The Week In Review: Test time for a marathon man

It is time for Niall FitzGerald, Unilever's chairman, to reassess the strict training schedule he put his household products on four years ago. The marathon restructuring programme, Path to Growth, has left the Anglo-Dutch group gasping for breath. This year has been disappointing.

Efforts to slim down, by paring 110 businesses from its portfolio, mean that Unilever's 400 top brands now represent 92 per cent of its sales.

The third-quarter results, coming hot on the heels of the second sales warning of the year, were not encouraging. Poor sales of its SlimFast diet products, Calvin Klein perfumes and a plethora of frozen food and home-care products mean sales of its leading brands will struggle to hit 3 per cent this year, a far cry from the original 5 to 6 per cent target.

It is far from certain Unilever will escape further injury before its five-year transformation programme is complete. Its main brands, such as Dove soap and Magnum ice cream, grew by just 3.2 per cent during the past three months although pre-tax profits were up 10 per cent at €1.4bn (£1bn).

There hints of share buy-backs and bigger dividends, now that debt is a manageable €14.4bn. Hang on to the shares, down 8.5p to 487.5p, until Unilever proves it is back on track.

Whitbread

Interim results showed the company is doing well, give or take the odd hotel brand. The City has warmed to the company's vision of creating a leisure company with a brand for every British consumer. From Costa to Pizza Hut, Travel Inn to Brewsters, it's a fair bet that most Brits will have contributed to the group's 3 per cent rise in pre-tax profits, after exceptionals, to £122.5m. The group may deserve its share price premium but with an imminent interest rate rise set to make us all feel poorer, the stock, down 8.5p to 738.5p, looks toppy. Hold.

ICI

Here is ICI's vision of the future: more profits, better use of resources, lower costs, cash flowing in. This vision is based on "performance transformation rather than portfolio transformation". Let's cut out the verbiage. What ICI is saying is that it cannot get rid of its worst- performing businesses so it will have to do the best it can with what it has got. Or as ICI prefers to put it: "Major divestments are unattractive at present." Underlying group pre-tax profit was down 13 per cent in the third quarter. Such is the reputation of ICI for underperforming that the shares shot up on relief that the profits fall was no worse. Take the opportunity to get out.

Westbury

Westbury gives the British people traditional-looking houses, though often built with innovative methods. The company's interim figures showed the formula is working. Pre-tax profits were up 35 per cent at £47.6m for the six months to 31 August. Westbury has reservations worth £366m on its books, which is 10 per cent higher than last year, so the outlook is good. The shares, at 400.5p, close to a recent high, trade on a forward multiple of 6. A solid hold.

Bookham Technologies

Bookham Technologies, the optical components maker, was trumpeting a 10 per cent rise in its third- quarter results out yesterday but a closer look gives a murkier picture. It is still very dependent on two clients, Nortel and Marconi. The stock has benefited from the interest of US fund managers and, although the shares fell 8.75p to 146.25p after it reported a third-quarter loss of £29.2m, it is still trading at a premium with a lot of recovery appearing to be priced in. Avoid.

Logica

The IT services company LogicaCMG proved to be the latest beneficiary of Skynet 5, the Ministry of Defence's military communications contract this week.It is worth £80m to LogicaCMG over 15 years. The company was right in predicting that deals from the public sector would be on the up. The win is also proof that the merged company - Logica with CMG - is better placed to win the big deals than either business alone. Forecast earnings put the stock on a multiple of about 30 times. That is hardly cheap. The shares are a hold at best.

Bodycote International

Bodycote, the subject of bid rumours this week, has a number one position in many of its markets and there are now encouraging signs in some of them. Car production, for example, seems to be on the up, particularly in the US, where Bodycote gets 40 per cent of its business. Its shares have been rising in recent months and, at 175.5p, Bodycote is trading on about 16 times 2003 earnings. This isn't cheap and it will be 2006 before even Bodycote expects to see real recovery in markets such as aerospace. Hold.

Superscape

The 3D technology company Superscape has transformed its business to cash in on what it believes will be the next big thing on mobile phones: 3D games. It has an excellent partner in ARM Holdings and has also signed up deals with big names including Siemens, Samsung and Motorola.But the company has a long road to travel. It reported a pre-tax loss of £4.1m for the six months to 31 July. This week's £10m fund raising should ensure the company has enough cash to get to profitability. The real test will be whether consumers start playing games on their mobile phones en masse. Hold.

St James's Place Capital

St James's Place Capital, the wealth-management business, is seeing genuine signs confidence is returning. The decline in long-term savings handled by St James's has at last been reversed: the figures were down 20 per cent in the first quarter, 14 per cent in the second and 2 per cent in the third. The crucial point is that the recovery is continuing. This side of the business was marginally ahead in September and has been better still so far this month. There is a dramatic rise in protection business, products such as life, critical illness and loss of income insurance. The shares fell along with the financial sector to a low of 75p in March but they have since doubled. Buy for further recovery.

Jennings

Jennings made a pretax profit of £1.8m in the six months to 30 August, up from £1.5m. Sales were £9.1m in the period, up from £8.8m. Sales of its Cumberland Ale were up by 24 per cent in the half year and the company has also signed an agreement to brew and distribute Ward's Best Bitter, something that could prove a fillip. That brand sold, at its peak, 40,000 barrels a year. To put that in context, Jennings sells about 33,000 barrels. The company also has an option to buy the brand. The shares, which closed up a penny at 217.5p on Thursday, look up with events for now. Hold.

Halma

Halma makes all kinds of safety and accident prevention equipment for both homes and companies. These include devices that detect gas leaks for the oil and power industries, the sensors that reopen lift doors, and smoke alarms. The company said, ahead of its interim results, that trading in some of its businesses had been good, particularly in its fire and gas division. Halma benefits from having a captive customer base, which must buy its products to meet health and safety regulations in the workplace, and protect the public from potential damage. At 141p, Halma is trading at about 16 times forward earnings, which isn't cheap. Avoid.