Account gamble
Hopes for Burgess
John Bull
Homfray came in for an even better improvement in profits than I had forecast last week but even so I was dismayed by the apparent apathetic market attitude to the results with the share marked up 1 p to 77p. However I have higher hopes for Burgess Products which announces its interim figures on March 9.
Now Burgess's recent record has not been particularly in spiring. However, what should help current results is the high level of motor vehicle produc tion At the end of 1972 the silencer and metal ceiling divisions experienced a strong turtiround in demand and higher steel prices were being passed on. A new range of silencer products and plant in the process of being modernised bodes well for the short-term while in the longer-term new noise and pollution requirements should help the group.
In other areas Burgess looks well set with the German subsidiary likely to get into the black and the Canadian company should be doing better. The power tool section also shows promise.
The shares have come back 10p since the full year state ment in December but I feel that the interim profit figures should give sufficient grounds for cheer and I am going for profits of at least the £778,000 achieved in 1971, this year. On this basis the shares at 75p are On a PE ratio of only 8 and yield 6 per cent. Another point worth remembering is that the shares are backed by assets of 71p, and in a period of high interest rates, borrowings as a percentage of shareholders' funds at the last year end were only 5.5 per cent.
Again, in conclusion, I feel I should say something tbout my share of the year, Firth & Brown. Rumour has it that GKN has approached a large institutional holder of the stock with a view to purchase. Also I hear that Richard Johnson & Nephew has a good profit .forecast up its sleeve, so my advice is still hold on.
First Last Acount dealing dealing day
Feb 12 Feb 23 Mar 6 Feb 26 Mar 9 Mar 20 Mar 12 Mar 23 Apr 3
Previous page
