Northgate speeds ahead of pack

WHITE van man - that aggressive road hog who looms large in your car mirrors - has a predator on his tail.

GE Capital has the number two position in the UK light commercial vehicle rental market and would become numero uno - not only in the UK, but also in Spain - should it buy Northgate.

Last month, Northgate took full control of Spanish rental business Fualsa after acquiring a 40% stake in 2002. Spanish expansion was part of management's plan to have a fleet of 60,000 vans in the UK and Spain by April 2006.

Internet and cable TV home shopping business has boosted demand for Northgate's light commercial vehicles. Analysts expect group pre-tax profits to jump this year to nearer £43m, from £36m last time.

There is no doubt that Exel's agreed £328m 668p-per-share cash bid for rival logistics firm Tibbett & Britten (1p off at 665 1/2p) has made other stocks in the transport sector - particularly Northgate - look vulnerable and undervalued.

Interest elsewhere centred around Marks & Spencer after its management threw out billionaire retailer Philip Green's increased £8.4bn bid, worth 370p per share. Reflecting disappointment that Green's cash offer did not have the figure four in front of it, some speculators baled out, sending the price down to 352p. The close was 6 3/4p easier at 356 3/4p.

On the other side of the High Street, Currys-to-PC-World retailer Dixons buzzed 5p higher to 161p. UBS upgraded to buy from neutral ahead of Wednesday's results and raised its target price by 10p to 180p. It would not be surprised to see a private equity group one day launch a buy-out.

Other stores were helped by news of stronger-than-expected retail sales in May. Warmer weather gave 'er indoors the urge to shop until she dropped. Sales jumped 0.8% on the month and were up 7.4% from the same month in 2003.

But fears that stronger sales will prompt a further rise in UK interest rates next month dragged the Footsie nine points lower before elevenses. It later rallied in thin trading to finish 2.2 points better at 4493.3.

Wall Street declined 41 points initially after the largest increase in US producer prices in more than a year revived worries that inflation may be tackled by a 1/2% hike in interest rates later this month.

Sterling improved to $1.8356, while the euro softened to 65.6p and $1.2049.

Daily Mail and Mail on Sunday publisher Daily Mail and General Trust rose 10 1/2p to 703 1/2p after withdrawing from the long drawn-out auction for the Telegraph titles. Numis Securities says buy and has a target price of 752p. The broker says that with the uncertainty surrounding the Telegraph behind it, the shares are good value.

The revelation in a trading statement that interest payments on a £44.5m vendor loan to Albion Chemicals have been suspended and management is considering whether an impairment provision is required left support services group Hays 5p down at 123 3/4p.

Builders merchant Heiton Group soared 72 1/2p to 415p after rejecting a bid approach from private group Grafton.

Asia Energy firmed 3 1/2p to 67 1/2p. The board has decided to increase production at its Phulbari Coal Mine Development in Bangladesh from 9m to 15m tonnes a year.

Aim- quoted optical component manufacturer Gooch & Housego advanced 20p to 138 1/2p after doubling interim pre-tax profits to £1.27m. Chief executive Gareth Jones said sales and profits have grown substantially and acquisitions are on the agenda.

ITIS accelerated 2 1/2p to 25 1/2p after agreeing a new contract with Land Rover to supply its Radio Data System Traffic Message Channel service as standard across all models fitted with factory-installed satellite navigation.

DOWN from a May peak of 562 3/4p, Peter Hambro Mining rallied 6p to 404 1/2p after beefing up its Russian gold portfolio. It has acquired the Ametistovoye gold deposit in the Kamchatka area for £13.7m. Numis believes the acquisition is worth around £1 a share and further rubber-stamps PHM as one of the leading Western participants in the resurgence of the Russian gold mining industry. Its target price is 715p.