TOM STEVENSON City Editor The new issues market continued to stagnate in the

TOM STEVENSON

City Editor
The new issues market continued to stagnate in the first quarter of the year despite the stock market being relatively stable and within a whisker of its all time high – usually ideal conditions for flotations.In the first three months of 1996 only 16 companies achieved full listings, down from 22 in the first quarter of 1995, itself a disappointing year.According to Neil Austin, new issues specialist in the corporate finance department of KPMG, the accountancy and consulting firm, one factor has been the unexpected success of the Alternative Investment Market. DunnHumby will be looking at the possible launch of smart cards to help Sears develop a closer relationship with its 8 million UK customers.Around 11 per cent of Sears sales are already made using the SearsCard, which has nearly 500,000 accounts. It is now looking at a system which will enable shoppers to pay via their normal Visa or Access card but build up points on a loyalty scheme. The trial will start this summer.Sears business development director Ian Cheshire said: “We didn’t want to do a Tesco and launch a loyalty card as people can get annoyed about having yet another card in their purse or wallet. This scheme means they can use their normal card and we can still offer rewards while developing our database.”Sears is testing a card in its Adam childrens’ wear chain and hopes to roll it out later this year.

A “budget” card is under trial in the Shoe Express discount shoe stores and this may also be extended.The Wallis and Richards womens’ wear groups are testing database schemes that reward customers with early previews of seasonal sales and other promotions.Sears has employed DunnHumby Associates, which worked on Tesco’s ClubCard, to help analyse the data. NIGEL COPE

Sears, the retail group which includes Selfridges, is set to launch a series of credit cards and loyalty schemes across the group in an attempt to develop a more extensive database on its customers’ shopping habits.
Sears already operates a Selfridges credit card which gives exclusive offers on promotions. By way of contrast, it claimed that operating margins outside Rentokil’s traditional core sectors have fallen from 18.9 per cent in 1992 to 15.2 per cent last year, suggesting its diversification strategy had failed.BET’s dividend forecast follows its estimate that profits for last year to 29 March would rise 28 per cent to not less than pounds 142m The group had forecast a dividend of 5.1p for 1995/96.. Gearing at 30 per cent was reasonable, he suggested, and reflected an impressive performance, given that capital expenditure was running at up to pounds 170m a year, including pounds 80m of acquisitions in 1995.The BET document set a series of targets for its six highest growth businesses, which aim for margins of from 10 per cent or more for distribution services to 33 per cent or more for the education and training division. A spokesman said no analyst had been forecasting such a high dividend for this year, while at the time of the previous dividend cuts management had been clearing up the business and attempting to raise cash. Clive Thompson, chief executive, said he did not place much credibility in the forecast.

The dividend was lower than most people had expected, certainly in the circumstances of a bid, he claimed.”Having said that, any forecast from BET can have very little credibility, because this was the board which halved the dividend twice in 1992 and 1993, despite promises to the contrary.” Mr Thompson cited the 1992 annual report, in which it was stated the dividend was being “rebased” to a level from which a progressive dividend policy could be pursued.He went on: “Dividends can only reasonably be financed from cash flow and at the date of last reporting, at the interim [results], they had net debt of pounds 114m.” That reflected a negative cash flow from the previous period, he said.Mr Thompson’s claims drew an angry response from BET. As an independent company, BET is well positioned to deliver future growth.”But Rentokil hit back last night. The group saw a group of 35 key institutions on Wednesday and intends to use the latest document to ram home its defence in individual briefings to large shareholders.The forecast will increase the pressure on Rentokil to raise its offer, although BET shares at 203p, unchanged on Friday, were standing only fractionally clear of Rentokil’s terms. With the bidder 4p ahead at 362p, the offer of nine new shares plus 800p in cash for every 20 shares in BET valued the latter at 202.9p.Sir Christopher Harding, chairman of BET, said the dividend demonstrated once again the board’s confidence in BET’s future as an independent company.

“Rentokil asks you `who do you really think will deliver value?’ The answer is BET. MAGNUS GRIMOND

BET yesterday forecast a rise of at least 20 per cent in next year’s dividend, in what is likely to be its final attempt to see off Rentokil in the pounds 1.9bn bid battle for the services to distribution group.
BET said in document sent to shareholders last night that dividends for the year to 29 March next year would increase to not less than 6.15p from the 5.1p already forecast for the current year which ended on Friday.The move is being seen as BET’s last shot before day 39 of the bid this Friday, when no further material information can be released to the market under bid rules. The industry’s trading climate has improved quite significantly, with even the struggling Queens Moat Houses making a much better showing than many expected last week.The group should have shared in the revival and Greig Middleton is forecasting pounds 4.34m, up from pounds 3.65m.Friendly is the third quoted creation by veteran hotelier Henry Edwards, who has 8.65 per cent of the shares.. Last year the group achieved profits of pounds 107.2m.Alfred McAlpine is another builder featuring in this week’s diary. It reports on Thursday when a little changed pounds 10.5m is the expectation.Friendly Hotels is scheduled for Thursday. Williams de Broe expects profits of pounds 97m before losses on a construction contract.

The two whisky houses have close links with Remy Cointreau, the French brandy and champagne group.Big guns reporting this week include Burmah Castrol (today) and Tarmac (tomorrow).Excellent figures from Burmah’s quoted Indian off-shoot in February have encouraged the market to look for around pounds 250m, up from pounds 219.5m.Tarmac, following its assets exchange with George Wimpey, is now a pure aggregates/ construction hybrid. On Monday, Macallan Glenlivet, the famous malt whisky producer, reports, followed by The Highland Distilleries Co on Tuesday.Although the world whisky market remains weak, the Scotch double should manage progress. NatWest Securities, the investment house with a strong north-of-the-Border influence, sees MacGlen producing a year’s figure of pounds 7.58m against pounds 6.69m and Highland, the Famous Grouse group, making interim profits of pounds 24.8m, up from pounds 23.7m. They closed at another record high on Friday.If there are any shocks next week the market should be able to tap into a drop of the hard stuff to steady its nerves.