Roar of approval as Lex wins race

MOTORING support group

Lex, which plans to change its name to RAC, the motoring breakdown organisation it acquired for £437m in 1999, made a pretax profit of £62.3m compared to a loss of £17.5m in 2000. The dividend is raised 1p to 22p. Analysts hope this year it will make £74.3m before tax and exceptionals.

Lex has successfully transformed itself into a support services group for the motoring industry after selling its car retailing operations and then buying RAC and Auto Windscreens for £112m.

It will adopt the RAC name for all its consumer businesses but retain the Lex brand for its corporate fleet management businesses.

The market was also treated to better-than-expected full-year figures from building materials group Hanson. It jumped 20 1/4p to 450 3/4p in response to a 10% rise in pretax profits to £351m on sales of £4.179bn, up 22%. Chairman Christopher Collins said tighter costs and margins controls helped boost earnings but it is still concerned about the US.

Wall Street's overnight surge of 195 points and further gain of 54 early yesterday helped the Footsie jump 72.5 before closing 49.2 higher at 5073.3. But many dealers were taking the rise with a pinch of salt. They remain nervous about corporate accounting, while rumours continue to do the rounds that another major rescue rights issue is on the cards.

Shrugging off the havoc wreaked on the telecom sector yesterday by Energis (9 1/4p down at 4p) and Colt Telecom (9 3/4p lower at 44p), British Telecom rallied 6 3/4p to 249p. But talk of an imminent trading statement left Kingston Communications 3 1/2p easier at 76 1/2p, while fundraising chatter prompted a fall of 12 1/2p to 142 1/2p in Fibernet.

Mobile phone giant Vodafone put 17 points-plus on the Footsie with a gain of 5 3/4p at 131 3/4p. MmO2 recovered 3 3/4p to 63 3/4p after Deutsche Bank advised clients to buy. Its target price is 106p.

Chip designer Arc International fell 3p to 33p after warning that market conditions continue to be difficult. That was enough to drive much bigger Arm Holdings 11p lower to 277 1/2p.

National Grid lost 9 1/4p to 462 1/4p after broker UBS Warburg easily placed 26m shares at 460p with various institutional clients.

Nervous selling amid vague talk of accounting problems left Trinity Mirror, the largest newspaper publisher in the UK, 13 1/2p down at 404p. Bears also believe next Thursday's results will be accompanied by a profits warning.

Rumours have also suggested that Trinity is desperate to sell the Sunday People. Trinity has confirmed that four potential buyers had been in touch. Harrods boss Mohamed Al Fayed is said to have pulled out of talks because the £60m asking price was too high.

Shares of HP Bulmer closed as flat as a pint of home-made scrumpy at 352 1/2p, down 71p, after warning that second-half profits will fall short of last year. Volumes of Cider Jack in the US have continued to decline, but at a greater rate than expected. Strongbow and Woodchunk, on the other hand, continue to grow.

Support services company Quantica firmed 3 1/2p to 63 1/2p following pleasing annual results and a Credit Lyonnais Securities earnings upgrade.

Ofex-listed Lo-Q, which has developed a patent protected reservation and location sensitive messaging system used in leisure parks, edged up to 137 1/2p on its planned promotion to Aim.

SCi Entertainment, the computer games publisher, touched 92 1/2p on a bullish agm statement before closing 1 1/2p easier at 83p.

SCi plans to publish Rally Championship for Nintendo's GameCube. It is due for release in the first half of 2003 and will follow the PlayStation 2 version released earlier in the year. SCI has launched three new products in the first four months of the current year, including The Italian Job on Sony PlayStation.

AIM-listed business information provider Hemscott firmed 1 1/2p to 26 1/2p amid reports that Luke Johnson's Intrinsic Value Fund had bought 1m shares. It has rallied from a bombed-out 21p after Hemscott earlier this month reported that pretax losses had fallen to £3.9m in 2001 from £11.7m a year earlier after it cut costs and sales surged. If confirmed, Johnson's interest should prompt further improvement.