Newspaper article The Evening Standard (London, England)

Panmure Views Dignity as a Share Buy to Die for; MARKET REPORT

Newspaper article The Evening Standard (London, England)

Panmure Views Dignity as a Share Buy to Die for; MARKET REPORT

Article excerpt


LOOKING for signs of confidence in the "death market" can be a dark art. But an autopsy on the latest annual figures of quoted undertaker Dignity reveals it has bought 65 new Mercedes hearses and limousines.

At [pounds sterling]65,000 a go, chief executive Peter Hindley is clearly banking on getting a lot more business. The UK death toll fell last year, and was 3% below Dignity's forecasts, but Hindley still upped profits 17% thanks to better cost controls.

He has always said death rates have a habit of self-correcting over the long term and Dignity is clearly well-equipped to deal with a catchup in funeral volumes.

Its shareholders will get a 100p special dividend in August. Broker Panmure Gordon has slapped a buy on the stock, calling it a "growth utility", with a 520p price target Kingfisher's plummeting profits were not enough to put off buyers yesterday. Despite a slump in profits, the shares climbed - mainly on hopes a bidder will finally appear. Steve Davies at Numis is just one analyst warning clients of the dangers of being short in Kingfisher.

He notes that while rumours of interest from the US come and go all the time, it is also an interesting story from a private-equity viewpoint; lots of property, a turnaround opportunity and a credible exit strategy in the shape of a US buyer. The names most recently in the frame are Home Depot and Lowes. Davies' preferred shorts in the retail sector are JJB, Next and HMV.

It was the opposite story at building and plumbing supplies merchant Wolseley, where a strong show triggered profit-taking and sent the shares skidding down. A 21% rise in pre-tax profits before exceptionals was tempered by concerns over a possible slowdown in the US homes market.

Tony Shepard at Charles Stanley reckons Wolseley is a sell, and warns the American housing decline may be more extreme than investors are anticipating. …

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