Charles Stanley

Analyst Ben Archer has inked his thoughts on the recent fundraising from AIM-quoted insolvency business Begbies Traynor, which has placed 5.3 million new shares (raising £8 million of fresh cash) as well as 9.2 million shares held by directors, to boost liquidity – both at a discounted 152p.

Archer expects the fundraising to modestly dilute earnings in 2008, but he sees the move as ultimately leading to acquisition-spurred upgrades for 2008 and 2009. While the group’s valuation ‘still looks expensive, this placing gives Begbies the funds to pursue and potentially accelerate its acquisition strategy, which will feed through to upgrades in due course’, he writes.

On the Full List, analyst Susan Gordon suggests the market has got it right with regard to ‘time critical’ logistics group John Menzies, even though the 520p shares trade on a forward p/e of less than 12 for December 2007. Annual numbers for 2006 revealed pre-tax profits of £35.8 million from £1.45 billion sales, with growth in aviation services offset by a poor performance from the stagnant distribution arm. ‘Given the competitive nature of this industry, we believe the current valuation, supported by the yield [Menzies offers four per cent], looks about right,’ she notes.

Results from the company – one of Scotland’s largest – were accompanied by the news that chief executive Patrick Macdonald has stepped down, though he remains on hand to help the board until the end of April. Two divisional heads have been appointed to the executive team, though the group rejects any notions of strategic disagreement.