It managed to pull itself round then, and I think it will do so again.Stagecoach at 15.25p, Bulmer (107.5p), My Travel (16.25p) and SFI (28.5p) are a punt for those with spare cash, prepared to gamble. As Surrey Free Inns, it suffered an acute hiccup in the Nineties, and the shares bumped along not far above today’s level. But no one outside the company (and possibly inside) knows the answer to that.” Collins Stewart goes along with my view that SFI is one for the brave.This is not the first time the Litten Tree pubs chain has run into difficulties. The stockbroker Collins Stewart says: “The problem is that Quest assumes SFI will survive. The on-line Quest analytical formula shows SFI to be massively undervalued. SFI, the pubs chain, has been hit by an over-ambitious shopping spree. It already has trading links with Bulmer.MyTravel, until recently called Airtours, should be able to trade its way out of its present distressing mess.
The Irish drinks group, C&C, which pulled a summertime flotation, is one name in the frame. In fact, a bid could provide a quick answer to the cider-maker’s problems. And there is always the chance of a takeover bid should the controlling Bulmer family grow disenchanted. Indeed the next preference dividend is unlikely to be paid.But Bulmer is trading reasonably well on the domestic front, even if some of its bruised overseas operations could be for the chop. This year profits could disappear and any resumption of ordinary dividends could be a few years away. A profits collapse and a black hole in its accounts forced it to take the axe to an already declared final dividend. Bulmer, the nation’s largest cider producer, embraces such top brands as Strongbow and Woodpecker.
But there is plenty of scope for recovery.The other recent casualties could also be worth a gamble. And any investor buying the shares must be prepared for the group running off the road. I must admit I would be tempted to undertake such an exercise with Stagecoach I realise the group faces a multitude of problems. It is, therefore, impossible to indulge in the old trick of averaging down.