Account gamble
Fags, food and peanuts
John Bull
It is not necessary to smoke yourself to death in order to keep up the demand for cigarettes: there are plenty of fools around, suffering from incurable death-wishes, if not from incurable cancers, to keep the tobacco fields growing and the cigarette factories churning out their nasty little tubes.
And I don't suppose the Government will ban cigarette companies from advertising, or from promoting sporting activities.
As a short-term speculator, I have few ethics about investment. Certainly, as I have never seen a share certificate, I would not have the slightest scruples about recommending a South African company (if there were one) which experimented in colour pigmentation. Thus, though I abhor smoking and the way Government effectively promotes this distasteful and harmful habit, it is my advice this week to buy Imperial Tobacco Group.
The shares have slipped this year from a high of 123p to 103p and are currently sel ling on PE ratio of only 14. At the annual meeting in March the chairman, Sir John Partridge, said that results were then ahead of the previous period and unless unforeseen setbacks occurred Imps would achieve a further advance in profits and
at least " sustain its dividend distribution.
Despite the power crisis and rising costs I am still optimistic that these ex pectations will be justified in the interim report due on July 12. And one advantageous factor will be last December's devaluation of the dollar. I make the as sumption that growth will be around the 10 per cent level on which basis the shares are selling at about eleven times earnings. Also to be considered is the yield attraction and the return is just under 5 per cent. Apart from its tobacco interests — and recent figures indicate that the Royal Col
lege of Surgeon's. reports on smoking has
gone largely to the wind — the other Imp activities should be doing much better.
Last year about a fifth of profits came from such interests as food and paper. As far as the former interests are concerned, after surviving two fowl pest epidemics Profits should move sharply ahead. There are signs, too, that the paper division will do better. Another section that is doing well is the packaged peanut interests.
Finally, there is a good deal of debate about Imp's close relationship with BATS Worth about £200 million and the possi bility of a bid for flour miller and baker, Ranks Hovis McDougall. If Imps does sell EATS and buy RHM there will be plenty Of beef put into the group's earning Potential.
First dealings Last Account
dealings Day June 19 July 3 July 17
June 30 July 11 July 14 July 25 July 28 Aug 8
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