OVERSEAS holidays are never far from our minds at this time of year, with most of us not long back from, or still looking forward to, an idyllic fortnight in the sun.
But on the down side, who can forget last month’s scenes of chaos at Britain’s airports when wildcat strikes meant holidaymakers had to rough it in airports up and down the country?
Yet, despite losing 100,000 passengers because of these strikes,
BAA still recorded its second busiest-ever month in July with passenger volumes up 0.4 per cent in the month. Add to that the fact that the International Civil Aviation Organisation has predicted world passenger traffic will grow by 4.4 per cent next year and 6.3 per cent in 2005, and the future is looking bright for BAA, which runs Glasgow, Edinburgh and Aberdeen airports. With a fifth terminal planned for Heathrow, shares in BAA could be worth considering.
As ever, there are currently several companies whose shares are worth consideration. One is the book publisher Quarto, which has only recently turned down an offer of 132p a share from JO Hambro. As the company is looking stronger, the shares are becoming, for some, more attractive.
Speaking of Hambro, gold mining company Peter Hambro Mining has seen its shares soar lately but are said by analysts to remain worth buying, as are those of Eckoh Technology, a voice and data specialist whose recent acquisition of Intelliplus looks to have been a smart move.
Another smart move could be eyes down and look to bingo hall owners Top Ten Holdings in the AIM market. The company became Britain’s fourth-largest chain of bingo halls when it acquired five halls from Welcome Social Clubs late last year.
The Government’s liberalisation programme has had a positive impact, particularly the abolition of point of sale tax and the benefit of having additional gaming machines in each club. The planned liberalisation will benefit TTH in other ways, notably the abolition of stake and prize limits in bingo games. With the company still on the acquisition trail, you could be shouting "House!"
Another small business doing well on AIM is the animal healthcare company Lawrence, which has been performing well with an impressive product range. A lot could depend on the company being awarded a drugs registration and the timing of that award, but the view from the City seems to be that it is worth at least a quick look.
Back with the big companies on the stock market, engineers Cookson has recovered particularly well though its shares could hardly be said to be for the faint-hearted. This is not a nice, secure little company in a growing sector, but one besieged by near permanent tricky market conditions.
From a high point of 255p over three years ago, by March this year they had tumbled to 16p largely because of the uncertain market and high debt. But the company seems to have weathered the storm and its finances are in much better shape after a rights issue last August and the disposal of its precision products arm. The once crippling debt has been brought under control, and analysts think the company is now well on the road to recovery.
Electricity utility National Grid Transco looks a less risky proposition, with analysts taking the view that with its next regulatory review not until 2006, and a possible dividend increase, now may be a good time to buy. Conceivably it could also be a good time to buy shares in aerospace, medical and defence equipment manufacturers Smith Group, where a recent restructuring, including the sale of its polymer business for £495 million to Swedish group Trelleborg, has made it leaner and healthier.
Other companies performing well at the moment include BSkyB, the kingpin in the pay-television sector following the demise of ITV Digital and the financial collapse of the cable operators. The company has now unveiled new targets of eight million subscribers and average annual revenue per user of £400 by 2005. One worry, however, is that BSkyB’s dominance of the market could lead to intervention from the competition authorities.
While there have been casualties a-plenty, the life assurance and financial services sector still has many fans. The South African company Old Mutual has performed well and second-half sales are expected to be up. The company also intends to increase its presence in the UK through acquisition and, along with the strengthening rand, Old Mutual could be a worthwhile bet.
• Drew Johnston is a business writer and managing director of Blueprint Media
The full article contains 789 words and appears in Edinburgh Evening News newspaper.
