News

Property services group Fletcher King pulled no punches yesterday when it warned that full-year profits would be hammered after institutions slammed the brakes on all investment in the commercial property market. The company is well funded and poised for the first signs of an uplift in the property market. But it could be a long winter. Avoid says the Independent.

Sub-prime lender Provident Financial's bad debts are high - at 30% of revenues - but the numbers are built into the business model. The dividend has been guaranteed this year and, though it is unlikely to be increased until the cover improves, it pays a near 8% yield. Trading on 12 times 2008 forecasts, buy says the Telegraph.

Arriva reckons it can double current European revenues from last year's £712m by 2011 through acquisitions and new contracts. That could prove risky, but so far it hasn't made a mistake. Analysts expect Arriva to make around £125m of profits for 2007, meaning the shares are trading on a multiple of 16 times earnings, yielding 2.9%. On a one-year view they remain a buy says the Telegraph.

Arriva's full year will be in line with management expectations, suggesting £121m at the pre-tax level, and further sound growth seems assured for 2008. Hold says the Independent.

Shareholders in Informa Group must look ruefully back at the 630p a share offer from Cinven and Candover that its board turned down just over a year ago. Informa trades at ten times next year's earnings, a discount to its peers and beneath the lowest rating it touched in the last downturn earlier this decade. But the group's net debt position and the fact that the IIR performance improvement businesses in the US remain untested by tougher times suggests caution. Avoid says the Times.

PR group Chime's balance sheet is much stronger than the last downturn in 2001 - it has net debt of just £4m - but the stock market's current aversion to cyclical small-caps is likely to weigh against it. Avoid says the Times.

Electric Word is a specialist publisher with a knack of spotting gaps in the market. Its publications have proved remarkably resilient, and after a few years of sluggish progress the company is now moving ahead briskly. At 8p selling on 11 times earnings, the shares look good value. Buy says the Independent.

With the Olympics looming, - it is due to work on the velodrome, fit out specialist Interior Services Group businesses are more broadly spread than in the past. So it is hard not to feel that a forward multiple of 6.9 times is too low for a company with £22mof cash, a 5% dividend yield and where earnings should grow 21 per cent next year. Hold says the Times.
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