Propan Homes

Propan's shares edged up slightly as it announced the proposed acquisition of fellow southerly-based company Honeygrove Holdings for 21m shares plus up to £2m of loan notes. But it remains to be seen if shareholders will benefit from this, and sceptics could point out that the company might be better off getting its own house in order rather than chasing after more deals. Honeygrove has apparently won numerous awards for its developments, but it also lost £627,000 in the last year for which its accounts were audited, despite turnover increasing 8% to £12.9m. This is similar to Propan's result for the six months to September, in which it saw pre-tax profits collapse to £95,000, despite turnover increasing 53% to £5.5m. Chief executive Chris Johnson claims that 'the two groups have very strong synergies' and reckons that a welcome amount of cost savings may come to pass. Whether this is true remains to be proven. One thing that will definitely come to pass very soon is a change of year-end to September and several sets of report and accounts that will make for difficult reading. Avoid/sell.

Sector: General Financial

Companies: Park Plaza Hotels

Market cap: £7.2m

PE Forecast: n/a

Share price: 10p

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