Emap claws its way forward

FHM lads magazine publisher

Analysts will be particularly interested in the ABC's of the men's weekly magazines launched recently, Emap's Zoo and IPC's Nuts. Nuts apparently should report average weekly circulation of 280,000 with Zoo lagging up to 70,000 copies per week behind.

However, media guru Lorna Tilbian at Numis Securities believes Zoo is outperforming Nuts significantly in advertising sales. Emap's two largest titles by retail sales volume are Heat and Closer. The latter continues to be a success story and is expected to add up to 25,000 per week to its circulation.

Emap's share price plummeted 10% in May when it revealed that the circulation of its top two titles in France had fallen 15% to 20% since Bertlesmann, the German media group, launched a new fortnightly title.

Tilbian reckons the value of Emap's UK consumer magazines, UK business-to-business and radio/TV divisions currently justify the entire enterprise value of Emap while the troublesome French operations are in the valuation for nothing. The shares offer excellent value.

Shrugging off a record oil price, the Footsie rallied 36.5 points to 4,350.9 on expectations the Fed would raise US interest rates by a further 1/4% to 1 1/2%. Wall Street jumped 83 points in early dealings on hopes the Fed would point to a slower pace of rate increases in the coming months. Buying ahead of forthcoming results lifted mining group Xstrata 26 1/2p to 762p.

Pay-TV giant BSkyB lost 7 1/2p more to a year's low of 476 1/2p. Global fund manager Franklin Resources, which has bought 3.6%, appears to be the only buyer in town. James Murdoch's big spending plans to win new subscribers scared shareholders to death last week. As well as upping the marketing budget 50% next year, he has earmarked £450m for various projects including upgrading its headquarters in Osterley, Middlesex.

US fund manager Capital Group stopped the rot at lastminute.com by acquiring 19.3m shares, or 5.3%. Shares of the on-line travel group, which had collapsed 25% in less than week on dire trading news, recovered 12p to 106 1/2p.

As Cairn Energy gushed 82p to £14 after announcing its fourth significant oil discovery in Rajasthan, India, buyers scouted around for other bargains in the oil sector. Aim-quoted Regal Petroleum, which has been friendless of late, rebounded 16p to 373 1/2p amid speculation that a bullish drilling report from its operations in Greece is on the short-term agenda.

Reports of a pending bullish circular helped Glasgow pump maker Weir Group rally 18p to 292p. It recently shocked the City by admitting it is caught up in the global row over illegal kickbacks to Saddam Hussein's regime under the United Nations' 'oil for food' programme. Weir discovered it overpaid by an estimated £4.2m on 15 Iraqi contracts.

Independent International Investment Research jumped 8p more to 34 1/2p for a two-day gain of 19 1/2p on news it will be supplying equity research to two major investment banks in the US for the next two years.

Family-owned engineer Loades jumped 100p in a thin market to 435p on talk of an imminent deal.

Reflecting the strong return to profitability in the first-half to £212,000 from last year's loss of £722,000 and chairman Peter Wardle's optimism for continued recovery, builder Chieftan rose 5 1/2p to 41 1/2p.

Reports of a military coup in Mauritania left Hardman Resources 8 3/4p down at 81 1/4p. The oil exploration company has extensive interests in the region.

Aim-quoted Supporta, which is the major provider of payroll and pension services to the NHS, returned from suspension 11p lower at 43 1/2p. Several new institutions including Newton and Majedie bought stock in a placing of 16.4m shares at 38p. The £6.25m raised helped finance the acquisition of Parys Snowdown, which supplies outsourcing services to the NHS and Quality Care, a supplier of care workers. Cheap.