Hoare Govett raised its forecast for next year to pounds 120m from pounds 116m, pointing to the strong impact of a high street-led recovery on Securicor’s diverse businesses, which include collecting cash from retailers, delivering goods to retailers and the mobile phone market.
One reason for the forecast rise in profits is that the group has apparently managed to sustain increases in prices in most of its key businesses. The price war that so damaged the mobile phone market early this year seems to have petered out, while Securicor has resisted matching price cuts in its security businesses.But the company’s earnings are dominated by the 40 per cent stake in Cellnet, which contributed pounds 76.6m to annual profits, an increase of 8.5 per cent. Since the Government blocked the sale of the Cellnet stake to BT last year, it gives investors a dilemma – Securicor is worth much more in pieces than it is as a whole.The Cellnet stake could net as much as pounds 2bn, against Securicor’s current market value of less than pounds 1.6bn. Directors have floated the idea of selling the Cellnet shareholding to an outside bidder, but without BT to bid up the price this is unlikely. Shareholders can hope for the boost from organic growth, but the big prize seems as far off as ever..

Judging by the crowded state of the country’s high streets a bumper Christmas is in sight. But such thoughts did not win unanimous support in the stock market yesterday as retail shares retreated, with some dealers fretting about the array of pre-Christmas sales and reports that one retailer had expressed disappointment with the level of trade. The Christmas unease was shrugged off by NatWest Securities. Analyst Sean Eddie described the reaction as “an attack of traditional Christmas nerves”. Today’s November retail sales figures were another unsettling influence. Governor of the Bank of England, Eddie George, felt trade was building up as expected and the UK would indulge in its best spending spree since 1988.
The cautious stance appeared to come from Bentalls, the department stores group. No comment was available from its main store at Kingston-on-Thames but there was talk the more sobering Christmas tale had emerged during a meeting with analysts.Next, as if to steady market anxiety, let it be known it would not engage in pre-Christmas price cuts and was trading well.

In busy dealing Next was down 15.5p, settling at 553p, off 9.5p.Other leaders lower included Burton (3.25p to 149.25p); Argos (10p to 747.5p) and Dixons (6.5p to 533p). Bentalls was unchanged at 129.5p.The rest of the market had an uneventful session with Footsie down 14.2 points at 3,979.6 Volume was swollen by tax-efficient bed and breakfast deals Takeovers, real and rumoured, provided much of the action. Insurances remained the centre of attraction with Commercial Union again leading the charge, up 13p to 693p, another peak General Accident put on 21p at 716.5p Among insurance brokers Willis Corroon gained 5p to 140.5p. The shares were 118p last month.The bids which did arrive came from engineers Fairey and FKI. Fairey offered pounds 51m for Burnfield, a quality control equipment group, and FKI followed its signalled interest with a pounds 196m offer for building materials group Newman Tonks Both offers were rejected. Burnfield moved up 36p to 136p against the 135p offer and Newman jumped 20.5p to 149.5p, around the bid level.The 18 million Severn Trent share buy-back, conducted by HSBC James Capel and UBS, left the price up 13.5p at 667.5p against the 675p buy-in. The action encouraged Thames Water 18p higher to 586.5p.BSkyB, on the Government’s digital rules, rose a further 29p to 518.5p and media group Pearson, ahead of a trading statement today, slipped 11.5p to 689.5p.