping the markets then the Shares
team get their stocks on and pick their favourites
for a rewarding New Year

2005 W
hile the stock markets this year have traded sideways, it looks as
though for the start of 2005, at least, it is going to be a case of more of
the same. Not that exciting then and even tougher when it comes to
picking shares. Returns have been modest and in these markets
picking outperformers is something of a task. The question is where
the best value lies for 2005. If you want to appreciate what forces are going to be
shaping your portfolio this year, an understanding of the economy is vital.
At home, interest rates and the housing markets have been the hot topic not only
around middle-class dinner parties but in the stock market for most of 2004. And
boringly, nothing much is going to change for the next 12 months.
The four interest rate rises in 2004 to 4.75% have made saving better value, but it
doesnt appear to have put too much of a dampener on consumer spending and there
is still speculation over whether rates will increase further to 5% in 2005. Pundits are
split down the middle, which is no help for investors, home owners or anyone with
decent savings or debt.
The housing market has certainly slowed down, aided by the media hysteria about
another crash and without a doubt accelerated by the rises in interest rates. The major
question on everyones lips is will it fall further? Not likely, say house builder
bosses, who point at the supply/demand imbalance, but the jury is still out, with
lacklustre stock markets helping a diversification into other forms of equity.
A UK election could well take place in the late spring, with many reckoning that
Labour has it in the bag. What does this mean for the stock markets? Traditionally a
Conservative win was always seen as good for the markets while Labour meant a fall,
but thanks to Blairs neo-Conservative style a Labour third term might not
necessarily be bad news. Helpful as some sort of stock market/general election trend
would be, economists have shunned any discernible relationship between the two,
and add that a Labour victory is already priced in. Howard supporters, get active!
One major risk to 2005 returns that was less of a problem in 2004 is the tightening
of monetary policy. As we end 2004, central banks in the UK, Australia, the US and
China have already raised interest rates, and even the Japanese are getting closer to
the point where 0% is no longer appropriate.
The world economy is facing an array of geo-political challenges at a time when the
US, its global policeman, is stretched both financially and militarily
The size of the US current-account deficit is one of the major concerns for global
investors, and the already weak dollar could fall further in the first half of 2005. Any
company with exposure to the dollar is at risk and investors should remember to
hedge any holdings with a strong US bent.
The high oil prices in the second half of 2004 have now come down from $55 a barrel
but the outlook for oil prices over the next year is uncertain. OPEC recently tightened
up oil production to push prices back up and any move significantly above $55 a
barrel could lead to a further downgrading of forecasts for global growth.
So what does this all mean for stocks? While the market continues trading
sideways, with certain sectors such as software and utilities outperforming,
consumers are expected to chase stocks with good growth and earnings prospects.
Bond yields look likely to start the year between 4% and 5% and equities should give
a higher return than bonds, of 7% to 9%. Large caps are expected to see a return to
prominence in 2005 after underperforming for five years.
Sectors that look set to take centre stage include telecoms, banks, utilities, energy
and construction and mm02, Vodafone and BP in particular have all been noted for
growing profits faster than the market. While higher oil prices will benefit not just the
major oil companies but also utilities and other businesses with oil divisions.
The Shares selection of Tips for 2005 includes a wide range of sectors and sizes, but
we believe that 2005 is the the year the market could wake up to the true potential of
each one. Some are new companies, some solid performers, some niche plays and
some have a whiff of potential corporate action. As always, balance is the key to a
well-structured portfolio so make sure you mix and match your more risky tips with
a few reliable companies. This year we are including stop losses on each stock to
avoid any nasty stings. Good luck!

22 December 2004 7
221204 p06-17 tips preview 12/21/04 11:34 AM Page 8

PIXOLOGY (PIX) 155p STOP LOSS 124p


The growth of digital cameras has But the coming year could be phone networks as possible. Chief camera phones will eventually
been explosive. With similar crucial thanks to the far more executive Yuval Yashiv thinks emerge as the dominant imaging
growth in camera phone sales, cutting-edge mobiles with digital camera phones are doing in device. He forecasts revenues of
this is the time to buy a company cameras which are outstripping quarters what digital cameras 4.4 million for 2004, rocketing to
cashing in on both trends. the sale of stand-alone cameras, have been doing in years. 13.3 million in 2006. Chows 12-
Pixology builds software and with more than 200 million sold Anthony Chow, analyst at month target price is 222p.
systems for the development of in 2004 alone. Picture quality has Canaccord, agrees: We believe by: Chris Bourke
digital photography and is in the improved so much that users can
right place at the right time. With now develop their photos on to Shares Summary
film photography rapidly losing paper. So far this service has only
market share, companies like been possible via the internet but Pixology is at the heart of a digital BUSINESS:
Pixology are proving essential for Pixology has recently announced photography revolution, and its Provision of innovative imaging
retailers such as Tesco (TSCO), a market first. camera-phone software proves software
which is investing heavily in Teaming up with mobile giant
the groups ability to stay ahead VITAL STATS:
digital photography and has Nokia, the company is halfway
chosen Pixology as a partner. through a three-month pilot of the curve in a competitive Market value: 30.3 million
Since September, its software has project with Boots (BOOT) to market. Historic PE: n/a
been used in digital photo kiosks install software on Nokia camera Prospective PE for 2005: n/a
in 165 Tesco stores. Shoppers phones sold by the retailer. The PIXOLOGY
share price
Prospective PE for 2006: 16.7
insert their digital memory cards phones offer a menu of various 180 Sector PE: 16.41
HIGH 174.00 16/2/04
in a machine, preview the images Boots stores to which customers 170
LOW 96.00 8/9/04 1-month relative strength: +17.6%
160
on screen and process their orders can text photos for processing, for 150
LAST 155.00
1-year relative strength: -3.4%
at a mini-lab in the same store. collection the next day. The 140
Dividend yield: n/a
Pixology also supplies high-street concept is being tested in 10 130
120 NMS: 2,000
camera chain Jessops (JSP) stores and, if successful, could
another Shares Tip of the Year eventually be rolled out in Boots
110 Spread: 4.7%
100
with the same software, and the outlets throughout the UK. 90
D J F M A M J J A S O N D
market expects more retailers to Pixologys aim for the project is Source: Thomson Financial/Datastream

follow suit in 2005. to partner as many retailers and

VANCO (VAN) 276.5p STOP LOSS 221p


Vanco is one of the few telcos that pricing pressure. Vanco rents and Panmure Gordon are this is a 12-month view based on
is thriving. The virtual telecoms networks off existing telcos, so it forecasting continued sales Vancos unique position in the
provider, or non-asset based can be agnostic about the growth of around 40% for this year marketplace and significant EPS
carrier buys only a minimum of equipment it uses. Renting also and next year. Our price target of growth of 58% over the next two
equipment and capacity to service makes it easier to keep up with 330p values the company on a years, says Mark Davis at
a global network of largely blue- new technology, as network January 2006 PE of 24 times. Panmure Gordon.
chip companies such as Ford, owners often face hefty upgrade Though not a cheap valuation, by: Chris Bourke
Siemens and Virgin Megastores costs and depreciation write-offs.
and is poised for capital growth. Vanco has some major growth Shares Summary
No other company has a similar drivers going forward. The
successful business model. groups average contract size is Vanco is about the only telco with BUSINESS:
The group was formed by serial steadily increasing, while its US a consistent track record of high Virtual network operator
entrepreneur Allen Timperley in sites have increased 360% since growth and earnings visibility. VITAL STATS:
1988 after the deregulation of the January this year. There is also This is not the sexiest company
UK telecoms industry. Floated in rising demand for VoIP services Market value: 151 million
around, but one to add to your Historic PE: 47.8
2001 when other alternative telcos that allow phone calls to be made
were at deaths door, Vanco defied via the internet. And top global portfolio and leave there for a Prospective PE for 2005: 23.3
the sector by rallying steadily for research firm Gartner has long time. Prospective PE for 2006: 17.5
the next three years. The share stopped short of advising clients VANCO Sector PE: 13.42
share price
has enjoyed growth since that Vanco should be their 360 1-month relative strength: +1.5%
flotation of 282% and seen average preferred supplier. 340 HIGH 348.50 16/1/04 1-year relative strength: -16.4%
revenue growth of 40% a year. Quite simply, Vanco provides 320 LOW 212.50 11/8/04
Dividend yield: n/a
LAST 276.50
Timperley compares his group telecom solutions on a large 300
NMS: 2,000
to a Carphone Warehouse-type geographical basis that no single 280
Spread: 2.56%
model. Customers are offered a carrier can meet on its own. While 260
240
choice of carriers and receive its peers are weathering tough
220
independent advice. Vancos peers times, this groups long-term
200
own their expensively-acquired prospects just keep on growing. D J F M A M J J A S O N D
Source: Thomson Financial/Datastream
networks and are subject to tough Analysts at Williams de Broe

8 Shares
221204 p06-17 tips preview 12/21/04 11:34 AM Page 9

COVER STORY

BROKER NETWORK HOLDINGS (BNH:AIM) 126.5p STOP LOSS 101p


Times are changing. The FSA has a networked broker rather than groups at the end of the half year expected to increase as
spread its wings and is now the thousands of small IFAs, stood at 138 and there are a compliance-related issues impose
flexing its regulatory muscle over while the latter are happy further six firms contracted to greater working pressures. With
the mortgage and insurance because any product requirement join before February plus another cash in hand of 3.1 million at the
sectors. The most immediate is just a phone call away. six at an advanced stage of end of October and a positive
implication is one layer of control By acting as a go-between discussion. The attraction for cashflow, the group looks good.
and another of transparency and Broker Network satisfies both more companies to join up is by: Jonas Crosland
accountability. For many high- sides and takes a commission on
street independent financial the way. The group is proactive
advisers who up until now have and places its own staff into
Shares Summary
given good advice, the future is partnerships where the partners The combination of providing an BUSINESS:
bleak. Indemnity insurance costs may be retiring but the customer umbrella of services together with Insurance brokers
have gone through the roof as a base remains.
actively taking over IFAs could at VITAL STATS:
result of recent scandals Given the fact that the FSAs
associated with the alleged mis- expanded remit effectively shuts some stage be complemented by Market value: 20.1 million
selling of pensions, savings and down any IFA unable to meet the establishing greenfield outlets. Historic PE 2004 : 9.2
mortgage-related products. Many increased cost of compliance With around 26,000 independent Prospective PE for 2005: 13.4
IFAs have given up altogether, there is an understandable IFAs the potential is considerable. Prospective PE for 2006: 7.7
BROKER NETWORK HOLDINGS
while others face the prospect of interest to join up to Broker share price Sector PE (next 12 months): 13.9
150
disappearing as senior partners Networks umbrella of services. 1-month relative strength: 27.6%
140
and one-man bands hang up The group is modest in size 130 1-year relative strength: n/a
their broking boots. but right in at the start of an 120 HIGH 141.00 7/12/04
110
LOW 57.50 16/6/04 Dividend yield:
Enter Broker Network expanding market. Floated on LAST 126.50
100 NMS: 2,000
Holdings, with a clever but AIM in May 2004 at 71p, the 90
simple game plan. The idea is to shares have all but doubled Spread: 5.1%
80
provide a layer of support already and turnover in the six 70
60
between IFAs and the major months to October climbed by 50
suppliers of financial products. 75%. Pre-tax profits over the same MAY JUN JUL AUG SEP OCT NOVDEC
Source: Thomson Financial/Datastream

The big names prefer to deal with period climbed by 68%. Member

KINGSPAN (KGP) 471p STOP LOSS 377p


This provider of specialist to change to conform with groups overall growth projections 410,000 new homes projected for
products for the construction increasing environmental are impressive. From less than 2% the Thames and Cambridge
industry is not as well known obligations. These changes centre of the new product market in 2002 gateways and Milton Keynes. The
among investors as it should be on heat and emission control the target for this year is 9%. group is also growing fast in
because it is based in Ireland. both in domestic and commercial Looking ahead, apart from new Poland, Hungary and the Czech
Even so, nearly two-thirds of its property. The groups insulation schools, hospitals and Republic.
business is in the UK. There is a panels installed in a 10,000 square commercial property there are by: Jonas Crosland
full UK listing, 166 million shares metre building would save in one
in issue and a free float of 62%. year 125,000 in heating and Shares Summary
A glance at the companys ventilation, 310,000 kwhr in
performance reveals that while energy and a 46,000 kg reduction Add to all this the demand for BUSINESS:
the FTSE 350 index has risen by in CO2 emissions. The temptation raised flooring and the handling Provider of specialist product for
188% in the past 10 years, to play down these statistics will and storage of waste and toxic the construction industry
Kingspans share price has become harder and harder as new materials and Kingspan looks set
climbed by over 2,500% and is still legislation is introduced to VITAL STATS:
to be kept very busy. Market value: 774 million
growing strongly. control pollution. In short, there
So what makes this company will be no alternative but to Historic PE 04 : 11.6
any different from any other insulate. Prospective PE for 2005: 14.6
construction industry supplier? Kingspan is also a leading KINGSPAN GROUP Prospective PE for 2006: -
For a start the company has exponent in pioneering off-site share price
500 Sector PE (next 12 months): 9.6
found the right niche and is very construction. This not only 1-month relative strength: n/a
450
good at what it does. Key speeds up the building process HIGH 484.50 23/11/04 1-year relative strength: n/a
products include insulation but also allows the group to 400
LOW 269.00 24/3/04
Dividend yield: 2.1
LAST 471.00
panels and boards, environmental provide a bespoke service for
350 NMS: 2,000
pollution control and raised specific situations. Some of the
floors. Where the group has stolen more innovative products include Spread: 1.91%
300
a march on its rivals is by acting unit construction of roof tiles in
250
on the growing realisation that multi-tile sheets, which again cuts D J F M A M J J A S O N D
Source: Thomson Financial/Datastream
construction methods are having down on installation costs. The

22 December 2004 9
221204 p06-17 tips preview 12/21/04 11:34 AM Page 10


IDEAL SHOPPING DIRECT (IDS:AIM) 158.5p STOP LOSS 126p
QVC is the market leader in UK the shares) quickly solved by re- net is growing at around 50% a Current-year profits will top 3
home shopping followed by Bid- organising the warehouse and year and Ideal is well placed to million dropping the PE to 17.
Up TV with Ideal in third place. distribution facilities. capitalise on this buoyant market. Next year profits should reach 5.5
Sales are expected to top 50 This year the company has Institutional investors have million cutting the PE to 12.
million this year. closed its low-return traditional woken up to its charms with In 2007 the PE should fall into
Additional transmissions on mail-order business. It completed Invesco a major shareholder and single figures.
Freeview which started last April the transfer of its call centre to others building up stakes. by: Timon Day
are starting to make a big impact. India allowing 24-hour customer
After a chequered history Ideal is service and sales support. Shares Summary
beginning to come good as seen Ideal has the last free-to-air
in the trebling of the share price shopping channel on Freeview Ideals three TV shopping BUSINESS:
since the company was tipped as a which is a highly valuable space channels now reach over 8 million Business: leading independent
Play at 45p on 20 March 2003. and initial sales over summer households. Sales and profits multi-channel TV home shopping
Fire destroyed Ideals offices were far ahead of expectations growth is running at 45% which is business
and warehouses in March 2001 producing a profit much earlier about the same as ASOS but the
but the company managed to than forecast. VITAL STATS:
2005 prospective PE is 60% lower. Market value: 46 million
keep going while it rebuilt its TV The move into selling over the
studios and infrastructure. It internet has also gone well, Historic PE for 2003: losses
made a loss of 3 million that year transmitting the original Create IDEAL SHOPPING DIRECT Prospective PE for 2004: 17.3
share price
but turned round to make profit and Craft channel as an 180 Prospective PE for 2005: 12.1
of 3.4 million in 2002 before additional route to market. C & C 160
Prospective dividend yield: 1.2%
140
collapsing again to losses of is still going strong with sales Sector PE: 12.8
120
400,000 in 2003 due to costs rising 15%. The health channel 100 1-month relative strength: +0.5%
getting out of control. Ideal Vitality was brought fully 80 1-year relative strength: +192%
However it was a problem of under Ideals control in January HIGH 160.50 4/11/04
60 NMS: 2,000
success rather than failure which after a year being a turnkey 40
LOW 36.50 22/12/03

energetic chief executive founder operation for Goldshield. 20


LAST 158.50 Spread: 4.5%
D J F M A M J J A S O N D
Peter Wright (who owns 34% of Home shopping via TV and the Source: Thomson Financial/Datastream

OCEAN WILSONS HOLDINGS (OCN) 265p STOP LOSS 212p


Investors seeking shares in million and 200 million. There is profits and sales. downside should be limited as
undervalued companies will find also an investment portfolio held The chances of no corporate the rating is so low. The historic
it hard to ignore the attractions of outside Brazil and worth almost activity are remote, according to PE is only 6.2, the prospective for
Ocean Wilsons. Although the 40 million. insiders, as the main shareholder next year is only 5 and the
shares have already doubled this Admittedly the board might is getting on and wants to retire dividend yield for 2004 should be
year and risen 38% since tipped as decide not to sell if it cant achieve with plenty of money. almost 4%.
a Play on 18 November 2004 at its valuations. Even if nothing happens the by: Timon Day
200p they still look very cheap. There is minimal debt and
The main driver is that the business is booming as Brazils
controlling family/director exports of commodities such as Shares Summary
shareholders want to cash in. An soya beans and coffee and metals Insiders reckon Oceans Brazilian BUSINESS:
announcement on 6 December like copper are soaring. Much
operations alone are worth twice Leading supplier of maritime
stated that the board is in the more freight is also imported as
early stages of reviewing strategic rapidly rising living standards the current share price and then services in Brazil
options in relation to the Brazilian mean soaring demand for cars there is the 40 million investment VITAL STATS:
operations. This means selling the and electronic goods. portfolio on top. Downside is Market value: 97 million
whole company or its trading The Brazilian economy looks in negligible, upside is still immense. Historic PE for 2003: 6.2
operations in Brazil, which consist much better shape than it has Prospective PE for 2004: 5.6
of a shipyard, a container terminal ever done with political stability OCEAN WILSONS Prospective PE for 2005: 5.0
and almost a dozen tugs that and a firm financial framework. share price
280 Prospective dividend yield for
make it the leading towage Growth should amount to around 260
2004: 4%
operator. 7% for 2004 with almost the same 240 HIGH 275.00 13/12/04
LOW 134.50 18/12/03 Sector PE: n/a
There is also a burgeoning again in 2005. 220 LAST 265.00
1-month relative strength: n/a
200
logistics and transport business Risks of another big 1-year relative strength: n/a
180
to carry goods in and out of devaluation of the local currency
160 NMS: 500
Brazils ports to the interior. the real against the dollar look 140
These businesses and valuable much lower than they did a few Spread: 3.6%
120
D J F M A M J J A S O N D
property and land assets could be years ago. As Ocean accounts in Source: Thomson Financial/Datastream

worth anywhere between 100 dollars any movement skews

10 Shares
221204 p06-17 tips preview 12/21/04 11:34 AM Page 11

COVER STORY

DX SERVICES (DXS) 320p STOP LOSS 256p


Everyone knows how unreliable market is worth 700 million, and way of a tangible capital the increased cost base from
the Royal Mail has become; late if DX captures just 4% of this requirement in the business and network expansion and costs of
deliveries and post simply not market the profit could be an this is reflected in 18.2 million establishing the mail business.
arriving are almost the norm and estimated 28 million a year. Of fixed assets (14% of sales). This year things will pick up,
weary customers are desperate course, this depends on take-up Earnings for 2004 were slightly with a first-ever interim dividend
for an alternative. Step forward and people switching over from down on the previous year due to payment.
DX Services. Royal Mail, but as long as the shedding the parcels business, by: Polly Fergusson
Once part of the Hays (HAS) latter continues to disappoint, it
conglomerate, DX was demerged plays straight into DXs hands. Shares Summary
earlier this year to take advantage The mail division has a run
of deregulation in the UK mail rate of 4.5 million and should The upside to profits and the BUSINESS:
market. It operates in the end the year on a run rate of 6 current share price is derived Private business-to-business mail
business-to-business (B2B) million. Current-year forecasts from the success of the mail VITAL STATS:
market and collects, sorts and are for sales of 5 million business. With a lack of Market value: 274 million
delivers post. The DX network break-even is achieved on sales competition, a massive growth Historic PE: 12
has three strands: DX (64% of of 6 million, so the business market and prime positioning, it Prospective PE for 2005: 14.3
group sales with deliveries via should make a positive
has DX factor. Prospective PE for 2006: 13.6
private mailbox exchanges), annualised contribution by the
parcels and mail. The DX core end of this year. DX SERVICES Sector PE: 13.9
share price

business grows at 2% a year and DXs financial model is most 330 1-month relative strength:+5.1%
320
is expected to carry on at this appealing. It has no net capital 1-year relative strength: n/a
310
level but it is the new mail employed as subscriptions from Dividend yield: 3.88
300
operation that everyone is DX customers are paid in NMS: 15,000
290
getting excited about. advance, and given the high HIGH 323.00 26/11/04
Spread: 1.6%
280 LOW 265.00 29/10/04
DX is currently the only contribution levels from 270 LAST 320.00
licensed operator to offer these increased sales, DX should 260
services without relying on the generate substantial free 1 8 15 22
NOV
29 6 13
DEC
Royal Mail network. The mail cashflow. There is little in the Source: Thomson Financial/Datastream

HAMWORTHY (HMY:AIM) 200.5p STOP LOSS 160p


Having played a more defensive power the vessel. Hamworthys Interim results saw profits up Collins Stewart (which could raise
stock with DX Services, how about system reliquefies the LNG and 1.5 million at 3.4 million this some eyebrows among investors)
some fun with Hamworthy a returns it to the cargo during year. The shares have further to go it might win more support in the
new AIM stock tipped to double transportation. More efficient and on profits rising to 5.5 million City if it moved to a larger
over the next year? lower-maintenance diesel engines this year and 6.8 million next stockbroker. This isnt on the
This designer and maker of can then power the ship. year which would cut the PE to 13. cards but should not be ruled out.
liquid natural gas (LNG) and oil- Hamworthy has a record 130 While Hamworthys broker is by: Polly Fergusson
handling systems for tankers, million order book and has grown
supplies gas pumps for LNG sales and profits at almost 20% a
carriers and LPG gas reliquefaction year over the past three years. Its Shares Summary
systems and waste-water recently enlarged low-cost facility The world market for LNG is BUSINESS:
treatment for tankers. in China allows the company to
taking off and Hamworthy is in a Design, development and
All sounds pretty dry but the buy and assemble quality
world market for LNG is taking off products at knock-down prices. position to benefit, winning record manufacture of advanced marine
with 33 tankers delivered this This isnt all. Its waste water contracts and with its highest-ever fluid handling systems
year, 45 next and 59 in 2006. systems division is expected to order book. And forget about oil VITAL STATS:
Previously, this number has been take off when new US legislation prices current volatility will have Market value: 74.6 million
around 15 a year. forces cleaner ship discharges. The no short-term hit on the stock. Historic PE: 14.5
A breakthrough in LNG companys other new products to HAMWORTHY Prospective PE for 05: 18.32
reliquefaction means Hamworthy be unveiled in the next few years share price
210 Prospective PE for 06: 14.39
profits will rocket in a couple of include environmental products, a 200
Sector PE: 12.53
190
years thanks to a new largest-ever new C2G engine room pump 180
1-month relative strength:+17.9%
48 million order to fit eight LNG range and ongoing deepwell 170

carriers with reliquefaction plants offshore pump family.


160 1-year relative strength: n/a
150
in Korea, saving nearly 2 million There is no interim dividend 140
HIGH 203.50 16/12/04
Dividend yield: 2.66
130
a year compared with standard but a final one will be paid this 120 LOW 109.00 19/7/04 NMS: 5000
LAST 200.50
steam-powered vessels. year and both will be paid next 110
100
Spread: 3.5%
At present, LNG carriers burn year, which should produce a JUL AUG SEP OCT NOV DEC
Source: Thomson Financial/Datastream

boiled-off gas to produce steam to yield of around 3%.

22 December 2004 11
221204 p06-17 tips preview 12/21/04 11:34 AM Page 12


BEN BAILEY (BBC) 403.5p STOP LOSS 322p
Readers may think it a little the affordable end of the market. reckons nearer 110p EPS is likely in ripe for a takeover but with the
strange that Im tipping a house Operating margins have jumped the year ahead. Bailey family looming large in the
builder as one of my key punts for from 8.5% to 22.8% over the past Even on the 103p forecast, the background only the best terms
the year. These days finding three years or so. Completions implied PE is just 3.8, against a will do. It also ties future returns
anyone independent willing to have continued to rise. In the first dividend likely to be covered for investors and major
say something positive on the half of this year plot sales went almost eight times and promising shareholders tightly together.
sector is about as rare as a vertigo- from 195 to 251, helping to feed a yield of 4.2%. The company looks by: Steven Frazer
suffering high wire walker. Ill the bottom line.
stick my neck out on Ben Bailey The future looks pretty secure Shares Summary
partly because I think most new too since Ben Bailey has almost
home builders might actually do six years worth of landbank, at The regional house builder has BUSINESS:
quite well if interest rates truly current levels, with another 789 become a reliable company. With Regional house builder largely
have peaked, but mainly because plots working through Britains the shares so cheap, it could aimed at the affordable end of the
the company is well run by the labyrinthine planning system. become a takeover target, while market
founding Bailey family (which Financially, Ben Bailey looks in peaking interest rates this year VITAL STATS:
owns a third of the shares) and good shape. From 2000 to 2003
should fuel better sentiment Market value: 47.2 million
because, all things considered, the revenue doubled to 62.8 million,
shares are ludicrously cheap. while earnings have leapt from towards the whole sector. Historic PE for 2003: 5.2
Ben Bailey operates between 10.6p a share to 77.3p. Profits of BEN BAILEY Prospective PE for 2004: 4.1
share price
Nottingham and Leeds. While 16.3 million and 97p EPS are 500 Prospective PE for 2005: 3.8
rising interest rates in 2004 have expected to be unveiled for 2004 480 HIGH 492.50 23/2/04 Sector PE (next 12 months): 9.6
LOW 367.50 8/10/04
shaken the sector, the background when annual results are 460
LAST 403.50 1-month relative strength: +2.7%
dynamics of the industry are published in March, rising to 17.6 440
1-year relative strength: +0.5%
intact there is still a massive million pre-tax in 2005. This 420
Dividend yield for 2005: 4.2%
shortage of affordable homes. implies very modest earnings 400
NMS: 1,000
In Ben Baileys case, operating growth to 103p a share, a target 380
Spread: 0.75%
efficiencies have been neatly that may well prove too 360
D J F M A M J J A S O N D
combined with a clever switch to conservative. Corporate Synergy Source: Thomson Financial/Datastream

TOREX RETAIL (TRX:AIM) 70p STOP LOSS 56p


I make no apology for revisiting a early stage management knows
company recommended less where 70% of its 2005 income will
than two months ago (4 stem from.
November) as one of my tips for The key selling point is
2005 Torex Retail. While many demonstrating cost savings to
readers may already be familiar retail customers. Its newest Java
with the story, the shares have applications can sit on top of
remained more of less any hardware PC tills etc
motionless since the original tip thus extending the IT
at 67p, edging barely 5% higher to investment cycle of a customer. Shares Summary
70p. But rather than damn the This means Torex Retail has Torex Retail is building a market- BUSINESS:
company as a dud, I believe this been able to win more than one
leading position in electronic point- Design and sale of electronic
recent inactivity means the out of every two contracts it bids
window of opportunity remains for no mean feat. of-sale (EPoS) now it is free from point-of-sale software systems
open or readers. So while most recent figures subsidiary slavery. Energised and services to retailers
Formerly run for cash as a interims announced in management and cash-generative VITAL STATS:
small subsidiary of Torex, the September saw sales fall 9%, a business with growth prospects Market value: 127.7 million
healthcare IT group bought by consequence of fewer low margin make a good medium-term bet. Historic PE for 2003: 16
iSoft (IOT) at the beginning of hardware sales, profits and TOREX RETAIL Prospective PE for 2004: 15.6
2004, EPoS specialist Torex Retail earnings should ramp-up nicely share price
85 Prospective PE for 2005: 11.6
is now master of its own destiny in 2005. House broker Evolution 80 Sector PE (next 12 months): 16.5
with a fresh sales-and-marketing predicts 10.5 million pre-tax HIGH 80.50 24/11/04
75 1-month relative strength: +2.9%
strategy. A bucket-load of profit in 2004 to become 15.2 70
LOW 52.00 8/9/04

contracts have been quickly million in the coming year,


LAST 70.00 1-year relative strength: n/a
65
nailed, swelling the order book to implying EPS of 4.4p and 5.9p Dividend yield: n/a
60
20 million, 7 million of which respectively and placing the NMS: 10,000
55
has come from entirely new shares on a 2005 PE of just 11.8, a 50
Spread: 5.56%
MARAPR MAYJUN JUL AUG SEP OCT NOV
customers, laying a visible path 25% discount to the sectors 15.6. Source: Thomson Financial/Datastream

to future earnings. Even at this by: Steven Frazer

12 Shares
221204 p06-17 tips preview 12/21/04 11:34 AM Page 13

COVER STORY

GLISTEN (GLI:AIM) 274p STOP LOSS 219p


Glisten has sealed its presence in Simmonds says the combined growth of around 44% on last trebled between 1998 and 2003.
the cereal bar market with the firm will have twice the buying year. In 2006 they predict As more consumers seek out a
purchase of Halo Foods last power when purchasing 30 earnings of 20.42p, a further healthy diet there is no reason
month. Since we first tipped the million-worth of ingredients spurt of about 13%. to believe that this trend will
stock on 9 December, it has risen each year against the present 15 Market research firm Mintel not continue.
a couple of pence but there is million. says that sales of cereal bars by: Simon Keane
plenty more to come. Simmonds has a good track
Cereal bars are a rapidly record of making acquisitions
growing market. Halo has not work. He bought three Shares Summary
made much money from it of companies last financial year The proposed Halo Foods
late pre-tax profits were only and all were contributing to BUSINESS:
acquisition will transform the Food producer
65,000 in the nine months to 30 earnings by Christmas. After
September but Glisten will Glisten bought chocolate button company taking it into the fast- VITAL STATS:
turn it into a much more maker Sunya in October 2003 it growing cereal bar market. Glisten Market value: 27.09 million
profitable operation. relocated it to its Blackburn has a track record of successfully Historic PE for 2004: 21.98
Halos bad run is a one-off plant from York within a few integrating its new purchases. Prospective PE for 2005: 15.22
because of the impact of the months. Prospective PE for 2006: 13.49
Atkins diet on products it There are probably going to be GLISTEN Sector PE (next 12 months):12.55
produces like the SlimFast more acquisitions on the way: share price
300 1-month relative strength: 6.3%
range. Unilever, owner of Glisten recently agreed 17.25 280 1-year relative strength: 46.7%
SlimFast, has hit back with low- million-worth of loans with 260
carbohydrate alternatives of the Barclays. Dividend yield for 2005: 0.34%
240
popular slimming brand. The consensus currently has NMS: 500
220
Glisten is likely to take Halo Glistens pre-tax profits at 2.57 HIGH 293.50 10/3/04 Spread: 1.44%
200 LOW 165.00 5/1/04
and shake it by the scruff of the million this year rising to 3.02 180 LAST 274.00
neck, cutting costs by squeezing million next. Analysts are 160
better terms out of suppliers. forecasting earnings per share of D J F M A M J J A S O N D
Source: Thomson Financial/Datastream

Glisten chief executive Paul 18.10p this year representing

IDOX (IDOX:AIM) 11.5p STOP LOSS 9p


The new Freedom of Information a service to scan planning put a lot of stress on the systems current share price of 11p. Civica
Act comes into force on 1 January. applications, used by 16 local which are currently kept together (CIV), perhaps the closest of its
Councils are among the public councils, then posting these on with sticky-back paper, com- peers, is on a PE of 13.5 with a
bodies required to hold the web for public viewing. ments Kirkby. consensus prospective EPS of
information about their subjects, The addition of TFPL means the Hardman & Co has a 15.9p. This implies IDOXs price
which is good news for tech firm now has more of a services prospective EPS of 1.33p, putting should be closer to 18p.
bubble survivor IDOX, which presence. The biggest part of that the company on a PE of 8.3 at the by: Simon Keane
provides software to make this business is recruitment. It seeks
possible. Even if town hall letter out people to manage the kind of
boxes are not flooded with systems IDOX makes. In six Shares Summary
demands the firm, which months recruitment contributed With the Freedom of Information BUSINESS:
reported its first pre-tax profit of 2.41 million of the 9.55 million.
Act coming into force next year Document management
90,000 last week, will still do Broker Corporate Synergy
well with a solid business already forecasts sales will be 18.4 the company is well placed to VITAL STATS:
in tow. million by 2006. Research firm meet the demands from local Market value: 20.03 million
Following the acquisition in Hardman & Co, which is paid by authorities for any software Historic PE for 2004: 22.92
May of TFPL, it has a good mix of companies to write reports on needed to deal with this. Prospective PE for 2005: 16.18
interests encompassing both them, is forecasting 18.5 million Prospective PE for 2006: 8.27
software and a more predictable in 2006. Hardmans Andrea Kirkby IDOX Sector PE (next 12 months): 13.28
share price
on-going services element. Most says a large amount of future 13.00
HIGH 12.75 27/9/04 1-month relative strength: 8.3%
of the firms sales this year 6.4 revenue will come from services. 12.50 LOW 9.50 15/4/04
1-year relative strength: -2.6%
LAST 11.50
million of 9.55 million came Her forecast only takes into 12.00
Dividend yield: n/a
from the old business. account a muted impact from the 11.50

There are three parts to this Freedom of Information Act. 11.00 NMS: 10,000
including a software division She is not banking on a spike 10.50 Spread: 10.87%
10.00
which started out making in demand. IDOX says local
9.50
programs for scanning and authorities are ill-prepared for the 9.00
storing documents in electronic new legislation. If a lot of people D J F M A M J J A S O N D
Source: Thomson Financial/Datastream

format. The old business also has ask for information it is going to

22 December 2004 13
221204 p06-17 tips preview 12/21/04 11:34 AM Page 14


ULTRA ELECTRONICS (ULE) 685p STOP LOSS 548p
The Americans are living way example of many. The strategy one of the least exposed in the year. On a 2005 PE of 15.4, it is
beyond their means. How long continues there will be more sector to dollar weakness. trading at a premium to the sector
they will be able to continue to do acquisitions financed by strong Ultras share price has but this looks merited.
so is a matter for debate between organic cash generation. continued its steady rise since the by: Jeremy Lacey
economists but meanwhile the Since George Bush took office, 2002 low of 384p, showing 21.7%
determination of the Bush the US has swung from a hefty relative strength over the past
administration to spend whatever budget surplus to a record deficit
it takes to fight terror is good of $422 billion, which the White
news for companies like Ultra House blames partly on the war
Shares Summary
Electronics. against terror. Bush supporters Defence and aerospace industry
Ultra designs, develops and have pointed to the fact that the BUSINESS:
player with a sound record of Electronic systems for
manufactures electronic systems deficit was previously projected at
acquisitions, enabling it to exploit international defence and
for the international defence and $477 billion as a sign that the
aerospace markets. It has pursued governments economic policies growth market niches. While Bush aerospace markets
a highly successful strategy of are working. Whether or not that administration is committed to VITAL STATS:
making acquisitions in niche is too optimistic, the hawks are defence spending, US oppor- Market value: 449 million
growth markets. These have led firmly in control of defence tunities should protect it from Historic PE: 17.6
directly to contract wins. Last year spending. vagaries of UK market. Prospective PE for 2004: 15.6
Ultra acquired an American Not that Ultra is purely a US ULTRA ELECTRONICS HDG. Prospective PE for 2005: 14.2
share price
torpedo countermeasures play. For example, another 700
680 Sector PE: 13.0
business, Ocean Systems, which contract recently announced, 660 HIGH 690.00 12/11/04
this month announced an $18 worth more than 23 million, was 640 LOW 494.50 18/12/03 1-month relative strength: -1.4%
620 LAST 685.00
million demonstrator contract for from Rolls-Royce for control and 600
1-year relative strength: +21.7%
a US torpedo defence programme. instrumentation equipment as
580
560
Dividend yield: 2.16%
Numis analyst Andrew Gollan part of the propulsion system for 540
520
NMS: 5,000
says this win could lead to a much Royal Navy submarines. Gollan 500 Spread: 0.07%
480
larger and longer-term production says that with the US accounting D J F M A M J J A S O N D
Source: Thomson Financial/Datastream

contract. He adds: This was one for around a third of sales, Ultra is

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COVER STORY

HALFORDS (HFD) 304.75p STOP LOSS 243p


Halfords was part of Boots convert a total of 35 this year and Securities is forecasting profits of company should be able to extract
(BOOT) when that groups another 35 next year. This 80 million and earnings of 25.1p, much higher earnings over the
previous management believed programme may be accelerated rising to 92.5 million and 27.6p in next 3three to four years, we
growth lay in diversification. It and will certainly be concentrated 2005/06. At 298p, the shares are expect a significant rerating over
was then sold to venture on those areas where the selling on an undemanding rating the next 12 months.
capitalists CVC, which floated the planning authorities are likely to a 2006 PE of only 10.8. As the by: John Marshall
group earlier this year. Since then be most difficult.
the shares have outperformed The increased floor area
the market by 4.3% over the past resulting from these conversions
Shares Summary
six months. has enabled the group to widen Strong physical expansion should BUSINESS:
Although the markets the its product range and open Kids enable the group to outperform Selling car-maintenance and car-
group serves are expected to grow Zones. In the first half of this year the market over the next 12
by some 3%, Halfords is well these Supermezzanine stores enhancement products, travel
months. The group is enjoying solutions and cycling products
positioned to do better than this. increased their sales by 21.5%
It has the scope for substantial compared with the groups much stronger growth than most VITAL STATS:
physical expansion. In the first underlying growth of 10.3%. retailers. Market value: 678 million
half of this year it opened six new Although the government is Prospective PE for 2004/05: 11.6
stores and has a target of adding threatening to restrict the growth HALFORDS GROUP Prospective PE for 2005/06: 10.8
share price
some 12 to 14 this year. In the of mezzanine floors, which are 310 Sector PE: 12.8
medium term it plans to open a popular with other retailers too, it 305
HIGH 306.25 16/11/04
1-month relative strength: -1.0%
LOW 283.00 8/10/04
further 70 superstores and 80 has still to issue a consultation 300 LAST 304.75 6-month relative strength: +4.3%
smaller urban stores. paper. This means nothing can
295 Dividend yield for 2004/05: 3.9%
Apart from these new outlets happen for some time. We suspect
the group has been busy adding the group will take advantage of 290 NMS: 25,000
mezzanine floors to its this hiatus to accelerate its 285 Spread: 0.3%
superstores in advance of possible programme. 280
SEP OCT NOV DEC
planning restrictions. It converted The maiden interims were Source: Thomson Financial/Datastream

22 in the first half and plans to encouraging and Evolution

JESSOPS (JSP) 155p STOP LOSS 124p


Although Jessops birth as a has ordered 60 self-service shares should enjoy a significant
public company could be called a machines for new digital instant rerating.
difficult delivery, the recent kiosks. by: John Marshall
results underline the potential Currently, Jessops has 220,000
of the company and were in line sq ft of retail space with 268
with expectations at the time of stores but plans to double its
the IPO. sales area, starting with an
Sales were up by 11%, additional 20 stores each year for
reflecting both new store the foreseeable future. These
openings and 6.1% like-for-like new stores could add 6% to 7% to Shares Summary
growth. One of the important sales each year, but house Jessops is the leading specialist BUSINESS:
issues was the increase in sales broker ABN AMRO believes the
camera group and should benefit Specialist camera group
of digital cameras, which grew group may accelerate expansion
by 30%. These now account for plans. from the increased popularity of VITAL STATS:
some 75% of cameras sold and it This financial year has started digital cameras. It should be able Market value: 152 million
is a rapidly growing market well, with sales up 6%, compared to double its sales area within Historic PE: losses (due to IPO)
forecast to grow by nearly 60% with an otherwise flat sales eight years. Prospective PE for 2004/05: 10.8
by 2009. period for most high-street Prospective PE for 2005/06: 9.3
However, only 29% of retailers. Jessops is set to be one JESSOPS Sector PE: 12.8
households currently have a of the winners this Christmas. share price
156 1-month relative strength: -3.1%
digital camera. The replacement ABN AMRO is forecasting EPS 154 1-year relative strength: n/a
cycle for digital cameras is much of 13.7p this year rising to 16p
Dividend yield: 1.9%
shorter than for analogue next year and 18.2p in 2007, and 152

cameras at some two to three has a target price of 176p with a NMS: SET stock
150
years. PE of 11 for 2006. Spread: 1.7%
148
Apart from selling digital The shares have been held LOW 147.50 9/12/04
146 LAST 155.00
cameras the group is installing back by ABN AMROs 18% stake, 1 8 15 22 29 6 13
the technology to support which it is going to sell in 2005. NOV DEC
Source: Thomson Financial/Datastream

printing from digital media and Once this stake is placed the

22 December 2004 15
221204 p06-17 tips preview 12/21/04 11:34 AM Page 16


PETRA DIAMONDS (PDL) 71p STOP LOSS 56p
Currently the largest diamond pipes beneath the surface. indicator and there is little doubt partner funding most of the
company on AIM, Petra While to date only 115 million about the enormity of Alto Cuilo. exploration, Petra can be
Diamonds should extend its lead tonnes of kimberlitic material Chairman Adonis Peroulis says considered a safer bet than many
in 2005. Diamond explorers have have been independently verified, that this is still no slam-dunk of its diamond peers.
prospered this year owing to the some market sources are prepared deposit but with BHP Billiton by: Emily Parkinson
dearth of gems and rocketing to speculate the figure could (BLT) onside as a joint-venture
prices, and the uptrend is set to eventually be as high as 500,000
strengthen next year. million tonnes. If true, a deposit
While the supply shortage has that size would make Petra a Shares Summary
generated goodwill towards world-class diamond producer. Despite the Alto Cuilo diamond
diamond explorers as a whole, the Meanwhile there is still much BUSINESS:
deposit in Angola and platinum Diamond exploration in Angola
rise in Petras shares is also due to work to be done. The presence of
having an impressive resource in diamonds is unquestionable but and gold projects in South Africa, and South Africa
its Alto Cuilo project in Angola their grade (carats per 100,000 Petra is for now primarily an VITAL STATS:
and a series of positive drill results tonnes) is still not known. The explorer but has said it will Market value: 43 million
throughout the year confirmed as companys task for the next year acquire income-producing assets Historic PE: n/a
much. is to firm up an estimate of price in the next 12 months. Prospective PE for 2004: n/a
A September drilling update and tonnage via an aggressive PETRA DIAMONDS Prospective PE for 2005: n/a
confirmed the presence of another drilling programme. The results of share price
100 Sector PE: n/a
15 kimberlitic pipes at the 70- this will be released in a pre- 90
HIGH 95.00 26/11/04
LOW 32.50 17/12/03 1-month relative strength: -17%
hectare site, adding further feasibility study, expected at some 80 LAST 71.00
impetus to industrys suspicion time in the next 12 months. 1-year relative strength: +124.6%
70
that Petra has a huge diamond A difficulty involved in Dividend yield: n/a
60
resource on its hands. Drilling to recommending junior explorers, NMS: 5,000
50
date has uncovered 115 million few of which have cashflow, is the 40
Spread: 2.6%
tonnes of kimberlitic materials, lack of financial details to hang 30
which is basically ore that proves your hat on. Instead, the size of D J F M A M J J A S O N D
Source: Thomson Financial/Datastream

the presence of diamond-bearing the resource is the favoured

STREAM GROUP (SEA:AIM) 44.5p STOP LOSS 35.5p


You may find some ringtones provides reliable cashflow but For now, however, gaming will told Shares he is in advanced
objectionable but for Stream Mobile Services is the growth be the focus and Stream is likely negotiations concerning a major
Groups chief executive the sound engine, with just over 50% of to build its product offering partnership. Management is also
is literally music to his ears. As a revenues from 3% two years ago. through acquisition. Investors can flagging the possibility of an
provider of polyphonic ringtones In the past four years annual expect news on this front as early upgrade to its full-year profit
(and other things) the company sales have nearly doubled and as next January, according to chief forecast of 15.5 million.
collects 75p every time a user opts profits have grown 91%. At executive Gordon Robson, who by: Emily Parkinson
for one of its custom-made tunes. 910,000 at last count, half-year
With customers selecting Stream profits had nearly doubled from a
ringtones at the rate of several year ago, prompting the first Shares Summary
hundred thousand a month, the dividend. Key to this growth has Stream aims to grow its offering of BUSINESS:
company has dazzled the market been a change in the business
premium content to mobile Provides premium content such
with some impressive profit model which has seen Stream
figures in the past few years. move from being an unbranded, phones via expansion into por- as ringtones, games and video
But there is more to Stream third-party provider of content to table gaming. Positive news clips via fixed line and mobile
than ringtones. As a key provider a direct seller of higher margin includes a possible upgrade to its telephones.
in the mobile phone content products with a subscriber base of own full-year forecasts. VITAL STATS:
business it also offers an SMS chat 300,000 users. Market value: 27.6 million.
service, video downloads and SMS Mobile content is clearly a STREAM GROUP Historic PE: 21.7
share price
dating through its Mobile Services growth market, with the single- 55 Prospective PE: 17.1
HIGH 53.50 19/11/04
division and is poised to collect function phone largely replaced 50 LOW 21.75 17/12/03 Sector PE: 16.1
on the appetite for ever more by phones with more functions 45 LAST 44.50
1-month relative strength: -6.8%
sophisticated mobile content. than people know how to use. If 40
The second part of the Stream has its way, customers 1-year relative strength: +104.6%
35
companys business is its Live will soon be using mobiles to bet NMS: 5,000
30
Services unit, which generates in a similar manner to online 25
Spread: 2.22%
some 3.1 million in revenues a casino sites and further out, 20
year, mainly through its popular maybe even as an all-in-one music D J F M A M J J A S O N D
Source: Thomson Financial/Datastream

astrology hotline. This business station to rival the iPod.

16 Shares
221204 p06-17 tips preview 12/21/04 11:34 AM Page 17

COVER STORY

SCOTTISH & SOUTHERN ENERGY (SSE) 840.5p STOP LOSS 672p


The utility sector has risen around but it also brings fuel diversity to its prices, SSE held on until later rise of around 18% on current
31% since the start of the year. the companys generation mix, in the year, which meant it levels. As you would expect from
Scottish & Southern has been no which is a very good thing when acquired several thousand new a utility company, the dividend is
exception, with its shares steadily you consider the rapid rise in gas customers who deserted Centrica. pretty decent. Its interim dividend
climbing by 24%, but there is still prices this year. SSE also changed The highest target for the share was up 8% on last year to 12.2p.
room on the upside and reasons its Peterhead plant from an open- price is 985p, which would make a by: Susanna Twidale
for them to go higher in 2005. cycle to a combined-cycle gas
Next year sees the European turbine, which emits much lower
emissions trading scheme begin, greenhouse gases. This should
Shares Summary
under which any companies give the company some surplus With a favourable Ofgem ruling BUSINESS:
emitting more than their carbon credits which it can then and good generation mix behind
allocated carbon dioxide use for a different plant. Energy generation, transmission,
it, SSE shares should continue distribution and supply
allowance will be fined 40 per Recently SSE was one of the
tonne. With the UK aiming to biggest winners when Ofgem their steady rise well into 2005. VITAL STATS:
exceed its Kyoto targets and announced its electricity Market value: 7.187 billion
reduce CO2 levels by 80% in 2010 distribution price control review, Historic PE: 12.9
compared with 1990 levels, this is gaining approval to raise Prospective PE for 2004: 15.94
going to be a major issue for distribution charges by 9.3%, well SCOTTISH & STHN. ENERGY Prospective PE for 2005: 14.30
share price
generators. Scottish and Southern above the industry average of 850 Sector PE (next 12 months): 11.85
is better placed than most of its 1.3%. Shares rose slightly LOW 637.00 27/1/04 1-month relative strength: +6.6%
800
peers as it already produces immediately after the news but LAST 840.50
1-year relative strength: +15.5%
around 10% of its power from the ruling also gives the company 750
hydro plants and has a growing security that it can raise funds for Dividend yield: 4.5
portfolio of wind and biomass investment in the distribution
700 NMS: 75,000
projects. network over the next five years. 650 Spread: 0.18%
The recent acquisition of the SSE has also been very canny 600
Fiddlers Ferry coal plant in July when it comes to customers. D J F M A M J J A S O N D
Source: Thomson Financial/Datastream

will increase its CO2 emissions While Centrica (CNA) was upping

SKYEPHARMA (SKP) 67p STOP LOSS 53.5p


SkyePharmas shares have had a further rewards with the The shares were recently the rumours but nevertheless a
bumpy ride in 2004 starting at European launch planned for buoyed by speculation that takeover in the future still
around 75.25p and hitting a low 2005. Australian founder Ian Gowrie- remains a possibility.
of 50p before bobbing up and The companys blue-chip Smith was planning to sell his by: Susanna Twidale
down to its current price around clients are also a bonus, and it 1.3% stake, which would pave
67p. But after several false starts has also completed phase III the way for a takeover. The
and broken promises about trials for its asthma inhaler for company poured cold water on
delivery dates the biotech that AstraZeneca (AZN), Pulmicourt.
cried wolf finally looks set to Syke is also awaiting FDA
deliver. If you have the heart for approval for its cardiovascular Shares Summary
it and can stomach some product, which will be After a series of false starts BUSINESS:
volatility in your portfolio this distributed by First Horizon. The
Skyepharma looks poised to Drug delivery
could be the share for you. The clock is ticking for this process
company, which specialises in to be completed by the end finally achieve its potential. The VITAL STATS:
drug delivery technology, has a of the year but when it does highest target for share prices is Market value: 426 million
number of things going for it. come Skye can receive up to currently 97p, which marks a juicy Historic PE: -13.9
Firstly, this month saw US $50 million in milestone increase of 43% on current levels. Prospective PE for 2004: 47.9
commercialisation of the payments and it is also set Prospective PE for 2005: 43.8
spinally injected painkiller to receive 25% of First Horizons SKYEPHARMA Sector PE (next 12 months): 14.1
DepDur, which can provide up to net sale of the product. share price
80 1-month relative strength: +23.7
48 hours of pain control for poor Although the company is loss- 75 HIGH 76.00 18/12/03 1-year relative strength: -17.8
soles undergoing major surgery. making at present this is LOW 50.00 10/8/04
70
LAST 67.00 Dividend yield: N/A
Around six million of these expected to change once it 65
procedures are carried out in the reaches a respiratory drug NMS: 100,000
60
US each year and a further five partnership deal. Analysts are Spread: 0.36%
55
million in Europe. Skye has also confident that this deal 50
already received a 5 million will take place it just may 45
D J F M A M J J A S O N D
milestone payment for the not come in time to boost Source: Thomson Financial/Datastream

product but can expect to reap 2004 profits.

22 December 2004 17
221204 p18 uncovered 12/20/04 11:39 AM Page 18

SHARES UNCOVERED

New year buyback


by: Polly Fergusson
TDG (TDG), the logistics
TV Corp looks to life after cricket
by: Chris Bourke

T
operator that recently dropped elevision Corporation (TCP) has been dealt The new arrangement will come into effect in one
out of bidding for rival Christian a blow from Channel 4, losing cricket years time.
Salvesen (SVC), is now coverage, but the group hopes to recover Channel Five has also been awarded the rights to
expected to put its cash into a revenues from the broadcasters who won the screen prime-time highlights.
share buyback. A recent trading rights. We are very close to Five as we produce virtually
statement gave no news on a On the face of it, this is not great news, but it is all of their sport coverage. While it will obviously not
potential buyback programme. too early to say. We have got several calling cards, replace the entire lost revenue, we hope to be
However, given its strong cash chief executive Jeff Foulser told Shares. considered for their coverage. We also plan to talk
generation and annual savings, Television Corp shares have dropped 10p on the with Sky Sports and will hopefully get a piece of the
the company is expected to hand announcement and are now trading at 106p. action there as well, says Foulser.
cash back to shareholders. The England and Wales Cricket Board has awarded Its not all doom and gloom, says analyst Iain
TDG has the financial capacity Sky Sports live cricket rights in a four-year deal worth Daly at Baird. Prospects in the broader production
to finance such a program and 220 million, replacing Channel 4. landscape remain promising.
now the merger talks have Television Corporation produces Channel 4s Shares says: Although a profitable
ceased, action could be more coverage through subsidiary Sunset and Vine, which contract loss for TV Corp, this is unlikely to
forthcoming after the company accounts for around 7% of the groups total revenues. alter its long-term outlook.
releases its full-year results on 23
February, says analyst Gert
Zonneveld at Lazard. He reckons
Cheap beer shame about the shares
by: Emily Parkinson
the shares should be nearer 190p.
Shares in TDG are trading at Investors flocking to buy JD as both are focused on setter among its rivals, but this
218p and have fallen from highs Wetherspoon (JDW) stock on the residential, food-led pubs has also resulted in a flattening
of 241p. rumour that it will soon be they are unlikely to want to of margins and profits over
subject to a takeover bid could dilute their estate with the recent years.
be disappointed. Wetherspoons high street First-quarter results revealed
Chartists view The companys concentration venues. the company was unable to
by: David Jones on low-margin high street The uncertainty over the recoup the money it lost from a
venues could be the main outlook for trading margins at price cut in September after like-
Travel chaos hurdle to any corporate activity. the pub operator is also likely to for-like sales fell short of its 2%
Results from MyTravel (MT.) Companies such as Mitchells deter any potential suitors. target.
announced earlier this month & Butlers (MAB) and Spirit Wetherspoons strategy of Shares says: Unjustifiably
showed a sharply narrower pre- Group have been named selling cut-price beer in large expensive given continuing
tax loss of 190 million, as potential buyers of JDW, but volumes has made it the price- doubts about trading. Sell.
compared with 910 million
previously. On Monday (20
December), the High Court was
Silicon injection
by: Steven Frazer
due to have ruled whether 96%
of the companys equity can be Tightening belts in the silicon
transferred to creditors. chip industry in the year ahead
Regardless of what the promise a bumper start to stock
immediate future brings, it market life for Pure Wafer (PUR),
would be a brave person who which floated on AIM this week.
picks the bottom of this five-year The Swansea-based company
downtrend. has raised 7 million from
Cheap shares have a habit investors and will use the cash to
of getting cheaper and even up capacity at its South Wales
when trading around the 5p facility and strengthen its
mark, the risk is for these to position in the silicon wafer concentrating to go from 295,000 A gloomy 2005 is predicted by
head lower still. reclaim industry, where it in 2003 to 3.4 million by 2008. some analysts. We remain
MYTRAVEL GROUP
currently has a 12% market share. Silicon chip makers have had a negative on the semi-conductor
share price
40 US semi-conductor analyst mixed 2004. CSR (CSR) shares sector, says Andrew Griffin, co-
35 Prismark reckons there will be doubled at one point to 441p, but ordinator of Merrill Lynchs
30
25
spectacular growth in the worries over stock inventories, global fundamental equity
20 recycling of silicon wafers because sparked by a warning from research team.
15
of the cost efficiencies to Wolfson Microelectronics (WLF) Shares says: Niche
10
5 manufacturers, and forecasts in October, have seen share prices player should benefit from
0
D J F MAMJ J A S O ND J F MAMJJ A S O ND
volumes recycled for the 300mm come under pressure right across rising recycling demand for
Source: Thomson Financial/Datastream
version on which Pure Wafer is the sector. semi-conductors.

18 Shares
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221204 p20 uncovered 12/20/04 9:58 AM Page 20

SHARES UNCOVERED

Tree spree
by: Chris Bourke
A shock report has confounded
Filtronic looks like a bad call
by: Polly Fergusson
City observers by suggesting

T
that Christmas tree sales are the he future of Filtronic (FTC), which
best sign of consumer manufactures wireless infrastructure for
confidence. mobile phone base stations and handset
Retailers are rejoicing in the antenna, looks shaky after the company warned
aisles after a bumper season for of difficulties at its handset products division.
tree sales signals an increase in The company intends to reduce its debt burden
consumer spend for 2005. It and finance the growth of its Wirelesss
seems that families are snapping Infrastructure operations by floating its Cellular
up festive fir trees quicker than Handset Products (CHP) business in Helsinki for
you can say Norway Spruce. a possible 150 million.
This year, tree price is no However, the Finnish stock market does not
object. Its clearly a case of the look promising and there have been no IPOs in
bigger and bushier, the better, Finland for several years. The CHP business is
said one City analyst who also facing declining margins and sales,
refused to be named. depressing the chances of a successful flotation.
Easy2spreadbet.com, a Filtronic has said that its long-term revenue
spread betting company, has growth will be driven by continuing expansion of
been closely watching trends in fir the cellular antennae business, together with sales
tree sales: Christmas trees come of non-cellular antennae and mechanical
in a range of prices and most components. But the company has had limited
households buy smaller, cheaper success in expanding its customer base beyond
trees when they start to feel the Nokia (around 90% of sales), and is behind
financial pinch, says chief competitors such as Centurion and Laird in its
executive Will Akerman. move into non-cellular antennae.
This year points to a The news caps a miserable year for Filtronic
confident consumer, throwing shareholders. In June, the group issued a profits
caution to the wind and buying warning, blaming a strong pound and the costs of
big luxury trees. moving mass production to low-cost China. In
August, it delivered its fourth loss in five years
They dont feel good and revealed that it had breached covenants on a 50 Shares says: The outlook is weak and
by: Jonas Crosland million term loan. with so much negative sentiment around the
It will not be a happy Christmas Shares have fallen to 184p from a high of 295p stock is unlikely to do well even if trading
for Messrs Robin Hutchings and earlier this year, putting them on a PE of 15. does pick up. Sell.
Jason Smith as both have
incurred the wrath of the FSA,
and have been fined 18,000
and 15,000 respectively for Break-up on the cards for GUS
market abuse. by: John Marshall and Polly Fergusson
Hutchings, an FSA
approved equity analyst at GUS (GUS) is the latest retailer announce the results of its mega-rich private equity funds
Evolution Securities, used to fall prey to rumours of a strategic review in the first half out there, why not look at
privileged information on a bid takeover bid. However, a break- of next year, with an update on breaking up Boots and flogging
for I Feel Good to buy shares up of the company is far more trading at the Q3 statement on off BHI? Or strip PC World and
in the stock, which eventually likely. 13 January. all the cash out of Dixons? We
led to his making a profit on The company, which has The story is not totally can see easier pickings out
the sale of just under 5,000. already demerged its Burberry improbable, but equally as GUS there than GUS, adds Nick
The information was passed (BRBY) and South African looks as if it is going to split Bubb at Evolution.
to him by Smith, who at the business, is expected to split anyway, why should Shares says: Investors
time was IFGs finance director its remaining Argos/Homebase shareholders effectively pay should be wary of these
and company secretary (he no and Experian operations after a someone else to do it?, argues rumours. However, GUS has
longer holds either post). strategic review. analyst Richard Ratner at real momentum and existing
Apart from the stupidity of Meanwhile, speculation that Seymour Pierce. He believes management should
two people with a known a VC consortium might be the break-up value of the stock succeed in undertaking a full
friendship acting in this way, tempted to pay 11 compared is 1060p per share after placing demerger within the next two
the pair were daft enough to to the current 919p price has Burberrys 66% stake. years.
log it all nicely with e-mails and sent the stock soaring. If GUS is pretty fully valued THE WRITER HOLDS SHARES IN THIS
text messages. Management is expected to at 930p and there are plenty of COMPANY

20 Shares
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221204 p22-23 crossword 12/17/04 6:06 PM Page 22

CHRISTMAS CROSSWORD

Find the shares


Stock market closed? Never mind you can still
exercise your mind. Take a break from the festive
celebrations to have a go at our Christmas
Crossword and you may win one of these great
prizes presented by some of our favourite
companies!
Theres an extra twist to this years crossword: 14
of the answers also form the EPIC codes to UK-
listed companies. Solvers should list these codes
with the company names in the space below the
completed grid.
Answers also include two companies which should
be familiar to Shares readers.

Allied Domecq case of champagne


Cadbury Schweppes tin of Roses
chocolates
Carpetright rug worth 100
Dairy Crest selection of cheeses
Disperse Technologies Group cases of
Elizabeth French cosmetics
Post your entries to:
Christmas Crossword, Shares, MSM Findel - Sharp CD system
Magazines Ltd, Thames House, 18 Park Glenmorangie bottles of Glenmorangie
Street, London SE1 9ER, or fax to 0207
378 6605. and Ardbeg
Solutions must be received by 7 Home Entertainment portable DVD player
January. The winners will be drawn from Inter Link Foods William Lusty fruit cakes
the correct entries and announced in the JJB Sports British Lions replica shirt.
13 January issue of Shares.
A big thank you to all the companies that Majestic Wine six bottles of champagne
donated prizes! Merchant Retail fine fragrances selection
Peacocks Group 50 of vouchers

22 Shares
221204 p22-23 crossword 12/17/04 6:06 PM Page 23

CHRISTMAS CROSSWORD

Across 1 2 3 4 5 6 7 8 9 10
1 Ken's shop (8)
6 Astoundingly huge (10) 11 12
13 Relating to
ammonia (5) 13 14 15
14 Will keep you out of
heaven (6,3)
15 Diminutive of Marguerite
(5) 16 17 18
16 Taking the myth out (17)
18 What you will find
corn on (3)
19 Meat jelly (5) 19 20 21 22 23 24 25 26
21 Japanese dish (5)
23 ___-been is no longer
a hit (3)
25 For a cow, to 27 28 29 30
give birth (5)
27 Where end of
instrument string is
wound (6-3) 31 32 33 34 35 36
29 Mock (3)
30 Prints or re-counts (3-4) 37
31 What's left after loss
or decay (5) 38 39 40 41
32 Flying mammals (4)
33 Car's luggage
compartment (4)
35 Support for art work 42 43 44 45 46
in progress (5)
38 Restraints to control
horses (7)
39 Provide with 47 48 49 50 51 52 53
weapons (3)
40 Communal
settlements (9)
42 Keyboard wind 54 55 56
instrument (5)
43 Spiteful woman (3)
44 Oval ball game (5)
46 Deep spoon for liquid (5) 57 58
47 Urge on (3)
49 In a manner relating to
words or dictionaries (17) 20 Wainscoting (9)
54 _____ gang recruited 21 Drink in small quantities (3) COMPANY EPIC
forcibly (5) 22 Small distance (4)
55 Books left out of Bible (9) 24 Walk stiffly (5) 1.
56 Cambodian (5) 26 As big as the object 2.
57 Aerospace leader (3,7) represented (4-5)
58 Entrance, not the 28 Grasp the meaning (3) 3.
front nor back (4-4) 32 Computer language (5)
34 Gabriel ___ in Hardy
4.
Down novel (3) 5.
2 Hatred (5) 36 Place to store timber (6-4)
3 ___ Grande (3) 37 North African independent 6.
4 Form of wrestling developed in chieftain (4)
Russia (5) 38 Drinking bouts (5-3)
7.
5 Jumpy (7) 39 Thistle-like plant with edible 8.
6 Hindu religious instructor (5) flower-head (9)
7 Without injury (9) 41 Lad (3) 9.
8 Weariness or boredom (5) 45 Popular name for many
9 Shares Hispaniola (9,8) whales (7)
10.
10 Like Magyars, for example (5) 48 Diminutive of Margaret (5) 11.
11 Person in charge of a 50 Help to view bones (1-4)
marshalling yard (10) 51 Clothes (5) 12.
12 They're often found at 52 Hidden stock (5)
the last (8) 53 Neither here nor there (5)
13.
17 Investment using charts (9,8) 56 Young goat (3) 14.
22 December 2004 23
221204 p24 brok tip sector 12/17/04 7:21 PM Page 24

BROKERS TIPS
by: Jeremy Lacey

House builders

Firm economic foundations


F
undamentals still favour the house builders, says Arbuthnots The company indicates that liquidity in the second-hand market is
Stephen Rawlinson in a research report on the construction slowing, that chains are getting longer and that prices remain steady,
and building materials sector headed Greed and fear in says Rawlinson. Despite those factors the company has a higher level
spectacular collision. of sales than last year.
Rawlinson concludes: The arguments about the shortage of Further updates were due this week from Persimmon (PSN), which
dwellings in the UK, the impact of low interest rates and high Arbuthnot was expecting to be quite upbeat, and Wimpey (WMPY),
employment and the sluggish planning system are well rehearsed which it thought would probably be quite downbeat.
among most fund managers. We expect that there will be a soft landing Rawlinson adds: Some of the rhetoric directed towards the City at
in the UK housing market but the true picture will not show through present has more to do with the negotiations to finalise materials
until the spring of next year. contracts (price and size) for the forthcoming 12 months than other
With an election looming and interest rates on hold until then, we factors. So nothing new there then.
expect the housing market to be stable. The table shows how the brokers recommendations from
In that environment, share prices should perform well and with the last year have performed. If anything we are now more positive,
added spice of consolidation in the sector we will see positive moves Arbuthnot says.
from all stocks, especially a few of the smaller ones with good landbanks. A bull note it issued in mid-December highlighted the embedded
Rawlinsons comments came on Friday, the day following a hectic value of the companies landbanks and balance sheets that is the
Thursday on the stock market for house builders, with rises of up to 8% potential cash that could be released to shareholders.
in some shares. Berkeley took us literally and decided to release a large proportion of
The biggest shifts were among the larger more liquid stocks, it to shareholders through a mechanism that keeps the management
suggesting that there was some bear-closing as well as long funds incentivised, Arbuthnot comments, adding that management
getting on the bandwagon as soon as possible, says Rawlinson. Many motivation is the real blockage to this financial tactic.
of the smaller house builders hardly moved.
The madness of crowds can be a spectacular sight but in this case the
madness was justified. The bears are right to close because the house-
House builders performance
building stocks are not, in our view, about to collapse despite tougher
market conditions. The bulls are right to buy they may have paid a
December 2003 vs December 2004
15 DEC 03 17 DEC 04
little too much but on a one-year view there should be no COMPANY SHARE PRICE (P) % CHANGE RECOMMENDATION
recriminations. Barratt 493 608 23 Hold
Arbuthnot believes the bottom of the market for house builders Berkeley 831 765 (1265)* 52 Buy
Bovis 435 576 32 7Buy
shares has probably been passed now but adds that while we remain Crest 300 367 22 Buy
bulls of the sector the newsflow over the next few months will continue Persimmon 471 700 49 was Add, now Buy
Redrow 325 373 15 was Add, now Buy
to be mixed. Taylor Woodrow 250 268 7 Sell
The good news for investors is that this means there are likely to be Wilson Bowden 995 1160 17 was Add, now Buy
opportunities to pick up the better stocks. For instance, last weeks Wimpey 339 421 24 was Add, now Buy
*Adjusted for cash return to shareholder through redeemable share issue.
AGM update from McCarthy and Stone (MCTY). SOURCE: ARBUTHNOT

24 Shares
221204 p25 Brokers 12/17/04 7:22 PM Page 25

BROKERS TIPS

BUY
GKN COULD CLAIM RERATE
GKN (GKN) has many good points, including a strong
dividend, that are not reflected in the current share
price, says Williams de Bro: The focus has been on
rising steel prices and the
subsequent downgrades. Share price: 216p
While this is an important 12 mth hi/lo: 279.25p/202p
issue, the broker thinks Projected EPS: 20.34
medium-term recovery Projected PE: 10.6
prospects in product areas Projected yield: 5.5
such as powder Dividend cover: 1.9
metallurgy will lead to the Next news: finals 1 Mar
stock being rerated.

RALLY ON THE CARDS FOR


PREMIER
Shares in support services group Premier Farnell (PFL)
have fallen 27% this year and Deutsche thinks the stock
HORNBY STEAMS INTO CHINA is in a trough, pricing in the probability of recession.
A British model maker acquires an Italian rival with a Looking back, the broker has spotted that since 1986 the
Peruvian name and ships all its manufacturing to China. average rally in PFLs share price from one years low to
Theres global for you. Hornby (HRN) has now completed the following years high has been 93%. Given the
the 5.5 million Lima acquisition, acquiring current pessimism
its trademarks and things like moulds and Share price: 263p reflected in its valuation, Share price: 164p
tooling out of administration. Production 12 mth hi/lo: 284p/201.5p Deutsche thinks it is 12 mth hi/lo: 272.5p/162p
will go to Hornbys Chinese manufacturing Projected EPS: 13.91 highly likely expectations Projected EPS: 11.44
partners. Baird reckons the deal has long- Projected PE: 18.9 will improve at some point Projected PE: 14.3
term potential new geographical markets, Projected yield: 2.67 in 2005, triggering a major Projected yield: 5.51
including the US, and strong brands. Dividend cover: 1.9 rally in the stock, and Dividend cover: 1.1
Outperform. Next news: finals 3 June upgrades it from Hold to Next news: finals 17 Mar
Buy.

SELL
LOOKING OUT FOR BAD KARMA CASINO CAT AMONG BROKER PIGEONS
Not a Sell as such, but house broker Seymour Pierce* Labours U-turn on casinos last week has set the cat among most of the broker
has marked Private & Commercial Finance (PCF:AIM) pigeons. To take just one note from many, Arbuthnot sticks with its Sell view on
down from Outperform to Hold. The worry is Karma both Rank (RNK) and Stanley Leisure (SLY). The decision to continue to restrict
Cars, which started trading at the end of September existing casinos to ten machines represents a major betrayal for the industry
2004, says the broker. It is not performing in line with and furthermore looks anti-competitive in the extreme, it says. London Clubs
our expectations. Karma will add an additional (LCI) is best positioned, as if it were to win two licences the impact on earnings
470,000 to our forecast losses for the full-year to 31 would be meaningful, but it still ranks only a Hold. There is a growing risk that
December 2004. We suspect if trading does not pick up super-normal
in the first quarter of 2005, the project may well be profits available STANLEY LEISURE RANK
canned, resulting in an from the new Share price: 487p Share price: 303p
Share price: 82p
estimated 250,000 licences will be 12 mth hi/lo: 507.5p/375p 12 mth hi/lo: 339p/275.5p
12 mth hi/lo: 93.75p/72.5p
exceptional charge. So competed away Projected EPS: 26.27 Projected EPS: 20.22
Projected EPS:
bad karma? We will be through an Projected PE: 18.5 Projected PE: 15
Projected PE:
looking for a clean exit aggressive auction Projected yield: 2.15 Projected yield: 4.81
Projected yield:
from Karma if it process, says Dividend cover: 2.1 Dividend cover: 1.4
Dividend cover:
continues to Arbuthnots Alan Next news: interims 21 Jan Next news: finals 23 Mar
Next news: finals 15 Mar
disappoint. Millar.
SHARES NORMALLY AVOIDS COVERING HOUSE BROKER RECOMMENDATIONS IN THIS SECTION. WHERE THE VIEW IS THAT OF THE HOUSE BROKER, THIS IS MARKED WITH AN ASTERISK.

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


Ottakars (OKR) has been oversold, says Baird following Meeting Keir (KIE) management confirms Bridgewells view that
improved book market figures. Outperform. the builder is a unique company successfully combining cash-
Miner Antofagasta (ANTO) could pay 4% tax under a new regime generative construction and property arms with housebuilding.
likely to be proposed by the Chilean government, reports Numis. ABN Amro suggests a pause for breath on Smith & Nephew
More than 80% of BT (BT.) customers surveyed by Deutsche (SN.). A strong Q4 is in the price and dollar weakness is a short-
say they have no plans to change telecoms provider in 2005. term threat.

log on to for our daily news updates 22 December 2004 25


221204 p26 Brokers tables 12/20/04 10:21 AM Page 26

BROKERS TIPS

LATEST UPGRADES & DOWNGRADES


Share EPIC Broker Date Recommendation Price (p) at Target price (p) Analyst Accuracy
New Previous recommendation New Previous rating
- Aggregate Industries AGG ABN Amro 16.12.04 Add Buy 100 110 Christopher Grant
- Aggregate Industries AGG Morgan Stanley 16.12.04 Equal weight Overweight 99.5 101 104 John Messenger nc
+ Allied Domecq ALLD Exane BNP Paribas 15.12.04 Hold Sell 505 Steven Bowen
- ARM ARM UBS 16.12.04 Neutral 2 Buy 2 107.5 128 122 Jonathan Dutton
- Britannic BRT Williams de Bro 15.12.04 Sell Hold 450 380 Youssef Ziai
+ Cadbury Schewppes CBRY Numis 16.12.04 Hold Reduce 465 465 419 Andrew Saunders nc
- Cairn Energy CNE Williams de Bro 17.12.04 Sell Hold 1100 Richard Griffith
- First Choice Holidays FCD Oriel 15.12.04 Hold Buy 151 Mark Brumby
- Hotgroup HOT Numis 17.12.04 Add Buy 16 19 30 Paul Jones ih
- iSoft IOT UBS 15.12.04 Reduce 2 Buy 2 322 320 540 Peter Whiting
+ John David Group JD. Numis 16.12.04 Add Hold 196 220 270 Iain Mc Donald ih
+ John Menzies MNZS Altium 15.12.04 Buy Add 492 Andrew Nussey
- Kidde KID Arbuthnot 16.12.04 Hold Buy 166 Michael Blogg
- Kingfisher KGF Numis 15.12.04 Hold Add 293 295 315 Iain Mc Donald nc
- Kleeneze KLZ Seymour Pierce 15.12.04 Hold Buy 128.5 Rhys Williams
- London Clubs Intl LCI Bridgewell 17.12.04 Neutral Overweight 104.5
- London Clubs Intl LCI Williams de Bro 17.12.04 Hold Buy 104.5 Nigel Parson
+ Lonmin LMI Numis 17.12.04 Hold Reduce 897 870 John Meyer nc
- LSE LSE WestLB 15.12.04 Sell Underperform 546 Johannes Thormann
- Next NXT Bridgewell* 17.12.04 Neutral Core holding 1645
+ Premier Farnell PFL Deutsche 15.12.04 Buy Hold 171 204 234 Matthew Smith
- Private & Commercial PCF Daniel Stewart 17.12.04 Hold Buy 34 James Hollins nc
- Private & Commercial PCF Sermour Pierce* 16.12.04 Hold Outperform 34.5 John Beddoe ih
- Rank RNK Bridgewell 17.12.04 Core holding Overweight 262
- Regent Inns REG Arbuthnot 16.12.04 Hold Buy 69.5 Alan Millar ih
- Smith & Nephew SN. ABN Amro 15.12.04 Add Buy 553 610 Ed Ridley-Day
- Stanley Leisure SLY Panmure Gordon 15.12.04 Hold Buy 472 Douglas Jack
- Trafficmaster TFC Bridgewell 17.12.04 Neutral Overweight 58.5 Carl Franklin ih
+ Urbium URM Panmure Gordon 15.12.04 Buy Hold 590 Douglas Jack
BASED ON ACCURACY RATINGS BY STARMINE: TOP 10% OF ANALYSTS RECEIVE 5-STAR RATING, NEXT 22.5% 4-STAR, 35% 3-STAR, 22.5% 2-STAR AND 10% 1-STAR.
IH=INSUFFICIENT HISTORY FOR RATING; NC=NOT COVERED.

MOVING TARGETS recommendation remains same but target price is changed


Share EPIC Broker Date Recommendation Price Target price (p) Change
(p) at %
rec New Old

Antofagasta ANTO Numis 15.12.04 Buy 1088 1233 1332 -7.4


Antofagasta ANTO UBS 17.12.04 Neutral 2 1054 1050 1020 2.9
AWG AWG JP Morgan 13.12.04 Overweight 822 880 750 17.3
Britannic BRT Numis 15.12.04 Reduce 410 380 375 1.3
British Vita BVIT CSFB 17.12.04 Neutral 286 240 250 -4.0
BT Group BT. Deutsche 15.12.04 Buy 204.5 215 211 1.9
Cadbury Schweppes CBRY Barclays 16.12.04 Outperform 466.5 510 464 10.0
Consolidated Minerals CNM Numis* 16.12.04 Buy 94.5 114 104 9.6
Cookson CKSN CSFB 16.12.04 Neutral 34.5 40 48 -16.7
Hanson HNS Goldman Sachs 16.12.04 In line 414.5 435 447 -2.7
Johnston Press JPR Numis 15.12.04 Buy 519 619 607 2.0
Kelda KEL JP Morgan 13.12.04 Underweight 581 575 515 11.7
Pennon PNN JP Morgan 13.12.04 Neutral 956 1000 850 17.6
Rank RNK Deutsche 17.12.04 Buy 296.5 360 330 9.1
Ryanair RYA UBS 17.12.04 Neutral 2 * 5.43 5.50 4.80 14.6
Severn Trent SVT JP Morgan 13.12.04 Overweight 958 990 930 6.5
Tesco TSCO DKW 16.12.04 Add 311.5 320 310 3.2
Travis Perkins TPK CSFB 17.12.04 Neutral 1722 1700 1500 13.3
Travis Perkins TPK Morgan Stanley 17.12.04 Overweight 1740 1939 1670 16.1
United Utilities UU. JP Morgan 13.12.04 Underweight 615 550 615 -10.6
Virgin Mobile VMOB Cheuvreux 15.12.04 Outperfform 218 240 220 9.1
Whitehead Mann WHT Numis 16.12.04 Sell 153 116 140 -17.1
Wilmington WIL Numis 15.12.04 Add 147 167 160 4.4
Wilson Bowden WLB CSFB 16.12.04 Neutral 1063 1040 1160 - 10.3
Wood Group WG. Morgan Stanley 17.12.04 Equal weight 139.5 135 147 -8.2
Yell Group YELL CSFB 17.12.04 Neutral 433.5 440 380 15.8
Vodafone VOD UBS 15.12.04 Buy 1 140 170 160 6.3

COMPILED BY SHARES FROM VARIOUS SOURCES


*=HOUSE BROKER

26 Shares
SHARES_221204_p27_GNI 12/17/04 5:01 PM Page 3
221204 p28 ss comment 12/20/04 9:07 AM Page 28

edited by: Simon Keane

Ofex lives in hope


that institutions
will think small
COMMENT

I
t has been an eventful year for small
company investors not least the
changes at AIM and Ofex. While one
has grown stronger the other has weakened;
AIM got its 1,000th member this month but
Ofex lost 24 companies in the first half.
edited by: Simon Keane Always the poorer cousin, Ofex almost
became destitute after announcing it was
running out of money in September. But despite being dogged by poor development for the private investor. The market makers squealed. But
liquidity it reckons that market makers (introduced last summer) are they have to face up to the changing times.
going to make a positive difference. While market markers still have a role on AIM, going straight to the
Ofex needs institutional investors that vital oil between the cogs of order book through SETS is the best option for those investing in the
any exchange. However, Small Shares is doubtful market markers on most liquid small stocks. Also this year details emerged of plans to
Ofex are going to produce a magic cure. create a premier league of 50 to 100 of the most liquid stocks in AIM
Meanwhile news arrived that bosses at the London Stock Exchange (see opposite).
(LSE) could inject more liquidity into AIM. One of the big developments These are part of plans with index compiler FTSE for a new range of
at the LSE baring news that Deutche Borse is knocking at its door once indices. This is all about improving liquidity by getting more
more involved AIM. institutions on board. If, as London Stock Exchange bosses claim, the
In November, it published plans to extend the SETS system into the institutions are waiting in the wings with AIM-based tracker funds, it
junior market. Likely to improve liquidity, this would be a good can only be a good thing.

iTrain applies the brakes with profit warning

S
oftware firm iTrain (IRN:AIM) has issued a severe profits loss of 50,000 to 70,000 is expected due to the delay in the start of
warning after revealing orders from at least three separate another project supplying tutorials for generic software packages such
customers have failed to come in on time. They were expected as Microsoft Word.
before year-end on 31 December. This was expected to bring in the first orders in December but these
iTrain, which develops computer-based tutorials on using programs are now unlikely to start until January.
including Microsoft Word, had been forecast to make a pre-tax profit of iTrain made a pre-tax profit of 16,360 last year after moving out of a
600,000 this year it has now been slashed to 100,000. loss of 318,863 in 2002 with turnover rising just 2% from 856,381 to
The firm has promised that the orders will come in the first half of 878,583. At 8.25p, iTrain is currently trading near its year low of 7.88p.
next year. Executive chairman Derek Moore says: We are confident that Shares says: Small software companies are vulnerable as
iTrain will maintain its top and bottom line growth in 2005. it only takes one customer delaying a big order to hit
Delays in orders relating to five or six projects will account for a revenues. With the shortfall involving at least three
250,000 loss of sales. This was for computer tutorials designed customers, it begs the question why iTrain was not more
specifically for tailor-made software used by large companies. A further conservative in its estimates. Tread carefully.

28 Shares
221204 p29-30 ss news 12/20/04 9:11 AM Page 29

SMALL SHARES

Imprint searches and selects ECHM


by: Simon Keane

I
mprint Search and Selection (IMP:AIM) expects to make a Meanwhile, house broker Altium has been more conservative,
second acquisition next year after revealing its first purchase raising its forecast to 3.2 million.
this month. Both firms have put up earnings per share (EPS). Bairds Ian Jermin
Imprint is to buy peer ECHM for up to 14 million and chief says: This is a business moving in the right direction at some speed.
executive officer Brian Hamill believes a similar-sized purchase in While Imprint and ECHM are both involved in recruiting for finance
the second half of 2005 is likely. He says: The market for recruitment roles Imprint recruits at the board level, where individuals earn
firms is currently soft and you can buy private companies at between 70,000 to 130,000. ECHM will typically place employees on
significant discounts. salaries of between 25,000 and 70,000.
The purchase is the first since the company joined AIM in 2001 and is Hamill says he can save on back office costs by joining the two firms
set to be partly funded by a placing of 7 million shares at 140p raising and can expand ECHMs business by cross-selling into Imprints
9.15 million after expenses. customers. At the end of this year the company will have 250 staff and
Hamill predicts the company will generate enough cash to avoid Hamill wants this to rise to 450 by the end of 2005. Imprint will make an
coming back to the market for future purchases under 15 million. initial 6 million payment for ECHM with up to a further 8 million in
Combining ECHM with the existing business could push up pre- performance-related payments.
profits more than 50%. Analysts at Baird have increased next years Shares says: This deal will make a massive difference
profit forecast before tax by 55% to next years bottom line with lots of potential for cross
from 2.2 million to 3.4 million. selling.
Bizspace announces
28m acquisitions
by: Simon Keane
Bizspace (BIZ:AIM), which AIM to introduce Premier League
rents premises to small by: Simon Keane
businesses, has announced a
28.05 million acquisition of 22 An AIM Premier League of the down in stone. All main index compiler FTSE and
properties in the North East of most liquid stocks on the index market companies, in last week AIM head Martin
England. could form part of a new set of accordance with Financial Graham revealed the plans are
The deal, to be paid for with AIM indices now confirmed for Services Authority (FSA) rules, almost ready to go. FTSE,
a combination of cash and debt, the first half of next year. need to have a free float of 25%. which currently runs a FTSE
will make little difference to the The moves come on the back An AIM All-Share index of AIM index, provides detailed
company this year but will add of targets to attract more between 600 and 700 of the information on a variety
to earnings next predicts house institutions to invest in the most liquid stocks has also of sectors making up the
broker Teather & Greenwood. AIM market and are expected been proposed. FTSE 350.
Analyst Stephen Thomas has to increase liquidity in AIM The plans are designed to Sectors such as media &
raised his projection for 2006 companies. attract more institutional entertainment have their own
prospective pre-tax profit from The plans could include an investment, which is key to index allowing investors to
3.03 million to 3.2 million. AIM premier league of 50 to 100 liquidity. The London Stock compare how their stock is
Thomas has put up his stocks, which would have a Exchange (LSE) says some performing versus a peer. This
estimate for 2006 prospective minimum free-float serious institutions have information is regularly
earnings per share (EPS) from requirement. The proportion of already shown an interest in updated. The FTSE 100 index is
2.63p to 2.81p. shares held outside the control creating tracker-based funds refreshed every fifteen seconds
The stock rose 1.25p on the of the firms directors their based on new indices. while others are updated on a
day to close at 44.25p. friends and family would be set AIM has been working with daily basis.

22 December 2004 29
221204 p29-30 ss news 12/20/04 9:11 AM Page 30

SMALL SHARES
edited by: Simon Keane

Napier Brown serves up sweet results


by: John Marshall

N
apier Brown Foods (NBF:AIM) was sugar market and Napier Brown has marzipan for its cakes. It has also bought
floated on AIM last December at succeeded in winning a substantial share of James Budgett Sugars from its co-owners,
110p and over the past 12 months the industrial market. Greencore and Ed&F Man.
the shares have appreciated by 41.2% to 156p. The EU sugar regime has been bitterly However, this deal has perhaps
Its first set of results since listing earlier attacked by consumer groups and aid surprisingly been referred to the
this month were good and trading as organisations. The EU sugar price is Competition Commission (CC). With the
planned and to budget. well above the world price, which market dominated by British Sugar and
Napier Brown is the largest independent disadvantages consumers. Tates, it is difficult to envisage this merger
sugar merchant in the UK and supplies the At the same time, surplus EU sugar is being vetoed.
food processing industry with a number of dumped on the world market forcing world What the reference did do was to delay
ingredients such as industrial marzipan, prices down and disadvantaging Third synergy benefits as Budgett has currently to
value-added sugars and dairy powders. World producers. be managed separately.
The company was born of sugar shortages Following the expansion of the EU the Despite this delay outside commentators
in the mid-70s. Entry into the EEC altered the regime is due to be reformed and Napier are optimistic with EPS of 20p this year
structure of the industry and there were Brown hopes that this will provide it with rising to 25.6p next year. This rating is clearly
transitional shortages. growth opportunities. undemanding and the shares should enjoy
Napier Brown took advantage of these Following the float the group acquired further relative strength.
problems by importing sugar and supplying Renshaw Scott, a supplier of marzipan to Shares says: Once the CC has
food manufacturers. Imports have food manufacturers. Its quality is such that spoken these shares should motor
continued to provide a third force in the UK at least one major retailer specifies Renshaw ahead.

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

As this is the last column for this year, it has also broken previous high at 160p. and last week saw new highs hit
2004, it seems appropriate to look through previous years highs to Although the price may be a once again. Assuming the trend
at those small cap companies put it at levels not seen since late little over-extended in the short is going to continue, 700p-plus
that are ending the year on a high 2000. term, any pullback should prove to looks achievable.
in more ways than one. Any short-term weakness be short-lived. There are various
All four companies below last would be viewed as a buying levels of support running from Leisure group Jennings
week hit fresh 52-week highs, opportunity, with the 300p/350p 150p to 180p and strength ahead Brothers (JBC) is another steady
demonstrating their trends have area expected to act as good of any of these areas should result riser that has surged recently.
real strength behind them and the support. Longer term, a move to in a bounce to higher highs with Last weeks move puts it above
momentum to carry them higher the 500p mark does not look 250p the next target. the 2000 high of 275p and hints
into the New Year and beyond. over-optimistic. there should be more in this
INTER LINK FOODS recovery left to come.
It has not been a dull year for share price
650 There has been an almost text
ICM COMPUTER
share price oil and gas companies and 600 -book uptrend in place since
400
Edinburgh Oil & Gas (EDG) 550 June last year and any weakness
350 500
continues to be one of the steady back to the 260p/275p area
450
300
movers. The rally that started in 400
should be treated as a buying
250 October 2002 continued this 350 opportunity.
200 year, with the share price 300

150 managing to break through its 250


2002 2003 2004 JENNINGS BROTHERS
Source: Thomson Financial/Datastream share price
300
100
2001 2002 2003 2004
Source: Thomson Financial/Datastream
EDINBURGH OIL &.GAS
share price For a lot of its stock market 280
220 260
history Inter Link Foods (ITF) has 240
200
The share price of ICM 180 been a steady riser, and the past 220
Computer Group (ICM) has 160 21 months have been no different. 200
180
been moving higher for the past 140 September saw signs of
120 160
18 months and the last few weeks 100
further strength as it surged 140
have seen some key chart levels 80 higher and took out the 2002 high 120
2000 2001 2002 2003 2004
broken. Not only has the share 60
2002 2003 2004 of around 470p. Progress since Source: Thomson Financial/Datastream

Source: Thomson Financial/Datastream


price pushed out to new highs for then has continued to be vertical

30 Shares
221204 p31 SS profile 12/17/04 4:44 PM Page 31

SMALL SHARES
edited by: Simon Keane

Ringing up
the changes
When you buy a drink youre
not just lining the pockets of
the bar owner, but also the
company that supplies the
till technology. Simon Keane
spoke with Ed Dayan, CEO
of just such an enterprise

W
hen Ed Dayan took a step back from
the company he founded two decades
earlier he thought it would tick over We have the technology: A student union bar using an
nicely without him. But after only a couple of XN Checkout till and Ed Dayan, XN Checkout CEO
years the 52-year-old was forced to take up the
reigns at XN Checkout (XNC:AIM) once more, broker Daniel Stewart this year, about 14 pilot carried out with Punch Taverns for XNs
following a ill-fated overseas expansion. million will be from hospitality. This includes new web-based till. With more than 8,000 pubs
Now XN Checkout, which designs the flat- 7.5 million from new sales mostly till run by Punch, each pub could pay around 27 a
screen tills found in thousands of pubs, has systems instead of computer services and week to use the tills based on the assumption
returned to its roots. 6.5 million from ongoing services. that a typical pub has two-and-a-half tills
Chief executive Dayan is more of a hands- costing 11 a week. This
on man than his pin-striped appearance In with the new Fact file: equates to potential revenues
suggests. The electronics graduate designed New sales have more than XN Checkout of more than 11 million a year.
his companys first till, and today is getting doubled compared with last Predictions for the new web-
excited about another piece of technology. year and earlier this month XN Market value: 33.67m based tills contribution are
This new gadget lets players use touch- announced that profits will be Projected PE: 18.84 initially conservative; sales to
sensitive computer screens to join a roulette ahead of expectations. This Projected EPS: 7.51 Punch only contribute
game without physically being at the table. was thanks to more computer Projected yield: n/a 500,000 to next years forecast
You can have hundreds of people playing system sales including Tragus, NMS: 2,000 of 23.6 million. Once again
one roulette table, he says. Hotels guests can owner of Cafe Rouge. Daniel Spread: 4.83% hospitality, at about 15.4
be playing in their slippers from the bedroom. Stewart has since upgraded Next results: 31 December million, will make the biggest
More of this later the gaming side of XN this years profits by 21% to 1.7 contribution, with on-going
Checkout is just a small part of the business. million from 1.4 million. Next services expected to chip in
The pub business, or hospitality, is by far the years profit forecasts are also up, from 2.9 around 6.5 million and new sales 8.9 million.
biggest division. million to 3.1 million, giving a prospective
earnings per share (EPS) of 13p a growth rate Game on
Packages for profit of about 57% on this The gaming side of the business is still very
Floated in June, XN Checkout XN CHECKOUT years EPS of 8.3p. much in its infancy and offers most potential
share price
has three offerings. It sells 145 If the company proves for growth. Dayan is confident his virtual
packages the software 140 itself it should move to roulette screens will start making an impact
135
needed to run tills together 130 be on a closer rating to next year. The firm installed the first set of
with the tills themselves or 125 its peers, such as roulette screens at a Gala casino in Birmingham
LOW 104.50 23/9/04
just the hardware. The 120 LAST 141.50 Alphameric (ALP). At earlier this year, which has been followed up by
115
packages are more lucrative, 110 77.5p and a consensus orders for another four Gala sites. Stanley
since they include an element 105 EPS of 5.21p for next Leisure (SLY) is set to pilot the system.
of ongoing service. 100
JUL AUG SEP OCT NOV DEC year, Alphameric is on a While XN Checkout has risen sharply
Source: Thomson Financial/Datastream
The third strand of business PE of 15. already this year from the float price of 98p,
is software development. This service can be At the current share price of 141.5p, XN is on there is scope for further upside thanks to
used by a pub company wishing to analyse a prospective PE of 10.9 for 2005 a Software & the strong new sales growth and a
spending patterns perhaps a happy hour Programming sector par of 13.6 would see the potentially lucrative new revenue stream
promotion, for example. XNs engineers can share price breach 175p. Lots more room for from gaming. The initial illiquidity appears
tweak the tills. growth then. to be breaking out, but be aware of this
Of the 19 million sales forecast by house Part of this could be fuelled by a successful potential problem.

22 December 2004 31
221204 p32 floats 12/17/04 6:56 PM Page 32

FLOATS
by: Emily Parkinson

Mining AIM Shares rating:


Uruguay Mineral Ex.
Shares rating:
Cluff Gold
to strike gold management:
market:
1 (low)-5 (high)
3
4
management:
market:
1 (low)-5 (high)
4
4
product: 3 product: 3

T
wo new explorers made their debut on financial strength: 3 financial strength: 3 (CLF:AIM). While it doesnt have
the Alternative Investment Market TOTAL SCORE 13/20 TOTAL SCORE 14/20
the luxury of near-term
last week to a fairly lukewarm cashflow it comes to market
reception. The first, Uruguay Mineral Exploration (UGY: with a long list of exploration projects in West Africa, three of which it
AIM), comes to market from its home listing in Toronto with advanced- aims to have in production within three years.
stage projects in four major commodity groups. As the name suggests, For now, though, it is ploughing the cash from its recent 6.5 million
the company is focused primarily on Uruguay, where it controls 500,000 raising into funding further exploration at its Kalsaka project, the most
hectares of ground in what is seen as a relatively stable place to park a advanced of its seven projects.
mine. Surveys of the deposit by consultants SRK estimate a deposit of some
Within its licence, the company has singled-out nickel, diamonds and 600,000 ounces of gold, 290,000 of which are proven. It is hoped that
a combined iron/copper and gold system but its gold deposit at Arenal, further drilling at contiguous permits may see the resource size doubled
with its thick, continuous grades, offers the best near-term prospect of to 1.2 million ounces but the results will not be known until a feasibility
cashflow. study is released mid-summer next year.
Capitalised at 93 million, the company is promising cashflow of The Kalsaka project alone carries a net present value of $9.3 million,
around $25 million a year, based on annual production of 100,000 ounces based on a conservative $400 an ounce gold price. Consider that against
from its Arenal deposit, priced conservatively at $200 an ounce. The first the companys current capitalisation at 12.4 million and the hectares of
ounces will be processed in the first quarter of next year. unexplored strike zone at prospective deposits like Baomahun in Sierra
This is more that can be said for another AIM-entrant, Cluff Gold Leone and Cluff looks interesting even as a wild card.

Anker moves to AIM Shares rating:

The last AIM float of the year comes with the debut of Anker on contract is usually worth 4-5 million,
Anker
Thursday (23 December). The listing was prompted by the 90% of which is for the hardware itself
1 (low)-5 (high)
management: 3
companys venture capital owners, American-based Gores and the remainder for software and market: 3
Technology Group, which wants to realise their two-year old maintenance. product: 3
investment. From Ankers point of view the move to AIM offers a Our OSCAR product is terrific and financial strength: 3
handy recourse to cash at a time when the company is considering weve invested a lot in software TOTAL SCORE 12/20
becoming a consolidator in the electronic payments market. development and we now have a
European-based Anker provides electronic payment systems, or highly market-ready product so we expect the market to react
EPOS, to Western European retailers such as Harrods, Dutch-based accordingly, says John Foulkes, chief executive.
Servex and the drug chain Schlecker. The group had profit of 13.6 The company is optimistic about future sales, particularly given
million on revenue of 170.9 million in the 2003 financial year. next year marks the beginning of another software replacement
Most turnover is in sales of its EPOS terminals but some 40% is cycle in which retailers will replace outdated pre-Y2K software
from its supplementary software, known as OSCAR. A typical nearing the end of its seven-year life cycle.

Forthcoming floats This new issues information has been provided


together with shares research site Digital Look.
To find out more visit www.DigitalLook.com
Company Main activity Market Float date Method Valuation (m) Broker Contact
Trading New Homes Property investment AIM 29 Dec Placing 11 Durlacher 020 7459 3600
Interbulk Investments Engineering investments AIM 30 Dec Placing 1.8 Seymour Pierce Ellis 01293 517744
Rheochem Oil and gas services AIM December Placing 13.65 Williams de Broe 020 7588 7511
Town and City Holdings Real estate Ofex December Introduction TBA Moore and Smalley 01772 821 021
Absolute Capital Management Hedge fund AIM December Placing TBA TBA TBA
Vividas Video technology AIM TBA Placing TBA Teather & Greenwood 020 7426 9000
Maghreb Minerals Minerals exploration AIM TBA Placing TBA Westhouse Securities 020 7601 6100
121Media Online marketing services AIM TBA Placing TBA John East 020 7628 2200
Westech Holdings (currently Grand Banner) Holding company AIM TBA Placing 13.3 Westhouse 020 7601 6100
Mincorp Mining investments AIM TBA Placing TBA Keith, Bayley, Rogers 020 7871 2232
TNX Television Holdings Commuter train television AIM TBA Placing 40m - 50 TBA TBA
ATI Oil Oil and gas exploration Ofex TBA Introduction TBA St. Helen's Capital 020 7628 5582
Belmore Resources Irish mining company Ofex TBA Public offer 1.5 VSA Resources 020 7628 3989
Planet Conservatories Bespoke conservatories AIM TBA Placing 70 TBA TBA
Immunodiagnostic Systems Healthcare AIM TBA Placing TBA Teather & Greenwood 020 7426 9000
Amtico Floor tiles specialist TBA TBA TBA 120m-150 TBA TBA
Carlton Clubs Bingo club owner AIM TBA Placing 40 KBC Peel Hunt 020 7418 8900
Mango DSP Israeli technology firm AIM TBA Placing 16.4 TBA TBA
QinetiQ Defence research Main TBA TBA 1000 Morgan Stanley 020 7425 8000
SSA Global Business software AIM TBA Placing 1650 TBA TBA

32 Shares
221204 p33 special sits 12/17/04 4:45 PM Page 33

SPECIAL SITUATIONS
by: Polly Fergusson

Problems mount at Whitehead Mann This should have come as little surprise given that any potential
buyer would of course be buying people and we were unsure how the
people would be reacting to the problems the company has had in the

W
hitehead Mann (WHT) has dropped out of takeover talks last few months, says analyst Paul Jones at Numis.
with US rivals and could be facing an MBO, as its quoted The shares have fallen from highs of 150p in early November to
future continues to look uncertain. The troubled 102.5p but should rise slightly given the ongoing takeover speculation
recruitment company has moved into a loss, issued a surrounding the stock. Any takeover offer should come at a premium
profits warning, and lost its founder and a chief executive over the past to the 102.5p share price, given its steady fall since early 2004.
year. Whitehead Mann shouldnt really be publicly quoted. It is a difficult
Management has so far failed to comment on any takeover efforts on business to value as its assets are its people. You are buying goodwill,
its part and another suitor is not widely expected due to ongoing says Ian Jermin at Baird, who has only a Neutral rating on the stock and
problems within the business. has downgraded his pre-tax profit forecasts to just 5 million.
Trading has not improved since the interim results in November, Shares says: Whitehead Mann is not likely to stay private
according to house broker Baird, with weak performances in the for long and any offer would come above the current 102.5p
general industrial sectors and problems retaining key staff and clients. price, which represents a PE of just 7. Buy up to 120p.

Takeover bids Compiled by Digital Look


All information correct at
time of going to press
Target Current Bidder Current Timing Nature Terms
Company share company share of deal
price (p) price
Airbath 1.5p n/a n/a n/a Possible offer n/a
Bank Restaurant Group 1.88p n/a n/a n/a Considering merger and/or raising funds n/a
Berkeley Morgan Group 104.5p Personal Group Holdings 211.5p Recommended cash offer 105p cash per share
Bertam Holdings 270p Rowe Evans Investments 162.5p Early stage discussions re amalgamation of 3 cos n/a
Lendu Holdings 62.5p see above n/a
Big Food Group 92.5p Baugur Group and partners n/a n/a Revised possible offer 95p cash per share
Burtonwood 569.5p Wolverhampton & Dudley 1050p Acceptance forms Recommended cash offers 550p cash per ordi (plus 3.45p
in by 5 Jan 05 interim div) and 130p cash for 1
preference share
Countryside Properties 287.5p Copthorn Limited n/a Offer extended until 22 Dec Recommended cash offer 275p cash per share
Countryside Properties 287.5p Rock Pacific Limited n/a Possible offer At least 280p per share
Cox Insurance Holdings 89p n/a n/a n/a Possible offer n/a
ebookers 314.75p Cendant Bidco n/a Closing early Jan 05 Recommended cash acquisition 320p cash per share
Eidos 75p n/a n/a n/a In discussions with parties re possible sale n/a
Geest 626.5p Bakkavor Group hf n/a n/a Possible offer n/a
GeneMedix 11.25p n/a n/a n/a Talks re possible merger n/a
Harrier Group 18p Matrix Communications Group 165.5p n/a Possible offer n/a
Heart Of Midlothian 35p Vladimir Romanov n/a n/a Possible offer n/a
Honeygrove Group 6.75p Oakdene Homes 81.5p Closing date 23 Dec Recommended share offer 1 Oakdene share for every 12
Honeygrove shares
ITNET 324.5p Serco 227.75p Late Jan 05 Recommended offer 320p cash offer with partial share
alternative
Kidde 154.75p United Technologies Corp n/a n/a Revised proposal 165p cash per share (no price has
been agreed)
LA Fitness 246p n/a n/a n/a Received a number of approaches n/a
London Stock Exchange 544p Deutsche Borse AG n/a n/a Rejected proposed cash offer 530p cash per share
Malcolm Group 97.5p MBO n/a n/a Possible offer n/a
Marlborough Stirling 30.75p n/a n/a n/a Seeking possible joint venture or sale of co n/a
Merrydown 128p n/a n/a n/a Possible offer n/a
Mersey Docks & Harbour Company 930p Private equity house n/a n/a Possible offer n/a
Minerva 280.5p n/a n/a Reviewing proposals Approaches received n/a
Moneybox 37p n/a n/a n/a Talks ended n/a
NHP 257.25p TBG Careco Limited n/a Acceptance forms in by 29 Dec Recommended cash offer 260p cash per share
Novar 188.5p Melrose 111.5p n/a Possible offer rejected 45p cash, together with one new
Melrose share of 100p per share
Novar 188.5p Honeywell Internatonal n/a Recommended all-cash offers 185p cash per ordinary share + 2nd
interim 6.6p divi in lieu of final 2004 divi.
Paramount 34p Craftbutton Ltd n/a n/a Possible offer Expected 35p cash offer
Park Group 31p n/a n/a n/a Chairman Peter Johnson could sell 74% stake n/a
Poole Investments (formerly Pilkington's Tiles Group) 4p n/a n/a Reviewing proposals Seeking an offer for the company n/a
Prestbury Holdings 33p n/a n/a n/a In discussions with a further number of parties n/a
QXL Ricardo 777.5p Tiger Acquisition Corporation Limited n/a Late Dec Recommended cash offer
of 700p cash per share
QXL Ricardo Kenn Robson and Andrin Bachmann n/a n/a Possible cash offer n/a
Royal Doulton 10.12p Waterford Wedgewood 5.75p Recommended cash offer 12p cash per share
Shell Transport and Trading Company 435p Royal Dutch Shell n/a AGMs of RD and ST&T in Jun 05 Company to merge Dutch and UK arms
TBI 92p Airport Concessions and Development Limited n/a Forms of Acceptance in by 18 Dec Recommended cash offer
92.5p cash per share
UA Group 1435p Elphinstone Land Limited n/a Closing date late Dec Recommended cash offers 14.70 cash per ord share & 1.00
cash for each UA Pref share
Uniq 212p Duke Street Capital n/a n/a Revised approach in respect of a potential offer n/a
Warner Chilcott 856p Waren Acquisitions Limited n/a Effective date 5 Jan 05 Recommended acquisition 862p cash per share (includes
3p final divi)
Your Space 2.12p n/a n/a n/a Possible offer n/a

Open offers
Company Main activity Announced Last payment First dealings expected Amount raised m Terms Issue price (p) Current Offer
price (p) status
Secure Trust Banking and financial services 15 Dec 20 Jan 21 Jan 4.0 tbc 310 304.5p Open

22 December 2004 33
221204 p34 DDs table and news 12/20/04 10:06 AM Page 34

DIRECTORS DEALINGS

Buys
Indigo trio show the Company Director Position Date Price
()
Amount Value
()
Holding
%

colour of their money United Utilities


Indigo Vision
Indigo Vision
AI Claims Solutions
Latham (James)
Simon Batey
Oliver Vellacott
Hamish M Grossart ned
Charles Good
Roger Latham
fd
ce

ch
ch
17/12/04
16/12/04
16/12/04
17/12/04
16/12/04
6.28
0.74
0.74
0.26
5.95
79,600
90,000
90,000
250,000
10,000
499,490
66,150
66,150
65,000
59,500
n/a
n/a
n/a
14.49
2.40
by: John Marshall Baronsmead Vct Godfrey F Jillings d 15/12/04 1.00 51,500 51,500 n/a
Aberfth.Smll.Co M Chiappelli ned 16/12/04 5.07 10,000 50,725 0.02

I
Latham (James) Peter Latham d 16/12/04 5.95 8,000 47,600 7.00
nvestors in Indigo- indicated that turnover in the Centrica Roger Carr ch 17/12/04 2.28 15,000 34,125 0.00
vision (IND:AIM) will first quarter, to 31 October, BG Group William M Friedrich dce 14/12/04 3.52 8,750 30,787 0.01
Secure Trust John Reed ned 17/12/04 3.06 10,000 30,550 0.08
be hoping chairman would be at least a third higher Elec. & Gen. IT Gerald Aherne d 14/12/04 2.89 10,000 28,850 0.02
Hamish Grossart is equally than in the corresponding Legal & General David A Walker ned 15/12/04 1.11 25,000 27,688 n/a
successful buying shares in the period of last year. Morse Holdings Walter William Passmore d 13/12/04 0.97 25,000 24,250 n/a
Phoenix IT Group John Sussens d 13/12/04 2.80 8,500 23,800 0.02
company as he was with Royal The companys technology is
Doulton (RDN). designed to benefit from the Options exercised
Well-respected City grandee shift from analogue to IP Video Company Director Position Date Price Amount Value Holding
Grossart is one of three directors products. () () %
of Indigovision who have The value of the technology
Vodafone Arun Sarin ce 15/12/04 0.84 2,890,000 2,423,236 n/a
demonstrated their faith in the has been underwritten by a
BAT Antonio M Castro de coo 14/12/04 4.34 102,155 443,557 n/a
company by buying shares. licensing deal with a Taiwan Land Securities Ian Ellis d 13/12/04 8.69 20,000 173,800 n/a
He bought 90,000 at 73.5p, as firm, which will pay the group BPP Holdings L Chandler d 13/12/04 2.84 40,000 113,500 n/a
John Menzies Iain Callaghan d 15/12/04 3.91 25,000 97,750 n/a
did chief executive Oliver upfront fees of $1.4 million over ITE Group Ian Tomkins ce 15/12/04 0.19 500,000 95,000 0.00
Vellaott. Finance director the next 18 months. ITE Group Edward Strachan ed 15/12/04 0.19 500,000 95,000 5.05
Marcus Kneen bought a more The shares were launched in Cambridge Antibody David Glover d 14/12/04 6.13 15,000 91,950 0.07
Mcinerney Holdings Daniel P. McInernery ech 15/12/04 1.21 75,000 90,510 2.21
modest 10,000. the technology boom of 2000, BOC Group John L Walsh ed 15/12/04 7.22 10,000 72,200 0.13
Grossart is also chairman of when they reached 915p. ITE Group Ian Tomkins ce 15/12/04 0.39 150,000 58,125 0.00
Royal Doulton. Last December Having survived the ITE Group Edward Strachan ed 15/12/04 0.39 150,000 58,125 5.05
Wolseley Claude 'Chip' Hornsby ed 17/12/04 3.97 10,000 39,700 n/a
he bought six million shares in subsequent downturn in the Wolseley Claude 'Chip' Hornsby ed 17/12/04 4.84 8,000 38,680 n/a
that company at 3p, which market they could be well Windsor Mike McKim d 14/12/04 0.11 300,000 33,750 1.67
compares well with the 12p bid placed to move further ahead, Wolseley Claude 'Chip' Hornsby ed 17/12/04 3.81 8,000 30,480 n/a
Headway Stephen Thornton d 13/12/04 0.35 70,000 24,500 0.43
from Waterford Wedgwood having outperformed the
(WTFU). market by 109% over the past Sells
When Indigovision reported year and by 34% over the last six Company Director Position Date Price Amount Value Holding
its 2003/04 results in October, it months. () () %

Morgan Sindall John J C Lovell d 16/12/04 5.20 855,000 4,446,000 8.11


Vodafone Arun Sarin ce 15/12/04 1.44 2,890,000 4,159,174 n/a
Investors hope purchases will Capita Group
ITE Group
Rodney Aldridge
Edward Strachan
ech
ed
15/12/04
15/12/04
3.59
0.85
1,000,000
2,818,731
3,585,000
2,395,921
2.70
5.05
Helphire Group Mark Jackson ce 17/12/04 2.00 858,000 1,716,000 0.83
help put Colt back in the running ITE Group
Synergy Healthcare
Ceyda Erem
Richard M Steeves
ed
ce
15/12/04
17/12/04
0.85
4.15
1,500,000
295,000
1,275,000
1,224,250
6.83
5.40
Helphire Group Michael J Symons ech 17/12/04 2.00 493,000 986,000 2.13
Helphire Group David E Lindsay fd 17/12/04 2.00 479,500 959,000 0.07
by: John Marshall Amvescap Robert H Graham dch 17/12/04 3.09 300,000 927,750 3.36
BAT Antonio M Castro de coo 14/12/04 9.01 102,155 920,054 n/a
Long-standing and long- risen by 190% since 2000, the BAT Paul N Adams ce 17/12/04 8.90 88,161 784,192 n/a
ITE Group Ian Tomkins ce 15/12/04 0.85 650,000 552,500 0.00
suffering shareholders in Colt shares have languished, falling Amvescap Robert H Graham dch 16/12/04 3.10 100,000 310,000 3.36
Telecom (CTM) will no doubt be from a high of 4073p in 2000 to Vodafone Peter R Bamford mkd 14/12/04 1.43 210,000 300,300 n/a
relieved that three non- a subsequent low of 28p. Land Securities Ian Ellis d 13/12/04 13.24 20,000 264,836 n/a
SOURCE: WWW.DIGITALLOOK.COM

Helphire Group Peter Frank Holding d 17/12/04 2.00 100,000 200,000 0.00
executive directors bought stock Like others in the sector, Colt BPP Holdings L Chandler d 13/12/04 3.70 40,000 148,000 n/a
after the publication of the is seeking to serve the SME and John Menzies Iain Callaghan d 15/12/04 4.91 25,000 122,750 n/a
groups latest trading statement. corporate markets across United Drug Stephen J C Simms d 16/12/04 2.28 46,977 107,108 0.02
BOC Group John L Walsh ed 15/12/04 9.42 10,000 94,170 0.13
Andreas Barth acquired Europe. Although this has Britannia Finance M J Burgess md 14/12/04 0.27 185,000 49,950 52.56
25,852 at 44.08p; Vincenzo been a much longer haul than First Quantum Robert A Watts d 13/12/04 7.73 5,000 38,626 0.01
Damiani and Frans van den the optimists thought at the First Quantum Robert A Watts d 17/12/04 7.66 5,000 38,312 0.01
First Quantum Robert A Watts d 13/12/04 7.65 5,000 38,227 0.01
Hoven both bought 24,704 at height of the boom, the fact Theo Fennell Alister Theodore Fennell d 16/12/04 0.34 100,000 33,500 17.84
44.8p. that the group expects to be Cambridge Antibody John Aston cfo 14/12/04 6.13 4,912 30,111 0.10
The group indicated on 14 cash-flow positive in 2005
cd commercial director cs company secretary mkd marketing director
December that it expects to be would suggest that the
KEY

ce chief executive d director nech non-executive chairman


free cash flow positive on a company is a survivor and ced chief executive of division dch deputy chairman ned non-executive director
cfo chief financial officer ech executive ch od operations director
sustainable basis during 2005. should be part of the probable ch chairman ed executive director sd sales director
coo chief operating officer fd finance director sec secretary
Although Colts turnover has consolidation of the sector.

34 Shares
221204 p35 DDs 12/17/04 7:18 PM Page 35

DIRECTORS DEALINGS RETROSPECTIVE

The mixed messages of boardroom deals


When directors buy or sell shares they send a signal to the market but what does that
signal really mean? John Marshall guides you through the maze of boadroom deals

D
irectors dealings provide a guide to a signal to others to follow suit. They were in Mann (WHT) and husband of Anna Mann, the
the probable performance of a fact acquired by another Big Yellow director, founder of the business, sold shares during
company, but taken alone they are an David Ross, who is a multi-millionaire and also the year. The wisdom of these deals was
insufficient compass. Indeed, they can on deputy chairman of Carphone Warehouse confirmed when the company had to issue a
occasions be quite misleading: there are times (CPW). The only way Ross could acquire a trading statement and make management
when the decision by directors to buy shares meaningful stake was for another large director changes.
should alert others to selling them. to sell him shares. Although some purchases by directors can
Non-exec Sir Tom Farmer, for example, was Another factor which may influence be misleading as the unfortunate Steve
an enthusiastic purchaser of shares in directors is the need to diversify their Norris is discovering many have helped Shares
MyTravel (MT.) in the same manner in which portfolios. Stockbrokers constantly advise readers to enjoy good returns this year.
chairman Steve Norris and some of his their clients not to have too much of their In March David Munro, the newish chief
colleagues at Jarvis (JRVS) bought shares wealth tied up in one share. Founders of executive of RMC (RMC), bought 34,079 shares
earlier this year. companies can have a disproportionate at 581.86p, a total investment of 198,294.
Both of these deals should have been a percentage of their wealth in these businesses Munro obviously believed that RMC would
signal to investors to sell. In both cases, senior and a timely sale may reflect that rather than recover under his stewardship, but little did he
management thought that the situation facing an imminent downturn in trading. know that it would
these two companies was less dangerous than But although there can be FINSBURY FOOD receive a bid of 855p
share price
it was. The fact that both Sir Tom and the Jarvis occasions such as these, there are 55 from CEMEX in
HIGH 52.00 29/12/03
board did not recognise that they were dealing many others when a sale by a 50 LOW 29.50 19/8/04
September, a mere six
with a potentially terminal situation meant director should alert the market to 45 LAST 44.00 months later.
that remedial action the problems facing a 40 Paul Monk, a non-
PORTMEIRION GROUP
could be taken too late. share price company. 35 executive director,
210
Equally worrying 200 Among the cases 30 bought 50,000 shares in
HIGH 207.50 18/3/04
was the decision by 190 LOW 145.00 28/7/04 Shares has mentioned 25 Finsbury Food Group
D J F M A M J J A S O N D
LAST 170.00
directors of Ultraframe 180 this year were the (FIF:AIM)
Source: Thomson Financial/Datastream
at 36p
(UTF) to buy shares in 170 decision by Euan immediately after its
December 2003, which 160 Cooper-Willis, a non-executive profits warning last January. With the shares
indicated that they did 150 director of Portmeirion (PMP), to now at 44p, he has been well-rewarded for this
not recognise the 140 D J F M A M J J A S O N D sell stock.
Source: Thomson Financial/Datastream
display of loyalty.
problems facing the Cooper-Willis sold 100,000 shares More fortunate were some of the directors of
company. at 200p, shortly after an optimistic AGM Marks & Spencer (MKS) who bought shares
By the same token, the fact that a director statement and three weeks before a profits earlier this year. They were rescued not by any
sells shares does not necessarily mean that warning. Since then the shares have laboured improvement in the groups trading but by
others should do so. There can be occasions and are currently at 170p, 15% lower than when Philip Greens opportunistic bid and
when the share price of a company is held back he dealt. subsequent developments.
because of limited liquidity. This may Two directors of Airsprung Furniture (APG) Shares will continue to monitor these deals
discourage institutions from building up a each sold 300,000 shares at the end of July after during 2005 and will hopefully continue to
stake and means that an optimistic AGM statement. Some point readers towards stocks such as Royal
the shares are, in effect, AIRSPRUNG FURNITURE
share price months later, the company had to Doulton (RDN) and UA Group (UAS), where
the preserve of the 75 correct this false optimism, issue a directors purchases acted as a wake-up call to
70
private investor. If a 65 trading statement and confirm that the City. These were companies which were
senior director agrees 60 the group would incur yet another not well-researched by brokers but which have
to reduce his holding, 55 loss this year. To add insult to injury, handsomely repaid those investors who were
then the institutions 50 HIGH 72.00 2/1/04 it even passed the interim dividend. willing to follow the lead of directors.
LAST 42.50
may be happy to enter 45 Although no one is We will also use our
the market. 40
D J F M A M J J A S O N D accusing
Source: Thomson Financial/Datastream
these WHITEHEAD MANN GP.
share price industry and City
Thus the share price gentlemen of behaving 400 HIGH 366.00 27/1/04
contacts to monitor
of Majestic Wine (MJW) did not suffer when improperly, they were perhaps 350 LOW 126.50 13/10/04 those deals where we
LAST 134.00
the chairman, John Abthorp, placed part of his subconsciously hinting that their 300 feel directors have been
holding. This merely enabled the institutions long experience of these two 250 foolish purchasers of
to show greater interest in the shares. difficult industries cautioned them 200 shares and, we hope,
Similarly, the decision by Patrick Burke, against excessive optimism. 150 prevent readers from
property director of Big Yellow Group (BYG), to Similarly, Clive Mann, a non- 100 D J F M A M J J A S O N D following directors
unwise actions.
Source: Thomson Financial/Datastream
sell 500,000 shares at 128p last January was not executive director of Whitehead

22 December 2004 35
221204 p36-37 chartist 12/17/04 6:10 PM Page 36

THE CHARTIST

FTSE is Scrooge to US cheer


I
n a distinctively un-festive end to the week, the FTSE-100 slipped back below the 4700
mark. The US markets had a good week with the S&P 500 nudging out to fresh highs
again and the Dow just poised below the high for 2004.

DAVID JONES, CHARTIST

FTSE 100 (UKX) BURREN ENERGY


share price
BURREN ENERGY (BUR)
The previous weeks uptrend in the FTSE 100 500 Last week FTSE 250 oil & gas company Burren Energys
came to an abrupt halt on Friday afternoon 450 share price staged a 12% comeback. While this has yet to
with the index sliding back below 4700. It is 400 shake off the two-month downtrend that is in force, for
the same old story for now on the UKs blue- 350 now the major trend remains up. There is scope for
chip index further short-term weakness 300 some more dips in the weeks to come, but this is
cannot be discounted but the strong rally 250 viewed as a buying opportunity at the moment and
that started in the summer is still intact and 200 should present an opportunity to get in ahead of the
only a break below the 4520 mark suggests 150 next major move higher. Only a slide below 430p would
the tide is turning. 100 warn the trend was changing.
D J F M A M J J A S O ND
Source: Thomson Financial/Datastream
FTSE 100 BUY at 360p STOP LOSS 320p TARGET 480p
price index
4900
4800
CARPETRIGHT
CARPETRIGHT (CPR)
4700 share price Last week saw Carpetright hit fresh all-time highs
1200
4600
again, moving up around 9% on the week. Any chartist
1150
would have to be a buyer in the face of a trend like this
4500 1100
and further gains are expected in the weeks and
1050
4400 months ahead. The temptation is to wait for a pullback
1000
4300 to get in at a better price but the risk is of course with
950
4200
this sort of momentum that it will just surge further
900
JUN JUL AUG SEP OCT NOV DEC ahead. From a short-term point of view, if this is a valid
Source: Thomson Financial/Datastream 850
800 D J F M A M J J A S O N D
breakout, then any weakness should not push much
Source: Thomson Financial/Datastream below 11.10 and 13-plus looks achievable.

DOW JONES INDUSTRIAL BUY at 11.60 STOP LOSS 11 TARGET 13


AVERAGE (INDU) AVIS EUROPE
The Dow is a bit more interesting to watch share price
110
AVIS EUROPE (AVE)
day-to-day at the moment. By last Thursday, The FTSE 250 car rental business Avis Europe was last
100
the US index had reached 10,726 a mere weeks biggest FTSE 350 loser, clocking up a 17% drop for
90
whisker away from the 2004 high of 10,754 set the week. The demise of Avis has been well telegraphed
in February. The S&P and NASDAQ 100 both 80 with the share price in decline for five years. It can be
moved out to new highs for the year in 70 tempting to try and pick the bottom in a bombed-out
November the Dow has been the poor rela- 60 share but for now the assumption is for further weak-
tion. A break through its high would leave all 50 ness ahead and it would take a rally through at least
the US indices looking bullish for early 2005. 40 68p to suggest the slightest hint of a sentiment change.
D J F M A M J J A S O N D
Source: Thomson Financial/Datastream

DOW JONES INDUSTRIALS SELL at 50p STOP LOSS 68p TARGET 40p
price index
10.80
ISOFT GROUP ISOFT GROUP (IOT)
share price
10.60
460
Software company iSOFT was another big loser,
10.40 440
dropping by around 10%. But in the great scheme of
420 things this has set up a trading opportunity assuming
10.20 the one-year sideways trend is going to hold. All this
400
10.00 380 year, 300p/320p has proved to be a floor for the share
360 price, setting up a run back up to the 420p-plus zone.
9.80 340 The assumption is the same will happen this time
000'S

9.60 320 around so a bounce is expected.


D J F M A M J J A S O N D 300
Source: Thomson Financial/Datastream D J F M A M J J A S O N D
Source: Thomson Financial/Datastream BUY at 340p STOP LOSS 300p TARGET 420p

36 Shares
221204 p36-37 chartist 12/17/04 6:10 PM Page 37

THE CHARTIST

Full of festive spirits


A
s this is traditionally the time of year to exchange gifts, relax, eat, drink and be merry, what better sectors to look
at than retail, beverages, food producers and leisure? One from each sector is highlighted below and all four seem
to have the strength to continue delivering the goods into the New Year.

ALLIED DOMECQ (ALLD) ALLIED DOMECQ


share price
This FTSE 100 company recovered in line with the rest of the market in 540
March 2003. But here momentum faded on a lot of stocks early this year, 520
Allied Domecq has kept on going. April this year saw a key chart breakout 500
as the share price moved through the 470p mark the highs going back a 480
number of years. Since then the share price has moved ever higher, in a
460
steady procession of higher highs and lows. Further gains are expected in
440
the medium term and only a move back below 470p would warn the trend
was losing steam. 420
400
D J F M A M J J A S O N D
BUY at 508p STOP LOSS 470p TARGET 600p Source: Thomson Financial/Datastream

ASSOCIATED BRITISH FOODS (ABF)


ASSOCIATED BRIT.FOODS
The trend for this FTSE 100 food producer has been up for the best part of share price

the last five years. Like Allied Domecq, there was a key chart breakout this 760
year when the share price moved through the 660p highs in September. 740
The last couple of weeks have seen some inactivity for the share price but 720
in the great scheme of things all the trends remain positive and it should 700

be just a matter of time before the strength resumes. Only a move back 680

down below 700p would suggest the price is in for a deeper pullback. 660
640
620
600
JUN JUL AUG SEP OCT NOV DEC
BUY at 235p STOP LOSS 700p TARGET 825p Source: Thomson Financial/Datastream

BODY SHOP INTERNATIONAL (BOS) BODY SHOP INTL.


Christmas is of course a time for giving and where would we all be share price

without the Body Shop for the perfect collection of strange-smelling 190

bathroom bits for the difficult-to-buy-for aunt. The chart has been 180

covered a few times this year because the move through 145p seen in May 170
160
looked to be the first stages of a real recovery. Since them more progress
150
has been seen and although the share price has been in decline over the
140
past month, at the moment this is just viewed as a pullback, setting up a
130
buying opportunity. The 155p/160p area should provide a floor and the
120
first target is for a run back up to 185p.
110
D J F M A M J J A S O N D
Source: Thomson Financial/Datastream
BUY at 168p STOP LOSS 155p TARGET 185p

CARNIVAL (CCL) CARNIVAL


If the prospect of a houseful of screaming kids and half-cut relatives fills share price
3100
you with dread at this time of year, then Carnival can help you get away
3000
from all of it. The cruise company has been another strong performer 2900
over the past couple of years and there is nothing at the moment to 2800
suggest the trend is changing. A move through 3100p is needed to kick 2700
start the next leg higher and this should set up 3500p as the next target. 2600
Any weakness over the last couple of months has been short-lived and 2500
2400
only if the 2700p support were to break does it look like it is time to bail
2300
out. 2200
2100
D J F M A M J J A S O N D
BUY at 3050p STOP LOSS 2700p TARGET 3500p Source: Thomson Financial/Datastream

22 December 2004 37
221204 p38 mrkt moves 12/17/04 6:11 PM Page 38

MARKET MOVES ALL INFORMATION SUPPLIED BY

by: David Jones

CONSECUTIVE NEW 52-WEEK HIGHS


5-DAY GAINERS
On 9 December engineering business Zytronic The company announced that it had agreed to
NAME PRICE %
(p) CHANGE
(ZYT) announced its results and by the end of buy Perkins Chilled Foods for 80.6 million, to
last week the share price was up by 50%. be financed from new bank facilities.
DRS Data 43.5 31.8 Sales were up by 54% to 8.8 million, resulting Cranswick also announced that it plans to raise
London Stock Ex 566.75 29.5 in a profit of 350,000 compared with a about 9 million via a share placing and to use
Caffe Nero 120 12.7 366,000 loss last time around. The company the proceeds to reduce debt.
Quintain Estates 558.25 8.6
Lambert Howarth 302.5 8.4 commented that moving into the new year, the FTSE Fledgling coffee shops business
Inchcape 1776 7.4 order book continues to strengthen, with new Caffe Nero (CFN) pushed higher on no fresh
customers coming on board in addition to news. The share price has been rising steadily
RISERS/FALLER OF existing accounts. for 18 months and this latest strength
THE WEEK Last Fridays news from Cranswick (CWK) suggests there is even more to come from
helped the company nudge out to a fresh high. these in early 2005.
There were no new announcements
giving clues as to the rise of the DRS
FRESH HEIGHTS: ZYTRONIC
Name Epic Current Change share price
Data & Research (DRS) share price price (p) (%) 130
the last one was in November. Back 120
then, the finance director bought 110
Zytronic ZYT 122.5 21.6
6,784 shares taking his stake up to 100
just under 450,000. While the latest Cranswick CWK 501.5 7.0
90
rise has been impressive, the trend Caffe Nero CFN 120 4.4 80
for the past year remains firmly down Richmond Foods RFD 640 3.2 70
and at the moment the rally is just ICM Computer ICM 407.5 2.5 60
looking like a dead cat bounce. Diploma DPLM 634 2.3 50
Bid speculation continued to Thorpe (FW) TFW 355 2.2 40
boost London Stock Exchange Helical Bar HLCL 1092.5 2.1 30
(LSE) share price last week. On Tarsus TRS 122.5 1.7 20 D J F MA MJ J A S O N D J F MA M J J A S O ND
Thursday it was reported Euronext Source: Thomson Financial/Datastream
had taken on Morgan Stanley and
ABN Amro to advise it on a NEW 52-WEEK LOWS
prospective bid, according to the FT.
Deutsche Boerse remains the bidder
in the open. It has sought to reassure Friday saw the share price of security business lows last week. There was no fresh news but in
the LSE that it is not a hostile bid and Screen (SEN) plunge further, in reaction to the November the company announced first-half
it is open to negotiation on all previous days late news that the company is results that showed first-half pre-tax losses had
aspects of the business. raising up to 5.5 million via a placing of new widened to 929,000, from 822,000 previously.
Avis Europe (AVE) continued to shares at 1p. This latest dive puts the share price Oil & Gas business Cairn Energy (CNE) had
set all-time lows after a gloomy on all-time lows, and a far cry from the heady been a one-way bet for most of the year, but on
trading statement last Thursday. The heights of 300p reached in early 2000. Friday the shares dropped by more than 20%.
company said it would not be paying Real estate business Northacre (NTA) also The slide reflected disappointment that its drilling
a final dividend, it expected to make extended its multi-year downtrend and hit all-time update contained no new oil discoveries in
a significant write down, and warned Rajasthan, and a surprise potential royalty tax
that it expects its market to remain SCREEN from the Indian government.
share price
difficult next year. House broker DKW 25
cut Avis profit forecasts for the next FRESH LOWS:
two years and put its hold 20
Name Epic Current Change (%)
recommendation under review. price (p)
15
There was no such news behind Screen SEN 1.15 -29.2
the slide of consumer electronics 10 Northacre NTA 2.625 -22.2
business Amstrad (AMT) although Cairn Energy CNE 1072 -21.3
the price has been in decline for the 5
Mosaique MQE 10.5 -16.0
past few months. At the moment this
looks set to continue with sub-140p 0 D J F MA M J J A S O N D J F MA M J J A S O ND Proteome PRM 57 -14.9
the next short-term target.
Source: Thomson Financial/Datastream Trafficmaster TFC 56.75 -11.3

CONSECUTIVE MOST ACTIVE SHARES


5-DAY FALLERS
NAME PRICE %
MOST ACTIVE:
(p) CHANGE
The list below shows the five most active stocks for the Name Epic % Traded
five days to last Friday. Most active is defined by the
Avis Europe 49.75 -18.1 number of shares traded that week as a percentage of London Stock Ex LSE 31.3
Rank Group 258 -14.8 the companys capitalisation. For example, London
Amstrad 151 -13.0 Kidde KID 29.9
Antonov 32 -8.6
Stock Exchange was the most active and saw a value Corus Group CS. 26.1
Laird Group 336.75 -5.8 of shares equivalent to 31% of its market cap trade
Novar NVR 17.4
Cobham 1242 -3.1 during the week.
Body Shop 167.5 -2.5 Big Food Group BFP 16.75

38 Shares
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221204 p40 prospector 12/17/04 7:01 PM Page 40

At the sharp end


by: Emily Parkinson Oil is as slippery in the field as it is on the trading floor
The climax of any exploration project is
with giants striking out and not striking it rich
arguably the moment a mine enters
production. Curiously enough, while many
companies will bust their guts for years to get
to this point, few will hang about to actually
see it happen.
How are the mighty fallen
by: Steven Frazer
Most tend to get vertigo at the thought of all
the added expense. Many opt to farm-out the

B
project to a cashed-up major. Others have no oing, boing. The oil price has been from 100p to 40p.
other ambition than to sell at the right price. bouncing about all over the place Better news comes from Burren Energy
A wise decision, some may say. Particularly lately. Rewind a week and Brent (BUR), which has reported well-testing above
given the trend that suggests production crude had slumped 16% to and beyond expectations, flowing 4,100 and
upside is still something the market wont around $37.50 a barrel, and that was just since 4,500 barrels a day from its 1301 and 303
necessarily pay for. the start of December.
Take for instance, European Minerals But a few supply Oil & Gas portfolio
(EUM). In spite of having a well-understood worries here and
Company Epic Price Date Current % Gain
resource with 10 years of investment behind OPECs decision to bought bought price or loss
it and a clear timetable to production, the reduce output there,
stock is still languishing well below hey presto, were back Burren Energy (BUR) 420p 12 Nov 429p +2.1%
estimated fair value. above the $40 mark Sondex (SDX) 205.5p 12 Nov 217.5 +5.8%
The companys Varvarinskoye gold and again, at $41.41 as we Sterling Energy (SEY:AIM) 17.5p 12 Nov 15.75p -10%
copper project in Kazakhstan contains a go to press. Star Energy (STAR:AIM) 180p 12 Nov 190p +5.5%
resource of an equivalent 3 million ounces of Yet for many UK Out: Dana Petroleum(DNX) 441.5p 12 Nov 414.25p -6.1%
gold. Taking an ultra-conservative gold price of investors it is sweaty- In: Premier Oil (PMO) 543p 13 Dec
US$375, the project carries an NPV of around palms time as sector
US$301 million, dwarfing its current market star (should that be past tense?) Cairn Energy appraisal wells in the Congo. This has turned
capitalisation of 25 million. In spite of (CNE) crashes and burns. The shares, which only out to be the best flow rates to date at Burrens
promising its first gold pour in the third quarter three months ago were elevated to the FTSE 100, MBoundi field, sending the share price 9%
of 2006, the company is unable to drag its slumped nearly 25%, falling 327p to 10.35, as higher to 429p and putting one of my stocks to
share price anywhere close to these levels. investors drew disappointing conclusions from watch in the money for the first time in a
Contrast this with Falkland Gold and the firms failure to uncover any new potential while. Long may it continue: I think it will.
Minerals (FGML), which has had a bouyant oil sources in the Rajasthan hillside. Falling off our watch list, however, is Dana
start to trading on AIM in spite of having no This turned out to be the second in a double Petroleum (DNX) which appears to have run
real idea of the size or value of its resource. blow to upstream fans, coming as it did just a out of steam lately, while latest newsflow has
Both examples highlight one of the curious day after Petrel Resources (PET:AIM), another done little to stem the sagging shares. Danas
contradictions of the mining sector. That is, highly rated stock, lost half its value amid current woes surround the Fiddich-1 well in
without the ounces in the ground, no-one will rumours that it had vital Iraqi oilfield Western Australia, which has been plugged
look twice at you; the flipside of this seems to development contracts snatched from its and abandoned because instead of oil tests
be that once youve proven up your reserve grasp. The market whisper is as yet show that theres only water sloshing about
the market will lose interest. unconfirmed but investors seem to be down there. While the exercise cost Dana
The market loves nothing more than a good convinced enough, desperately dumping the nothing, the company has ended up with
find and this point is usually where the most stock and sending the share price plunging precisely that to show for itself. Well just have
upside is found. Even to accept the 6% loss with good grace.
so, with some tipping Mining portfolio Instead we plan to follow Premier Oil
the gold price to break Company Epic Price Date Current % Gain (PMO) in future, which we believe has been
through to a 20-year- bought bought price or loss given an unfairly rough ride recently because
high of US$500 an of mechanical problems with recent flow rate
ounce mid-way Asia Energy (AEN) 425p 18/11/04 482.5p 13.50% testing in Mauritania. New tests should kick-
through next year, now ZincOx (ZOX) 55p 18/11/04 74.5p 35.50% off in January and, with hopes high of
is the time to add a few Oriel Resources (ORI) 56.5p 18/11/04 57p neutral something close to 300 million barrels
producing gold assets Monterrico (MNA) 539.5p 18/11/04 487.5p -9.60% drillable, positive newsflow next month could
to your portfolio. Firestone Diamonds (FDI) 89.5p 18/11/04 107.5p 20.00% spark a re-rating of the shares.

40 Shares
221204 p41 big pic 12/17/04 4:46 PM Page 41

BIG PICTURE

Its time to halt


the gravy train
No one minds when directors are rewarded for boosting a
companys value, but what about when theyre paid obscene
sums for poor performance? Timon Day says its high time
directors pay was aligned with the interests of shareholders

R
ecent headlines show no end to enough on improved content. The ending of three-year rolling pay in
the fat cat gravy train that Tesco (TSCO) directors collect more than favour of one-year contracts has slashed the
directors are merrily riding to rich 20 million, putting them near the top of the compensation paid when the director is
retirement. It has been reported pay league, headed by chief executive Terry sacked or simply decides to leave.
that Howard Cohen, a former director of bust Leahy who will collect over 3 million this
furniture company Courts (CRTO), transferred year in salary and benefits. But Tescos share Fairer way to pay
3.9 million out of the companys pension price has risen steadily from 180p in early A fairer way of rewarding executives is to pay
fund into his own scheme just eight months 2003 to its current 310p, so shareholders have them a big chunk of their salary in shares of
before the retailer went into administration. also reaped substantial rewards. their company. In the past most share
This was despite the Courts pension fund What really gets up peoples noses and option schemes were a license to print
showing a 14 million deficit. The rest of its lets be fair the noses of many directors is money. The conditions were laughable, as in
members, mostly shop staff, are facing a when 15 million is handed out to an former Sainsburys chief executive Sir Peter
highly uncertain future as the scheme will executive such as Michael Green, former Daviess package. Virtually whatever
probably have to wind up. chief executive of Carlton, who departed happened, directors got big chunks of
The takeover of construction company following the merger with Granada. options which they usually promptly turned
Novar (NVR) by Honeywell for 815 million is into shares and sold. Now, more and more
jolly good news for Stephen Howard, Rewards for failure companies give directors a set number of
appointed chief executive seven weeks ago. The government tried to put a stop to this shares or share options as part of their
He will make 1.75 million in salary, bonus sort of largesse. It published a consultation annual packages.
and pension benefit. document Rewards for Failure 15 If the share price advances 20% then the
On the other hand, shareholders might months ago, but nothing has changed since. director would get 20% more money. And
not begrudge him his payoff as they have There was no clear way to legislate against vice-versa if the share price falls. This means
arguably got a good price for their shares. high pay and pay-offs, though one reform his interests are strictly aligned with the
Also, Howard helped convince Honeywell to means shareholders must now vote on ordinary shareholder.
bid for the whole of Novar and not just its boardroom pay. This is the key to the whole subject
fire and safety business Intelligent Building A rare example of this happening was aligning the interests of directors and
Systems. when GlaxoSmithKline (GSK) was forced to shareholders so that both prosper. If you pay
shelve an extraordinarily generous peanuts you get monkeys. To attract a director
Pay and performance remuneration and termination package for with a strong track record of success to turn
The biggest problem for advocates of big chief executive Jean-Pierre Garnier after around a once-ailing company such as Charter
salaries for directors is that there is no clear shareholders voted down the entire (CHTR) you have to offer extra ordinary
evidence that the higher the pay, the better boardroom pay package last year. incentives. But these incentives should not be
the executives performance and returns for But Garnier is still one of the best- paid unless clearly-stated objectives are met in
shareholders. Running a utility company, for rewarded directors in the FTSE100, with a a straightforward manner.
example, is hardly rocket science but the guaranteed retirement income of nearly 1 There is plenty of room for improvement.
average pay for a chief executive is around million a year. People might not mind so much that a chief
400,000 and all he has to do is make sure The other route being pursued is the executive gets on average 600,000 (thats 24
customers pay their bills and stop costs appointment of more non-executive times the average pay packet) if he works
(mostly other peoples salaries) rising as fast directors to the board, who would usually very hard and has had to do so for many
as income. form the majority of the remuneration years to get to that position.
The highest paid executive last year was committee that decides executive directors But this should be clearly visible to
Tony Ball, former chief executive of satellite pay. But the problem remains that it is the shareholders. No one has a right to get that
broadcaster BSkyB (BSB), who received more chief executive and chairman who appoint sort of pay without any risk. An
than 11 million. The shares slumped over a the non-execs, who are then beholden to underperforming top executive in a FTSE350
third this year at one stage before recovering them. Therefore non-execs are unlikely to company should be shown the door and not
as it turned out the company had spent too rock the boat especially as their pay rates given a big pay-off, especially as they usually
much money chasing subscribers and not could also be affected. get another job.

22 December 2004 41
221204 p42 LTI 12/17/04 4:49 PM Page 42

LONG TERM INVESTOR

Looking back, looking ahead 10%. This pretty much confirms our suspicion
that companies at either end of the valuation
spectrum tend to revert to the mean, creating
an opportunity for the astute investor.
As the old year gives way to its successor One factor you cannot see in this portfolio is
Peter Webb considers the achievements of the huge impact of the weaker dollar. Any
2004 and the opportunities in 2005 portfolio outside of the US, measured in
dollars, will have taken a thumping in the last
year; currently this looks set to continue.
Usually I have friends who visit Europe from
the US each Christmas. This year they are not
coming. With the dollar sitting at nearly $2 to

I
ts the time of year for reflecting on levels and that stocks that have been beaten 1 its just too expensive for them. In contrast I
the past and looking forward to up by the market are undervalued and will have just booked a holiday at Disney! Its much
the future. Over many articles this slowly drift up. cheaper than a few years ago.
year I have discussed the theory In the example illustrated you can see that I However, these distortions in exchange
and practice of long-term investing. You will be valued Home Depot at $53 but it was being rates cannot continue without something
glad to know that this isnt hollow rhetoric but offered in the market at $35.25 or 67% of the giving and there lies one of our risks for next
that I put this into practice on a regular basis. discounted cashflow (DCF) valuation. In year. A weaker dollar and higher bond prices
Every year, as well as creating real positions in contrast, 3M was selling for $88.66 when I could have a significant impact on the global
the market, I often create dummy portfolios to valued it at only $46. During the period since economy.
test and prod the markets efficiency and my the construction of this portfolio you can see One thing for sure is that it looks like being a
approach to it. Its a useful exercise to measure that while the DOW has risen just short of 2% stock pickers market for a while and that
the effectiveness of various strategies and to the most undervalued stocks have, as a group, should focus your mind in terms of setting
reinforce some discipline and principles. risen just over 7%. At the other end the realistic expectations and adopting sensible
Earlier in the year we looked at the high-yield overvalued stocks have dropped nearly 3% in strategies. I look forward to seeing you in the
portfolio that I create each year. 2003 was a value. Even over the short time period New Year and being your guide for a safe and
stellar year and the portfolio was up 55%, no measured, the undervalued stocks have prosperous passage through 2005. Best wishes
doubt helped by the turn in the market. But outperformed the overvalued stocks by nearly for the festive period.
this year I expected returns to be more
subdued, probably on the back of interest rate
rises. The cornerstone of its construction is a UK high yield portfolio results for 2004
high dividend yield which is well covered and
Portfolio type Portfolio size Losers Winners Overall gain
supported by a strong balance sheet. We use
financial ratios to roughly measure the balance Narrow 5 1 4 18.80%
Medium 10 3 7 12.36%
sheet strength. We look for debt to equity to be
Broad 20 6 13 11.14%
below 0.50, a current ratio of 2 or more and a
quick ratio of 1 or more. FTSE 100 4476.90 4736.80 5.81%
The high-yield portfolio performed well FTSE ALL SHARE 2207.4 2359.00 6.87%
again this year and at the time of writing is up FTSE 250 5802.3 6594.00 13.64%
18.8%, a compounded gain of 84% over the past
two years. As well as buying the constituents DCF valuation of DOW stocks
of the main portfolio I also constructed weaker Portfolio constructed 25/06/2004
versions of the same portfolio. The theory was
if you choose weaker criteria for constructing a Best valuations Price to Current
Company Fair value Bought at valuation price Gain Total
portfolio, you will get weaker results. That is
Home Depot (HD:NYSE) $53.00 $35.25 67% $42.43 20.37%
exactly what happened. As we widened the net
Pfizer (PFE:NYSE) $35.00 $33.82 97% $27.12 -19.81%
to get a larger portfolio size we lowered the Altria Group (MO:NYSE) $49.00 $47.80 98% $59.38 24.23%
quality of our selections and the return JP Morgan (JPM:NYSE) $38.00 $37.99 100% $38.09 0.26%
dropped. However all three portfolios were Disney (DIS:NYSE) $24.00 $25.18 105% $27.76 10.25% 7.06%
ahead of the FTSE-100 index and the narrow,
better qualified, portfolio was streets ahead. Worst valuations Price to Current
Early next year I will offer you entrants for the Company Fair value Bought at valuation Price
2005 version. Coca Cola (KO:NYSE) $32.00 $50.10 157% $40.42 -19.32%
Back on 25 June I slaved over a full cashflow SBC Communications (SBC:NYSE) $15.00 $23.80 159% $25.31 6.34%
valuation of every stock in the DOW Jones 30 Boeing (BA:NYSE) $30.00 $51.30 171% $52.42 2.18%
industrial average. I then ranked each American Express (AXP:NYSE) $28.00 $51.35 183% $55.18 7.46%
3M Company (MMM:NYSE) $46.00 $88.66 193% $78.80 -11.12% -2.90%
company by its discount to current market
price. I was trying to test the theory that fully- Benchmark
valued stocks will get bid up to point where
DOW 30 10371.84 10576.77 1.98%
they have to drift down to more reasonable

42 Shares
221204 p43 trading intro 12/17/04 6:13 PM Page 43

Edited by: Chris Bourke

COMMENT

S
o how was it for you? Was your 2004 a INSIDE...
year of trading triumph or a long

Trading series of short-term shocks? If youve


been a reader of our trading section, it will
have hopefully been the former. I asked one
44 Trading: Ideas
Playing safe on the Dow

memories of our top Trading Ideas contributors,


Andrew Gibson from Galvan Research and
Trading: what were his trading highlights
45 Trading: Currency
All aboard for the two-dollar pound?

46 Trading: Profile
of 2004
of 2004?
For me, it has to be the fall from grace of Battle of Britain a crocodile trader
two of the Citys best-loved stocks, Compass
(CPG) and British Sky Broadcasting (BSY), he 47 Trading: Progress
says. Both stocks were seriously hurt by Take profits Stateside
profit warnings this year. If you looked at
them at the start of the year, both were
unanimously supported by brokers across
the square mile. However, that only makes a
stock even more vulnerable to bad news. It
was a classic case of when everyones a buyer
theres nowhere else to go.
Markets are most stable when there is a lot
of divergence in terms of opinion. When
everyone agrees, thats an unhealthy market.
Stability only comes from having a large
number both of buyers and sellers.
What was interesting for me was how
48
those companies almost redefined the idea of
a blue-chip stock. It reinforced the fact that there is actually no such thing as a blue- Trading: Warrants
chip stock. No matter how loved a company is, it is just as capable of issuing a profit Certificates of merit
warning as any other company.
From a traders point of view, there is no pessimism or optimism. We only care if
a stock is moving up or down.
In contrast to Compass and Sky, the success story of the year has to be Cairn
Energy (CNE), coming from nowhere and going straight into the FTSE 100. We saw
some phenomenal price action, with the shares trading at 400p in January and then
hitting 15.81 in November. The last time a company managed a similar feat was
back in 2000 with Baltimore Technologies.
If traders had been in on Cairn from January, the leveraged gains would have been
mind-boggling.
Provided they had got out in time, that is. Somewhat uncannily, Gibsons no
such thing as a blue chip theory was proved again the following day. Cairn Energy
lost 25% of its value after a negative update on its Indian drilling.
51
Again, these stocks are priced for perfection. The companies are so hyped up that
any imperfections are severely punished by the market. Remember, Cairn is a stock Trading: Tactics
built on promise, not reality. There are not sufficient foundations to support the The science of CFDs
companys high price. Cairn is going to have to make quite a comeback to stay in the
FTSE 100 in the next quarterly review.
53 Trading: Services
Execution with a human touch
We look forward to sharing more highs and lows with you in 2005. Have a great
Christmas and a successful new year.

22 December 2004 43
221204 p44-45 trading ideas 12/17/04 6:57 PM Page 44

TRADING: IDEAS
Edited by: Chris Bourke

INDEX PLAY STRATEGY PLAY:


BUY
+ TESCO (TSCO) SHORT FTSE350 RETAIL INDEX
W
ith a lot of evidence that consumers are would appear to be safer than most is Tesco
leaving Christmas shopping to the last (TSCO).
minute, some retailers are under pressure. Given that supermarkets sell more essential
Many of the bigger names in British retail are items, they are better protected from any cut backs
said to be behind budget with a lot of stock yet in spending than more general or specialist
to shift. retailers. TSCO is also succeeding in leveraging its
M&S, Dixons and Boots to name a few, have all reputation for low prices by branching out into all
Dow Jones play safe resorted to pre-Christmas sales to ensure they draw kinds of new products such as clothes, books, fuel
Momentum is now such that in the crowds. While this might mean sales targets and insurance.
the push forward to create a are reached, profit targets may be a different story. Andrew Gibson from Galvan Research and
new high for the year should One retailer whose performance over Christmas Trading says: If this Christmas proves to be tough
take place by Christmas: 10795
is much stronger resistance SHORT TERM PLAYS
than levels seen recently and
requires greater effort in Virgin Mobile (VMOB) Brewin Dolphin (BRW) MMO2 (OOM) 119.75P BUY
planning ahead. 231.25P BUY 103.5P BUY Many traders are kicking
The level is derived from the After something of a dodgy float Last weeks merger between themselves for not buying mobile
major low in October 2002, and earlier this year, VMOB shares are brokers Carr Sheppards and phone group OOM this summer. It
is a doubling of the initial 25% gaining some ground at last. Rensburg could be the start of is only human nature to look back
rise from this low. Sentiment is gradually changing another round of consolidation in in frustration for not buying at just
You can see on the chart for the better as investors are the sector. To quote a Morgan 85p in August. However, all is not
that the 25% rise from Oct 02 encouraged by positive newsflow, Stanley analyst, private client lost. That old trading adage, the
met with fierce resistance and there should be more to come businesses need to spread their trend is your friend is perfectly
initially, but met equal over the festive season. costs over a large number of clients. applicable to OOM right now.
acceleration in upswing once it Analysts at Investec believe This trend will continue to roll out. Trading in an uptrend since the
was finally broken in summer these shares are significantly This development highlights end of July, shares have exploded
2003. undervalued and see the likelihood BRW, a company long held back by nearly 43% from their July 2004
My instinct is that the market of solid trading over the Christmas by uncertainty over the split-cap lows at 84.25p, says Will Akerman
will tease slightly higher than this period as a likely catalyst. With the trust investigation. However, recent at www.easy2spreadbet.com. But
level, says Warren Firth at IG company still benefiting from some press has speculated that this stock could still surge by at
Markets. However, the risk in glowing interim figures, they are compensation will be considerably least another 10 to 15% in the
holding a long position through expecting a further re-rating over less than feared. These events, coming six weeks, and any short-
to 10880 is currently too high, the next six months. plus the direct benefit to brokers term retracement towards 119p
particularly with relative strength The next news will be in February, of what I believe will be a very would represent a low-risk, high-
looking overbought. which will provide an update on strong short-term stockmarket, probability opportunity to buy.
So Firth is playing it safe for Christmas trading. Analysts are also make medium-sized companies in OOMs immediate upside target
the next few weeks, looking to expecting to see an acceleration in this sector an attractive is 124.5p the all-time high
buy if the market falls to 10580 customer growth in Q3, following on proposition, says Warren Firth at reached on December 7 and
or sell short on a rise to 10880. from the strong Q2 performance. IG Markets. then we should see 132p.
DOW JONES INDUSTRIALS
Technically, the shares are in an The potential merger of LSE and Optimists are still eyeing 150p
price index
000'S
10.80
uptrend and any dips in price Deutsche Bourse only adds appeal now that would be a happy new
10.60
provide a good buy opportunity. as dealing costs come down. year for traders.
10.40

10.20 VIRGIN MOBILE HOLDINGS BREWIN DOLPHIN MMO2


share price share price price index
10 240 120 130
9.80 230 LOW 174.25 30/9/04 110 HIGH 109.75 24/2/04
120
9.60 LAST 232.00 LOW 58.75 3/8/04
SEP OCT NOV DEC 220 100
Source: Thomson Financial/Datastream
LAST 103.50 110
210 90
100
200 80
90
190 70
180 80
60
170 50 70
JUN JUL AUG SEP OCT NOV DEC D J F M A M J J A S O ND D J F M A M J J A S O N D
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream
Source: Thomson Financial/Datastream

ACTION REQUIRED: ACTION REQUIRED: ACTION REQUIRED:


BUY Virgin Mobile with a price BUY Brewin Dolphin with a target BUY MMO2 with an initial target of
target of 260p. Stop loss 215p. of 116p. Stop loss 100p. 124.5p. Set your stop loss at 110p.
TIME TARGET 10 WEEKS TIME TARGET 8 WEEKS TIME TARGET 6 WEEKS

44 Shares
221204 p44-45 trading ideas 12/17/04 6:57 PM Page 45

TRADING: IDEAS

CURRENCY
by: David Jones

for retailers, one way to capture that theme would be to short the
FTSE350 retail sector, paired with a long position in TSCO. For quite a few
years now, TSCO has been in a virtuous cycle where the bigger it gets, the
greater its buying power
becomes, giving it an edge on TESCO
price index
its competitors. 320
315
At the same time, its 310
competitors profits get 305
squeezed as they either lower 300
295
their prices in order to remain 290
competitive or risk losing
market share. This trade
would ideally be held until
285
280
275
270
A game of two halves
the end of January. SEP OCT NOV DEC Choppy week for the dollar, but
Source: Thomson Financial/Datastream
weakness remains in place

T
o use footballing parlance, the last week or so has been
a game of two halves for the US dollar in particular in
Dixons (DXNS) 146.25P SELL Pendragon (PDG) 290.75P BUY relation to the pound (GBP/USD) where there has been
Another High Street Christmas sale A purely technical and plenty of day-to-day volatility. Friday 10 December saw
headed for the bargain basement? On straightforward play. The luxury car GBP/USD back to the 1.9015 area; by last Thursday it had
November 17, DXNS said that sales dealership has been in a downtrend punched its way to multi-year highs around 1.9550 and it then
growth had slowed and expressed since July, but made a decisive dropped by around 300 points later on the same day.
caution about the outlook for high- break upwards last week. The fact that new highs have been seen again by the pound
ticket expenditure for the balance of Crucially, the previous February confirms the dollars weak trend is still intact. However, even
the year. The group also flagged that it low at 255p has been held and the though the euro also swung wildly, EUR/USD failed to make a
is preparing for an aggressive trading stock is now heading north. The new high and the dollar managed to hold off from making new
environment this Christmas. price action was no doubt helped lows versus the yen (USD/JPY).
Gross margins across the group by the news that PDG is bringing The sort of moves seen lately demonstrate that selling the
were 0.7% lower than last year. I see the Corvette to the UK for the first dollar is not the easy one-way bet it has been for the past few
further weakness in DXNS share time and reintroducing Cadillac to months and no doubt the Christmas period, with lower
price going forward, with the 154p the market. volumes, will produce the odd erratic move.
level providing very clear and strong The dealership which has The wise move at the moment would seem to be to sit
resistance, says John Stassi at SFS exclusive retail rights to the brands things out till the New Year starts and all FX participants are
International Securities. in the UK has opened its first back from their Barbados retreats, ready to start the game all
Even though Novembers retail showroom for the brands and could over again. What would really confirm further dollar weakness
sales number was higher than well enjoy strong sales of the US into next year would be new highs against the euro and new
expected showing a rise of 0.6% vehicles, whose reputations lows against the yen.
against an expected rise of 0.2% it precede them. There is scope for The wise move at
would be difficult to see DXNS as a The next level of resistance will further dollar comebacks
beneficiary given last months be when the shares approach the in the short term the moment would
trading statement. 310 to 315p area. without altering the
overall bearish trend, seem to be to sit
DIXONS GP PENDRAGON with 1.8800/1.9000 still things out till the
price index share price
180 360 the big area of support
175 340 for the two-month rally New Year starts
170 320
in GBP/USD.
165 300
160 280
Any dips are still DOLLAR TO POUND (BBI)
155 260 viewed as opportunities 1.96 exchange rate

150 240 to jump on board this 1.94


220 1.92
145 trend as long as the 1.90
200
140
JUN JUL AUG SEP OCT NOV DEC 180 DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
support holds, and the 1.88 1.86
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream magical two dollars to 1.84
ACTION REQUIRED: ACTION REQUIRED: the pound level is still 1.821.80
SELL Dixons with a target price of BUY Pendragon with a target price the next target. 1.78
1.76
117p. Set your stop loss at 155p. of 315p. Stop loss at 255p. OCT NOV DEC
Source: Thomson Financial/Datastream

TIME TARGET 8 WEEKS TIME TARGET 10 WEEKS

22 December 2004 45
221204 p46 trader profile 12/17/04 4:47 PM Page 46

TRADING: PROFILE

Battle of
Britain
Mike Battle, the crocodile
trader, earned his
nickname from his highly
successful business
approach. Larry Levy talks
to him about hunting in the
financial jungle

B
attle commences at 7am, an hour
before the European markets
open. I check off and write down has been called) is a very successful private Crocodile trading
the technical particulars of each futures trader who also runs a futures fund. Mike urges traders to approach the market
thing Im interested in, he says. Dubbed by a He looks to return between 200% and 400% a psychopathically, stalking the trade, to wait
long-standing City buff as Britains Best year speculating for his own account. For his and to keep waiting as long as it takes for a
Trader, Battle left school at the age of 17 to futures fund, he takes a rather more good trade set-up to come along. Like a
join stockbrokers W. Greenwell & Company. conservative approach. crocodile waiting in a water pool for a deer, but
He was promoted to the title of floor dealer not just any deer: the croc waits for a baby
about a year before the London Stock Strategy deer with a bad leg before he makes his
Exchange closed its floor in October 1986. He Battles trading strategy is based on move metaphorically trading is the same.
recalls the newly computerised post-Big Bang consistently exploiting the probability biases Battle emphasises the following points:
market as being like the Wild West. There he identifies through his comprehensive, Most of the time I find that trying to listen
were more job positions than people qualified highly technical approach. The emotional to other peoples opinions is more confusing
to take them at that point. One minute you trader within all of us is trying to do the wrong than helpful, however credible the source.
were a floor dealer and the next day they just thing nearly all the time. Youve got to trust Cut losing trades.
said youre now a (screen- the probability bias, he says. If things start going consistently wrong
based) market maker in these He uses various moving past the sample size, a) steadily reduce
10 stocks away you go sink Approach averages, day ranges, trading size and b) break the system into its
or swim. momentum and market component parts determining exactly where
Soon Battle was managing the market profile. techniques are going wrong, or where the
a deal book worth millions He stresses the importance strategy is flawed.
and his salary was up twelve- psychopathically, of trading the sample size Be clear why you are going into trading. It
fold in just under a year. All and ignoring the emotional should be only to trade effectively not for
this on one of the worlds stalking the effect of individual profits excitement.
great exchanges atop the and losses. Work out the type of risk profile you want to
crest of a wave of a resurgent trade A trader works in a similar adopt and keep to it.
bull market. Britain and way to a craftsman, explains Dont be too hard on yourself. But do be
Thatcherite capitalism had created an Battle. He needs his tool bag to first organise realistic. Are you able to actually do this job?
atmosphere that may never be repeated. the raw material (market information) into a Do you have the right personality?
Battle moved on to the Security Pacific Bank format he can work with. The trader then uses Take full responsibility for everything.
where he managed markets in three stock this database as a representation of the whole, Bromley-based Battle only trades the
sectors. Aged 22, he was promoted to assistant ignoring other potentially valid information European time zone because, as he puts it,
director at the bank. But despite his success, while working with this data to locate youve got to have a life its part of the
his heart was in personal trading. probability biases. Thats all he can do. He balance of trading to do other things as well.
Starting in 1988, Battle began trading doesnt seek to solve the market as such. Happily married to Alison, they have four
futures, at first from a brokerage and a clearing Currently he trades mainly the DAX but also boys between six and 11. He drives a Seat
house before deciding it would be easier to takes positions in the EuroStox, Dow, S&P, Alhambra peoples wagon, as well as a Golf
work from home. Though he has never had a NASDAQ and FTSE futures. However, he GTI; enjoys the odd pint, works out regularly
losing year, in the early years he struggled to yearns to encompass a more dynamic trading and runs Keston Boys Football Club under-
establish his roadmap to success. focus and to incorporate more markets, going nines soccer team.
Fast forward to 2004 and BattleMike (as he where the action is. EXTRACTS TAKEN FROM TRADERSPEAK CD

46 Shares
221204 p47 trading retro 12/17/04 7:02 PM Page 47

TRADING: RETROSPECTIVE

US brokers
blaze a trail
By: Chris Bourke

C
harles Schwab (SCH) continues its spectacular
run, with margin traders sitting on profits of
100% in just four weeks. The positive newsflow
keeps on coming, with US firm IRG Research
initiating coverage with a buy rating. Cautious
traders may want to take profits ahead of Christmas, although
our time target of ten weeks remains in place.
Fire safety group Kidde (KID) has finally accepted a cash
offer from United Technology Corporation of 165p a share,
valuing the group at 1.4 billion. The takeover price action
should have traders making around 40% on margin.
Another successful week for Andrew Gibson of Galvan
Research & Trading, as both of his trades Smith & Nephew
(SN.) and Tesco (TSCO) hit their targets nicely. Thats not
enough for Galvan though, and he has dived straight back
into the mega-supermarket (see Trading Ideas, page 52).
Most of last weeks suggested trades are going in the
right direction, with John Stassis Centrica (CNA) short sell
already making more than 20% on margin.
Finally, a note of interest for anyone who was following
our rather speculative Cambridge Antibody Technology
(CAT) trade, which was timed out last week after not being
filled. The court judgment following legal action with
Abbot was due to be handed down at the time of going to
press on Monday.

Trade monitor
Trade Issue Buy/sell Price Stop Price Time Trade Status
price (p) close 8/11 loss (p) target (p) target performance*
Warner Chilcott BUY 04/11/04 863.5 856 840 950 8 -0.88% Running
Wolseley SELL 11/11/04 916.75 948.5 963 845 8 -3.46% Running
British Sky Broadcasting BUY 18/11/04 545.1 551.75 520 600 4 1.21% Timed out
Smith & Nephew BUY 18/11/04 537 550 503 550 4 2.36% Target hit 13/12
COLT Telecom SELL 18/11/04 46.39 46.25 55 36 8 0.30% Running
Charles Schwab BUY 18/11/04 1056 1177 1001 1300 10 10.28% Running
Imperial Chemical Industries SELL 25/11/04 235.75 234.25 242 205 4 0.64% Running
Rolls Royce BUY 25/11/04 266.06 250 248 263 4 -6.42% Running
Prudential SELL below 380p 25/11/04 436.75 435 340 4 Not yet filled
Kidde BUY 25/11/04 158.22 165.25 125 190 8 4.25% Running
Expro International BUY 02/12/04 365 356 340 427 6 -2.53% Running
Tesco BUY 02/12/04 303.78 315 293 315 4 3.56% Target hit 13/12
Vega Group BUY 02/12/04 173 178.5 155 210 8 3.08% Running
Barclays SELL 02/12/04 547.41 570 570 515 4 -4.13% Stopped out 14/12
Ashtead BUY 02/12/04 82.04 77.5 66 100 8 -5.86% Running
Legal & General SELL 09/12/04 107.09 109.75 116 95 8 -2.48% Running
BBA Group BUY 09/12/04 287.61 286.5 265 330 5 -0.39% Running
Smiths Group BUY 09/12/04 774.5 802 755 810 3 3.43% Running
Kesa Electricals BUY 09/12/04 280.23 285.25 265 304 8 1.76% Running
Corin BUY 09/12/04 331 319 300 350 4 -3.76% Running
Next SELL 16/12/04 1609.58 1639 1620 1550 10 -1.83% Running
JJB Sports SELL 16/12/04 189 186.25 205 180 2 1.46% Running
Cattles SELL 16/12/04 369.75 366 388 360 3 1.01% Running
Centrica SELL 16/12/04 231 225.75 238 215 4 2.27% Running
Bradford & Bingley BUY 16/12/04 308.25 309.25 273 330 5 0.32% Running
* DOES NOT TAKE INTO ACCOUNT ANY GEARING

22 December 2004 47
221204 p48-49 trad ft warrants 12/17/04 4:50 PM Page 48

TRADING: COVERED WARRANTS

Certificates
of merit
While certificates and warrants are part
of the same family, and both are traded
on the LSE, there are some crucial
differences between the products.
B Bradburn explains

W
arrants and certificates are both securities traded in Diverse instruments
sterling on the London Stock Exchange. Belonging to the Neil Jamieson of Comdirect says, Covered warrants are very diverse
same family: the main difference between them is instruments, which means that they can help to meet the investment
gearing. Covered warrants offer the ability to long or short objectives of different styles of investors. Warrants can be leveraged, i.e.
the market, and offer geared exposure to commodities, covered warrants, or unleveraged, i.e. certificates, which shows that they
currencies, shares and indices. They are traded regularly by short-term can meet very different appetites for risk. They also give exposure to a
traders, with trade being both speculative and defensive. Certificates are variety of asset classes, which means that they can play an important
unleveraged and enable investors to track a wide range of underlying role in optimising asset allocation.
assets directly, giving one-for-one exposure to the underlying asset. Jamieson also thinks that you should avoid covered warrants if you
They are a cost-efficient means to trade a share, and both warrants and have no appetite for geared risk and should possibly consider
certificates come free of stamp duty. With warrants and certificates, you certificates, because in their standard format they are ungeared.
will never lose more than the initial investment or premium, and they Conservative investors could then consider using them to track indices
can be traded online or through a broker. Certificates, unlike covered and commodities.
warrants, are not straight Calls or Puts and some certificates have stop-
losses, which means that once the stop-loss is reached the certificate The ABC of certificates bulls & bears
automatically expires. The easiest and most common forms of certificates are bulls and bears
The stop-loss is designed for investor protection, as it defines a which offer a quick and simple way to access a wide range of underlying
maximum level of potential loss. Certificates were historically the assets. The bull certificate directly tracks the price of an underlying index
preserve of institutional investors, but can now be used by private or security, giving you onefor-one exposure to the underlying. These
investors just as easily for short-term and day trading, or for investing underlyings could be anything from precious metals to the Hang China
long-term. Enterprises Index. They may also be called tracker, or benchmark
Warrants offer potentially high returns, but this goes hand-in-hand certificates, and are not affected by time decay or movements in implied
with a high risk factor. Certificates have a much lower risk profile, yet volatility, like warrants. Certificates are much longer-dated than covered
there is still the ability to trade globally and to spread the exposure over warrants, but can be updated indefinitely. The price of a bull certificate is
a range of equity markets and sectors. Certificates are similar to pooled calculated by subtracting the underlying price from the strike price.
investments, such as unit or investment trusts, but without the Bear certificates also track the underlying on a one-for-one basis, but
management or administration fees. They are termed low-risk products. when the price of the underlying asset moves down, the price
On the other hand, warrants, being riskier, come somewhere between movement of the bear certificate goes up. An additional feature is the
traditional share trading and high-risk products, such as futures and provision of a stop-loss level, which limits potential loss if the
options. If you had to choose between warrants and certificates, it would underlying decides to go against expectations. They can quite aptly also
all boil down to your attitude for risk and what sort of returns you are be called reverse tracker (put) certificates.
looking for. The most popular reverse tracker is the FTSE 100 tracker, which is

Advantages of index trackers


Wide appeal. Balance. Index Efficiency. Its Transparency. Liquidity. Easy Accessibility. Tax Simple to
Suitable for Trackers have a possible to Their value is to trade due to Easy to trade as advantages. understand.
certain investors lower risk profile accumulate e.g. easy to calculate pricing shares. There is no Index Trackers
seeking simple than investing in 100 shares because it is availability Stamp Duty are designed for
and diversified individual shares (FTSE) with only equal to the during normal payable for retail customers
access to the due to their one security. index value. MQP. Index Trackers and offer a
equity market. diverse only CGT simple way to
underlying. applies. invest.
SOURCE:DRKW

48 Shares
221204 p48-49 trad ft warrants 12/17/04 4:50 PM Page 49

TRADING: COVERED WARRANTS

Spot the difference: certificates and warrants


Certificates Warrants
Securities issued by a third party Securities issued by a third party
that track the performance of a that offer investors the right, but
specified index, sector or share. not the obligation, to buy or sell
an underlying asset at a set price
Listing within a specified time frame.
LSE-listed and available
through the majority of UK Listing
brokers. LSE-listed and available
Taxation policy through the majority of UK
No stamp duty. Capital gains brokers.
tax on gains over 7,500 CGT Taxation policy
allowance. No stamp duty. Capital Gains
Typical charges Tax on gains over 7,500 CGT
Broker commission and allowance.
bid/offer spread. Typical charges
Typical risk Broker commission and
Low. Typically diversified bid/offer spread.
products that passively Typical risk
listed on the LSE. The price of the tracker is calculated by dividing the replicate the returns of a certain Medium. Can lose initial
price of the FTSE by 1,000 that means a 10-point move on the index index or sector. Single stock investment but no more.
would amount to a 1 point move on the certificate. A 1% fall in the certificates offer no Diversification with index and
FTSE 100 will bring about a 1% rise in the value of the reverse certificate diversification. sector warrants.
and vice-versa. It provides an easy and transparent way to either Product fundamentals Product fundamentals
speculate on a decline in the FTSE 100 index, or if held as part of a No leverage. Bi-directional. Leveraged product through
portfolio, can provide a highly effective way to hedge against market Investors can long or short the optionality. Similar economics
weakness. underlying index, sector or to options, but investors can
There is usually no minimum trading size, so you can buy one tracker stock. Diversified in the case of only buy warrants, not sell
certificate for a few pounds and make the first step to building a global index and sector products. them. Global underlying range.
indices portfolio. As the certificate is undated, you can even buy them Maturities up to five years.
and hold them in a SIPP. The certificate route undoubtedly gives you SOURCE GS WARRANTS
exposure to many different indices and maybe thousands of stocks for
simply just a few trades and a brokers fee. A few years back this would certificates can be designed to gain from either upward or downward
have been difficult without making a much bigger commitment. movement of the underlying. They can be used for hedging or
The index tracker would appeal to investors who are interested in speculation, especially if you are bearish, but can also bring great profits
constant asset growth, yet their convenience to trade and the fact that or losses with any small movements in the underlying. In this way, they
continual pricing is available at any time also makes them attractive are more akin to covered warrants, and as such are considered a high-risk
short-term investment vehicles. product.
With the current talk of a housing market downturn, you can still make
Bonus or range certificates money from property by using certificates to gain long exposure to the
Bonus or range certificates track the price of the underlying, once again UK average house price.
without leverage. They combine a zero strike call or standard certificate As an example, in June 2004 an investor believes that the UK average
and a barrier option or down-and-out put. But in addition, the certificate house price will rise from the published level in May 2004 of 157,785 to
will make a guaranteed return on expiry if the asset stays in a given 180,000 by 2006. By using a certificate, the investor trades in May 2004 at
range. They are also continuously priced throughout their lifetime and a price of 1.55 to 1.60.
face no early redemption penalties. The investor buys 16,000 worth (10,000 @ 1.60 each). If in June 2006
They could be used if an investor were bullish or neutral and not the average house price rises to 180,000 then the 10,000 @1.80 = 18,000
expecting any drastic fall, but still wanting upside exposure. Neil (a gain of 2,000 up 12.5%). If it falls to 140,000, the loss is then 2,000
Jamieson says, In markets that are moving sideways over an extended down 12.5%. However, if you start losing, remember you dont have to
period, investing in instruments such as bonus certificates that give a hold the product until expiry as it can be sold back at any time.
guaranteed return subject to an instrument remaining in a given range (SOURCE GS)
can be a profitable strategy.
New issues
Discount certificates Goldman Sachs (www.gs-warrants.com) has a commodity index tracker
If you want to make profit in a static market, then the discount certificate (TIDM) code G800 providing unleveraged long exposure to
certificate will serve the purpose. The holder buys an asset at a GSCI total return index to 14 December 2007. It also has a bonus certificate
discount to the underlying price, although the potential gain is limited on the FTSE 100 index, plus house price warrants and certificates.
to a set level or cap. So although there is added downside protection, Dresdner Kleinwort Wasserstein (www.warrants.dresdner.com) has
at the same time you get limited upside exposure above a certain level. just launched the first UK tracker certificate linked with the hedge fund
This certificate is a combination of a zero strike call (bull certificate) and asset class in October. This is a three-year tracker certificate based on the
shorting (selling) a call option. The certificate follows the performance of HFRX Global Index as the underlying asset class, and is available to
an index, with no leverage, and expires at the value of the index. private investors through their stockbroker.
SG (www.warrants.com) has a FTSE 100 reverse tracker and a FTSE 100
Leveraged certificates bonus certificate for long-term investors, plus open-ended tracker
Leveraged certificates turbo certificates and short leveraged/bear certificates.

22 December 2004 49
OnLine PAGE SharesMag 8/11/04 5:22 pm Page 1

To start trading, apply online.


From then on, apply judgement,
skill and cunning.
OK. You want to start spread betting.
Isnt it complicated to get started? Not now
that you can apply online with City Index.
And whilst winning will never be as easy,
we do have a number of online trading
features that ensure youre not just relying
on beginners luck. Firstly, theres our live
trading simulator, which allows you to
spend time trading on the markets, without
it costing you a penny.Then to keep you up
to speed and in the know, there are a host
of financial tools including market research,
an options model and a charting package.
Plus our guaranteed stop losses on certain
markets put you in position to maximise
your profit potential (whilst limiting your
losses). A key feature of spread betting and
trading CFDs is the leverage that it affords.
Fluctuations in the value of the underlying
instrument can quickly lead to profits
or losses, which can exceed the initial
deposit. Ensure you fully understand the
risks, as spread betting and trading CFDs is
not suitable for everyone. Find out if its
suitable for you at www.cityindex.co.uk.
Make your own luck

www.cityindex.co.uk

City Index is authorised and regulated by the Financial Services Authority


221204 p51-52 trad feat CFD 12/17/04 4:54 PM Page 51

TRADING: TACTICS

The science of CFD trading


CFDs are sophisticated products that offer position. Going short, you are being paid for having the larger sum.
With a position like 20,000, you are looking to go long.
the investor a wealth of opportunities. The CFDs are of course ideal to employ as part of your overall trading
key to success, says Christopher Lockhart, strategy, in that they take advantage of both rising and falling prices.
Investors can open a long or short position on thousands of UK, US and
is building a strategy based on your European stocks using a CFD. This is difficult and expensive to do in the
specific needs and attitude to risk traditional stock market and makes CFDs ideal for speculative trading.
Going long is the simplest and most straightforward strategy to
profit from an upward price movement and has the benefit that no
stamp duty is payable. There is no limit for the holding of a long

T
he science of strategy is one that can take a lifetime to position, but there does come a point in time where going long may
learn, but you dont have the luxury of a lifetime to become an uneconomic strategy to continue employing.
strategically plan todays investment decisions. Many Most CFD trading revolves around short-term trading, so any
investors employ the strategy of using their CFD account comparison between that and long-term strategy is best made by
purely as a hedging tool to minimise the potential losses comparing the savings achieved by not incurring stamp duty with the
of their share portfolio by benefiting from the fact that CFDs can still financing cost of a long CFD.
earn you money in a declining market. But how else can a CFD account The additional cost of going long on a CFD position over a traditional
be used? What strategies should an investor be looking to employ? purchase is only the interest cost. For example, the interest charged on
Here, we talk to the market leaders in CFDs and ask what strategies a long CFD is around 6.5% of the contract value. The 10% lodged by way
should be employed when investing with this instrument. of margin is held to secure the performance of the contract and is not
Geoff Langham, head of trading at deal4free.com, says that you need available to be set-off against the contract value.
to understand what kind of investor you are before you can build up a Conversely, a traditional share purchase incurs stamp duty at 0.5%.
strategy. He asks: What do you want out of your investment? What The crossover will occur at the time that the interest charged on the
level of risk can you live with? What can you afford to loose? What do
you know, first of all?
Marc Gorrod, senior broker at E*Trade Securities, believes that
trading CFDs will whet the risk takers appetite. CFD traders, by and
large, have a healthy appetite for risk. They are also sophisticated
investors and coupled with the availability of both fundamental
and technical analysis now available through online brokers
such as E*Trade they are increasingly confident dealing in
an arena previously only enjoyed by the institutions. The
biggest single driver of any investors trading strategy
will be his or her appetite for risk.
CFD traders, by and large, have a healthy
appetite for risk. They are also sophisticated
investors and coupled with the availability
of both fundamental and technical analysis
now available through online brokers such
as E*Trade they are increasingly
confident dealing in an arena previously
only enjoyed by the institutions.
Angus Campbell of FinSpreads agrees:
It really depends on what kind of
investor you are. If you are a relatively
risk-averse investor, you would be
looking to invest in substantial amounts
on a stock, such as Vodafone, a stock that
doesnt really move that much, or ITV,
some of the slightly smaller priced stocks
within the index.
If youre a risk-loving investor, you may
want to consider changing your strategy
slightly. You would look to use a more modest
sum on a riskier stock, like Royal Bank of
Scotland, AstraZeneca and Standard Chartered and
leverage your funds. It depends on whether you are
going long or short, because if you are going short, then
certainly you may want to consider a larger block of capital
because you are going to be earning more interest from that

22 December 2004 51
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TRADING: TACTICS

long CFD matches the saving made on stamp duty. This point is probably going to be investing in FTSE 100 shares and will only need
reached in 28 days (0.5/1.0 multiplied by 365/6.5). However, this needs to use 10% of that to trade 100k of shares leaving you 90,000 to
adjusting to allow for the fact that the stamp duty on the traditional invest elsewhere.
purchase will be payable three days after the bargain date. Langham points out the benefits and risks of leveraged trading. You
Accordingly, the crossover occurs on day 25. Consequently, for trades want to be very careful of liquidity if you are dealing with any sort of size
outstanding for less than 25 days it is economically more viable to trade on margin. You should have a very good understanding of how Level 2
the CFD rather than the underlying stock. The crossover point will occur operates. You could also consider playing the sectors because instead of
earlier if interest rates rise above the 6.5% used in the example and be having to buy a considerable amount of Vodafone or a considerable
later in the event of a reduction in the interest rate. amount of Infineon or Microsoft, you can just buy the UK or UK
This is, of course, a basic calculation as there are other costs, but for technology sector, where you have better liquidity and the margins are
short-term or intra-day trading and in the latter case there are no 3% instead of 5%.
interest costs the argument is undeniable. Pairs trading is another strategy that you can employ with CFD
trading. An example of this would be if you believe that one company is
Diversity is the key undervalued compared with another company such as Vodafone
Going short is a simple and straightforward strategy, and one of the against Mmo2 you buy the cheaper share while selling the expensive
principal attractions of CFD trading is seeing a profit if the price of the one. This strategy reduces your exposure to market movements but
underlying falls. Such a position can be maintained indefinitely without allows you to take advantage of perceived short-term anomalies.
the need or the associated costs of having to continually roll the position Langham suggests a sensible strategy should be based on the amount
over. Additionally, short positions generate an interest income whereas of cash you have to bring to the market. When you are dealing in smaller
dividends are paid gross. investment amounts, it doesnt matter too much, your investment
Although there are no time limits on CFDs, most investors will use choice might move 2%, so your overall position isnt too big. But when
them for either short to medium-term speculation or for hedging of youre dealing with larger amounts like 100,000, 2% starts adding up.
physical stock portfolios.
In practice, most CFDs are closed within three months and the average An eye on the big picture
time is around six weeks. With a larger amount such as 100,000, Langham suggests that you
So it makes more sense to trade a CFD than the stock itself and, says need to be aware of a bigger picture before planning your move in the
Langham, you dont necessarily need to be have tens of thousands to market, and that you need to be aware of the currencies that you are
enter the market. Nowadays you can put on a 50 investment if you using. You should take into account what the general macro-
want, he explains. Guys with 20,000 to invest would be buying economic picture of the world is. Youre looking for more of a balanced
something in reasonable sizes. Someone with 100,000 might come into portfolio approach. With that you should not only take the indices side
some liquidity problems. of it and take a view if you want to, but you should always look at the
Langham advocates diverse trading tactics as the key to a balanced forex option. In CFDs, you are effectively buying American stocks in US
portfolio, and no matter what the amount you have to play with you dollars. If you were to convert those back to pounds there could be an
should look at all the areas that CFDs can be used in. Liquidity is the key, impact, especially with the nature of foreign exchange. With any
so I would say trading on foreign exchange is probably key to a significant position you take out you should always take into regard
successful trading strategy. We are seeing a lot of movement in that area, the implications of any forex trade.
and its also where you will find the tightest spreads. With liquidity Langham also suggests that the sectors are a good way
Langham goes on to explain the sense of using foreign exchange CFDs to gain large exposure in the areas that you want to without having to
as part of your trading strategy. The foreign exchange has a 1% margin, trade 10 times every time your use alters.
which is really powerful. You have an advantage in that we offer it in 20 You certainly dont want to bet the farm. You should be looking for a
different indices, and you can get exposure to them quickly. Some of balanced portfolio, so you want several different instruments and
them are 24-hour markets, and the liquidity is always there. several different types of instruments, he adds.
Of course, the real strength in CFD trading is that you are trading with Hedging, going long or short or even both, the ability to lock in a profit
some serious leverage. Andrew Edwards, head of trading at on a physical stock position, trading on margin and taking advantage of
TradIndex.com has some very sensible advice on the strategies that one the leverage that a CFD can offer, having the ability to release cash from
should employ across the market, given the benefits that leverage can your usual stock trading account by transferring your physical stock
offer. The investment strategy is the same for CFD and spread betting. holdings into CFDs and of course pairs trading, are among many
One of the key advantages to both CFDs and spread betting is leverage. strategies that you can to employ to create a successful CFD portfolio.
You can trade with a lot more than you deposit, so I would suggest using But dont forget the stop losses, as Gorrod explains: The use of stop
it as much as possible within your own personal trading boundaries. and limit orders is of paramount importance to risk management. It
And by that I mean dont stretch yourself too far. But you can build a provides invaluable functionality to close out loss-making positions and
large portfolio with a relatively small investment take profits at appropriate times.
Angus Campbell says that, regardless of how much you want to Indeed, we find at E*Trade, our most successful clients use the order
invest the leverage factor means that you are going to be using less of functionality on the platform frequently to enter and exit positions at
your capital in order to invest. If youre investing 100,000 you are self-selected, pre-defined levels.

52 Shares
221204 p53 trading services 12/17/04 4:55 PM Page 53

TRADING: SERVICES

The online
trading
revolution
The internet has enabled a new breed of The key factors are of course ease and speed of access, low charges,
a flexible platform that enables you to trade a wide range of
private investor to trade in a broad range instruments, and effective analysis tools. For example, spread-
of products, but this revolution has also betting company easy2spreadbet gives its customers access to the
online technical analysis services pioneered by Quantigma,
created a bewildering array of execution providing straightforward technical analysis tools, charts and a
services. Les Keith has some tips for databank for spread-betters and intermediate traders.
Combine these with the vast array of online analysis web-sites
choosing one providing stock screening, fundamental analysis and heat-maps,
and it soon becomes clear that the online investor has never been
better served. But in an increasingly technological world, William

T
he last three years have seen an astonishing escalation in Akerman, CEO of easy2spreadbet.com, believes there is a still a place
on-line trading, with thousands of private investors for the personal touch.
making regular transactions from the comfort of their In my experience, although there is a vast amount of information
armchairs. This on-line revolution has transformed what available online, most traders still need the human touch. Its all too
for most was the mysterious territory of city slickers and easy to feel isolated and thats when emotions can get in the way of
wheeler dealers inaccessible to the average man on the street into a effective trading. Investors who trade with easy2spreadbet.com
booming, ultra-efficient market place with a myriad of companies automatically become members of TradersClub, which gives them
offering professional services equalling that of any stockbroker. access to free training seminars, technical analysis data and, most
Today, 52% of UK households are online and the greatest importantly, a helpful person on the end of the phone.
percentage increase in internet usage is in Im a trader myself, so I understand the
adults aged between 45-55. Not surprising, frustrations people can feel, and sometimes all
then, that recent years have seen a dramatic Following a brief the technology in the world is no substitute for
increase in the number of private investors a helpful and experienced voice at the end of the
speculating online. Following a brief pause in pause in online phone.
online trading account growth following the
collapse of technology stocks, UK investors are trading account Public execution improved orders
well and truly back in action. An area of intense recent interest among online
And by far and away the fastest growing area of growth following the traders is the launch of improved order execution.
online trading is spread betting. There are now Now traders have the ability to place contingent
more than 50,000 regular spread betters in the UK collapse of technology and OCO orders while spread-betting.
twice as many as 18 months ago. And its a Until now, traders entering a new position with
trend thats set to continue. Competition for stocks, UK investors a limit order would have to wait for this order to
accounts is fierce, with a host of financial spread- be filled before placing a stop loss or limit to take
betting brokers offering customers the are well and truly a profits order. Contingent or if done orders are
opportunity to speculate on everything from the instructions you give to attach a stop loss and/or
FTSE 100 to the outcome of Im a Celebrity Get Me back in action a limit order to your opening order if it is triggered
Out Of Here. and filled.
In a similar way, OCO or one cancels other
Healthy competition orders mean you can leave two separate
Of course, healthy competition can only be good for the end user opening orders in the same market so that if one of them is triggered
and a seasoned trader can benefit from tighter spreads, professional and filled, the other is cancelled. This leaves you with just the one
analysis and increased liquidity. But for the new and inexperienced open position.
online trader, this information overload can be bewildering and Advancements in trading technology such as these are ensuring the
making the choice of who to trade your hard-earned cash through continued growth in online trading. Combined with human contact
can be a time-consuming process. So what should people look for in through seminars, its easy to see why one day all business may be
an on-line execution service? executed this way.

22 December 2004 53
221204 p54 bets 12/20/04 10:46 AM Page 54

TRADING: BETS
OPINION BY CAPITAL ORACLE LTD
OPTIONS INDEPENDENT FINANCIAL ADVISERS, 020 8853 2220
Chickens home to roost
Its been a hard year for Pitbull,
but not a total disaster

T
radings hard. I cant remember a period of writing Pitbull
where so many trades have gone so horribly wrong with such
consistency over such a long period. My only consolation is to
remind myself of the huge winners we occasionally bag, so its no
surprise that the chickens come home to roost once in a while.
The best funds in the world return 25% on their capital per annum;
that means if youve a trading capital of say 20,000, to return more
than 5k profit yearly is pretty stellar. No doubt some readers are now
left thinking they should give up the day job; perhaps even start
sending out their CVs and trading P&Ls pronto to all the hedge funds
that they can find? Not so fast. The deal in investment management is
risk: lots of it. Think about it for a minute: If youve taken someones
300 million dropping 20 or 30% of their dough in a week is er...far from
acceptable.
Pitbull (and Id like to think a few of our readers) divvy-up
handsomely from time to time; but the % gains involved are
alarmingly large relative to the size of our cash balance. It follows,
Rio Tinto (RIO) unavoidably Im afraid, that the losses, or drawdowns (if were going
Rio Tinto has found support at the 1430p level after falling back to get technical here) will be similarly eye-watering.
from its highs of around 1550p. The support around 1430p has Its self-deception to think that double digit % capital gains, from
been in existence for over a year now and should hopefully say, a single weeks trading is sustainable. If it was possible, the rocket
provide a springboard for an upward move. scientists at the likes of Goldman Sachs etc would be there first.
Added to this, Rios chart Annoyingly the writing on the wall (or positions blackboard if you
has formed a double-bottom, RIO TINTO
share price
like) only became clear for Pitbull after print deadline. Worse, this
suggesting a move up towards 1600 HIGH 1574.00 5/1/04 vision was prompted by the realisation that Norman Lamont was
minor resistance at 1480p. If it 1550 LOW 1212.00 14/5/04 saying pretty much the same thing as the entire worlds financial
1500 LAST 1451.00
can break this level, Rio can 1450
press; even The Sun. Remember $2/1?
push on towards those recent 1400 So why on earth was I in the same boat? Timing of course; the arch
highs again. 1350 enemy. Four weeks ago Pitbull suggested that the decline of the dollar
Bullish investors should 1300 would be a wayward path, but in the face of a straight-line decline for
research options like the 1250 the first two weeks I figured I had it wrong so jumped aboard the good
March 1450 Calls, which allow 1200 D J F M A M J J A S O N D ship Dollar devaluation with everyone else. Such is life.
plenty of time for the stock to Source: Thomson Financial/Datastream
There were two lifeboats: Wynn resorts which rallied a pleasing $10
move up and are priced on the neckline of the stocks recent or 100 ticks, and a long euro bund recommendation which rallied hard
double-bottom. despite Greenspans tightening outlook. Unfortunately favourable US
economy figures brought bond pricing in general terms back into line
mid last week. For the moment, perhaps inspired by a market desire to
3i (III) flatten positions over the holiday period, the $, and many related
3i Groups chart has made a sharp move up towards the top of its prices have calmed somewhat. Equities remain firm, despite Astras
2004 trading range. The next bullish signal would be a break of its Bah humbug approach to Christmas week. No doubt New Year will
recent high at 658p. bring the occasional hiccup, but it all seems pretty rosy; on recent
The key levels however are the mid-660s, which would then Pitbull form this means it must be time for a collapse.
target a test of the 52-week Gaming resorts feature again this week in an effort to emulate the
high at 686p. 3is March 3I GROUP meagre successes from the recent poor showing. Las Vegas Sands
share price
700
options are priced at 650p. casinos, is worth a small wager from the long side, even at its current
680
For those investors looking to 660 levels around $49.The idea being to increase exposure should the price
profit from any positive break, 640 fall to our preferred level @ $45, so any opening exposures ought to be
620
the March 650 Calls are priced small.
600
just below the 658p resistance 580 Staying in the States for a moment
level and offer the opportunity 560 HIGH 686.00 19/2/04
LOW 528.00 12/8/04
Morgan Stanley, are perhaps somewhat
to profit from a positive move 540 LAST 655.50 similar to a casino (in terms of profitability
520
while sitting comfortably below D J F M A M J J A S O N D
Source: Thomson Financial/Datastream
anyway) and release their earnings this
the break level. week. The ebullient equity market will
hopefully be reflected in their profits and
* OPINIONS EXPRESSED ARE A PERSONAL VIEW AND READERS ARE URGED TO CONSULT reward my faith and corresponding long
THEIR INDEPENDENT ADVISERS position. Happy Christmas.

54 Shares
221204 p55-62 round table 12/17/04 4:57 PM Page 55

r o uCFDs
n dspread
t a b lbetting
e r ando u futures
ndtab
Roundtable DAVID JONES (CHAIRMAN)
CHARTIST FOR SHARES MAGAZINE

In the last of Shares series of Round


Table discussions for 2004, our panel
discuss the relative merits of three
BEN FEW-BROWN different types of product CFDs,
GNI TOUCH
spread betting and futures.

IAN JENKINS
David Jones, Shares: First, as this is a multi-product discussion, could
CANTOR INDEX
everyone explain what their company does, the products it offers and
what these products do?
Foster Bowman, Idealing.com: My company deals equities, CFDs,
spread bets and covered warrants, and Im going to talk principally
about our CFD product today. Our CFDs are currently on UK equities
but we are launching FX CFDs in the first quarter of next year.
Ian Jenkins, Cantor Index: Cantor Index essentially offers spread
betting and CFDs. I am here to talk about spread betting, which is a
FOSTER BOWMAN tax-free derivative that allows clients to go long and short in the
IDEALING.COM worlds markets. Again, it has the added advantage of not having
stamp duty. You decide however much you want to play in the
market, from a very small size to a very large size.
Jones: What does GNI do?
Ben Few-Brown, GNI touch: It is part of Man Financial and covers the
whole spectrum of spread betting , CFDs and futures. Futures is my
area. We provide access to all the main derivatives exchanges globally
on behalf of customers, from private clients right through to major
institutions. We are the market leader in electronic distribution of
these exchanges and still operate with the traditional phone-broked
service too.
Jones: Lets say I have been an active investor for years, but I have just
used my traditional stockbroker for buying and selling shares. If I
want to start using CFDs, what else can I trade?
Bowman: You can do CFDs on any sort of underlying security. The
CFD market started developing to meet the needs of institutional
traders who wanted to avoid paying stamp duty. Now you can also
trade a CFD on foreign exchange, commodities or bonds. But within
the equity market, the most common CFDs are on FTSE100 or FTSE
250 shares traded on the London Stock Exchange.
Jones: Is it similar with spread betting?
Jenkins: Well quote pretty much any share with any type of liquidity
in the market. In addition to that, you can trade most financial
markets in the world we stopped short of clean air futures and
chicken broiler futures, theres not a big demand for that but
commodities, bonds, currencies, shares and indices are big trading

22 December 2004 55
221204 p55-62 round table 12/20/04 11:20 AM Page 56

ndtable roundtable

products with us. deductible.


Weve also added weather futures. There are Well quote pretty The chances are that anyone who has got to this
political bets where you can buy and sell Tory seats stage of trading has got some form of portfolio and
or Labour seats, and you can trade interest rate much any share may wish to consider this as part of the whole
decisions with us. Well make a price on anything rather than as a tax-free bet.
where we can get liquidity. with any type of If you are going to trade in the long-term, it is a
Jones: Is it similar with futures? question of choice whether you decide to go for a
Few-Brown: No. The futures markets are global, liquidity in the spread bet and possibly pay a higher entry cost.
with global access through an exchange and cleared Spread bets do offer extras you may feel are worth
via a clearing house. So rather than operating on a market. In addition paying for, such as guaranteed stops and that sort
counter-party basis on a market designed for the of thing. But on the other hand, if you are looking
purpose of a football match or an election or to that, you can for the best possible value you are going to get in
something else, there are standard contracts that the market, you are better off going directly into an
are globally recognised and are traded by an trade most on-exchange futures contract.
international client-base and brokerage houses. Jones: Foster, could you make an argument for
Jones: And this covers all sorts of markets? financial markets doing a CFD trade on the index rather than a spread
Few-Brown: Absolutely financials, commodities, bet?
energies and indices. A lot of these are also covered in the world Bowman: You would want to use a CFD as
by the spread betters, but we wouldnt be covering opposed to a spread bet if you were trying to match
the sporting markets or such. up your after-tax profit and loss statement,
Jones: It may be a bit confusing for somebody who hasnt done this especially if you were hedging.
before. Say he thinks, Over the next three months, we are going to see Lets say that you had some exposure to the FTSE or to a security
a big rise in the FTSE 100 because Bush is back in the White House and maybe three years ago, and you have built up a large capital gain. If
everything is rosy. How does he put money on it through a spread you dispose of that originating security, you are going to have a tax
bet, a CFD on an index, an option or a futures trade? event.
Few-Brown: You could do all of the above. It depends what you are If you want to lock in that profit now without actually creating a tax
looking for. event, you can use a CFD and know that your after-tax profits are
If you want a short-term trade over a trade figure or specific locked in and symmetrical. If you were to use a spread bet, you would
announcement, you are probably better off doing it in the futures have to adjust your hedge ratio or know that the after-tax profits on
market where you have got a tight market spread and these days a one contract is going to be larger or smaller than the other one.
fairly competitive commission structure. If you make a profit you are Jones: So the tax-free hook is useful if you are just doing out-and-out
going to have to pay some tax, but if you make a loss it is tax trading, but if you are looking to hedge against an existing portfolio

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then it really doesnt make sense what his exposure to the market is these exposures are multiplied,
because you can shift one liability as are the potential gains.
against tax if it doesnt work out as Jones: Its the same with CFDs, isnt it? If I deposit 1,000 in a CFD
planned? account, depending on which company I do it with, I can leverage that
Bowman: Thats right. money up and take a much bigger position.
Bowman: Thats correct. The margin mechanisms work in most cases
Jones: But if you were going to do an in a very similar fashion to the margin mechanisms in the futures
out-and-out trade on the FTSE over markets.
the next couple of months, a spread Jones: You can see why initially people may be a little scared. If you
bet would be the logical way of doing are a cautious, sensible investor you probably use margin to spread
it? your risk over a number of markets. But if you are a little bit gung-ho
Jenkins: I think the 40% tax break and want to make your millions by the end of next week, you can
that you get and lets be honest, over-leverage yourself and a small move is going to wipe you out.
everybody only trades if they are Bowman: That can be the case. A lot of people might use a CFD where
hoping to make money just blows they want to take a position in a single equity or a single company.
away every other advantage of every Although there are some futures on single company stocks, the
other product. It is absolutely huge. liquidity in the CFD market is slightly better. Some people like to use
Only this country offers such an CFDs to take short-term positions if they think that bad news has
amazing deal on tax, and you dont caused the stock to overcorrect, for example.
pay stamp duty either in the case of Jones: But in the greater scheme of things, margin is a sensible thing
shares with spread betting. if it is used properly. So what can your customers do to minimise the
Thats quite apart from the fact that risk? Lets say I want to buy 10,000 Vodafone at 1.40 but I want to get
most companies give you credit to go out at 1.20 Im going to have to put up perhaps 1,000 to do that.
into the market. What can I do to minimise that risk?
Its a lot more flexible you are Bowman: We usually require a stop loss when a client establishes a
able to trade whatever size you want position, and it has to be within a certain range.
in spread betting, whereas in futures Jones: Is it the same with spread betting? Lets say I want to do a trade
you have standard contract sizes. on the pound against the dollar I think it is going to go to 2 so I want
Spread betting has allowed pretty much anybody to enter the to buy loads but I dont want loads of risk.
market. You can trade 1 a point on the FTSE with a guaranteed stop Jenkins: A guaranteed stop loss would be the ultimate way of
loss and that means 100 to enter one of the worlds major indices. minimising the risk. But to be honest, there is an inherent risk in
Guaranteed stop losses have helped a lot of people who otherwise coming into these markets and I dont think any clients kid
wouldnt have been up for the sort of risk involved with futures and themselves that it is risk-free. It is the very, very top end of the
spread betting. risk/reward pyramid and you just have to stand up and be counted. A
Jones: One of the reasons people get scared off products like futures, guaranteed stop loss does give it a finite risk and thats probably the
spread betting and CFDs is the fact that they trade on margin. People best you can do.
think this is risky. Could we explain what margin is? Jones: So if I did a trade on Vodafone, even if it went bankrupt
Few-Brown: Margin is a deposit against the trade that you are making, overnight, if I had a guaranteed stop loss I would be out at my
on a futures contract typically between 5% and 10% of the total specified price?
underlying value. Jenkins: Certainly this is one of the main things that spread betting
As an example, if you took the FTSE 100 index to, say, 4000 points, a has brought to the market. You cant lose one penny more than your
one-lot contract is worth 10 per point which means we are looking at guaranteed stop loss.
40,000. The margin would probably be between 2,000 and 4,000, Few-Brown: Id add that we are all regulated by the FSA and it is our
depending on market volatility at that time. duty to assess clients and make sure they understand the risks they
Initial margin is really a sign of good faith to the market against are undertaking.
your position. Should the market move, say, 5% against you that day, Jones: Lets talk about how your clients trade. Theres maybe a
you are going to have to top it up because that margin has been perception that you have to be sitting in front of your screen all day if
eradicated. If it goes for you, you are in credit. you are using spread bets, CFDs or futures, and in and out 20 times a
Not everyone charges margin it is up to the spread betting day. But many of our readers are medium to longer-term investors.
company or the broker. Bowman: We do have a fair number of day traders but we also have a
Jones: So its a way of getting more bang for your buck, whatever you lot of people who will use a CFD or similar product to establish an
are trading. intermediate-term position. They typically have a stop loss on the
Few-Brown: That is correct. If you went into the market and bought position but they also have a take profit or a limit order on the
40,000 worth of stock you would have to pay 40,000, whereas to position. They are seeking to reach their profit target within anywhere
trade a futures contract you only have to put up a small amount of from two weeks to three months.
money call it 10% and that leaves you with 36,000 to do whatever Jones: They are treating it like a short-term portfolio rather than
you will with the rest. straight in and out.
Whether you are talking CFDs, spread bets or futures, it is a geared Bowman: Yes. Some people term it swing trading, we call it
product and the person using the instrument needs to be aware of intermediate-term trading.

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ndtable roundtable
Jones: With the spreads narrowing over the last few years, spread
betting has become viable for really short-term trading, particularly
with the market volatility that we have seen. Ian, do you see mainly
day traders?
Jenkins: It is the full gamut of types of clients with us, from people
who do it intraday to those who hold some stocks and roll the
product over for 18 months or more.
Jones: How about futures?
Few-Brown: Again, we have a cross-section. From our point of view,
the people who are trading a lot, the short-term traders, excite us.
They are turning things around and we are earning commission from
the trades.
We also have plenty of customers who take long-term views,
although the length of the trade isnt necessarily determined by them
but by how the market moves once they have taken it.
But yes, the majority of the volumes done in the markets are done by
the day traders. They like to see themselves as liquidity providers. They
have taken the place on the electronic market of the old locals on the
floor of LIFFE.
Jones: Lets say I fancy trading some of these products and have
opened my account. How can I actually place the trade? Is there any
difference between trading over the phone and online? Do I get a
better price or a narrower spread?
Bowman: You wouldnt get a narrower spread if you were trading
online versus the telephone, unless you were attempting to do a very
large trade which warranted what we call manual assistance from us,
almost acting as your agent.
If it is a very large trade, we might try to execute a hedge on the
underlying market and work it for a while in order to get you a better
execution. But in general, for the typical size of trades on CFDs and
spread bets by individuals, on-line and telephone execution would be
exactly the same.
Jones: Is it the same with spread betting?
Jenkins: Largely, but we have three ways you can trade with us: on-
line, on the phone and also on an XDA a hand-held PC and phone
which acts as a trading platform. And we have in the past given
smaller spreads on trials online and on the XDA. Largely though, its
the same spread whichever medium you use. started trading CFDs or futures or spread betting, they would look at
Jones: And which way do you see most of your clients trading? things like BP, Shell, Marks & Spencer and the FTSE100. What other
Jenkins: Looking at the number of bets, there isnt a big difference things should they consider?
between phone broking and internet dealing. If we are looking at size Bowman: Well, there are pair strategies they can look at. They may be
of bets, phone broking would dwarf internet dealing. using the same securities, but CFDs enable you to take a leverage
People who want to do size need a broker. Quite often they are position on the difference in price between one security and another.
coming on to do more than market size in shares and you cant do Normally, without leverage, the volatility of that spread may not be
that on line, you need a broker on your side. You have the benefits of enough to make a profit. With CFDs, however, because you can
both with us. leverage up 4, 5, 6 or even 10 times, you can afford to trade strategies
Jones: And there is no extra charge to pay? such as that.
Jenkins: No extra charge at all. Jones: That would be like you go long Barclays and short Lloyds Bank?
Jones: Online trading of a sort has been around in futures for quite a Bowman: Correct banking sectors are common pairs trading areas,
few years, even before the internet revolution. Do most of your clients as are energy sectors. Shell and BP, for example, is a classic pairs trade.
still want to speak to somebody and talk through a position, or are A CFD is probably more appropriate if you are looking at individual
they happy to sit at home and trade the FTSE or whatever? stocks or if you need a certain degree of tailoring. As you move to
Few-Brown: We have got both sides of the market, but by far the trade in a product that offers diversification, a future is better it is
biggest is online trading on the major exchanges. The advantages are very difficult for a CFD on the FTSE 100 index, for example, to beat the
speed and cost. Clients pay a lower commission to trade electronically. liquidity of the FTSE 100 future.
Not all exchanges are electronic, though, so you would have no choice Jones: Currencies have been in the news all year, with the dollar
in some cases but to be telephone-executed. If you are going to trade getting clobbered day in day out. The oil price has been going through
New York cocoa, coffee or sugar, say, they are still physically traded. the roof but has been coming off lately. What sort of things should
Jones: All our readers are familiar with the UK stock market and if they people be looking at outside of normal share markets?

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on an exchange is too
If you have the expensive. Our view, as a
company that offers both
basic building covered warrants and other
derivatives, is that if you are
blocks of trading on a very short-term
basis you are fine with a covered
trading, there is warrant because the spreads are
pretty tight. But it is not
no reason why something that you want to
hold for an intermediate or a
you cant long-term position because
there is a tendency for the prices
transfer these to be too expensive.
When we have looked at the
over to another price of covered warrants on the
FTSE100 or individual stocks
market and compared them with their
exchange-traded counterparts,
we have found them to be
consistently anywhere between 3% and 10% more expensive in
premium.
Jones: Lets move away from that and get back to the markets. I think
there can be an element of confusion for the new spread better who
wants to place a trade on, say, the FTSE 100.
He sees on his website that index is at 4750, so he rings his spread
better and asks can you give me a price for FTSE December?. The
spread better says 4765, and the client thinks ah, they knew I was
going to buy and have moved it away from me straight away.
But when you are trading it, you are trading the future and not the
cash index, Can someone explain why this is?
Jenkins: Apart from a couple of basket trades, you dont deal spot
products, you deal a futures product. That futures product has to
accommodate within its price the cost of carry, any dividends and any
storage, so typically a futures price would trade above a cash price.
That isnt necessarily so at the moment with the low interest rates
that we have but it would be the norm. Then over the course of the
Jenkins: Our clients look for volatility in the markets and certainly contract the futures price and the spot price become very, very close
this summer we saw a migration into oil and currencies. They are the until on the last day at settlement they will essentially be the same.
two markets that have taken off this year. Jones: By spot product, we mean the FTSE cash the FTSE100 index
If you have the basic building blocks of trading, there is no reason that we see every day quoted on the news. Its a synthetic thing, not a
why you cant transfer these over to another market. A lot of chartists real thing, and if you want to trade it, you trade a FTSE future via a
say it doesnt matter what the name of the chart is, all you are looking spread bet or CFD, or direct in the futures market thats why there is
at is the graph itself. And certainly since the movement in oil, our this difference.
clients have been moving into commodities cocoa, coffee, gold, But if you bought a FTSE future today and the FTSE cash went up
silver, we are taking a lot of trade in those. You have to be a little bit 100 points, the FTSE future would typically go up 100 points, wouldnt
quick on your toes as a client I think and look for the volatility. it? We are going to see similar movements.
Jones: And I can trade all these things through one account? Say the market is at 4750 and I think it is going to go to 5000: there is
Jenkins: Absolutely it is the most flexible way of trading. 250 points profit in this trade and I want to make 2500 if I am right. If
Jones: The one point we havent talked about today is covered Im doing it via CFDs, how do I put that trade in place?
warrants. This is a product that has been launched in the last couple of Bowman: On CFDs, it is expressed as a number of underlying
years and maybe appeals to people because of the limited downside. If securities. You would need to buy 1000 FTSE CFDs so that for every
you buy a covered warrant and it goes wrong, like an option the most point that the FTSE moves, you will make or lose 10.
you can lose is what you paid in the first place. Jones: So I buy my 1000 CFDs at 4750, which means my exposure is
How do covered warrants fit in vis--vis things such as CFDs and going to be 47,500. What would I need in my account margin to do
spread betting? that trade?
Bowman: The initial take-up of covered warrants was decent among Bowman: It depends on the broker, but lets say that the initial
private investors. Some of those have been complaining recently that margin is set at 10% of the nominal value of the security. You would
the price compared with an equivalent product that might be traded need 10 per cent of that nominal value, ie 4750.

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Jones: And if it gets to my 5000 target in six weeks, I can sell it out and exit and entry level, it is very simple in futures because the contract is
I have banked my 2500. Now, lets do it by spread betting what do I worth 10 a point. So to make 2500 on a 250-point move upwards,
need to tell the company? you would buy one lot of futures and when it moves up 250 points,
Jenkins: You need to say you want to buy 10 a point. You would you have made 2500.
phone up with the market at 4750, and the spread better would give Obviously there are other ways of going outside your parameters.
you a two-way price. Typically at the moment, most companies are 4-6 Trying to make the 2500 at 10 a point means you buy more lots and
spread in FTSE futures. your target is reduced. If you were to buy two lots, you would only
Just as if you were buying a share, he would make you a two-way have to see the market move 125 points. But that applies across the
price eg 4747 to sell, 4753 to buy. If you thought the FTSE was going market whether it is CFDs, spread betting or futures.
up, you would buy 10 a point it really is that simple. The dealer Jones: Lets say Ive read all this and I fancy the idea of trading these
says, Okay, Mr Jones, youre buying 10 a point on the December FTSE products, but all I have done over the years is buy and sell shares. How
at 4753. Then, every point it goes up you are 10 better off and every hard is it for me to open an account?
point it goes down you are 10 worse off. Bowman: It depends on how long you have been buying and selling
Jones: Okay, and no commission, obviously, no stamp duty. What shares and what sort of frequency. There is also an element of
would the margin requirement be? discretion at the broker level in determining whether or not you
Jenkins: In spread betting we have a multiple called the notional qualify to trade these products.
trading requirement. For the FTSE, it would be something like 300 Generally you need to be classified as an intermediate customer,
which means you need to have a certain level
of expertise, knowledge or awareness to trade
them. I dont know of any brokers that actively
promote CFDs, spread bets or futures to non-
intermediate clients, although they are not
prohibited from doing so.
If you had bought and sold shares a few
times within the last six months, I think most
brokers would also turn you away. But if you
have been investing for yourself for five or 10
years or day trading for a year or more, then it
is likely that you will be granted an account.
Jenkins: We offer a big educational package as
well, so it doesnt matter what your experience
has been in the past, we would encourage you
to come into a seminar, to go over the risks, to
go over market movements, go over market
strategies.
As long as you genuinely can afford to lose
the money you trade with, we will take most
people by and large. We really advise them to
get the education but it is a relatively simple
affair opening an account.
Few-Brown: We wont allow people without
any futures trading experience to go on line
until they have had some over the phone
futures experience. As regards starting to get
multiplied by your bet size, so you would need to put 3000 on futures experience, the share dealing you described would satisfy the
account. criteria for moving on to futures. It is not impossible to start but we
You could have a credit account whereby we waive the need for that will insist that we are satisfied fully that your knowledge of the
3000 and at the end of the trade its just a cash settled trade, if you products is satisfactory for the trading you intend to do.
havent been margin called in-between. Jones: You dont want people to blow their life savings in one
If you did 10 a point and wanted an upside of 2500 if it got to 5000, afternoon.
you could put in a guaranteed stop loss for which you pay a couple of Jenkins: Before you can even set up as a company, the FSA will look
extra ticks spread, indeed a non-guaranteed stop loss. So youd buy at over your account-opening procedure and it does spot checks on
4753 and stop loss at 4653, therefore risking 100 points times 10, and clients files.
all youd need to put up as a deposit is 1000. Jones: If I open an account and I can trade all these wonderful markets
Jones: So if I put a stop loss in place, the margin gets reduced thats with these fantastic products, what else do I get? Analysis, charting?
very good. Lets talk about doing it in the futures markets then. Say Bowman: You get a trading platform and streaming software, which
Im going to buy either one or lots of FTSE futures contracts, how do I makes the latest data and price changes continuously available to you
do it? I want to make 2500 from a 250-point move. all you need to do is hit the refresh button on your browser. A lot of
Few-Brown: Well, from the example you have given with the specific regular stock brokers dont offer this kind of service.

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We dont offer internal research, we offer access an absolute fortune streaming prices, real-
to external research and the ability to monitor the We are acting as time charts and all that. There are a lot of
proximity to any stops or take profit order that providers of CFDs and spread betting products.
you may have in real time. an agent to the What changes can you see in the industry over
Few-Brown: With us, you will get access to the next few years additional markets coming
internal and external research depending on the market place and online, say or anything else that is going to
product. We dont research everything ourselves. affect us as private investors?
We produce a daily early-morning commentary therefore have no Bowman: I think we will see continuing trends
and news sheet on markets that our analyst towards more providers offering a broader
thinks are interesting. Beyond that, we have axe to grind as selection of underlying securities and a broader
arrangements with specific research companies array of products. It wouldnt surprise me if
we can arrange favourable deals with on behalf of regards discussing more of the CFD and spread-betting shops that
our customers. dont currently offer cash equities started to do
As regards charting, we do produce an individual products so, and if more cash equity shops dont start
elementary package for the private client but a offering CFDs and spread bets.
number of our customers look for something more sophisticated and Jones: So you think the CFD providers and spread betters will start
have their own arrangements. However, we have relationships with doing the job of a normal stockbroker as well?
those companies and can
arrange fairly favourable deals.
On top of that, we do have
qualified brokers who have
knowledge in specific product
areas for the purposes of
customer advice. We are acting
as an agent to the market place
and therefore have no axe to
grind as regards discussing
individual products and where
they are going to move.
Jenkins: Clients are generally
well catered for, whichever
company they go for. Most
companies provide a good
level of research and charting,
and that is certainly so in
Cantors case.
The big add-on with us, I
think, is the Cantor Mobile. A
lot of the time people are busy,
away from their screens, and
just having access to
information on the worlds
markets has proved invaluable
to a lot of our clients. We have
a 24-hour desk and given the precarious nature of the world you Bowman: That is a possibility. A couple of us here, GNI and I-Dealing,
certainly need a broker with 24-hour coverage. already do that. And eventually it just makes sense.
Jones: So if I wanted to, I could be trading dollar/yen at 3 oclock in the It is true that a lot of the active trading is concentrated in the CFD
morning? and spread betting sectors, but if you are doing a lot of that execution
Jenkins: Absolutely. and hedging in that market, then ultimately, you might look to offer
Few-Brown: We have 24-hour coverage at GNI. We are obviously only the cash product to your client base as well.
covering the exchanges and markets that are open at that specific Jones: Which will be great for us as users.
time, but plenty of the US exchanges are open electronically for their Bowman: Yes, you will be able to have one or two accounts where you
out-of-pit hours and we are able to access them on behalf of our keep and monitor all your risk.
customers. Jenkins: It is probably good news whichever company you are with at
Bowman: We are available at any point in time that the underlying the moment. There are going to be more whistles and bells added on
security markets are open. to all products. Already, private clients are being offered a service
Jones: Lets do a bit of navel gazing. The industry has come on in leaps comparable to the top bank trader at Merrill Lynch the limits, the
and bounds over the last three or four years and we now have stops, the trailing stops.
information at our fingertips that only five years ago would have cost Few-Brown: We are going to see more exchanges going electronic. The

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US exchanges are being dragged kicking and screaming into this Cantor Mobile is the way that a lot of our clients are choosing to stay
environment. I think we are going to find increased technical in touch with the market.
sophistication of the client base more and more new customers But above all, we base our whole philosophy on customer services
coming into the market wouldnt consider trading over the phone, and approachability. Too many people are being kept out of these
they expect to connect electronically. markets by market terminology and we to a large extent have wiped
Obviously the off-line broker is still going to exist because you have that away. We just want to encourage people to call up and ask us
got to have back-up to your electronic connections, but in reality the questions. I think the fact that we were voted best spread-betting
majority of the business is going to go electronic and we are going to service by readers of Shares speaks volumes.
see the end of trading floors.
Jones: To wrap up, would you like to explain to readers why they Few-Brown: As regards the product, futures, it gives the customer
should be considering these products spread betting, CFDs and direct market access to global exchanges and therefore the liquidity of
futures if they havent before, and why particularly with your firm? global exchanges, offering tight market spreads at an extremely low
Bowman: It makes no sense to trade UK equities in the cash product exit and entry cost.
when you can trade in CFDs or spread bets, because with a CFD you Why GNI or Man Financial? First and foremost, when choosing any
get stamp duty exemption and with the spread bet you get capital broker or company to trade with, people should consider the balance
gains tax exemption. Those are powerful economic pulls. sheet and security of that company. There have been one or two well
On top of that, you get leverage and it doesnt make any sense to publicised failures in the past and often I dont think people
borrow money to buy a larger cash position in the UK necessarily consider that as a danger, but it is a bigger
equity when it just means you are going to be paying danger than probably the market moves.
even more stamp duty. Already, private Secondly, at Man Financial we offer all the
That is the primary driver for using a CFD. At products. We can cross-margin accounts for
Idealing, our proposal is that in addition to just clients are being customers between futures, CFDs, FX trading and
outright speculating, you can also hedge the spread betting. We are independent in the market
portfolios that you have with us as a stockbroker. offered a service place, offer independent advice and have extremely
Jenkins: The product sells itself and we have largely experienced staff. We were probably the first broker to
gone over that in this discussion. Why deal with comparable to offer remote online trading, by which I mean
Cantors? I think you want to deal with a company customer-end order entry.
with a big capital base. We all know the precarious the top bank And, last but not least, we won this years Shares
political backdrop to the world at the moment. We Broker of the Year Award.
have seen companies, including big pension trader at Merrill THE SHARES ROUND TABLE TOOK PLACE AT THE LONDON MARRIOTT
companies, really struggle.
Lynch
HOTEL COUNTY HALL ON 2 DECEMBER. COMPANIES PAID TO TAKE
You need access to the market 24 hours a day. PART IN THE DISCUSSION.

62 Shares
221204 p63 lrg caps 12/17/04 5:07 PM Page 63

RESULTS AND TABLES


Key to Shares opinion on stock + Positive / Neutral - Negative
LEISURE & HOTELS LEISURE & HOTELS
FIRST CHOICE HOLIDAYS (FCD) 154.5P + GREENE KING (GNK) 12.90 +
Record profits from the tour FIRST CHOICE HOLS. Greene King has never been a GREENE KING
share price share price
operator put paid to any lingering 155 stock to disappoint on like-for- 1350
1300
doubts about the overall health 150
LOW 115.00 15/7/04 like growth and after 10 years of 1250
HIGH 1303.00 8/12/04
145 LAST 154.50 LOW 853.00 5/1/04
of the travel industry. It seems 140
growth they arent about to let 1200
LAST 1290.00
1150
the shackles of 9/11 and the war in 135 the side down now. The latest 1100
130 1050
Iraq have been well and truly cast 125
trading update showed profit rose 1000
aside in what looks to be a 120 8% in the 24 weeks to 17 October, 950
900
healthy industry-wide recovery. 115 mainly due to its acquisition of 850
110 800
First Choice, which is the UKs D J F M A M J J A S O N D
Source: Thomson Financial/Datastream
the Laurel pub estate in August. D J F M A M J J A S O N D
Source: Thomson Financial/Datastream

largest independent tour We have a thriving brewing


operator, posted a record full-year healthy shape, with profit up 6% business and a well-invested high business, volumes of its three
profit of 98.3 million, pre- in the period. The outlook for the quality pub estate and we feel best-selling ales, Speckled Hen,
exceptionals. Part of the reason 2006 is buoyant with forward well placed to continue trading IPA and Abbot Ale all grew
behind the jump was a huge bookings for winter next year up successfully, commented chief between 2% and 3% percent in the
increase in long-haul flights to 5% and summer booking ahead executive, Tim Bridge. period. A dividend of 10.45p per
American destinations as 20%. The final dividend was raised The 432 pubs kit acquired from share has been proposed, up from
travellers set off in droves to cash 10% to 5.5p. (EP) Laurel contributed 11.2 million 9.5p a year earlier. (EP)
in on the weak dollar. Bookings to in trading profit during the
destinations like Mexico, the Shares says: Tide is period. The companys pub estate
Caribbean and the US were up 53% turning for First Choice with now consists of 2, 075 pubs , split Shares says: Will not
in the year ended 31 October. double-digit growth within between the groups two disappoint on growth any
The mainstream arm of its reach. managed pub divisions Pub time soon.
business, which accounts for Last Shares view: Company and Pub Partners. Last Shares view:
around half of all revenues, is still 17.06.04 / On the brewing side of the 15.07.04 +

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 2366 74.5 6.2 3.75 5.5 2.8 1.1 797 2004 314 42.7 41.2 10.4 2.7 4.0 908
2003 2263 47.8 3.6 3.4 5.0 3.4 0.7 717 2003 258 35.6 35.7 9.5 4.0 3.7 621
Div. Payable: 06.04.05 xd date: n/a Div. Payable: 24.01.05 xd date: 22.12.04

MEDIA & ENTERTAINMENT MEDIA & ENTERTAINMENT


PHOTO-ME INTERNATIONAL (PHTM) 94P + PENNON (PNN) 964P /
The digital photo explosion sees PHOTO-ME INTL.
share price
Results were better than expected PENNON GROUP
share price
Photo-Me continue its return to 150 at the group, which owns South 1000

growth, with first-half profits up, 140 West Water and waste 950
HIGH 144.00 12/1/04
900
largely because of reduced costs. 130 LOW 83.50 18/6/04 management unit Viridor, with LOW 633.00 29/1/04
LAST 94.00 850 LAST 964.00
Profits were maintained in the 120 incereased pre-tax profits. 800
110
vending division, which has Operating profit at South West 750
100
27,000 photo booths across 18 grew 6.9% to 65.3 million while 700
90
countries. However, its revenues the largest rise was seen at Viridor 650
80 600
were slightly down after a D J F M A M J J A S O N D
Source: Thomson Financial/Datastream
where profits soared 30.6% to D J F M A M J J A S O N D
Source: Thomson Financial/Datastream
disappointing performance in 14.5 million.
Japan. to third parties climbed by 8%, Viridor turnover was up 39% to accepted Ofwats decision. Profits
Following trials of two years, with the group signing a contract 126.7 million, which included a at South West were also buoyed
the roll-out of digital media with Tesco in September for the 17 million contribution from by by 3,600 new customers and
kiosks successfully started back supply of 165 mini labs. The board recent purchase Thames Waste connections. The interim
in May. The machines allow users is optimistic about its French Management, bought for 30.7 dividend was increased by 4.5% to
to develop any digital photos division, where the introduction million during the period. Viridor 13.8p. (ST)
entirely by themselves. By the of photos on national health ID also benefited from the higher Shares says: Shares
end of the first half, 1,500 had cards will see 48 million electricity prices. prices have already risen
been manufactured with 5,000 replacement cards in 2006. (CB) South West Water was allowed around 39% this year but
planned for next year. Average the largest average price increase the strong results show
revenues will be higher than from Shares says: One of the over the next five years by there may be more room
photo booths. best digital plays around. regulator Ofwat, at 6.9%. The for growth.
Manufacturing turnover from Last Shares view: industry average is 4.2%, so its Last Shares view:
the sale of processing equipment 15.07.04 + not surprising Pennon has 09.12.04 /

Tover Int EPS Int 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 118 18.0 3.06 0.8 1.8 3.8 356 2004 282 45.4 29.1 13.8 4.4 2.1 1194
2003 117 15.1 2.62 - - - 402 2003 235 42.7 30.7 13.2 6.6 2.3 833
Div. Payable: 08.04.05 xd date: n/a Div. Payable: 07.04.05 xd date: 26.01.05

22 December 2004 63
221204 p64-68 tables 12/20/04 9:25 AM Page 64

LARGE & MID CAP TABLES

FTSE
350 CODE MARKET PRICE (p) VALUE 1,000 EBIT NET PROFIT EPS (p) PE RATIO DIVIDEND NTA GEARING RETURN
CAP Over Latest % Latest % Forecast Forecast Latest % Current ON EQUITY
m Current High Low 1 yr 3 yrs 000 change 000 change Current 1yr 2yrs Current 1yr 2yrs Paid Change Yield % (p) % %
AEROSPACE & DEFENCE
BAE SYSTEMS BA. 7183.56 234.75 258.75 156.75 1471.20 854.10 *309000 0.00 *-61000 0.00 18.20 - 5.40 4.98 12.90 47.20 *3.7 0.00 3.92 55.52 31.08 - 0.28
COBHAM COB 1391.43 1247.00 1469.00 1132.00 1082.30 1208.30 *64300 0.00 *16600 0.00 95.70 75.01 83.67 13.00 16.60 14.90 *9.2 10.05 2.33 204.42 36.32 5.09
MEGGITT MGGT 1135.92 264.50 265.50 195.01 1358.60 1838.30 *51038 0.00 *20898 0.00 10.60 10.30 12.29 25.00 25.70 21.50 *2.2 5.29 2.76 12.41 37.90 8.13
ROLLS-ROYCE GROUP RR. 4295.89 252.00 269.25 160.30 1541.80 1831.90 *244000 0.00 *98000 0.00 13.01 11.57 14.63 19.40 21.80 17.20 *3.07089 - 36.40 3.25 102.66 37.59 5.71
SMITHS GROUP SMIN 4421.93 787.00 792.50 606.00 1262.90 1358.10 *342300 28.78 *212900 89.58 45.90 44.01 51.80 17.10 17.90 15.20 *18.25 5.80 3.43 75.37 39.14 24.84
ULTRA ELEC. HDG. ULE 452.09 677.00 694.50 492.00 1363.20 1919.00 *32742 0.00 *20406 0.00 40.30 35.32 39.40 16.80 19.20 17.20 *4.6 12.20 1.89 28.71 43.30 37.35
VT GROUP VTG 521.41 303.25 305.00 223.00 1393.80 1069.90 *22463 136.93 *8080 -451.76 19.33 14.45 16.62 15.70 21.00 18.20 *6.43 7.17 3.03 111.77 38.75 10.92

AUTOMOBILES
GKN GKN 1671.93 231.50 284.25 199.00 940.40 978.40 *112000 0.00 *0 22.20 15.86 12.54 10.40 14.60 18.50 *3.9 2.63 5.05 184.02 49.52 10.63
INCHCAPE INCH 1403.19 1766.00 1779.00 1260.00 1422.10 3203.60 *170000 0.00 *120000 0.00 152.80 140.48 151.31 11.60 12.60 11.70 *15 25.00 2.32 343.46 4.69 32.80
PENDRAGON PDG 387.00 295.00 348.00 181.00 1603.80 3824.30 *57001 0.00 *30490 0.00 27.70 27.49 27.90 10.60 10.70 10.60 *4.2 10.53 2.71 122.77 41.48 21.67
BANKS
ALLIANCE & LEICESTER AL. 4035.30 901.50 920.50 784.00 1072.00 1375.30 *577600 0.00 *379200 0.00 81.80 86.89 89.72 11.00 10.40 10.00 *15.7 9.79 5.02 146.46 92.52 21.98
BARCLAYS BARC 37059.71 577.00 586.00 434.50 1268.80 1249.30 *5695000 0.00 *2742000 0.00 47.70 50.17 54.56 12.10 11.50 10.60 *8.25 17.02 3.76 27.87 88.55 18.11
BRADFORD & BINGLEY BB. 1964.12 309.75 331.50 248.00 1104.30 1284.10 N/A N/A *213700 0.00 29.80 26.03 30.12 10.40 11.90 10.30 *5.7 3.64 5.39 21.91 90.27 16.44
EGG EGG 812.07 98.50 197.50 80.00 800.80 648.00 *36200 0.00 *-33000 0.00 0.00 - 6.90 7.26 13.60 N/A N/A 0.00 11.56 90.86 - 7.16
HBOS HBOS 32904.81 840.00 843.50 657.00 1251.50 1206.60 *4356000 0.00 *2645000 0.00 74.80 75.62 83.70 11.20 11.10 10.00 *10.8 4.85 3.74 119.83 89.56 18.09
HSBC HDG. (ORD $0.50) HSBA 96462.50 863.50 953.50 784.00 1039.60 1216.60 *8330292 0.00 *5840989 0.00 63.75 1.08 1.15 13.50 15.60 14.60 *0.13 - 45.83 3.85 78.94 75.36 16.55
LLOYDS TSB GP. LLOY 25546.38 456.50 480.25 387.00 1185.30 825.80 *4992000 0.00 *3338000 0.00 57.00 40.42 43.09 8.00 11.30 10.60 *10.7 0.00 7.49 70.01 85.48 40.91
NORTHERN ROCK NRK 3304.31 784.50 799.50 675.00 1196.30 1416.80 *477500 0.00 *274600 0.00 69.90 73.47 80.41 11.20 10.70 9.80 *8.5 13.33 3.10 42.52 92.33 23.95
RYL.BK.OF SCTL. RBS 53723.17 1709.00 1774.00 1456.00 1109.20 1218.00 *6698000 0.00 *4239000 0.00 167.20 141.65 156.27 10.20 12.10 10.90 *16.8 15.07 3.07 443.03 80.58 9.83
STD.CHARTERED STAN 11218.50 952.50 1038.00 831.00 1080.40 1314.80 *1196640 0.00 *636304 0.00 58.23 1.09 1.18 16.40 17.00 15.70 *0.1706 - 98.18 3.51 42.03 71.02 14.08
BEVERAGES
ALLIED DOMECQ ALLD 5637.97 509.50 530.00 401.25 1286.80 1489.20 *571000 -4.36 *348000 1.75 35.50 34.05 37.86 14.40 15.00 13.50 *5.83 10.00 3.04 83.23 77.82 45.12
DIAGEO DGE 22202.24 736.50 783.00 651.00 1066.40 1153.50 *1957000 147.41 *1232000 -1640.00 48.20 47.24 51.67 15.30 15.60 14.30 *17 8.28 3.75 65.55 55.97 29.65
SABMILLER SAB 8309.02 828.50 895.00 534.00 1463.90 2013.10 *849085 56.99 *408428 83.56 0.91 0.70 0.86 17.50 23.00 18.80 *0.225 21.62 2.25 203.09 34.67 9.65
SCOT.& NEWCASTLE SCTN 3882.78 434.50 447.00 355.00 1261.20 1013.30 *198000 0.00 *-21000 0.00 28.45 9.65 13.03 15.30 45.00 33.30 *6.87 - 65.65 4.00 129.36 41.51 2.07
CHEMICALS
BOC GROUP BOC 4704.78 943.50 979.00 837.50 1197.70 1043.40 *374500 0.00 *202900 0.00 63.20 66.83 71.20 14.90 14.10 13.30 *24.5 4.26 4.28 584.26 43.68 13.35
BRITISH VITA BVIT 498.20 269.00 281.00 230.00 1165.90 1538.80 *48300 0.00 *28200 0.00 21.80 17.42 20.53 12.30 15.40 13.10 *6 4.35 4.46 141.95 20.08 8.95
CRODA INTL. CRDA 438.04 325.00 328.75 246.00 1375.80 1580.60 *47500 0.00 *29300 0.00 20.20 20.38 22.78 16.10 15.90 14.30 *7.83 3.16 3.67 98.60 25.77 20.03
IMP.CHM.INDS. ICI 2817.19 236.50 252.00 187.25 1321.50 840.80 *257000 0.00 *42000 0.00 21.20 19.10 21.99 11.20 12.40 10.80 *3.4 23.64 2.92 150.60 78.72 4.32
JOHNSON MATTHEY JMAT 2148.23 972.50 1042.00 831.00 1055.00 1159.50 *203900 2.88 *119900 -1.40 65.80 60.46 64.78 14.80 16.10 15.00 *18.2 2.82 2.77 275.29 36.50 13.60
YULE CATTO YULC 416.31 287.50 303.25 216.00 1239.00 1416.50 *61234 0.00 *27747 0.00 19.00 3.07 7.17 15.10 93.50 40.10 *5.5 3.77 4.59 120.90 49.55 15.42
CONSTRUCTION & BUILDING
AGGREGATE INDUSTRIES AGG 1309.98 102.00 102.25 79.25 1307.70 1246.80 *166100 0.00 *96500 0.00 7.30 7.39 7.85 14.00 13.80 13.00 *1.67 9.87 2.80 98.91 35.82 10.84
BALFOUR BEATTY BBY 1288.44 304.75 312.75 205.25 1456.00 2008.80 *84000 0.00 *58000 0.00 23.30 19.31 21.80 13.10 15.80 14.00 *3.4 11.48 2.05 37.37 25.66 246.67
BARRATT DEVELOPMENTS BDEV 1460.81 608.50 649.00 477.00 1282.80 1717.40 *377000 25.96 *260500 26.21 111.40 112.46 113.05 5.50 5.40 5.40 *14.68 19.16 3.55 4.96 3.52 28.66

SOURCE: THOMSON FINANCIAL/ DATASTREAM


BELLWAY BWY 944.12 842.50 842.50 647.00 1334.50 2196.80 *214667 21.74 *143900 21.59 127.50 132.27 136.13 6.60 6.40 6.20 *9.3 50.00 2.97 14.84 20.59 26.43
BERKELEY GP.HDG.UNITS BKG 920.85 765.00 770.00 482.41 1619.60 2103.30 *218050 0.00 *149139 2.65 76.64 129.14 119.55 10.00 5.90 6.40 *9.63072 14.58 1.26 11.63 8.14 15.40
BOVIS HOMES GROUP BVS 681.04 576.50 607.00 440.00 1413.40 1758.10 *129378 0.00 *86513 0.00 86.70 85.78 91.10 6.60 6.70 6.30 *6.4 20.75 3.04 6.97 13.92 21.85
BPB BPB 2290.04 461.00 468.75 330.00 1400.30 1719.40 *209900 158.18 *113300 5565.00 35.50 33.93 37.58 13.00 13.60 12.30 *9.45 6.18 3.19 221.36 40.35 14.75
CARILLION CLLN 489.18 228.50 243.75 146.00 1642.90 1758.50 *21000 0.00 *4600 0.00 19.90 16.02 18.03 11.50 14.30 12.70 *2.675 69.84 2.25 31.81 30.93 5.87
CREST NICHOLSON CRST 399.35 357.50 375.00 304.00 1235.30 2364.10 *88300 0.00 *52100 0.00 47.40 49.31 52.80 7.50 7.30 6.80 *4 14.29 3.22 1.88 32.44 23.74
HANSON HNS 3178.19 435.00 457.75 358.00 1156.50 1047.80 *199800 0.00 *152400 0.00 39.50 30.88 35.36 11.00 14.10 12.30 *5.35 7.00 3.98 350.81 47.48 6.79
MARSHALLS MSLH 439.48 310.00 310.00 242.00 1321.30 1497.80 *53190 0.00 *34501 0.00 22.25 22.48 24.93 13.90 13.80 12.40 *3.9 6.85 3.63 145.77 8.83 17.08
MCALPINE(ALFRED) MCA 303.75 303.75 322.00 240.50 1099.00 782.10 *26500 0.00 *18700 0.00 28.60 22.35 24.91 10.60 13.60 12.20 *4.95 10.00 3.77 52.90 3.22 7.36
MCCARTHY & STONE MCTY 615.55 599.00 625.00 517.00 1195.00 2348.50 *149500 27.34 *103200 27.09 99.20 99.22 105.77 6.00 6.00 5.70 *4.8 - 51.02 2.89 25.79 4.09 36.93
NOVAR NVR 815.40 189.00 191.00 113.00 1643.60 1855.40 *-27500 0.00 *-67100 0.00 10.30 5.60 8.10 18.30 33.70 23.30 *2.9 0.00 5.03 53.87 50.37 - 25.13
PERSIMMON PSN 2018.13 700.00 725.50 490.50 1529.10 2266.00 *372000 0.00 *234200 0.00 102.80 110.34 113.87 6.80 6.30 6.10 *9.1 30.00 2.91 8.36 21.92 24.99
PILKINGTON PILK 1396.25 108.50 109.25 80.50 1311.70 1244.00 *178000 1.14 *75000 2.74 7.20 7.54 8.75 15.10 14.40 12.40 *3.25 0.00 4.61 107.24 49.61 11.49
REDROW RDW 591.48 373.00 406.00 319.00 1214.00 1741.30 *134100 16.61 *87700 17.09 54.80 61.94 63.72 6.80 6.00 5.90 *6 20.00 2.41 14.19 25.94 28.88
RMC GROUP RMC 2249.03 844.00 860.00 523.00 1399.80 1638.90 *-66200 0.00 *-137400 0.00 41.00 32.84 50.64 20.60 25.70 16.70 *9.4 0.00 3.70 888.20 39.22 - 9.10
SIG SHI 652.80 538.25 540.00 308.00 1859.70 2274.00 *62720 0.00 *34705 0.00 36.10 34.46 37.87 14.90 15.60 14.20 *4.6 12.20 2.40 57.05 39.74 17.65

GLOSSARY OF TERMS
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 rate individual cash income dividend adjusted for equity ratio. Preference capital plus total debt is
value is expressed according to individual that either reflects the latest financial year or an any capital change since the ex-dividend date divided by total capital employed plus short
issue. 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 a fall on the same day, the adjusted dividend RETURN ON SHAREHOLDERS EQUITY (%):
Shares goes to press, generally on Tuesday 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

64 Shares
221204 p64-68 tables 12/20/04 9:25 AM Page 65

LARGE & MID CAP TABLES

FTSE
350 CODE MARKET PRICE (p) VALUE 1,000 EBIT NET PROFIT EPS (p) PE RATIO DIVIDEND NTA GEARING RETURN
CAP Over Latest % Latest % Forecast Forecast Latest % Current ON EQUITY
m Current High Low 1 yr 3 yrs 000 change 000 change Current 1yr 2yrs Current 1yr 2yrs Paid Change Yield % (p) % %
TAYLOR WOODROW TWOD 1528.92 268.75 307.75 223.00 1140.70 1771.50 *348200 0.00 *202500 0.00 45.20 48.05 50.44 5.90 5.60 5.30 *3 25.00 3.53 33.49 34.42 14.43
TRAVIS PERKINS TPK 1953.12 1722.00 1748.00 1235.00 1446.00 2223.20 *172400 0.00 *108900 0.00 120.00 114.57 123.55 14.40 15.00 13.90 *9.5 25.00 1.53 254.80 25.40 27.54
WESTBURY WBY 514.86 450.00 514.00 362.25 1299.70 1933.20 *129634 25.85 *72151 26.80 78.10 73.47 76.82 5.80 6.10 5.90 *9.55 15.76 3.31 17.07 37.50 19.50
WILSON BOWDEN WLB 1090.15 1160.00 1205.00 925.50 1212.20 1588.70 *240800 0.00 *155200 0.00 183.10 191.98 200.69 6.30 6.00 5.80 *9.5 26.67 3.02 22.66 22.18 23.88
WIMPEY (GEORGE) WMPY 1643.94 421.00 460.00 331.00 1313.00 2241.30 *433100 0.00 *260900 0.00 74.69 79.17 81.42 5.60 5.30 5.20 *5.2 36.84 3.24 5.43 32.12 27.67
WOLSELEY WOS 5450.05 931.50 995.00 735.00 1276.40 2009.90 *606600 31.24 *397000 33.04 74.84 71.65 77.53 12.40 13.00 12.00 *16 2.56 2.56 122.53 42.86 22.38

ELECTRICITY
INTERNATIONAL POWER IPR 2253.12 153.00 165.25 107.06 1441.10 888.10 *-193000 0.00 *-323000 0.00 8.98 7.86 10.88 17.00 19.50 14.10 *5.64473 0.00 0.00 139.07 47.79 - 12.59
SCOT. & SERN ENERGY SSE 7195.15 839.00 844.50 635.50 1336.40 1665.60 *661200 0.47 *425400 1.82 57.20 55.72 62.23 14.70 15.10 13.50 *26.4 7.76 4.60 482.64 45.55 30.22
SCOTTISH POWER SPW 7258.40 389.50 446.50 348.25 1119.00 1348.40 *1120300 7.88 *543000 13.08 38.31 31.28 32.13 10.20 12.50 12.10 *4.95 4.21 5.37 469.90 51.63 11.84
VIRIDIAN GROUP VRD 951.90 714.00 730.00 541.00 1350.20 1717.40 *116100 2.65 *74300 26.36 52.40 53.95 51.19 13.60 13.20 13.90 *24.2 3.51 4.77 725.93 60.39 30.20
ELECTRONICS
INVENSYS ISYS 924.20 16.25 29.00 10.75 963.70 150.60 *-243000 -80.74 *-333000 -77.00 0.20 - 1.91 0.52 81.30 31.00 *0.96356 0.00 0.00 11.60 124.36
LAIRD GROUP LARD 533.14 338.75 376.75 265.00 1289.30 2245.50 *26500 0.00 *23800 0.00 24.10 16.76 20.46 14.10 20.20 16.60 *3.15 5.00 2.58 39.20 32.66 11.91
RENISHAW RSW 445.47 612.00 620.00 464.00 1154.80 1501.70 *20186 13.11 *16123 12.39 22.10 29.83 34.28 27.70 20.50 17.90 *12.39 9.07 2.94 80.36 0.00 15.32
SPECTRIS SXS 498.99 401.75 507.00 377.00 978.50 918.70 *47400 0.00 *26000 0.00 30.60 22.18 26.23 13.10 18.10 15.30 *4.25 4.94 3.37 74.39 50.74 14.99

ENGINEERING & MACHINERY


AGA FOODSERVICE AGA 344.28 274.00 274.00 212.00 1313.10 1360.90 *28700 0.00 *22300 0.00 23.70 14.91 16.63 11.60 18.40 16.50 *2.5 13.64 2.74 58.26 7.35 8.20
BODYCOTE INTL. BOY 500.43 156.00 169.00 120.77 1242.40 904.10 *2100 0.00 *-17300 0.00 10.10 7.95 10.87 15.40 19.60 14.40 *3.85 7.64 3.91 149.23 39.77 - 4.46
COOKSON GROUP CKSN 653.88 34.50 50.00 29.00 951.70 567.00 *-157000 0.00 *-202900 0.00 0.05 1.13 2.15 756.60 30.50 16.00 *3.12937 0.00 0.00 18.50 39.85 - 57.14
ENODIS ENO 421.11 105.00 111.75 78.50 1257.50 1440.80 *39500 0.00 *9500 0.00 8.70 5.05 5.83 12.10 20.80 18.00 *1.61946 0.00 0.00 20.35 56.59 6.03
FKI FKI 685.56 117.75 149.00 103.00 1128.80 739.70 *8900 -85.76 *-20500 -262.70 8.70 3.91 6.85 13.50 30.10 17.20 *3 900.00 3.82 48.71 68.00 - 4.54
HALMA HLMA 588.73 160.00 171.00 136.00 1210.20 1220.00 *37678 -14.53 *22322 -21.29 9.50 8.48 8.97 16.80 18.90 17.80 *3.75 6.32 3.96 12.81 13.86 13.66
IMI IMI 1332.10 377.00 394.00 328.50 1155.50 1729.00 *134400 0.00 *72000 0.00 27.20 23.17 26.23 13.90 16.30 14.40 *6.3 5.00 4.19 82.81 28.61 13.45
KIDDE KID 1396.26 165.50 173.75 91.00 1690.10 3034.30 *93400 0.00 *48800 0.00 9.50 7.90 8.65 17.40 20.90 19.10 *0.96 7.87 1.67 11.47 80.99 159.25
MORGAN CRUCIBLE MGCR 483.08 166.50 176.00 115.00 1345.10 967.90 *-60800 39.13 *-75600 29.90 10.90 8.57 11.28 15.30 19.40 14.80 *7.03278 0.00 0.00 133.14 54.12 - 25.30
ROTORK ROR 356.66 415.50 450.00 350.00 1232.20 1447.70 *28151 0.00 *18632 0.00 23.50 23.22 25.73 17.70 17.90 16.20 *5.35 1.90 3.57 15.89 0.48 26.35
SPIRAX-SARCO SPX 468.13 622.50 640.00 517.00 1150.30 1882.80 *46861 0.00 *29426 0.00 40.90 42.15 46.08 15.20 14.80 13.50 *6.3 5.00 3.28 117.14 25.99 19.57
TOMKINS TOMK 1931.57 250.00 288.50 241.00 987.60 1411.50 *150400 -41.67 *179300 -3.37 20.23 18.14 21.53 12.40 13.80 11.60 *4.83 5.00 4.89 102.73 36.36 45.25
WEIR GROUP WEIR 640.75 313.25 320.00 242.00 1263.20 1480.60 *49822 0.00 *35642 0.00 21.60 18.52 21.23 14.50 16.90 14.80 *3.45 2.99 3.99 50.14 33.33 23.81
FOOD MANUFACTURERS
ARLA FOODS ARU 336.80 55.25 63.50 42.50 1169.50 4443.20 *21500 0.00 *7600 0.00 4.87 1.00 3.98 11.40 55.30 13.90 *0.6 - 93.75 2.35 21.83 73.86 24.36
ASSD.BRIT.FOODS ABF 5842.55 738.00 752.50 560.50 1352.00 1684.70 *506000 5.42 *339000 4.63 46.60 44.24 46.54 15.80 16.70 15.90 *5.25 10.53 2.22 184.29 10.84 10.49
CADBURY SCHWEPPES CBRY 9820.01 474.50 480.00 383.25 1271.60 1237.80 *749000 0.00 *364000 0.00 32.20 23.05 27.93 14.70 20.60 17.00 *3.8 4.11 2.56 78.91 60.91 13.10
DAIRY CREST DCG 502.73 405.00 495.00 311.00 966.40 1136.50 *63100 0.00 *34100 2.40 51.90 37.90 35.05 7.80 10.70 11.60 *13.4 18.58 4.77 258.76 53.84 15.80
GEEST GET 457.51 625.00 642.00 424.50 1512.70 970.60 *39200 -16.95 *27100 -14.51 30.10 37.02 42.17 20.80 16.90 14.80 *12.9 9.79 3.44 365.97 35.18 16.51
NORTHERN FOODS NFDS 823.19 169.00 171.25 134.50 1333.30 1345.60 *96900 -22.48 *65300 -35.02 14.02 13.59 14.80 12.10 12.40 11.40 *5.6 2.75 5.30 138.04 51.76 18.16
PREMIER FOODS PFD 638.55 260.75 271.00 207.00 *75900 0.00 *8600 0.00 15.59 25.98 16.70 10.00 N/A N/A 0.00 62.52 178.18
TATE & LYLE TATE 2265.85 469.25 499.00 269.25 1600.40 1617.10 *227000 8.61 *118000 13.46 28.70 29.36 35.50 16.40 16.00 13.20 *13.2 3.12 4.03 219.94 35.66 15.68
UNILEVER (UK) ULVR 14397.16 494.50 582.50 438.00 1016.60 1016.90 *3893094 0.00 *2064708 0.00 43.44 26.35 29.42 11.40 18.80 16.80 *6.33 2.76 3.69 161.83 71.43 66.51
FOOD RETAILERS
BIG FOOD GROUP BFP 317.88 92.50 183.75 77.50 628.70 547.80 *54100 28.81 *27600 135.90 12.90 4.19 5.64 7.20 22.10 16.40 *1.9 26.67 3.14 143.43 43.82 6.95
GREGGS GRG 449.13 3700.00 3750.00 3075.00 1217.20 1310.70 *40480 0.00 *27237 0.00 237.60 247.06 265.20 15.60 15.00 14.00 *30 17.65 2.28 1323.91 0.00 23.40
MORRISON(WM)SPMKTS. MRW 5606.72 211.00 259.75 170.50 947.60 1120.80 *320359 15.47 *197635 8.49 10.27 10.49 14.20 20.50 20.10 14.90 *0.625 13.64 1.58 65.43 7.63 15.82
SAINSBURY (J) SBRY 4552.48 267.75 312.85 240.00 968.80 906.20 *695000 -9.97 *404000 -12.36 15.10 12.56 11.83 17.70 21.30 22.60 *11.2647 0.00 5.05 483.10 33.76 8.05
SOMERFIELD SOF 846.83 156.50 174.00 125.00 1234.00 2068.50 *60200 48.64 *55800 40.20 8.80 11.60 13.71 17.80 13.50 11.40 *1.6 28.00 1.41 197.35 13.52 7.36
TESCO TSCO 24241.34 314.25 315.50 234.00 1324.00 1476.10 *1773000 15.58 *1043000 14.74 17.55 18.07 20.34 17.90 17.40 15.40 *2.29 10.63 2.25 182.71 39.46 17.02
FORESTRY & PAPER
SMITH (DS) SMDS 581.10 150.00 188.00 132.00 1104.60 1251.40 *91000 9.51 *55800 17.72 15.50 10.35 13.06 9.70 14.50 11.50 *5.6 0.08 5.47 146.75 37.22 11.71

HEALTHCARE
SMITH & NEPHEW SN. 5031.50 538.00 617.50 437.50 1148.00 1544.80 *222300 0.00 *132800 0.00 20.36 18.77 21.99 26.40 28.70 24.50 *1.9 2.70 0.93 27.54 23.47 28.82
HOUSEHOLD & MISCELLANEOUS
ALBA ABA 326.65 640.00 880.00 600.00 1034.50 1610.30 *32700 4.81 *24000 2.56 48.50 49.92 57.36 13.20 12.80 11.20 *8.75 12.90 1.72 37.62 30.95 31.75
HEADLAM GROUP HEAD 359.75 420.00 430.00 318.00 1351.00 1866.60 *33469 0.00 *22129 0.00 29.60 30.57 33.17 14.20 13.70 12.70 *10.25 10.22 3.39 74.99 3.32 22.72
INFORMATION SERVICES
ARM HOLDINGS ARM 1097.57 107.00 147.00 79.00 846.80 337.10 *23240 0.00 *15263 0.00 2.90 3.16 4.35 36.90 33.90 24.60 *0.28 N/A 0.82 1.62 0.00 8.81
CSR CSR 460.88 383.50 450.00 225.00 *-746.91 N/A *1777.03 N/A 25.25 24.77 15.20 15.50 N/A N/A 0.00 4.01 0.57
SOURCE: THOMSON FINANCIAL/ DATASTREAM

MARCONI MONI 1144.05 549.50 747.00 496.00 981.20 *80000 -110.40 *-141000 -86.55 0.00 - 38.36 5.25 104.60 N/A N/A 0.00 71.09 46.42
SPIRENT SPT 722.41 75.75 92.00 47.50 1252.10 567.60 *7900 0.00 *-2900 0.00 2.70 1.92 2.83 28.10 39.50 26.70 *1.35 0.00 0.00 9.46 43.78 - 0.36
INSURANCE
ALEA GP.HDG.(BERMUDA) ALEA 354.06 203.00 275.00 196.50 807.20 *59055 0.00 *40871 0.00 8.90 16.15 29.59 22.80 12.60 6.90 *0.03 N/A 0.82 7.00 19.74 11.78
AMLIN AML 593.54 150.25 175.00 127.00 1173.90 1748.30 *120700 0.00 *83300 0.00 23.30 22.99 23.20 6.40 6.50 6.50 *3 252.94 3.09 1.62 2.67 27.15
BENFIELD GP. BFD 686.67 285.00 285.00 215.00 1200.90 *40805 0.00 *18017 0.00 14.44 21.01 20.78 19.70 13.60 13.70 *13.5 N/A 3.33 7.35 22.16 120.12
BRIT INSURANCE HLDNG. BRE 737.86 75.75 91.00 65.25 1146.70 1176.90 *81938 0.00 *57035 0.00 7.64 8.11 9.25 9.90 9.30 8.20 *2 - 0.85 5.28 0.49 7.69 12.10
CATLIN GROUP CGL 539.25 350.00 392.00 336.50 N/A N/A *77191 N/A 60.87 68.43 5.70 5.10 *4.3 N/A 1.23 5.89 7.28
HISCOX HSX 489.85 169.50 181.00 139.00 1261.30 1247.30 *85373 0.00 *60491 0.00 27.70 19.91 22.36 6.10 8.50 7.60 *1.5 15.38 2.60 2.54 0.22 21.58
JARDINE L. THOMPSON JLT 734.45 364.50 608.00 338.00 708.00 680.60 *106738 0.00 *75443 0.00 39.00 31.70 33.07 9.30 11.50 11.00 *8.5 0.00 5.62 14.17 3.71 50.10
ROYAL & SUN ALL.IN. RSA 2213.18 76.00 110.00 67.25 1007.60 292.10 *-23000 0.00 *-375000 0.00 0.00 12.30 11.71 6.20 6.50 *1.65 2.14 5.99 16.52 18.11 - 13.47
WELLINGTON UWRITING WUN 433.85 88.50 102.00 76.50 1162.40 857.20 *97200 0.00 *67000 0.00 18.20 11.25 11.63 4.90 7.90 7.60 *1 185.71 2.99 0.92 0.00 28.96

22 December 2004 65
221204 p64-68 tables 12/20/04 9:25 AM Page 66

LARGE & MID CAP TABLES

FTSE
350 CODE MARKET PRICE (p) VALUE 1,000 EBIT NET PROFIT EPS (p) PE RATIO DIVIDEND NTA GEARING RETURN
CAP Over Latest % Latest % Forecast Forecast Latest % Current ON EQUITY
m Current High Low 1 yr 3 yrs 000 change 000 change Current 1yr 2yrs Current 1yr 2yrs Paid Change Yield % (p) % %
LEISURE, ENTERTAINMENT & HOTELS
CARNIVAL CCL 6489.04 3059.00 3089.00 2192.00 1411.30 2677.80 *869503 0.00 *732149 0.00 2.18 2.26 2.77 26.00 26.30 21.50 *0.15 20.00 0.93 4799.09 34.93 41.94
DE VERE GROUP DVR 538.52 469.00 479.50 387.00 1207.30 1748.30 *45798 0.00 *25678 0.00 27.98 29.08 32.18 16.80 16.10 14.60 *4.28 7.00 2.79 748.20 27.83 4.56
ENTERPRISE INNS ETI 2574.93 737.00 742.50 499.50 1471.70 3099.30 *264200 0.00 *116500 0.00 47.50 58.23 64.33 15.50 12.70 11.50 *3.6 26.32 1.63 722.65 56.57 17.99
FIRST CHOICE HOLS. FCD 814.16 154.25 154.50 114.00 1183.80 1409.60 *55500 0.00 *32500 0.00 10.80 8.67 9.35 14.30 17.80 16.50 *1.75 9.37 3.57 55.61 17.80 6.49
GREENE KING GNK 922.50 1285.00 1303.00 850.00 1544.10 2006.80 *102900 5.11 *52000 10.17 86.00 73.26 78.21 14.90 17.50 16.40 *23.5 10.33 2.64 1495.33 40.98 11.29
HILTON GROUP HG. 4347.63 274.75 287.50 211.00 1310.40 1531.30 *260500 0.00 *103700 0.00 18.00 15.64 17.42 15.30 17.60 15.80 *3.6 5.88 3.32 162.32 41.67 4.53
ICTL.HTLS.GP. IHG 4053.93 650.00 693.93 476.76 1234.00 *149600 0.00 *42400 0.00 54.91 34.00 37.67 11.80 19.10 17.30 *4.29338 6.17 2.11 633.50 26.92 0.28
LUMINAR LMR 404.66 553.00 589.50 394.00 1357.70 702.20 *3000 -95.63 *-25500 -182.26 58.80 33.41 35.22 9.40 16.50 15.70 *8.87 10.05 2.33 707.35 34.34 - 5.09
MANCHESTER UTD. MNU 717.08 273.50 290.75 216.00 1042.70 2147.10 *27971 -29.25 *19421 -34.79 14.10 4.38 4.37 19.40 62.40 62.60 *1.4 - 57.96 0.97 47.71 0.00 12.42
MIL. & COPTHORNE MLC 1085.14 379.00 384.75 275.00 1271.30 1582.80 *57800 0.00 *14800 0.00 12.80 13.65 16.86 29.60 27.80 22.50 *2.08 - 50.48 1.09 734.50 33.93 0.82
MITCHELLS & BUTLERS MAB 1667.88 319.00 326.50 220.25 1492.50 *222000 0.00 *125000 0.00 22.20 24.06 26.27 14.40 13.30 12.10 *2.85 - 95.81 2.98 673.62 37.44 5.13
PUNCH TAVERNS PUB 1627.29 651.00 655.50 412.25 1608.50 *237300 0.00 *97600 0.00 48.80 54.70 63.68 13.30 11.90 10.20 *2.9 38.10 1.38 888.68 71.13 19.74
RANK GROUP RNK 1563.11 260.00 340.75 260.00 981.70 1364.20 *173700 0.00 *101000 0.00 20.20 19.26 20.43 12.90 13.50 12.70 *4.8 4.35 5.42 133.60 61.94 16.52
STANLEY LEISURE SLY 549.45 433.00 510.00 374.75 1164.60 1802.50 *48900 -3.76 *22200 -23.91 20.60 25.85 28.69 21.00 16.80 15.10 *6.75 10.66 2.19 640.38 29.20 3.53
WETHERSPOON (JD) JDW 478.75 255.50 324.00 220.00 1000.30 686.00 *70462 -2.28 *29274 -14.01 17.70 16.49 17.43 14.40 15.50 14.70 *2.56 9.87 1.52 418.18 54.58 9.19
WHITBREAD WTB 2511.75 842.00 860.00 695.00 1213.10 1757.40 *223800 -3.41 *137400 -2.00 61.54 62.05 74.47 13.70 13.60 11.30 *16.15 12.94 2.74 1002.22 29.10 8.32
WILLIAM HILL WMH 2157.85 546.00 568.00 410.25 1403.10 *198700 0.00 *123600 0.00 35.00 38.33 43.79 15.60 14.20 12.50 *5.5 57.14 2.66 25.56 56.51 51.29
WOLV.&.DUDLEY WOLV 789.22 1084.50 1084.50 758.00 1492.40 2239.00 *94800 0.00 *38500 0.00 75.80 66.44 76.10 14.30 16.30 14.30 *12 10.09 3.26 1222.85 51.22 8.65
LIFE ASSURANCE
AVIVA AV. 14136.09 619.50 626.50 472.00 1425.80 919.10 *1985000 0.00 *961000 0.00 51.50 59.87 64.59 12.00 10.30 9.60 *9.36 4.00 3.96 31.77 23.75 9.99
BRITANNIC GROUP BRT 865.23 440.00 456.50 274.00 1666.60 701.10 N/A N/A *47300 0.00 32.60 29.74 30.14 13.50 14.80 14.60 *5.45 - 70.54 3.51 34.12 14.11 6.29
FRIENDS PROVIDENT FP. 3097.70 155.75 161.25 123.75 1272.30 937.10 *279000 0.00 *188000 0.00 11.90 11.93 13.08 13.10 13.10 11.90 *2.55 2.00 4.78 3.82 26.22 10.21
LEGAL & GENERAL LGEN 7203.02 110.75 114.75 86.50 1217.70 919.90 *683000 0.00 *404000 0.00 12.44 7.71 10.32 8.90 14.40 10.70 *1.61 2.55 4.46 1.00 23.71 12.74
OLD MUTUAL OML 5103.97 132.50 136.00 90.00 1437.20 1831.50 *2263000 0.00 *202000 0.00 11.20 14.16 12.16 11.80 9.40 10.90 *1.75 2.94 3.66 2.10 15.56 10.22
PRUDENTIAL PRU 10778.22 453.75 514.11 380.00 1071.20 713.60 *1907000 0.00 *206000 0.00 16.24 32.69 38.46 27.90 13.90 11.80 *5.19161 1.89 3.55 15.37 33.91 5.72
ST.JAMESS PLACE CAP. STJ 939.00 214.50 216.00 154.00 1397.40 644.10 *12300 0.00 *4200 0.00 1.60 14.15 17.22 134.00 15.20 12.50 *1.25 0.00 1.28 1.32 22.98 3.50
MEDIA & PHOTOGRAPHY
AEGIS GROUP AGS 1159.92 103.75 116.50 76.50 1074.80 1220.80 *58900 0.00 *23000 0.00 5.20 3.20 3.70 20.00 32.40 28.00 *0.575 10.58 1.33 4.82 72.79 17.87
BRIT.SKY BCAST. BSY 10703.79 556.00 786.00 460.00 832.20 764.90 *570000 135.44 *322000 70.55 19.80 21.86 26.00 28.10 25.40 21.40 *3.25 18.18 1.08 19.53 92.28
CAPITAL RADIO CAP 345.97 405.00 574.00 388.25 879.90 582.90 *12650 0.00 *4888 0.00 20.10 11.64 12.45 20.10 34.80 32.50 *6 0.00 4.57 19.73 17.27 4.50
CHRYSALIS GROUP CHS 312.17 186.00 263.75 155.00 846.50 806.70 *30169 0.00 *22697 0.00 3.11 4.15 5.89 59.80 44.80 31.60 *1 - 80.00 0.67 11.53 50.47 122.77
DAILY MAIL A DMGT 2691.81 713.50 769.00 620.50 1162.90 1174.00 *176400 0.00 *60900 0.00 41.60 24.70 27.23 17.20 28.90 26.20 *3.45 9.52 1.54 133.38 75.61 22.50
EMAP EMA 2082.89 810.50 965.00 690.50 997.00 1222.00 *165000 5.77 *97000 0.00 56.10 37.42 43.09 14.40 21.70 18.80 *15.9 8.90 2.95 12.06 52.04 38.27
EMI GROUP EMI 2116.26 268.00 282.00 152.00 1820.70 897.00 *37100 -90.73 *-72100 -130.47 15.80 11.19 13.53 17.00 23.90 19.80 *6 0.00 2.99 25.67 289.77
EMONEY INSTL.INVEST. ERM 373.80 425.00 460.00 325.00 1106.00 1535.90 *11496 0.00 *3985 0.00 26.71 18.56 23.06 15.90 22.90 18.40 *5 0.00 3.53 9.85 - 783.52
GWR GROUP GWG 316.63 241.50 330.00 221.00 953.00 1063.30 *19281 -350.89 *9656 -161.81 8.80 3.59 5.24 27.40 67.30 46.10 *4 14.29 2.65 15.09 49.07 12.64
HIT ENTERTAINMENT HTE 417.91 264.00 341.00 192.50 961.00 743.10 *18811 -38.01 *6669 -56.54 15.20 3.94 5.74 17.40 67.00 46.00 *0.636 97.52 0.48 5.45 29.24 2.30
ITV ITV 4321.04 106.00 150.00 94.25 930.70 887.10 N/A N/A N/A N/A 5.50 2.78 6.12 19.30 38.20 17.30 *0.5 - 47.13 1.51 7.33 0.00
JOHNSTON PRESS JPR 1532.84 538.00 580.00 454.75 1199.00 1796.80 *160970 0.00 *89233 0.00 34.99 35.94 38.36 15.40 15.00 14.00 *2.4 20.00 1.19 55.09 40.55 15.99
PEARSON PSON 4899.74 610.00 688.00 574.00 1028.10 908.40 *237000 0.00 *74000 0.00 32.50 0.42 7.54 18.80 80.90 *9.7 3.19 4.02 58.26 38.27 1.67
PHOTO-ME INTL. PHTM 344.22 94.50 145.75 81.75 838.60 2157.00 *22812 -5518.53 *15085 -488.59 4.45 5.70 21.20 16.60 *1 233.33 1.90 17.56 28.87 24.37
REED ELSEVIER REL 5978.94 470.00 543.00 443.00 1073.70 930.30 *2000 0.00 *1000 0.00 32.00 12.05 15.50 14.70 39.00 30.30 *3.4 3.03 2.57 0.00 2.72 12.01
REUTERS GP. RTR 5299.16 369.50 445.00 230.00 1670.40 632.40 *119000 0.00 *57000 0.00 23.40 7.89 15.46 15.80 46.80 23.90 *3.85 0.00 2.71 33.54 65.45 10.05
SCOT.RADIO HDG. SRH 337.99 940.00 988.00 829.00 1147.30 1179.40 *14400 0.00 *7300 0.00 41.40 28.48 32.57 22.70 33.00 28.90 *7 7.69 2.23 47.28 36.48 6.62
SMG SMG 320.57 102.00 137.00 88.00 955.40 775.60 *18600 0.00 *-900 0.00 5.00 0.94 1.34 20.40 108.50 75.80 *2.5 0.00 3.43 11.07 78.39 6.34
ST.IVES SIV 402.91 390.00 429.00 325.25 1045.10 1021.20 *15349 -56.41 *3000 -86.66 25.08 28.24 31.96 15.60 13.80 12.20 *12.15 0.00 4.40 157.94 8.76 1.25
T&F INFORMA TFI 1113.19 371.75 405.00 305.00 1235.90 1689.50 *14978 0.00 *943 0.00 0.00 9.89 15.84 37.60 23.50 *2.8 5.26 2.08 9.10 71.21 3.80
TAYLOR NELSON SOFRES TNN 994.63 223.00 247.00 188.00 1125.90 1254.20 *46300 0.00 *11400 0.00 11.40 6.42 9.34 19.60 34.70 23.90 *1.1 15.79 1.41 18.16 83.91 44.79
TRINITY MIRROR TNI 1889.44 642.00 697.00 539.50 1247.60 1789.50 *99900 0.00 *13700 0.00 45.90 46.03 51.86 14.00 13.90 12.40 *5.9 7.27 2.91 136.25 38.31 1.18
UNITED BUSINESS MEDIA UBM 1592.65 474.25 576.50 408.00 1022.30 1116.70 *-1000 0.00 *-44200 0.00 28.20 - 5.28 0.15 16.80 3226.20 *3.63 10.00 1.97 16.23 81.91 - 20.23
WPP GROUP WPP 6596.25 561.00 648.50 463.50 1043.50 851.50 *415300 0.00 *204400 0.00 31.30 26.81 31.71 17.90 20.90 17.70 *2.5 20.19 1.23 29.31 32.15 6.20
YELL GROUP YELL 2995.79 429.25 443.75 297.00 1461.60 *94200 -49.30 *-51100 25.86 18.40 13.72 16.25 23.30 31.30 26.40 *6 N/A 2.38 6.58 58.26
MINING
ANGLO AMERICAN AAL 17552.61 1175.00 1425.00 1045.00 1038.10 1221.40 *1332850 0.00 *734440 0.00 1.50 1.92 2.23 15.20 11.80 10.10 *0.19 26.67 2.71 913.90 31.61 10.00
ANTOFAGASTA ANTO 2076.21 1053.00 1283.00 829.00 1099.80 2156.10 *237626 0.00 *177946 0.00 95.49 2.53 1.87 11.00 8.10 10.90 *8.264 19.83 2.00 529.18 40.71 18.45
BHP BILLITON BLT 14290.56 579.00 627.00 425.00 1289.20 2030.80 *2608944 35.18 *1857494 64.68 0.56 0.84 0.95 18.70 13.40 11.90 *0.095 18.75 2.46 467.32 31.38 26.60
LONMIN LMI 1270.33 897.00 1255.00 867.00 916.10 1032.30 *199832 0.00 *67233 0.00 51.79 1.29 1.27 17.30 13.50 13.70 *16.34 - 12.95 4.32 417.16 23.10 10.76
RANDGOLD RESOURCES RRS 348.36 595.00 796.50 415.00 801.90 3653.60 *29822 0.00 *28670 0.00 0.08 137.00 *0.025 0.00 0.00 69.65 15.24 39.09
RIO TINTO RIO 15281.05 1431.00 1585.00 1181.00 1029.00 1254.40 *940782 0.00 *639950 0.00 69.35 1.68 2.42 20.60 16.50 11.50 *17.54 - 4.93 2.53 796.90 35.37 19.68
VEDANTA RESOURCES VED 1051.04 367.00 391.50 266.00 1053.30 N/A N/A N/A N/A 15.14 21.61 38.60 24.20 17.00 9.50 *0.055 N/A 1.64 214.20 18.86
XSTRATA XTA 5680.36 899.50 956.50 590.00 1576.50 *269654 0.00 *187062 0.00 0.78 1.51 2.17 21.00 11.60 8.00 *0.08 19.40 1.30 675.26 25.86 7.65
SOURCE: THOMSON FINANCIAL/ DATASTREAM

OIL & GAS


ABBOT GROUP ABG 391.68 222.75 222.75 136.00 1397.70 1828.80 *24128 0.00 *12512 0.00 11.80 11.00 11.86 18.90 20.30 18.80 *1.6 14.29 2.11 75.76 21.07 8.91
BG GROUP BG. 12205.38 345.25 382.00 269.50 1252.60 1388.70 *1201000 0.00 *641000 0.00 22.00 23.34 24.58 15.70 14.80 14.00 *1.73 8.12 1.04 113.71 20.89 23.10
BP BP. 108101.63 502.00 561.00 407.75 1207.60 1111.10 *9615662 0.00 *5686623 0.00 29.60 0.61 0.62 17.00 15.90 15.70 *3.91 1.37 3.04 239.02 22.48 14.51
BURREN ENERGY BUR 596.12 435.00 483.00 129.00 3234.20 *20156 0.00 *16215 0.00 11.19 24.70 42.05 38.90 17.60 10.30 N/A N/A 0.00 72.14 2.83 51.53
CAIRN ENERGY CNE 2165.06 1362.00 1581.00 363.00 3501.30 5547.90 *70888 0.00 *46303 0.00 23.81 25.34 27.81 57.20 53.70 49.00 N/A N/A 0.00 247.44 0.00 14.39
PALADIN RESOURCES PLR 613.53 189.50 192.00 85.25 2223.10 4476.00 *91762 0.00 *28446 0.00 9.02 11.05 15.28 21.00 17.10 12.40 *0.56 6.67 0.85 89.87 42.98 26.87
PREMIER OIL PMO 449.40 540.00 660.00 447.00 1221.70 3085.70 *52900 0.00 *9900 0.00 21.30 34.25 31.61 25.40 15.80 17.10 *6.05003 0.00 0.00 247.17 20.38 13.06
SHELL TPORT & TRDG. SHEL 41363.00 429.75 451.00 346.25 1152.60 1075.70 *4825455 0.00 *2653392 0.00 33.50 0.70 0.63 12.80 11.90 13.20 *6.25 2.46 3.70 204.11 20.88 20.99
TULLOW OIL TLW 930.64 145.00 154.50 83.00 1738.90 1948.90 *35348 0.00 *10921 0.00 3.46 6.56 7.61 41.90 22.10 19.10 *0.5 - 50.00 1.03 22.49 42.87 10.89
WOOD GROUP (JOHN) WG. 656.39 135.75 154.75 106.00 923.40 *41387 0.00 *13553 0.00 0.02 0.11 0.14 109.80 22.90 18.90 *0.012 9.09 1.41 20.17 31.18 7.98
PERSONAL & HOUSEHOLD GOODS
PZ CUSSONS PZC 293.58 1370.00 1440.00 1080.00 1271.00 2097.70 *61857 13.76 *41771 21.74 85.87 16.00 *23.95 11.40 2.34 684.39 2.63 15.43
PZ CUSSONS A PZCA 227.16 1177.00 1260.00 936.00 1209.90 2344.60 *61857 13.76 *41771 21.74 85.87 13.70 *23.95 11.40 2.72 759.88 2.63 15.43

66 Shares
221204 p64-68 tables 12/20/04 9:25 AM Page 67

LARGE & MID CAP TABLES

FTSE
350 CODE MARKET PRICE (p) VALUE 1,000 EBIT NET PROFIT EPS (p) PE RATIO DIVIDEND NTA GEARING RETURN
CAP Over Latest % Latest % Forecast Forecast Latest % Current ON EQUITY
m Current High Low 1 yr 3 yrs 000 change 000 change Current 1yr 2yrs Current 1yr 2yrs Paid Change Yield % (p) % %
RECKITT BENCKISER RB. 10702.90 1544.00 1616.00 1230.00 1265.80 1741.40 *703000 0.00 *489000 0.00 77.70 77.76 87.03 19.90 19.90 17.70 *16 14.29 1.94 72.42 24.99 40.89
SSL INTERNATIONAL SSL 522.89 276.00 342.00 255.00 904.20 580.10 *10500 -82.08 *-11800 -154.13 21.40 24.67 20.27 12.90 11.20 13.60 *4.2 - 50.00 2.32 61.49 78.85 - 8.73
PHARMACEUTICALS & BIOTECH
ACAMBIS ACM 268.81 253.00 372.00 245.25 911.70 774.90 *40400 0.00 *35500 0.00 13.90 15.29 0.42 18.20 16.50 598.10 N/A N/A 0.00 19.76 16.02 78.10
ALLIANCE UNICHEM AUN 2679.00 748.00 757.50 485.00 1544.60 1542.10 *225300 0.00 *106800 0.00 44.30 43.96 48.56 16.90 17.00 15.40 *6.25 9.65 2.31 85.13 50.11 15.29
ASTRAZENECA AZN 33906.49 2056.00 2773.00 2026.00 812.00 716.80 *2569524 0.00 *1859076 0.00 98.19 2.12 2.46 20.90 18.80 16.30 *0.295 15.69 2.22 255.90 3.32 26.59
GLAXOSMITHKLINE GSK 70226.19 1196.00 1299.00 1033.00 980.80 768.40 *6452000 0.00 *4539000 0.00 72.20 75.95 82.01 16.60 15.70 14.60 *10 11.11 3.68 109.69 47.28 119.41
SHIRE PHARMA SHP 2577.66 533.25 579.50 421.50 1086.50 628.60 *-288878 0.00 *-363355 0.00 33.27 0.64 0.78 16.00 16.10 13.40 *1 N/A 0.00 20.08 8.23 - 13.22
SKYEPHARMA SKP 424.07 68.00 78.00 49.50 903.70 1214.30 *-38490 0.00 *-43223 0.00 0.00 - 0.51 1.01 67.50 *7.90494 0.00 0.00 6.83 46.15 - 38.62
WARNER CHILCOTT WCRX 1603.73 855.50 875.00 530.50 1162.80 1247.90 *79544 0.00 *58540 0.00 62.23 0.81 1.19 13.70 20.10 13.80 *1.44 20.00 0.45 19.91 23.29 8.71

REAL ESTATE
BRITISH LAND BLND 4485.95 866.00 870.00 569.00 1556.20 2090.00 *460600 13.39 *152400 48.68 34.50 28.38 30.46 25.10 30.50 28.40 *10.07 8.28 1.72 1785.92 51.84 4.15
BRIXTON BXTN 915.52 340.50 342.00 258.25 1375.80 1824.00 *86600 0.00 *39000 0.00 15.20 14.65 15.28 22.40 23.20 22.30 *7.25 2.84 3.32 546.95 48.60 5.25
CAPITAL & REGIONAL CAL 438.31 694.50 698.00 391.00 1802.80 2997.30 *17931 0.00 *3678 0.00 43.30 39.60 36.74 16.00 17.50 18.90 *5 25.00 1.44 101.03 26.82 7.18
CLS HOLDINGS CLI 347.07 396.00 396.00 268.50 1432.20 1795.90 *49230 0.00 *17389 0.00 22.30 17.19 19.69 17.80 23.00 20.10 *2.4 0.00 0.00 1014.66 58.40 5.05
COUNTRYWIDE CWD 529.59 311.00 346.75 255.00 N/A N/A *50900 0.00 26.40 29.70 11.80 10.50 *4.5 N/A 4.50 20.96 28.28 438.79
DERWENT VALLEY DWV 585.95 1100.00 1119.00 710.00 1448.80 1711.70 *35800 0.00 *14800 0.00 25.30 27.08 27.25 43.50 40.60 40.40 *3.6 9.09 1.06 1515.17 39.07 2.89
GRAINGER TRUST GRI 471.62 1900.00 1955.00 1561.00 1215.60 2333.00 *52300 0.00 *25800 0.00 149.70 100.35 102.10 12.70 18.90 18.60 *4.04 15.10 1.22 439.52 75.73 24.57
GT.PORTLAND EST. GPOR 535.76 329.75 329.75 236.68 1374.50 1509.20 *55000 -691.40 *30700 -249.76 15.07 10.27 8.87 21.90 32.10 37.20 *50 614.51 3.74 455.58 35.41 5.42
HAMMERSON HMSO 2241.10 810.00 819.50 599.00 1294.20 1999.50 *155700 0.00 *52300 0.00 30.70 29.88 28.86 26.40 27.10 28.10 *5.45 6.45 2.12 1430.10 44.54 2.47
LAND SECURITIES LAND 6295.48 1348.00 1354.00 976.50 1404.40 1988.20 *532800 18.66 *270600 24.76 50.95 56.47 62.97 26.50 23.90 21.40 *27.2 4.62 2.79 1863.10 30.72 5.21
LDN.MER.SECS. LMSO 687.93 210.00 216.00 160.00 1325.40 1654.40 *45892 258.50 *13310 -157.32 5.36 5.30 5.48 39.20 39.60 38.30 *4.4 2.33 3.05 260.76 30.21 1.74
LIBERTY INTL. LII 3002.49 907.50 914.00 648.50 1390.00 2104.50 *236000 0.00 *75800 0.00 28.22 29.98 30.67 32.20 30.30 29.60 *12.4 5.53 2.83 1398.17 41.72 3.03
MINERVA MNR 461.32 287.00 325.00 208.75 1372.80 1342.20 *48085 4.82 *333 -181.02 0.00 - 2.94 1.67 171.90 *2.13 102.86 1.11 748.83 52.96 - 4.20
NHP NHP 534.62 257.50 263.50 149.00 1730.30 5260.10 *67408 0.00 *25289 0.00 15.50 12.40 13.60 16.60 20.80 18.90 *3 300.00 1.17 356.42 63.99 12.18
PILLAR PR. PLL 708.80 788.00 796.50 517.12 1517.40 2301.50 *43400 36.91 *20700 41.78 20.20 12.10 18.80 39.00 65.10 41.90 *6.2464 7.02 1.10 180.44 19.05 3.67
QUINTAIN ESTATES & DEV. QED 716.50 553.25 563.00 339.00 1696.40 3366.00 *33674 9.83 *16037 30.16 11.10 7.65 12.92 49.80 72.30 42.80 *6 14.29 1.58 616.45 38.92 3.58
SHAFTESBURY SHB 458.08 347.00 350.75 235.00 1489.30 1336.40 *32945 0.00 *8238 0.00 11.15 8.99 10.12 31.10 38.60 34.30 *1.513 10.04 1.27 551.77 45.46 2.19
SLOUGH ESTATES SLOU 2125.97 507.50 510.00 408.25 1194.30 1816.20 *181100 0.00 *79100 0.00 27.80 24.31 25.05 18.30 20.90 20.30 *6.15 6.03 3.02 860.73 43.07 3.88
ST MODWEN PROPS. SMP 392.21 324.75 331.00 223.00 1285.10 3259.40 *39927 0.00 *20912 0.00 22.90 22.67 27.59 14.20 14.30 11.80 *2.5 13.64 2.12 222.75 37.29 12.43
WORKSPACE GROUP WKP 366.79 2175.00 2175.00 1372.50 1545.20 2031.10 *30748 8.24 *10533 1.60 64.40 67.86 72.17 33.80 32.10 30.10 *20.7 0.49 1.47 3734.11 50.95 4.36
RETAIL
BODY SHOP INTL. BOS 354.69 168.00 186.00 117.50 1403.90 1925.60 *30800 25.71 *21700 59.56 10.70 12.58 14.08 15.70 13.40 11.90 *3.8 0.00 3.39 29.32 17.27 17.89
BOOTS GROUP BOOT 4811.39 650.50 756.50 591.00 1010.00 1303.10 *606000 11.97 *413300 31.54 43.20 47.33 56.90 15.10 13.70 11.40 *21 3.96 4.63 202.72 21.60 21.55
BROWN (N) GROUP BWNG 392.78 133.00 140.00 98.50 1239.90 562.00 *38000 -36.19 *18400 -52.41 5.12 10.71 11.42 26.00 12.40 11.60 *4.1 0.00 4.39 28.10 41.37 7.37
BURBERRY GROUP BRBY 1994.30 396.50 424.00 324.00 1107.90 *138900 58.20 *91500 75.29 21.50 20.70 23.42 18.40 19.20 16.90 *3 50.00 1.26 29.78 0.19 23.71
CARPETRIGHT CPR 812.15 1180.00 1180.00 818.00 1537.20 2298.00 *68945 30.19 *48937 33.29 72.30 68.97 74.72 16.30 17.10 15.80 *27 22.73 3.90 188.79 51.83 87.06
CARPHONE WHSE.GP. CPW 1509.80 172.50 175.50 116.75 1290.30 1324.60 *51465 22.56 *27704 25.53 7.48 5.67 6.94 23.10 30.40 24.80 *0.55 37.50 0.84 22.35 20.84 6.08
DIXONS GP. DXNS 2866.45 149.00 177.50 133.25 1174.20 715.70 *399700 28.77 *283300 35.42 14.40 12.82 13.88 10.30 11.60 10.70 *5.66 10.01 4.91 30.35 19.68 16.55
FINDEL FDL 423.22 500.00 500.00 321.00 1578.50 1886.10 *48508 38.46 *28205 51.88 37.19 13.40 *11.4 16.33 2.98 64.76 52.41 30.88
FRENCH CONNECTN. FCCN 213.77 224.00 502.00 217.00 617.60 1523.50 *38400 27.15 *26400 29.41 29.40 27.54 29.35 7.60 8.10 7.60 *1.2 20.00 1.54 33.32 6.35 33.04
GUS GUS 9380.38 930.00 957.00 701.00 1331.50 1663.00 *711000 69.69 *453000 105.91 63.60 46.72 53.33 14.60 19.90 17.40 *19 15.85 3.01 102.91 38.15 18.92
HALFORDS GROUP HFD 682.62 299.50 308.00 261.00 *74600 N/A *13500 N/A 17.70 20.32 16.90 14.70 N/A N/A 1.24 36.20 98.81
HMV GROUP HMV 1031.74 255.00 258.00 158.00 1609.50 *135530 61.89 *82220 74.84 20.40 22.43 24.00 12.50 11.40 10.60 *4.5 32.35 2.27 38.66 146.76
JJB SPORTS JJB 429.23 186.00 328.00 176.00 794.10 471.10 *77619 -12.38 *45462 -8.65 24.91 14.93 16.37 7.50 12.50 11.40 *3 0.00 5.38 67.51 41.97 13.98
KESA ELECTRICALS KESA 1497.44 282.75 317.00 243.00 1181.20 *197800 11.69 *105600 12.94 22.40 23.42 25.89 12.60 12.10 10.90 *2.75 10.00 3.63 98.68 65.25 17.90
KINGFISHER KGF 7114.91 303.75 320.00 267.25 1138.70 1213.90 *606000 9.25 *446400 75.20 19.30 20.81 23.08 15.70 14.60 13.20 *3.85 10.00 3.29 118.74 18.67 5.30
LASTMINUTE.COM LMC 401.73 118.00 246.00 90.00 552.70 2776.50 *-46485 0.00 *-47645 0.00 1.45 - 11.94 - 8.63 81.40 N/A N/A 0.00 6.41 42.34 - 45.56
MARKS & SPENCER MKS 5654.45 343.50 382.75 260.50 1297.40 1082.00 *840700 15.35 *552300 15.04 24.00 23.75 32.20 14.30 14.50 10.70 *7.1 9.23 3.41 212.47 52.53 18.82
MATALAN MTN 933.38 222.00 248.00 150.75 1363.80 812.10 *63900 -46.21 *43400 -49.94 10.40 14.24 16.12 21.30 15.60 13.80 *2.9 7.41 3.74 48.38 29.57 22.31
MFI FURNITURE MFI 767.96 123.50 166.00 100.25 939.70 971.60 *119100 0.00 *86800 0.00 10.10 6.41 9.74 12.20 19.30 12.70 *2 11.11 3.24 62.24 10.06 22.72
NEXT NXT 4307.48 1645.00 1725.00 1082.00 1558.70 1962.00 *368900 22.97 *243400 17.08 105.50 112.02 126.43 15.60 14.70 13.00 *24 14.29 2.25 135.84 70.42 107.50
SIGNET GROUP SIG 1850.40 106.75 123.00 92.25 1130.70 1258.30 *224600 3.36 *137200 6.44 7.90 8.22 8.84 13.50 13.00 12.10 *0.375 9.97 2.37 11.70 22.22 19.70
SMITH(WH) SMWH 561.06 311.00 376.47 227.43 1146.20 736.80 *-134000 -348.15 *-148000 -743.48 18.00 27.10 32.42 17.30 11.50 9.60 *4.12566 - 33.33 3.86 131.37 6.91 - 36.54
TOPPS TILES TPT 561.08 248.00 248.00 107.50 2332.50 4956.70 *34155 93.79 *25655 109.29 11.30 12.32 14.34 21.90 20.10 17.30 *2 233.33 3.23 12.92 16.49 83.21
WOOLWORTHS GROUP WLW 604.22 42.50 47.75 37.00 1010.20 1121.20 *77500 48.47 *45400 60.42 3.60 3.48 4.31 11.80 12.20 9.90 *0.39 8.33 3.60 22.77 18.28 10.68
SOFTWARE & COMPUTER SERVICES
COMPUTACENTER CCC 502.88 267.50 500.50 252.00 598.50 779.90 *69187 0.00 *45982 0.00 25.80 25.05 25.59 10.40 10.70 10.50 *2.3 15.00 2.73 53.49 14.24 19.08
DIMENSION DATA HDG. DDT 503.46 37.50 52.00 24.75 1063.80 457.30 *-243789 0.00 *-266436 0.00 0.49 0.03 0.04 77.10 28.00 19.20 N/A N/A 0.00 4.47 24.09 - 64.17
ISOFT GROUP IOT 780.85 345.00 451.00 305.00 1001.80 1242.50 *21097 -0.85 *10784 -19.50 17.48 10.82 15.15 19.70 31.90 22.80 *1.7 41.67 0.71 5.24 13.61 14.60
LOGICACMG LOG 1384.93 184.50 337.00 143.75 744.80 310.50 *-16100 0.00 *-43700 0.00 9.10 6.59 10.68 20.30 28.00 17.30 *2.3 0.00 3.09 11.20 42.53 - 8.92
MISYS MSY 1226.53 219.50 247.75 168.00 811.90 769.20 *33400 -53.42 *24500 -44.06 14.80 4.41 6.85 14.80 49.70 32.00 *4.08 14.93 2.97 4.49 269.45
SOURCE: THOMSON FINANCIAL/ DATASTREAM

NORTHGATE INFO.SLTN. NIS 318.08 64.25 73.00 47.00 1241.50 1862.30 *-8435 -129.96 *-10149 -134.12 7.36 1.78 2.59 8.70 36.10 24.80 *0.35937 0.00 0.00 5.95 27.01 - 22.44
SAGE GROUP SGE 2511.57 196.00 210.50 153.25 1159.10 908.40 *157300 0.00 *104216 0.00 9.90 10.87 11.94 19.80 18.00 16.40 *0.611 10.09 1.19 7.74 22.50 16.75

SPECIALITY & OTHER FINANCE


AMVESCAP AVZ 2500.84 308.50 464.00 257.50 831.00 332.30 *84665 0.00 *-17281 0.00 23.70 5.26 5.45 13.00 58.70 56.60 *2.5 - 50.00 2.92 21.04 25.88 - 0.81
CATTLES CTT 1197.67 365.00 391.50 279.50 1171.00 1423.90 *175247 0.00 *82915 0.00 27.67 29.20 33.82 13.20 12.50 10.80 *4.55 15.19 3.48 11.74 72.62 24.25
CLOSE BROTHERS CBG 1027.42 712.00 902.00 620.50 1047.70 1036.50 N/A N/A *67418 28.20 57.30 56.37 62.97 12.40 12.60 11.30 *18 5.88 3.79 22.77 63.59 13.40
COLLINS STEW.TULLETT CSTL 815.88 385.00 496.00 326.50 934.00 1103.50 *73500 0.00 *40900 0.00 31.10 14.74 15.05 12.40 26.10 25.60 *2.75 10.00 2.08 12.08 15.20 37.42
EVOLUTION GROUP EVG 378.90 152.25 158.50 95.50 1598.80 1806.90 *17920 0.00 *16048 0.00 20.90 7.30 *0.17 N/A 0.28 0.61 0.00 22.64
F&C ASSET MANAG. FCAM 1165.67 242.00 250.00 172.00 1176.80 1171.80 *4507 0.00 *-11821 0.00 13.82 1.39 2.97 17.50 174.20 81.40 *4 0.00 4.55 1.78 60.18 - 7.54
HHG HHG 1483.84 54.75 55.25 37.00 *-652000 0.00 *-847000 0.00 0.00 2.22 2.29 24.70 23.90 N/A N/A 0.00 2.32 21.09 - 111.14
ICAP IAP 1552.71 256.75 331.40 201.00 881.20 1767.40 *124600 10.85 *82600 9.55 18.30 12.17 14.02 14.00 21.10 18.30 *5.7 23.91 2.94 10.70 0.60 33.45
INTM.CAPITAL GROUP ICP 724.94 1050.00 1235.00 930.00 1018.40 1686.00 *92400 18.61 *43600 24.22 74.00 76.98 84.67 14.20 13.60 12.40 *11.8 12.38 3.41 2.03 71.19 20.17
INVESTEC INVP 1173.25 1572.00 1621.00 896.00 1440.40 73436.00 N/A *70598 -198.52 118.50 13.30 *30 7.14 3.82 61.76 74.53 9.97
LONDON STOCK EX. LSE 1413.51 555.25 565.00 325.21 1716.60 1419.20 *89600 12.99 *62400 20.00 21.20 21.69 25.24 26.20 25.60 22.00 *58.4 1857.40 0.98 66.11 1.32 20.43

22 December 2004 67
221204 p64-68 tables 12/20/04 9:25 AM Page 68

LARGE & MID CAP TABLES

FTSE
350 CODE MARKET PRICE (p) VALUE 1,000 EBIT NET PROFIT EPS (p) PE RATIO DIVIDEND NTA GEARING RETURN
CAP Over Latest % Latest % Forecast Forecast Latest % Current ON EQUITY
m Current High Low 1 yr 3 yrs 000 change 000 change Current 1yr 2yrs Current 1yr 2yrs Paid Change Yield % (p) % %
MAN GROUP EMG 4378.38 1423.00 1860.00 1150.00 1010.50 1374.40 *438300 41.94 *325200 43.07 129.50 90.05 106.97 11.00 15.80 13.30 *13.04 - 7.52 2.22 12.16 34.93 36.27
PARAGON GP.OF COS. PAG 483.17 403.00 419.75 292.50 1218.80 1637.60 *214000 0.00 *40300 0.00 48.00 49.87 57.12 8.40 8.10 7.10 *3.9 50.00 2.38 3.50 92.82 21.04
PROVIDENT FINL. PFG 1627.09 638.00 773.50 520.00 1079.20 1228.20 *252800 0.00 *141100 0.00 58.93 57.64 59.82 10.80 11.10 10.70 *13.65 4.20 5.26 18.86 64.60 36.01
SCHRODERS SDR 1677.08 742.00 745.50 531.50 1236.50 967.00 *65600 0.00 *49200 0.00 24.70 28.91 31.09 30.00 25.70 23.90 *6.5 18.18 2.63 4.47 33.18 4.68
SCHRODERS NV SDRC 473.66 669.00 673.50 494.00 1249.60 929.70 *65600 0.00 *49200 0.00 24.70 27.10 *6.5 18.18 2.91 14.27 33.18 4.68
SINGER &.FRIED.GP. SFL 482.81 280.00 316.00 206.74 1365.70 1509.90 N/A N/A *95267 0.00 13.38 20.90 *3 - 66.79 2.48 79.69 57.21 30.57

STEEL & OTHER METALS


CORUS GROUP CS. 2295.83 51.75 57.00 28.75 1725.00 763.50 *-150000 -52.23 *-313000 -34.52 0.00 5.46 7.33 9.50 7.10 *0.97172 0.00 0.00 61.51 32.57 - 11.20
SUPPORT SERVICES
AGGREKO AGK 404.54 151.00 170.25 136.00 1058.60 480.40 *45300 0.00 *27300 0.00 9.77 10.03 10.44 15.50 15.10 14.50 *2.25 2.27 3.77 105.41 36.42 15.73
AMEC AMEC 876.55 293.00 347.00 250.00 1188.90 834.80 *135600 0.00 *59100 0.00 26.20 20.05 23.06 11.20 14.60 12.70 *6.9 4.55 3.65 69.19 68.46 24.23
ATKINS(WS) ATK 720.14 689.50 712.50 464.00 1499.50 1156.30 *51400 -182.24 *22900 -138.68 45.80 38.45 43.08 15.10 17.90 16.00 *7 133.33 1.60 54.48 26.88 68.00
BRAMBLES INDUSTRIES BI. 1780.54 246.00 285.75 194.75 1286.00 854.70 *292000 9.36 *117000 5.41 12.40 12.03 13.95 19.80 20.40 17.60 *3.918 - 3.33 3.28 306.72 56.13 10.63
BUNZL BNZL 1901.65 435.25 494.00 399.75 1066.80 1102.30 *216800 0.00 *125600 0.00 32.10 28.33 30.93 13.60 15.40 14.10 *8.25 9.27 2.85 44.98 36.99 23.74
CAPITA GROUP CPI 2393.41 356.75 372.75 223.00 1496.30 824.10 *104500 0.00 *59400 0.00 14.50 11.27 13.60 24.60 31.60 26.20 *1.75 34.62 1.25 16.65 31.60 18.70
COMPASS GROUP CPG 5151.27 239.00 387.75 211.75 672.20 515.10 *495000 0.00 *206000 0.00 21.10 9.24 10.76 11.30 25.90 22.20 *3.1 14.81 3.89 80.45 49.77 6.50
DAVIS SER.GP. DVSG 792.28 391.00 408.00 348.00 1144.30 1302.20 *53290 0.00 *10372 0.00 30.88 22.47 27.08 12.70 17.40 14.40 *5.25 5.00 4.05 276.88 49.38 2.35
DE LA RUE DLAR 644.13 351.50 364.50 270.75 1295.80 852.70 *14900 -221.14 *5400 -138.30 26.20 19.60 20.93 13.40 17.90 16.80 *9.8 6.52 4.13 89.71 16.95 5.38
DX SERVICES DXS 273.40 315.00 325.00 263.00 *32700 -1.80 *22700 -2.16 N/A N/A 0.00 20.97 0.00
ELECTROCOMP. ECM 1228.48 282.25 385.00 275.00 931.40 621.60 *99600 7.33 *65700 8.96 18.50 15.77 16.68 15.30 17.90 16.90 *12.6 7.23 6.52 37.52 23.58 16.99
GROUP 4 SECURICOR GFS 1681.16 133.00 138.00 91.00 1481.70 1258.00 *126400 N/A *42500 N/A 8.70 4.69 7.48 15.30 28.30 17.80 *0.86001 10.26 1.86 25.92 42.13
HAYS HAS 2114.04 123.50 131.87 97.56 1148.10 732.90 *154400 -133.55 *66200 -112.65 3.87 6.27 6.92 31.90 19.70 17.80 *1.79417 - 44.90 2.43 2.26 2.61
HOMESERVE HSV 450.65 715.00 720.00 529.27 1333.30 1318.90 *23611 -47.23 *11363 -55.90 45.60 28.98 34.38 15.70 24.70 20.80 *8.8 - 28.87 1.94 295.49 42.08 17.72
INTERSERVE IRV 368.57 324.00 326.00 234.50 1335.50 767.10 *-5100 0.00 *-7300 0.00 18.70 15.62 19.68 17.30 20.70 16.50 *4.4 4.76 4.23 79.20 23.69 - 3.88
INTERTEK GROUP ITRK 1029.69 666.00 730.00 451.00 1446.00 *79000 0.00 *51000 0.00 31.60 33.37 39.52 21.10 20.00 16.90 *3.4 17.24 1.40 50.32 120.19
LAING (JOHN) LNGO 427.84 234.00 249.50 171.50 1323.50 1979.90 *36000 0.00 *1600 0.00 7.50 4.54 5.05 31.20 51.50 46.30 *1.1 10.00 1.32 17.06 74.28 2.92
MICHAEL PAGE INTL. MPI 623.75 178.50 201.75 155.00 948.30 1302.50 *22487 0.00 *13745 0.00 5.30 7.52 9.21 33.70 23.70 19.40 *1.25 13.64 1.99 6.61 1.44 28.13
MITIE GROUP MTO 479.29 157.25 160.50 111.25 1326.60 1078.80 *38245 20.10 *25887 19.84 9.20 8.02 9.65 17.10 19.60 16.30 *1.4 27.27 1.91 13.23 0.18 22.26
PHS GROUP PHY 417.76 81.00 96.50 66.50 1027.00 949.70 *50074 21.49 *30354 19.49 6.22 6.50 7.04 13.00 12.50 11.50 *1.48 289.47 2.62 7.59 31.59 11.39
PREMIER FARNELL PFL 635.16 175.00 276.00 157.75 758.00 708.80 *69300 -8.94 *39000 -6.25 11.30 10.70 12.29 15.50 16.40 14.20 *4 0.00 5.14 29.54 67.57
RAC RAC 737.48 621.00 730.00 574.00 1125.90 1328.60 *10300 0.00 *-9900 0.00 55.40 46.06 53.53 11.20 13.50 11.60 *10.2 5.15 3.99 149.21 32.99 2.36
REGUS GROUP RGU 755.83 76.75 91.50 51.23 1423.30 1594.10 *-20102 0.00 *-22854 0.00 0.00 0.51 5.18 150.50 14.80 N/A N/A 0.00 6.82 93.46
RENTOKIL INITIAL RTO 2534.16 140.00 210.00 135.25 749.80 570.80 *494700 0.00 *289700 0.00 15.88 13.86 13.49 8.80 10.10 10.40 *1.93 10.29 4.49 36.62 172.96
REXAM REX 2473.74 449.25 471.00 396.00 1102.60 1477.00 *90000 0.00 *-41000 0.00 38.30 22.52 27.90 11.70 20.00 16.10 *7.16 4.63 3.73 229.19 60.26 - 5.41
SERCO GROUP SRP 990.44 227.75 243.00 163.00 1355.80 642.40 *44446 0.00 *17513 0.00 11.97 8.08 9.91 19.00 28.20 23.00 *0.81 12.50 1.07 17.80 66.21 13.34
TELECOMS
BT GROUP BT.A 17452.02 204.50 207.00 166.25 1218.80 871.30 *3079000 -28.58 *1409000 -46.16 16.50 17.67 18.62 12.40 11.60 11.00 *5.3 24.71 4.50 181.47 81.61 55.70
CABLE & WIRELESS CW. 2761.61 116.75 155.50 94.00 918.80 411.90 *-175000 -97.25 *-243000 -96.24 2.00 8.44 9.31 58.40 13.80 12.50 *3.15 96.88 2.79 51.32 31.91 - 11.23
COLT TELECOM CTM 710.18 47.00 131.00 34.25 485.80 391.70 *-36352 0.00 *-124647 0.00 0.00 - 6.94 - 5.46 N/A N/A 0.00 88.97 57.02 - 13.05
MMO2 OOM 10427.52 120.00 124.50 75.00 1573.80 1450.20 *173000 -101.71 *166000 -101.64 4.30 4.04 4.34 27.90 29.70 27.60 N/A N/A 0.00 45.99 12.05 1.65
THUS GROUP THUS 195.55 14.50 39.00 11.50 471.50 288.60 *-19357 -62.43 *-25221 -57.24 0.00 - 2.03 - 0.89 N/A N/A 0.00 30.61 13.40 - 6.22
VIRGIN MOBILE HLDNS VMOB 580.00 232.00 232.00 167.00 *77087 N/A *93367 N/A 18.75 22.10 12.40 10.50 N/A N/A 0.00 10.61 965.15
VODAFONE GROUP VOD 91869.63 139.75 150.25 113.50 1067.90 840.60 *-3956000 -22.20 *-8201000 -10.51 9.60 - 12.73 - 12.30 14.60 *1.078 20.00 2.14 27.51 11.05 - 7.01

TOBACCO
BRIT.AMERICAN TOBACCO BATS 19062.46 890.00 904.00 745.00 1246.90 1914.60 *1832000 0.00 *772000 0.00 45.10 48.96 57.60 19.70 18.20 15.50 *12.7 7.63 4.46 120.36 62.73 13.46
GALLAHER GROUP GLH 4961.25 757.50 770.00 582.50 1353.80 1997.00 *504000 0.00 *243000 0.00 56.70 45.64 50.02 13.40 16.60 15.10 *10 5.82 3.98 90.85 112.43
IMPERIAL TOBACCO GP. IMT 10048.39 1378.00 1412.00 1051.00 1336.30 2129.70 *914000 0.00 *424000 0.00 101.60 87.08 98.26 13.60 15.80 14.00 *15 25.00 3.63 97.92 98.56
TRANSPORT
ARRIVA ARI 1002.95 517.25 525.00 335.75 1426.90 1984.60 *100800 0.00 *57800 0.00 38.70 32.16 30.92 13.40 16.10 16.70 *4.83 5.00 3.52 392.73 45.09 12.20
ASSD.BRIT.PORTS ABP 1462.14 470.75 498.00 394.75 1139.90 1369.00 *169100 0.00 *96700 0.00 29.50 30.56 30.44 16.00 15.40 15.50 *7 3.70 3.29 464.20 29.07 10.34
AVIS EUROPE AVE 294.36 50.25 106.00 41.00 568.10 382.70 *13209 0.00 *-35528 0.00 4.90 3.94 5.70 10.30 12.80 8.80 *1.3 0.00 7.76 169.53 98.69 - 114.46
BAA BAA 6185.22 577.50 596.00 475.00 1267.70 1167.50 *673000 -4.67 *377000 0.27 38.90 38.71 42.42 14.80 14.90 13.60 *13.4 5.51 3.52 847.22 42.35 8.32
BBA GROUP BBA 1315.25 291.50 293.25 244.00 1251.90 1260.60 *83700 0.00 *19700 0.00 20.70 16.24 18.34 14.10 18.00 15.90 *3.35 4.69 3.76 170.72 47.44 3.63
BRITISH AIRWAYS BAY 2460.89 227.25 343.00 196.00 998.90 1171.40 *435000 5.07 *114000 65.22 26.80 17.04 20.62 8.50 13.30 11.00 *12.8 0.00 0.00 797.58 70.86 6.41
EASYJET EZJ 709.26 177.50 389.00 115.00 623.90 412.10 *53072 0.00 *32402 0.00 14.64 8.43 11.53 12.10 21.10 15.40 N/A N/A 0.00 80.28 8.76 4.45
EXEL EXL 2138.34 717.00 792.00 666.00 1024.50 1026.00 *168100 0.00 *98200 0.00 35.60 38.95 39.96 20.10 18.40 17.90 *8.5 7.59 3.53 183.55 26.29 11.00
FIRST GROUP FGP 1390.25 349.00 353.25 249.00 1349.90 1456.20 *168000 -12.64 *92200 -5.53 28.30 22.74 24.58 12.30 15.30 14.20 *7.9 6.04 3.45 200.23 68.04 22.77
FORTH PORTS FPT 600.46 1317.00 1400.00 970.00 1377.20 2149.40 *59400 0.00 *40400 0.00 68.80 72.28 82.05 19.10 18.20 16.10 *13.3 9.92 2.85 631.46 30.54 18.61
GO-AHEAD GROUP GOG 763.52 1504.00 1520.00 1020.00 1552.30 2745.40 *26200 -37.77 *-7300 -137.82 110.30 107.55 117.11 13.60 14.00 12.80 *27 50.00 2.53 468.81 48.54 - 12.07
MERSEY DOCKS MDK 730.09 935.00 940.00 635.00 1482.50 2242.20 *65900 0.00 *36800 0.00 50.00 52.95 54.76 18.70 17.70 17.10 *8 12.68 2.57 822.57 38.27 9.00
NATIONAL EXPRESS NEX 1087.56 783.00 821.50 590.00 1351.60 1656.90 *87100 0.00 *42000 0.00 62.40 25.97 32.61 12.50 30.10 24.00 *9.35 10.00 3.43 292.02 58.99 17.06
SOURCE: THOMSON FINANCIAL/ DATASTREAM

NORTHGATE NTG 531.48 830.00 834.50 511.50 1631.10 1877.30 *57179 14.08 *28763 20.72 50.90 54.68 60.62 16.30 15.20 13.70 *10.6 - 4.50 2.12 628.86 61.12 20.60
PEN.&.ORNTL.DFD. PO. 2150.67 290.25 312.00 205.00 1286.90 1567.30 *126000 0.00 *19900 0.00 20.30 11.29 15.22 14.30 25.70 19.10 *3 - 33.33 4.13 226.46 53.81 3.86
STAGECOACH GP. SGC 1156.94 109.00 114.25 71.90 1466.90 1769.80 *125700 -127.76 *97600 -118.57 7.50 6.00 7.29 14.50 18.20 15.00 *1.9834 11.11 2.75 58.22 58.25 32.99
TBI TBI 526.51 91.75 92.50 59.25 1371.50 1799.90 *17500 -22.15 *700 -88.72 3.06 1.61 2.73 30.00 57.00 33.50 *1.6 0.00 2.51 63.12 36.18 - 0.26
UTILITIES
AWG AWG 1173.32 818.00 830.00 488.93 1615.00 2082.70 *198700 0.56 *-69200 38.40 43.90 38.83 42.56 18.60 21.10 19.20 *18.9403 0.00 1.76 2671.69 84.95 - 8.58
CENTRICA CNA 8638.98 228.50 258.00 194.70 1117.50 1159.30 *823000 0.00 *480000 0.00 17.58 18.28 22.39 13.00 12.50 10.20 *27.5 1528.42 2.70 72.21 28.28 22.46
KELDA GROUP KEL 2231.42 594.00 600.00 422.25 1353.10 2069.80 *319700 18.28 *179800 41.24 49.60 43.52 44.74 12.00 13.60 13.30 *18.73 2.97 4.56 990.18 51.64 10.64
NATIONAL GRID TRANS NGT 14723.16 476.75 491.00 384.00 1265.10 1296.70 *2235000 42.54 *1101000 204.14 34.70 32.87 35.81 13.70 14.50 13.30 *11.87 14.80 4.27 540.96 91.30 98.74
NORTHUMBRIAN WATER NWG 872.58 168.25 170.00 110.75 1512.50 *137900 -24.44 *58800 -34.23 16.10 17.17 15.99 10.50 9.80 10.50 *4.63 N/A 4.46 519.22 74.23
PENNON GROUP PNN 1214.07 970.00 975.50 623.00 1543.20 1977.90 *138900 1.91 *61500 7.71 60.80 53.66 59.33 16.00 18.10 16.30 *27.8 4.91 4.29 1710.67 59.32 6.92
SEVERN TRENT SVT 3264.88 944.00 964.00 696.00 1359.80 1680.40 *414000 23.58 *182800 86.15 56.30 49.30 63.65 16.80 19.10 14.80 *29.27 2.49 5.03 1526.07 56.38 8.33
UNITED UTILITIES UU. 3486.00 625.50 630.00 466.00 1365.20 1572.90 *611100 7.23 *361900 30.09 54.50 51.17 44.82 11.50 12.20 14.00 *29.88 7.66 7.14 1394.08 56.79 14.25
UNITED UTILITIES A UU.A 1351.58 437.00 440.00 279.00 1554.10 *611100 7.23 *361900 30.09 *14.94 N/A 5.11 2512.03 56.79 14.25

68 Shares
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CHEMICALS CONSTRUCTION & BUILDING MATERIALS CONSTRUCTION & BUILDING MATERIALS


DYSON GROUP (DYS) 342.5P / ARTISAN (ART:AIM) 2.87P - ENSOR HOLDINGS (ESR:AIM)
The materials technology group maintained Profits rose sharply for this property related
34.5P +
Profits and sales both showed good progress
profit levels during the six months to 30 service group thanks largely to an improved
at the halfway stage for this building supplies
September despite higher pensions and climate in the commercial property market.
company. The second half of the financial year
interest charges. In line with expectations it The group is taking a view on the residential
saw a further 400,00 profit from the sale of a
saw profits of 1.9 million from sales of 27.9 side that there are still opportunities although
redundant property. Its order book is strong
million. This filtered through to a modest it has been difficult to find any at an attractive
and the second half should see further
interim dividend increase of 0.5% to 1.05p, the price. While this side of the business is
progress. Ensor is also keen to expand through
first rise in dividend payments since the rights expected to be flat in the near term the
acquisition. All its divisions made a positive
issue in March 2002. The biggest improvement commercial side is regarded as being counter
contribution, with those supplying electronic
came from the thermal technologies division, cyclical. There are various legal proceedings
and security products increasing their market
which posted operating profit of 1.65 million, pending for which the group has made
share and expanding the product range. The
almost doubling its margin to 11.4%. (ST) provisions although it is contesting. Sales
board has proposed to increase the interim by
were down as a result of disposals. (JC)
7% to 0.375p per share. (JC)
Shares says: A Normal market size Shares says: If the Normal market size Shares says: The Normal market size
solid performer with 2,000 turnaround comes it is 100,000 building supplies 5,000
shares rising % spread 1.17 likely to be some way % spread 23.1 sector looks set for a % spread 12.1
throughout the year Last Shares view: ahead yet. Last Shares view: strong run. Last Shares view:
worth holding onto. 08.07.04 + 22.07.04 + 17.06.04 +
DYSON GROUP ARTISAN (UK) ENSOR HOLDINGS
2004 2003 share price
350 2004 2003 share price
3.60
2004 2003 share price
32
340 30
3.40
Tover (m) 27.9 30.2 330 Tover (m) 10.7 16.9 Tover (m) 12.7 11.5 28
320 3.20
26
3.00
Int PTP (m) 1.92 1.91 310
Int PTP (m) 0.85 0.27 Int PTP (m) 0.76 0.53 24
300 2.80
22
290
EPS (p) 4.7 4.5 280 EPS (p) 0.24 0.09 2.60 EPS (p) 1.8 1.3 20
270 2.40 18
Mkt cap (m) 106 86.1 260
D J F M A M J J A S O ND Mkt cap (m) 8.3 7.9 2.20 D J F M A M J J A S O N D Mkt cap (m) 8.97 5.44 16
D J F M A M J J A S O ND
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream

CONSTRUCTION & BUILDING MATERIALS ELECTRONIC & ELECTRICAL EQUIPMENT ELECTRONIC & ELECTRICAL EQUIPMENT
TITON HOLDINGS (TON) 99P / DELTRON ELECTRONICS (DET) FIRST TECHNOLOGY (FRS)
Profits slid at this window fittings and
87.5P - 361.5P /
Investors clearly cant quite believe that Gas sensor maker for the motor industry, First
ventilation products specialist and the electronic component maker Deltron is Technology is eager to put a positive spin on
company blamed this on a continuing currently in clover. After two years of losses is first-half figures, saying it believes it is back on
overcapacity in the window market. The good that really a surprise? So, having unveiled the growth path. This bold statement doesnt
news is that it has plenty of cash and is tripled full-year profits and a 6.7% hike in the appear to be backed up by the numbers
maintaining the final dividend at 4.8p per dividend, to 1.87p a share, a 6% rise on the day however, which relied on acquisitions to add
share, making an unchanged 7.1p for the year. has been largely chipped away since. However, shine. After stripping away the effect of new
Turnover was maintained but margins came investors should be careful to place too much business, sales were flat and profits sank by
under pressure as a result of a change in the faith in the company just yet, although more than a third. Still, given the backcloth of
product mix. Exports were ahead and now winning a pan-European distribution deal for pricing pressure and the falling dollar, the
account for 10% of all turnover, although the the connector range of ITT Industries Canon results could have been worse. At least the
weakness of the dollar naturally adversely will help win over the sceptics. (SF) interim divi was upped 0.1p to 3.6p a share.
affected its US operations. (JC) (SF)
Shares says: The Normal market size Shares says: The Normal market size Shares says: Normal market size
window market is cut- 2,500 shares have rallied 5,000 Prospects should 10,000
throat and Titon may % spread 7.77 lately and already % spread 5.56 improve this year, % spread 1.89
have to wait for Last Shares view: reflect Deltrons Last Shares view: although the proof will Last Shares view:
capacity to dwindle. 13.05.04 / recovery potential. 17.06.04 - be in the profits. 08.07.04 /
TITON HOLDINGS DELTRON ELECTRONICS FIRST TECHNOLOGY
2004 2003 share price
150 2004 2003 share price
95 2004 2003 share price
370
140 90 360
T'over (m) 16.4 16.3 130
Tover (m) 65.7 64.0 85
Tover (m) 79.1 58.3 350
340
120 80 330
Fin PTP (m) 1.06 1.52 Fin PTP (m) 1.14 -1.52 Int PTP (m) 4.7 7.2 320
110 75
310
EPS (p) 7.19 10.1 100 EPS (p) 1.5 -4.8 70 EPS (p) 3.5 7.3 300
90 65 290
Mkt cap (m) 10.4 12.8 80
D J F M A M J J A S O ND Mkt cap (m) 35.8 26.4 60
D J F M A M J J A S O ND Mkt cap (m) 270 241 280
D J F M A M J J A S O ND
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream

16 December 2004 69
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ENGINEERING & MACHINERY FOOD PRODUCERS & PROCESSORS GENERAL RETAILERS


ZYTRONIC (ZYT) 113.5P / IWP (IWP) 14P - KLEENEZE (KLZ) 129P /
The company, which makes vandal-proof Profits eased a little in the first half for this The interims were in line with expectations
touch screens, says more companies are Ireland-based personal care products and the group increased the interim divi to
signing up for its systems. While sales have manufacturer but the group is confident of a 1.07p. Kleeneze specialises in home shopping
improved the company has also managed to positive full-year outcome. The fall in profits through a raft of agents, most of whom are
build up its cash. At 30 September balances in the first half was blamed on decreased part-time. In addition, Farepak operates a
stood at 1.17 million compared to 954,000 exports to the UK in what turned out to be a voucher operation that enables consumers to
last year. Chairman John Kennair says: As we rather sluggish market. In Ireland, operating save during the year for Christmas. The group
move into a new financial year, the order book profits edged ahead although margins is seeking to increase its commitment to
continues to strengthen, not only from the slipped. The more optimistic outlook is based home shopping by acquisitions in TV and
groups existing accounts but also from new on its new Dutch brands and a growth in sales internet shopping and expansion into
customers. The company reported that is has at its Polish retail operation. Trading Holland. It hopes to enter the German market
suffered because of the weak dollar. No conditions remain competitive and there was next year. The market forecasts EPS of 13.2p for
dividend.(SK) no dividend proposed. (JC) this year. (JM)
Shares says: It Normal market size Shares says: Just Normal market size Shares says: Until Normal market size
appears many 5,000 managements word to 10,000 the success of the 2,500
companies are waking % spread 4.27 go on so investors % spread 25.0 new strategy shows % spread 7.3
up to its technology. Last Shares view: might be tempted to Last Shares view: through the shares are Last Shares view:
20.05.04 / look elsewhere. 22.07.04 / merely a firm hold. 15.07.04 +

ZYTRONIC IWP INTERNATIONAL (ISE) KLEENEZE


2004 2003 share price
120 2004 2003 share price
26 2004 2003 share price
160
110 24 150
Tover (m) 8.76 5.69 100 Tover (m) 90.7 99.6 22 Tover (m) 79.5 78.9 140
90 20
130
Fin PTP (m) 0.35 -0.36 80 Int PTP (m) -4.73 -4.18 18 Int PTP (m) 4.25 -9.17
120
70 16
EPS (p) 1.7 -2.1 60 EPS (c) -6.56 -6.63 14 EPS (p) 7.43 -19.6 110

50 12 100
Mkt cap (m) 14.2 9.93. 40
D J F M A M J J A S O ND Mkt cap (m) 14.7 21.4 10
D J F M A M J J A S O ND Mkt cap (m) 60.2 73.1 90
D J F M A M J J A S O ND
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream

HOUSEHOLD GOODS & TEXTILES INSURANCE INSURANCE


MULBERRY (MUL) 76.5P - THB (THB:AIM) 73.5P - WINDSOR (WNDR) 44.5P +
Although the Mulberry brand is well-respected Shares in this insurance broker have halved in Business is booming for this insurance broker
the group has suffered losses in three of the the last year and after the group announced a as it recorded its seventh successive year of
last five years. It recognises the scope for trying fall in first-half profits, it warned that earnings increased profits. The bottom-line was
to exploit the brand internationally and has in the second half will be significantly below boosted by the benefits derived from a
entered into agreements to launch in the US, last years. The gloomy message is blamed on significant restructuring of the Windsor
Japan and South Africa. However, these new a weak dollar, increased competition in its core Insurance Broker division and another good
arrangements did not influence these results. market and the affects of the hurricanes in the year for its professional indemnity operation.
Despite that, the group was able to earn US. By contrast the motor fleet and The group played down the investigation in
modest profits. As usual there was no sport/accident divisions showed an excellent New York into the payment of contingency
dividend and there is no likelihood of a performance. The interim dividend has been commissions as it does not use these.
dividend in the foreseeable future. House maintained at 1.5p. (JC) Shareholders are being rewarded with a 17%
broker Teather & Greenwood is forecasting EPS increase in the proposed final dividend
of 1.5p this year, rising to 2.5p next year. (JM) payment to 1.7p per share. (JC)
Shares says: The Normal market size Shares says: It Normal market size Shares says: No Normal market size
products are cheaper 5,000 would be nice to think 5,000 reason why profits 10,000
than the shares, just. % spread 3.41 that the worst is over % spread 4.0 should not rise for the % spread 2.22
The rating is too Last Shares view: but there is better Last Shares view: eighth year running. Last Shares view:
forward-looking. 01.07.04 + value elsewhere. 22.07.04 - 20.05.04 +
MULBERRY GROUP THB GROUP WINDSOR
2004 2003 share price
90 2004 2003 share price
120 2004 2003 share price
50
85 115 48
Tover (m) 12.1 12.1 80 Tover (m) 15.4 13.8 110 Tover (m) 20.1 19.1 46
75 105
70 100 44
Int PTP (m) 0.01 -0.61 65 Int PTP (m) 0.89 1.05 95 Fin PTP (m) 4.65 4.06
60 90 42
55
EPS (p) -0.22 -1.87 50
EPS (p) 1.9 2.3 85
80
EPS (p) 6.6 4.8 40
38
45 75
Mkt cap (m) 36.3 25.3 40
D J F M A M J J A S O ND Mkt cap (m) 19.9 30.4 70
D J F M A M J J A S O ND Mkt cap (m) 27.3 24.0 36
D J F M A M J J A S O ND
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream

70 Shares
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LEISURE & HOTELS MEDIA & ENTERTAINMENT MEDIA & ENTERTAINMENT


HARDYS & HANSONS (HDYS) CRADLEY GROUP (CDLY:AIM) ECKOH TECHNOLOGIES (ECK:AIM)
548.5P / 11P / 8.5P /
Maintaining healthy margins in the On the strength of these results, it appears Despite an improved financial performance,
notoriously costly managed pub sector is no that Cradleys transformation from a section the call centre solutions groups interims
mean feat. Nevertheless, H&H managed a magazine printer to niche magazine specialist came laced with a profit warning for its second
slight improvement in margins in the full- is paying off. Despite overall trading half. Turnover was actually up 65%, which saw
year, despite pressure from rising wage costs conditions remaining competitive in the last years pre-tax loss narrowed, while Speech
and refurbishment expenses. Overall, profit industry, the year was one of steady progress division revenues were up 96%. However, the
across its three businesses, including an estate with turnover rising by 14.3%. Pre-tax losses insolvency of the Auctionworld business and
of managed and tenanted pubs, and a brewing have subsequently halved. Since the year-end, increased competition within the voice
and beer wholesaling business, fell to 16.2 the group has acquired 3D Publishing, which recognition sector means that Eckoh will not
million from 18.3 million a year-ago. The owns a number of business titles, and the meet current market expectations for the full-
dividend was raised to 11.9p from 11.5p a year- group sees an excellent fit and potential year. New contracts include three-year
ago. (EP) synergies. Management looks forward to a agreements with Northern Ireland Electricity
secure and successful future. (CB) and mobile phone company O2. (CB)
Shares says: Normal market size Shares says: Normal market size Shares says: Long- Normal market size
Acquisitions should 1,000 Although outlook is 2,500 term growth potential 100,000
provide a shot-in-the- % spread 2.15 better, tough times are % spread 24.0 is still attractive. % spread 8.3
arm. Last Shares view: not over. Last Shares view: Last Shares view:
16.12.04 / 15.01.04 - 03.12.03 +
HARDYS & HANSONS CRADLEY GP.HDG. ECKOH TECHNOLOGIES
2004 2003 share price
600 2004 2003 share price
24 2004 2003 share price
20
580 22 18
Tover (m) 76.2 70.9 560 Tover (m) 27.8 24.3 20 Tover (m) 39.4 25.7 16
540 18
14
Fin PTP (m) 16.2 18.3 520 Fin PTP (m) -1.41 -2.64 16
Int PTP (m) -0.97 -1.29
14 12
500
12
EPS (p) 46.2 55.8 480 EPS (p) -4.8 -6.4 10 EPS (p) -0.4 -0.6 10
460 8 8
Mkt cap (m) 109 92.0 440
D J F M A M J J A S O ND Mkt cap (m) 3.56 2.39 6
D J F M A M J J A S O ND Mkt cap (m) 24.7 50.6 6
D J F M A M J J A S O ND
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream

MINING REAL ESTATE SOFTWARE & COMPUTER SERVICES


ATH RESOURCES (ATH:AIM) MCKAY SECURITIES (MCKS:AIM) CIVICA (CIV:AIM) 220.5P +
165P / 275P / The government has been throwing millions
The company operates two opencast mines in Profits were up for the real estate groups first
half largely thanks to the sale of some at getting local authorities IT savvy, and now
Scotland. It only floated on AIM in June of this
investment properties. Although net asset the Gershon report, which will drive greater
year. During the period it carried out work on
value increased 5.9% to 286p, rental income efficiency and cost savings from technology,
its Garleffan mine which required deepening.
was slightly down from the sales and the promises to push even more business Civicas
The site produced 640,000 tonnes during the
transfer of properties into development. The way. Demerged from Sanderson and floated
period while the other mine at Skares Road
interim dividend was boosted by 3.2% to 3.2p late last year, Civica is delivering as promised.
produced 800,000 tonnes. Interest charges ate
per share and gearing fell from 60% to 57%. Sales and profits are soaring and the shares are
into profits with the company paying out 1.1
Management says the group has continued to responding, jumping from its 175p float price
million although 0.5 million of this covered
benefit from a gradual improvement in the to the current 220.5p. Paying down borrowings
loans payments, which wont be repeated. The
occupational market and from the strength of is on the agenda after splashing 14.2 million
company paid out a dividend of 3.36p. (SK)
the investment market. (CB) on Radius during the year, but there is plenty
of organic growth still to come. (SF)
Shares says: Normal market size Shares says: Rental Normal market size Shares says: Civica Normal market size
Operations appear to 5,000 income should pick up 1,000 looks set to be 5,000
be going to plan. % spread 5.88 in second half. % spread 2.48 another star AIM % spread 2.24
Last Shares view: Last Shares view: performer. Last Shares view:
n/a 24.06.04 / 23.09.04 +
ATH RESOURCES MCKAY SECS. CIVICA
2004 2003 share price
170
2004 2003 share price
290 2004 2003 share price
230
280
165 220
270
Tover (m) 34.6 19.4 160 Tover (m) 8.42 8.73 260
Tover (m) 104 89.0
250 210
155
Fin PTP (m) 0.50 0.61 150 Int PTP (m) 3.86 3.7 240
230
Fin PTP (m) 8.33 6.67 200
145 220 190
EPS (p) - - 140 EPS (p) 6.65 5.49 210 EPS (p) 12.9 10.3
200 180
135 190
Mkt cap (m) 49.1 - 130
J J A S O N D
Mkt cap (m) 125 87.8 180
D J F M A M J J A S O ND Mkt cap (m) 98.8 - 170
JUN JUL AUG SEP OCT NOV DEC
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream

16 December 2004 71
221204 p69-72 sml caps 12/20/04 9:14 AM Page 72

SMALL CAP RESULTS

SOFTWARE & COMPUTER SERVICES SOFTWARE & COMPUTER SERVICES SPECIALITY & OTHER FINANCE
COMPUTERLAND (CPU:AIM) IDOX (IDOX:AIM) 10.5P / VANTIS (VTS) 132.5P +
196.5P + Shares in IT consultancy minnow Idox Sales and profits both rose sharply for this
The outsourced IT services market has been
going gang-busters this year and remained flat as the companys achievement professional services and accountancy group.
ComputerLand continues to milk its lucrative of transforming the previous years 600,000 There were no acquisitions during the first half
SME niche. A 26% jump in half-year profits and deficit into a 90,000 profit failed to register of the financial year and bottom-line growth
the huge opportunities, particularly in with most investors. All in all, the figures were was purely organic. The group expanded its
managed services and the public sector, a pretty mixed bag. While turnover more than specialist teams in taxation consultancy,
available to the company show through in its doubled and increased service revenue offset a corporate finance and business recovery and
generous 26% hike in the dividend to 1.7p a less impressive performance from software managed to push revenue higher without
share. It is equally reassuring that the top line sales, this looks likely to mean lower margins increasing non-salary related costs. There was
is growing again after a period of intense in the current year. Analysts expect big things also a full six month contribution for the first
pressure on hardware sales, while margins are from the company in earnings terms going time from Vantis McBrides and Vantis Redhead
also back on the rise. (SF) forward, with EPS pencilled in at 0.68p and French. The proposed interim dividend has
1.33p over the next couple of years. (SF) been increased by 20% to 1.2p per share. (JC)
Shares says: Normal market size Shares says: Normal market size Shares says: A Normal market size
ComputerLand 2,500 Prospects are exciting 25,000 tightly run ship that 2,000
remains a good value % spread 3.5 but on a PE of 15 % spread 13.0 should continue to % spread 3.70
play on outsourced IT Last Shares view: there is little room for Last Shares view: prosper. Last Shares view:
services. 09.09.04 + error. n/a 29.07.04 +

COMPUTERLAND UK IDOX VANTIS


2004 2003 share price
230 2004 2003 share price
13.00 2004 2003 share price
145
220 12.50 140
Tover (m) 29.8 25.7 210
Tover (m) 9.56 4.47 12.00 Tover (m) 15.1 10.2 135
11.50
200 130
Int PTP (m) 1.02 0.89 Fin PTP (m) 0.08 -0.59 11.00 Int PTP (m) 1.95 1.28
190 125
10.50
EPS (p) 7.1 6.2 180 EPS (p) 0.23 -0.42 10.00 EPS (p) 2.91 2.44 120
170 9.50 115
Mkt cap (m) 19.9 18.2 160
D J F M A M J J A S O N D Mkt cap (m) 20.0 16.1 9.00
D J F M A M J J A S O ND Mkt cap (m) 53.7 44.5 110 D J F M A M J J A S O N D
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream

SUPPORT SERVICES TELECOMMUNICATION SERVICES UTILITIES


AEA TECHNOLOGY (AAT) 160P / TELECOM PLUS (TEP) 206P - BRISTOL WATER GROUP (BWG)
This consultant specialising in environment A nice set of results for the multi-utility group
522.5P /
The sharp fall in first-half pre-tax profits, down
and rail, and is involved in battery production carried a nasty sting in its tail. While first-half 31% to 4.8 million, was worse than most were
produced a good set of results in a tough rail profits were up by a third, Telecom Plus has expecting. In the recent price review Ofwat
market and a busy few months. It has been warned of substantial losses to come in the said the company could raise prices by an
busy restructuring to reduce costs and second half from its gas business. However, the average of 3.2% over the next five years but
following last years sale of its non-core group has still increased its interim dividend to Bristol, which asked for 6.4%, says this will be
nuclear science business is trying to sell QSA. 5p per share. Management says that rapid challenging. It has not yet decided whether it
Environment was the strong performer with a growth in energy turnover from a low base has will accept the proposals or contest them. The
record 12 million contract won. Turnover in presented some short-term challenges. Its company has kept the interim dividend
the battery systems division was up 40% but failure to hedge against rising prices has unchanged at 7.85p, with the board
increased investment dragged down any resulted in an estimated 4 million loss which anticipating a final dividend of 18.79p, making
profit. Orders across the group are up 7% and it will hit second-half profits. Unsurprisingly, the a total dividend for 2004/05 of 26.64p,
looks as though things are picking up. (PF) group has now begun hedging forward. (CB) unchanged from last year. (ST)
Shares says: The Normal market size Shares says: TEPs Normal market size Shares says: Normal market size
market is gradually 5,000 markets are tough 5,000 Shares have already 2,000
improving but more % spread 4.46 enough without % spread 2.25 soared this year; % spread 2.83
work to be done to Last Shares view: making costly Last Shares view: outlook is cooling. Last Shares view:
compete effectively. 27.11.03 + mistakes. 17.10.04 + 14.10.04 +
AEA TECHNOLOGY TELECOM PLUS BRISTOL WATER GROUP
2004 2003 share price
260 2004 2003 share price
450 2004 2003 share price
550

240
Tover (m) 117 119 Tover (m) 42.8 37.2 400 Tover (m) 54.5 59.6 500
220
350 450
Int PTP (m) -0.8 0.4 200 Int PTP (m) 6.44 4.9 Int PTP (m) 4.8 7.0
300 400
180
EPS (p) -2.1 0.5 EPS (p) 7.4 5.4 250
EPS (p) 16.8 26.7 350
160

Mkt cap (m) 113 155 140


D J F M A M J J A S O ND Mkt cap (m) 127 221 200
D J F M A M J J A S O ND Mkt cap (m) 104 111 300
D J F M A M J J A S O ND
Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream Source: Thomson Financial/Datastream

72 Shares
221204 p73 mini caps 12/20/04 11:35 AM Page 73

SMALL CAP RESULTS


COMPANIES WITH MARKET CAP & TURNOVER BELOW 10M

ADVANCED POWER COMPONENTS COMPACT POWER EURO CAPITAL PROJECTS


(APC:AIM) 10P (CPO:AIM) 11.25P (ECR:AIM) 3.87P
Shares says: The recovery in markets for this Shares says: The waste recycling specialist is Shares says: This is a cash shell with an
designer and manufacturer of electronic currently negotiating the terms of a secured loan investment agenda for acquiring a company with
components has not been as strong as expected. facility for 500,000. It has also received approval opportunities for consolidation and further
Nevertheless, expansion has opened new doors from Bristol City Council to proceed with a development. It is also stipulating that any
for the group, while costs are being held down. project to develop a new waste processing plant consideration will be settled predominantly in
at Avonmouth. shares and not cash.

2004 2003 2004 2003 2004 2003


52-week high/low 17p/8.25p 52-week high/low 22.5p/8.5p 52-week high/low 6.25p/3p
Turnover (m) 5.08 4.41 Turnover (m) 0.53 0.24 Turnover (m) - -
Final pre-tax profits (m) -0.72 -0.55 Interim pre-tax profits (m) -1.05 -1.39 Final pre-tax profits (m) -0.05 -
Earnings per share (p) -2.8 -2.0 Earnings per share (p) -3.6 -4.7 Earnings per share (p) -0.45 -
Market cap (m) 2.61 4.44 Market cap (m) 3.28 6.27 Market cap (m) 1.03 -
Normal market size 25,000 Normal market size 5,000 Normal market size 10,000
% spread 9.52 % spread 16.7 % spread 117

HEREWARD VENTURES MAISHA MEDIASURFACE


(HEV:AIM) 5.12P (MSA:AIM) 1.75P (MSR:AIM) 7.5P
Shares says: The group has consolidated an Shares says: The computer consultancy and Shares says: Sales are improving for this
attractive group of mineral licences mainly on development group acquired Pearl Micro developer of website software and the pipeline is
gold in Bulgaria and Serbia. Along with other Solutions in August 2003 and in July this year a full of interesting possibilities. The new Morello
projects the aim is to drill at least five wells in Company Voluntary Arrangement was agreed for product is performing well and has a lot more
2005 including oil exploration. Pearl. Legal proceedings against various growth potential.
individuals are now being pursued.

2004 2003 2004 2003 2004 2003


52-week high/low 7.62p/4.12p 52-week high/low 3p/1.62p 52-week high/low 13.25p/7.25p
Turnover (m) - - Turnover (m) - - Turnover (m) 5.4 5.16
Interim pre-tax profits (m) -0.35 -0.21 Final pre-tax profits (m) -0.25 -0.39 Final pre-tax profits (m) -0.73 -2.23
Earnings per share (p) -0.28 -0.22 Earnings per share (p) -0.74 -1.65 Earnings per share (p) -0.7 -2.4
Market cap (m) 7.49 4.79 Market cap (m) 0.55 0.94 Market cap (m) 5.74 -
Normal market size 50,000 Normal market size 5,000 Normal market size 25,000
% spread 13.6 % spread 37.5 % spread 12.5

MG CAPITAL MKM RAGUSA CAPITAL


(MAP:AIM) 100P (MKM:AIM) 43P (USA:AIM) 66.5P
Shares says: The group continues to develop Shares says: Voucher sales to blue chip Shares says: Cash balances at this European
itself as a leading specialist investment house. To companies have performed well for this investment company stood at 5.4 million at the
this end it is exploring ways to expand its corporate entertainment specialist. Further half-year end. The board is currently looking at a
activities through collaboration and acquisition. investment is being made in travel and on-line potential acquisition opportunity within the oil
developments. sector and negotiations are at an advanced
stage.

2004 2003 2004 2003 2004 2003


52-week high/low 625p/92.5p 52-week high/low 47.5p/38p 52-week high/low 85p/54p
Turnover (m) 0.71 0.71 Turnover (m) 4.46 2.5 Turnover (m) - -
Final pre-tax profits (m) -0.01 -0.41 Interim pre-tax profits (m) 0.37 0.19 Interim pre-tax profits (m) 4.1 -
Earnings per share (p) -0.03 -0.16 Earnings per share (p) 3.0 695 Earnings per share (p) 0.02 -
Market cap (m) 4.8 2.32 Market cap (m) 5.67 - Market cap (m) 15.9 -
Normal market size 2,000 Normal market size 5,000 Normal market size 5,000
% spread 9.52 % spread 6.82 % spread 7.25

STEWART & WIGHT TALENT TECHCREATION


(STE) 512.5P (TTV:AIM) 22.5P (TCH:AIM) 5.62P
Shares says: Profits were a little lower for this Shares says: A mixture of caution and Shares says: This investment company has
property investor although comparative data optimism for this television programme producer. been providing post production film finance for
were bolstered by asset sales. Gross rental The shares are tightly held and while chairman Beyond the Sea and will be repaid with a
income was actually a little higher. Meanwhile Robert E Benton stressed the difficulty in 50,000 premium. There are other investments
acquiring new investments has been made determining growth in precise terms, the board and the group has an option to purchase 13% of
harder by increased interest in this sector. remains optimistic for the new year. film producer Trigger Street.

2004 2003 2004 2003 2004 2003


52-week high/low 525p/440p 52-week high/low 23.5p/16.5p 52-week high/low 7.5p/5p
Turnover (m) 0.43 0.42 Turnover (m) 5.42 2.92 Turnover (m) - -
Interim pre-tax profits (m) 0.33 0.39 Final pre-tax profits (m) -0.10 -0.48 Final pre-tax profits (m) 4.1 -
Earnings per share (p) 14.8 18.4 Earnings per share (p) -0.79 -3.1 Earnings per share (p) -0.52 -
Market cap (m) 8.02 6.49 Market cap (m) 3.65 2.84 Market cap (m) 3.52 -
Normal market size 1,000 Normal market size 5,000 Normal market size 10,000
% spread - % spread 20.0 % spread 12.5

22 December 2004 73
221204 p74-79 directories 12/20/04 3:26 PM Page 74

INVESTOR SERVICES DIRECTORY


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221204 p74-79 directories 12/20/04 3:26 PM Page 75

INVESTOR SERVICES DIRECTORY

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221204 p74-79 directories 12/20/04 3:26 PM Page 76

TO ADVERTISE IN THE SHARES SERVICES DIRECTORY, PLEASE TELEPHONE: TIMOTHY BOSWORTH 0207 378 4465 OR EMAIL T

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221204 p74-79 directories 12/20/04 3:26 PM Page 77

TBOSWORTH@SHARES.MSM.CO.UK INVESTOR SERVICES DIRECTORY

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221204 p74-79 directories 12/20/04 3:26 PM Page 78

TO ADVERTISE IN THE SHARES SERVICES DIRECTORY, PLEASE TELEPHONE: TIMOTHY BOSWORTH 0207 378 4465 OR EMAIL T

Foreign Exchange (contd)


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221204 p74-79 directories 12/20/04 3:26 PM Page 79

L TBOSWORTH@SHARES.MSM.CO.UK INVESTOR SERVICES DIRECTORY

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221204 p82 letters 12/20/04 11:44 AM Page 82

LETTERS

Over to you... from 97p to 77p and it


subsequently fell throughout
the day to close at 42p.
Last January we
all came back
I am not aware of any
statement being made by the
company to either agree or
from the
Family misfortunes are not bound to reveal
absolutely everything to share
disagree with the Reuters report.
Christmas-New
I need some advice about a If this is the case they were
purchasers and do not fall under
company I bought shares in,
which said that it would float on
the same level of scrutiny as
either unaware of what was
happening to the company and
Year break and
those on the stock market.
the stock market, but never has
(its been five years now).
All this means is that any
its prospects in Iraq or reluctant
to tell shareholders the truth.
the FTSE 100
private company can in theory
Whenever I try to contact the
owner of the company, he is
do what it likes, and small private
J R BESWICK
VIA EMAIL
soon went
investors have little if no
either in a meeting or at lunch
and will ring me straight back. I
comeback.
Steven Frazer replies: Events do
through the magic
Ardeo reportedly tried to float
am in need of help and I am
asking your magazine for it.
around five years ago without appear to have taken a grim twist
for Petrel. However, the company
4500 mark
success. Since then, according
My family gave 34,000 for did issue a statement in
to Brandenburg, its sales have
128,000 shares. Now we have response to the Reuters report
picked up although there are still
1,280 shares between us, my on the same day, although this
no plans to float on the went through the magic 4500
parents live in sheltered only seemed to press the share
stockmarket yet. Ardeo does mark great 5000 by the end of
housing and I rent a house. price even lower.
have a major investor, Geoff the year? Youll be lucky.
Out of the 34,000, I put in Petrel says it has not been
Squire, who is an IT industry Considering the amount of
15,000, which was all the contacted by Iraqi officials and
heavyweight and owns a thought and time that goes into
money I had saved with my wife was desperately trying to get
sizeable chunk of the company. running a portfolio of UK shares,
to put a deposit down on a confirmation about the outcome
The investment appears to Im seriously wondering
house. of the Khurmala and Hamrin
have been an expensive mistake whether its all going to be
The company in question is oilfield development contracts
for this readers family. worth the effort in 2005.
called Ardeo. from the oil ministry. Whether this
Im sure I could do better with
BRIAN will come before Christmas or
VIA EMAIL Lack of not is anyones guess.
sports betting. What does Shares
think?
Polly Fergusson replies: As the
communication This shows that even with
good contacts out there, Iraq OSCAR CATT
It seems bizarre that Petrel
reader did not give us his full Resources, tipped by Shares as remains an incredibly difficult VIA EMAIL

name we are unable to check speculative, can have fallen in place to do business and even
with this software product price in such a spectacular the lines of communication with Editor replies: Well you might do
company company regarding fashion as it has done today Iraqi authorities seem fragile. better on the horses or football, if
details of his investment, but we (Thursday, 16 December) Just to clarify our position, we youre one of those clever people
have spoken to its advisors, without a direct comment from have never actually tipped the who can work both sides of the
Brandenburg Securities, after the company. share as a Play of the Week, book and make a turn.
trying and failing to get hold of My online broker posted a although it did appear in our Most of us get too emotionally
the company itself. statement from the company at Sleeping Beauties cover feature involved in sport to do that,
Investing in a private company 11.18am, stating that the (4 November), when we though, which is why you dont
will, by its very nature, be fraught company was aware of a suggested that Petrel had the see too many millionaires
with risks and dangers not Reuters report that the potential to cash in if it could win coming out of betting shops.
least buying and selling the Khurmala Oilfield Development a development contract. My view is that you will see
shares. There is no official Contract has been awarded to a The shares were never ones modest returns from most equity
market for the stock and you are Turkish Company and that the for widows and orphans, and this markets next year but I am
stuck with the shares unless you Hamrin Development Oilfield chain of events shows why. reasonably confident of the
can find a private buyer. Contract has been awarded to a chances of the FTSE at least
Unlike a listed company, which
is beholden to its shareholders
Canadian Company. Sporting chance making it through 5000 by 2006.
At the time this information Last January we all came back Shares will be starting the new
and must be far more was put on the website, the year with a comprehensive look
from the Christmas-New Year
transparent, private companies share price had already fallen at trends for the year.
break and the FTSE 100 soon

Send your comments to: The Editor, Shares Magazine, Thames House, 18 Park Street, London, SE1 9ER. . . or email us at: editorial@shares.msm.co.uk.
Shares is happy to answer readers' questions through the Letters page but we are unable to deal with queries over the telephone nor can we advise on investments.

82 Shares log on to for our daily news updates


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