Luminar is one of the share picks for 2007 by The Sunday Times business reporters who punt on the winners in the coming year.
Matthew Goodman says the nightclub operator might have had a tough time over the past couple of years but now that a restructuring programme has been completed and the entertainment division sold, it is left focusing on what it does best.
He notes that last month’s interims were impressive and the shares, at 732p, are trading at just under 13 times forecast earnings for 2008, making them cheaper than those of several peers in the sector.
Goodman also comments on chairman Alan Jackson’s sound performance at The Restaurant Group – another reason for making Luminar worth backing next year.
The Sunday Telegraph tips SABMiller for the coming year. The company, whose shares are currently worth £11.85, is well-placed to benefit from emerging markets, it says.
The brewers should also see strong organic growth and benefit from increased “premiumisation” of the beer market.
Analysts believe there is scope to increase margins through improvements in efficiency and the launch of more upmarket versions of its brands.
However, a black cloud remains over the performance in North America, which accounts for 12% of earnings, although a well-regarded management has replaced the top team there, which is likely to result in better news.
Wolverhampton & Dudley Breweries is one of The Independent on Sunday’s tips on the basis it “probably won’t survive to the end of this year, at least in its current form”, which is likely to be good for investors.
Two people on The Observer’s tipping panel recommend Compass Group. Lesley Duncan, investment director UK equities, at Standard Life Investments, remarks on the new management team, which is leading to a rationalisation of the operations and disposal of non-core assets.
Colin McLean, managing director, at SVM Asset Management, says the world’s largest contract caterer operates in a challenging environment, but could see steady margin improvement over the next five years.
The Sunday Times (Business) 31/12/06 page 2
The Sunday Telegraph (Business) 31/12/06 page B6
The Observer (Business & Media) 31/12/06 page 2
