Companies: DVO    JRVS    RFD   

Hold on at Richmond and Devro, buy Geest, sell Jarvis

The UK's food sector may have offered a series of delectable delights to savour in March, yet Investec analysts Nicola Mallard and Ingrid Boon remained cautious when it came to company evaluations.

The group's pre-interim write-up of icecream manufacturer Richmond Foods set the tone. Boon explains that, while an anticipated £1.8 million interim profit will easily surpass last year's total, 'on a valuation basis Richmond still trades at the top of the small food universe'. The company, which is expected to produce an £11.7 million profit for the full year, is currently rated at 13 times prospective earnings and is deemed a hold at these levels.

Mallard, meanwhile, expressed similar sentiments in relation to beef and collagen products supplier Devro, which, like Richmond, is a corporate client of Investec. Full year profits were £1 million ahead of expectations at £18 million. Nonetheless, the prospective p/e of 11.1 is also high for the sector and again she urges clients to hold.

Chilled food specialist Geest is recommended as a buy, however, having produced a £42.6 million profit for the full year.

Receiving a less positive write-up from support services analyst Geoff Allum was rail services business Jarvis, as it announced that it was investigating the possibility of selling half of its holding in Tube Lines. Allum has downgraded his full year profit prediction from £67.5 million to £62 million and changed his recommendation to sell.