Companies banking on exploiting the introduction of home information packs (HIPs) have suffered a setback as Government minister Ruth Kelly has delayed the date HIPs come into force from 1 June to 1 August.
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Many ventures in this sector continue to suffer from sales pressure, cheap overseas competition and raw material cost hikes caused by the oil crisis and a mini-crisis in consumer confidence brought about by interest rate worries. With all these woes already priced in by the market, value investors should be on the lookout for well-managed businesses trading below asset value.
One such company is carpets play Victoria, which warned on profits in September. As well as suffering from an operational gremlin, it has seen a slowdown in its UK and Irish residential businesses. Management attributed this to 'general malaise in the UK economy' and a number of rate hikes, and investors can expect full year figures to next March to be significantly lower than last year. But bear in mind that in recent months the group's share price has plummeted from 400p to the current 222.5p which as broker Arden Partners points out, is a hefty discount to its NAV of 365p a share.
Another is the cash-generative Chapelthorpe, hit by bad debts and deterioration in the North American wall coverings market. Yet the business enjoyed a 137 per cent profits hike to £5.5 million last year to March, and sported year-end net assets of £45.3 million, significantly above the current £40.3 million market cap.
In other news, model and collectibles group Hornby hopes to complete the acquisition of Lima before the end of the year, having received the go-ahead from the Italian court. Frank Martin, chief executive, says that alongside Hornby's Spanish operation Electrotren, the deal will help Hornby steam into Europe.
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Overall retail sales continued to flourish in June with Government figures showing a 1.1 per cent increase in sales between May and June. The British Retail Consortium (BRC) went further, stating like-for-like sales increased 2.4 per cent during the period. But, perhaps the long-awaited decline has begun, as in the previous month the BRC calculated that like-for-like numbers were higher at 3.7 per cent.
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It's been a good past year for shares in the household goods and textiles sector, with the FTSE Actuary Industry Sector benchmark sparking up from 2163.17 to 4128.48. However, a sector average p/e of almost 23 looks high.
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Paul Sellars, the éminence grise at Montpellier is making progress slowly, patiently and profitably. Leslie Copeland reports
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Virtually whatever index or share price graph one looks at now paints the same picture – namely, the steady, incremental declines to March, then a period of virtual stasis as the war in Iraq played itself out, followed by sharp rises up to the present day.
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The general market massacre of the past month has a lot to do with an ongoing adjustment to the excesses of the technology boom. But it is a bit of a surprise that many telecoms companies have proved relatively immune, with the sector falling just 2 per cent since the beginning of July. Other major techMARK sectors have been well and truly battered. IT hardware has fallen by 17 per cent, software and computer services 16 per cent and pharmaceuticals 23 per cent, all in the wake of continuing bad news-flow and even worse market sentiment.
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July was an eventful month on the JP Jenkins market, although share prices often did not respond. Several firms buoyed their investors with encouraging figures, others disappointed. There was also a raft of contract news to keep market spectators intrigued as the main markets took a catastrophic fall.
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The treatment of technology stocks on the markets has got past the panic stage now, but rather than mounting a recovery, the attitude towards the 'new economy' seems to be one of wary suspicion. As a result the techMARK 100 hasn't been showing such pronounced volatility as it has done over the past months, the story instead being one of gentle subsidence, with the index falling five per cent to 2630.
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