WH Ireland ‘Amstrad has appeal, Pace Micro does not’

WH Ireland’s Ray Burgum focuses on set-top boxes this month, beginning with Amino Technologies, where results prompted profits downgrades, yet failed to dislodge his buy recommendation.

Electronic device maker Amstrad, chaired by Alan Sugar (now as famous for his television persona as for his business acumen), said that full year results would be ahead of WHI’s estimates. The broker believes this to be due to increased subscribers to BSkyB, for which Amstrad makes set-top boxes. Profit forecasts were nudged up to £20.4 million, giving EPS of 17.2p and a ‘buy’ from WHI.

Sugar’s statement ‘contrasted sharply with the trials and tribulations affecting Pace Micro’, where engineering development delays led to reduced revenues and interim losses. Ireland thinks cash balances will be heavily cut and while the broker applauds ‘the achievement of securing volume orders to the US it has come at a high price’ and advises selling or avoiding ‘until the situation becomes clearer’.

Elsewhere, analyst David Gorman takes a bullish view of prospects at both 4imprint and Formation. 4imprint, a promotional products printer, has been successfully turned around and Gorman likes ‘the shape of the US business’, saying ‘growth opportunities exist across the group’. Meanwhile, the growth strategy at sports marketing agency Formation, ‘an attractive investment but still small’, looks ‘very sound’.