The Birmingham Post from Birmingham, West Midlands, England • 22

22 TUESDAY September 8 1998 The Birmingham Post 7 philipplatts Arthur Andersen private client services 233 2101 BUSINESS A CREATIVE APPROACH TO PERSONAL FINANCIAL ADVICE? Rates hope perks up top shares Greenspan triggers £32bn surge on stock market them handle £1322 billion in investments The results show a marked turnaround since February when Merrill Lynch began the monthly poll For the first time most managers said the London stock market was undervalued Property professionals have told the Chancellor that fiscal measures would be a far better way of controlling the economy than interest rates Mr Neil Pountney West Midland regional construction spokesman for the Royal Institution of Chartered Surveyors called ahead of the Bank meeting for a significant reduction in interest rates over a period and urged increases in VAT or even taxation should be considered may cut key interest rates should the recent global financial turbulence intensify His words came as a new report said recent falls on the London stock market have left shares undervalued The survey of UK fund managers found most were buying into UK equities But the survey held no good news for the outlook on the economy with only three per cent expecting business growth The August survey was carried out by Gallup on behalf of Merrill Lynch It asked 243 finance houses for their views on global markets Just over 60 of the companies were UK-based and between By PHILIP muagm Business Staff The Stock Market rallied yesterday ahead of meeting of the Bank of Monetary Committee on interest rates It soared 180 points on the FTSE-100 its second biggest daily increase ever to finish at 5347 a £32 billion gain Most European bourses surged after US central bank chief Mr Alan Greenspan triggered hopes American interest rates had peaked breathing new life into global stocks But on currency markets the talk of lower US rates gave the dollar a battering dragging it £284m deal for Crystal is virtual reality Budgens merger leaves food for thought Budgens proposed merger with food distribution company Booker will result in a group rife with contradictions according to analysts reacting to the announcement that the two companies were in talks to create a single £5 billion business Negative reaction sent both shares down with Booker 18p lower by the close at 170p and Budgens down lp at 75V4p One after another analysts said they had been unable to discover the rationale for a deal between the two companies am struggling for a reason as to why these two companies have chosen to get said one industry analyst close to the company biggest single issue is that customers would be as unhappy about having Budgens as an owner as Somerfield Either way the corner shop owner will find a supermarket owns its supplier and that is not going to appeal In terms of structure it does not have any natural appeal particularly since Booker sold Budgens back in the he added Mr Clive Vaughan analyst at retail experts Verdict Research said: really see what is the point behind this deal Apart from sacking a few people at the head office I cannot see where any synergies Others pointed out the contradiction that Budgens would now be distributing food to its rival grocery stores One analyst said: Budgens manages to make Booker more competitive it will only be helping its rival grocers Budgens should stick to expanding in convenience search for a partner forms part of a shake up that began three months ago The company due to report half year results on Thursday is expected to slash its dividend and reveal that pre-tax profits have almost halved from £22 million a year ago The strong pound has hit salmon business and chicken sales to the United States while its domestic cash-and- carry operations have suffered from bad weather and stiff competition In a statement to the Stock Exchange the companies said a merger would be through a share swap Details of the transaction have yet to be released but Booker shareholders will receive most of the proceeds Analysts were branding the deal a reverse takeover by Budgens The chief executive Mr John von Spreckelsen will head up the merged group stocks and the hint that US rates could be cut sooner than expected stiffened the confidence of some European investors But others remained on the sidelines saying it was too early to talk of a recovery after the recent turmoil on global markets Federal Reserve chairman Mr Greenspan gave many markets a jump start with his remarks at a weekend conference He implied the central bank no longer viewed inflation as the big threat to the US economy and On target: Mr David Totney of Buyout team By PHILIP WILLIAMS Business Staff A Black Country engineering company has been saved from closure by a £2 million eleventh-hour management buyout Mawson Triton Mouldings which employs 60 people making compression mouldings in Rowley Regis found itself surplus to requirements after its parent company (the former asbestos company Turner Newall) was bought down to nine-month lows against the mark and a four-month trough on the yen In London the pound fell against both the German mark and the dollar It ended at 16691 against the US currency compared with 16721 previously and at 28786 compared with 29009 on Friday against the mark The trade-weighted index was down 090 at 10340 An overnight rally in Asian on the back of a buy recommendation from stockbrokers at Credit Lyonnais who said the strength of the Tomb Raider franchise and the current gaming portfolio were both reasons for favouring the stock The price is well off the high of £1275 in May however The shares lost ground after the company announced full-year profits well below City forecasts full-year profit of £165 million compared with losses of £68 million the year before and contrast with Crystal £1 million loss last year on turnover of £76 million Half the money for the acquisition of Crystal will be paid on completion of the deal expected on October 31 The remainder is due in April next year The acquisition continues relentless expansion based largely on the success of the Tomb Raider games The company has already licenced Tomb Raider for a film production And its success in branching out into sports-related fields was underlined last week after the company signed up England football star Michael Owen to endorse a range of soccer video games Ennstone back in the black Midland-based quarrying company Ennstone chipped itself back into the black in the first half and yesterday predicted solid progress in the second The Birmingham-based group formerly Albrighton earned profits of £180000 in the six months to June against a loss of £271000 in the same period 12 months ago The interim figures included a £426000 loss in the disposal of its loss-making US subsidiary McQuiston Stone Turnover was up to £174 million from £142 million Earnings per share stood at 036p and no dividend is recommended for the first half Chairman Mr Vaughan McLeod said the group had continued to develop its aggregate business in Scotland and two weeks ago announced the £103 million acquisition of its Thistle Aggregates subsidiary from the Hewden Stuart Group of two quarries in Fife Both could take Ennstone into new areas of business and the group is also pumping £11 million into other Scottish quarry operations which should result in efficiencies in the future Mr McLeod said Rugby-based Ideal Aggregates performed exceptionally during the period and the company aimed to expand its English operations by acquisition Candidates were being evaluated currently Ennstone shares closed Ap higher in London last night at 38p Rates peaked: Mr Alan Greenspan Burmah Castrol hit by pound and Asia Lubricants and fuels group Burmah Castrol put a confident face on first-half figures yesterday but admitted it faced challenging market conditions with underlying profits down on a year ago The combination of the strong pound and economic upheaval in the Far East meant that underlying pre-tax profits for the six months to the end of June were down from £1264 million to £1216 million a drop of four per cent However the company said the figures would have been nine per cent better but for the strong pound which wiped more than £14 million off the bottom line Overall pre-tax profits came in at £1535 million including £30 million of one-off profits from the sale of non-strategic businesses against £103 million last time when results included £30 million of one-off losses Burmah which claims Castrol has world number one spot in passenger car lubricants reported a two per cent fall in first half attributable profits to £671 million hit by strong sterling but said underlying growth continued in the period with profits up by nine per cent at constant currencies The company said volumes of its Castrol brand lubricating oils rose by three per cent with marketing launches well received in China and eastern Europe Burmah estimates a similar rate of growth for Castrol the second half Chief executive Mr Tim Stevenson said global demand for motor oils dropped in the first half so performance reflected rising market share He said: was a robust performance in difficult Toughest geographic areas were Malaysia Thailand and Japan where the company has taken action to cut costs although it is maintaining investment in marketing in China Results in industrial products lubricants and chemicals in Europe and North America saw improved profit margins chemicals operation which includes a metallurgical facility in the West Midlands boosted operating profits in constant currency terms by 13 per cent But there were more difficult conditions for the consumer lubricants business in Western Europe particularly Germany where demand remained weak and competition intense Mr Stevenson said there had been good progress in Eastern Europe with businesses performing well in the Middle East southern Africa and Latin America He added that the group remained on track to hand back £250 million to shareholders next year For the moment investors get a half-time dividend of 14p payable as a foreign income dividend The shares rose 4p to 925p By BUYPME8BEB City Editor Computer games publisher Eidos the company behind feisty female virtual heroine Lara Croft announced plans to buy one of the leading game designers yesterday The acquisition of California-based Crystal Dynamics for £284 million cash is the biggest deal since it bought Centre-Gold for £189 million two years ago The US company is responsible for adventure games GEX Pandemonium and Legacy of Kain Eidos said the deal which gives it access to development studio and expertise will be earnings enhancing from day one Chief executive Mr Charles Cornwall said Crystal would strengthen software development programme and give it a broader and stronger title portfolio The market reacted positively to the news with Eidos shares forging 30p ahead to 777p advance in the share price also came Baggeridge seals deal for rival Midland-based Baggeridge Brick third biggest brick manufacturer has cemented a £225 million deal to buy a southern rival It is buying up Horsham West Sussex-based Rudgwick Brickworks which has 50 staff Turnover in the year to April 1997 was £253 million but it posted a £150000 loss after charging £173000 paid to directors who will not transfer to Baggeridge under the deal It is currently trading profitably RB produces high quality stock bricks and pavers in a variety of colours extending the product range of the enlarged Baggeridge group Its assets totalled a book £172 million No value was ascribed to extensive reserves of prime Wealden clay Baggeridge managing director Mr Alan Baxter said the two companies had complimentary operations in terms of geography and product range is based in and sells mainly to the south-east to which Baggeridge with its operations in the West Midlands sells only a small part of its he said The RB operation will continue to be headed by general manager Mr Roger Nash He said: development gives our products access to extensive customer base and allows us to draw on technical and design resource which is among the best in the Ibstock lays solid base for shareholders Shares in brickmaker Ibstock climbed sharply after the Midland-based company announced a 81 per cent increase in half-year profits and plans to return capital to shareholders The company which bought the brick businesses of Tarmac and Redland also revealed debts had reduced substantially to leave gearing at just 24 per cent In June it raised £16 million selling its interest in a Portuguese subsidiary and at the half-year end debts were down to £655 million compared to 1 50 million at the end of 1996 Profits from the UK brick business climbed 32 per cent to £132 million while the contribution from Glen-Gery in the US improved to £56 million from £32 million Earnings per share increased 40 per cent to 265p and shareholders whose shares rose to 43p -see the dividend rise 1 3 per to 085p With a strong cash generation outlook and strengthening balance sheet the Ibstock board is now looking at ways to return capital to shareholders Euro Sales Finance with a torpedo casing made by Mawson saves mouldings company Advisers including chartered accountants Mazars Neville Russell and Cradley Heath law firm George Green worked round the clock to put the deal together but hit a major stumbling block 48 hours before the deadline of last Friday A financial backer pulled out but the deal was saved by the intervention of Birmingham-based asset finance specialist Euro Sales Finance It agreed to part finance the purchase and provide working capital by American auto components company Federal Mogul The US concern wanted to get out of non-core businesses without delay and gave the Mawson management just two weeks to put together a buyout The management team of managing director Mr Norman Barker finance director Mr David Jones commercial director Ms Dianne Clarke and operations director Mr Paul Sloan set out to put funding together British Vita unveils agreed takeover bid for Doeflex Planning delays restrict building of Bryant homes Cadbury sweet on Wedel to boost Polish operation share The typical cost of a Bryant home rose to 1 24800 from 1 1 6000 and the profit margin climbed to 121 per cent from 88 per cent Chief executive Mr Andrew Mac-Kenzie put the improvement down to the Bryant This focus on driving profit meant a big jump in the bottom line despite home sales slipping to 3895 from 4040 in 1997 southern region which accounted for 40 per cent of sales saw the most activity but sales in the Midland operation were particularly strong in the second half of the financial year Activity has now slowed but site visitor levels and reservations remain slightly ahead of 1997 The final dividend is seven per cent higher at 385p per share Bryant shares rose to 9 1 Ap By MARTIN WOOD City Correspondent Bryant Group would have built hundreds more homes last year without delays in the planning process The Solihull-based company reckons its experience is typical with the construction of new houses down ten per cent across the industry To get round the problem of escalating land prices Bryant has been investing heavily in strategic sites with an option to take full ownership at some time in the future The company is also building more flats and three-storey properties to make efficient use of land Figures out yesterday showed profits climbed 38 per cent to £533 million in the year to the end of May with after tax earnings up 41 per cent to 13 lp per placed to take advantage of further growth opportunities in Europe So far British Vita has received acceptances or pledges of acceptance from Doeflex directors holding 215 per cent of the shares British Vita operates in 16 countries and employs 9700 people worldwide making engineering thermoplastics compounds and mouldings foams and synthetic fibre fillings Results from British Vita showed pre-tax profits up from £32 million a year ago to £368 million in the half year to June 30 on turnover up from £416 million to £418 million In the first half of the year Doeflex made a pre-tax profit of £34 million up from £3 million on sales of £409 million down from £429 million i Chemicals group British Vita yesterday unveiled an agreed £659 million takeover bid for plastics materials manufacturer Doeflex British Vita based in Middleton Manchester is offering 375p a share for Doeflex which has its headquarters in Redhill Surrey Before Doeflex announced it was in talks with a possible buyer at the end of August its shares were trading at 236p Doeflex has six main sites in the UK and one in Belgium employing more than 500 people and its main products are plastic compounds and sheets British Vita said the deal represented an excellent strategic and product fit giving the enlarged group the opportunity to strengthen its market position And it said it would also be well Cadbury Schweppes director Mr Ian Johnston said: combination of Cadbury and Wedel puts us in a strong position to generate added value for the group in this large developing market Wedel trademark is a powerful asset in Poland representing high quality good value chocolate and is a good fit with our existing Meanwhile Smiths Industries the aerospace medical and industrial engineering group revealed it was set to buy a US company for around £50 million It wants to take over Biochem International Inc which is based at Waukesha near Milwaukee BCI designs manufactures and markets a wide range of patient monitoring products chief executive Mr Keith Butler-Wheelhouse said BCI complemented his medical systems activities perfectly Cadbury Schweppes is buying Polish chocolate maker Wedel from Pepsico for more than £46 million It is paying £463 million for the Wedel brand and confectionary business which employs 1100 people at a factory in Warsaw It will be run in conjunction with Cadbury Poland and is intended to give Cadbury Schweppes the number one position in Poland with a 28 per cent market share chocolate market grew by an average of 1 7 per cent a year between 1990 and 1997 making it one of the largest chocolate bar markets in Europe said Cadbury Last year the Polish company which had sales of £487 million relaunched its product range under the Wedel brand name i.