The Investment Column: Premier lifted by Mauritania hopes

Supermarket squeeze sours outlook for Geest;Cox is steering itself towards a better future.

Premier Oil has its eyes on prospects in Mauritania, an obscure West African state that is getting the energy industry excited. The City's interest in yesterday's half-year results was firmly focused on Mauritania. More than half the company's drilling programme for the next 12 months will be in Mauritania and there are at least 25 million barrels of oil that will be booked for Premier's offshore interests there (included in the chart, opposite) - there are, of course, many companies exploring the country's potential.

Premier rather neatly solved several problems through a restructuring completed a year ago, leaving Simon Lockett, its chief executive-designate, set to inherit a strong balance sheet and an ownership structure attractive to the City.

Two companies, Petronas and Amerada Hess, had ended up owning some 50 per cent of Premier. In 2003, Premier sold its interests in Myanmar and some of its assets in Indonesia to these companies. At a stroke it was able to repay all debts and end up with a cleaner shareholder structure.

Premier came in for much criticism for its involvement in Myanmar, ruled by a brutal dictatorship, but the company has always said that it quit the country for purely financial reasons.

Theresults show the impact of the restructuring, with the headline numbers well down on last year. However, taking only continuing operations into account, net profits were up £1.7m to £14.5m, and production was flat. Like all energy companies, it has benefited from the high oil price. There was concern that second-half profits would be hit by the pace of development of a field in Indonesia but this was something of a technicality.

Premier shares, which closed at 597.5p, have motored ahead over the past 12 months. However, Mauritania could add 100p a share to the company's net asset value. Buy.

Supermarket squeeze sours outlook for Geest

Geest is in a pickle. The bullyboys of food retailing are squeezing the profit margins of food manufacturers, even ones that produce tasty, fresh food like Geest. Its menu of bagged salads and chilled ready meals was once a recipe for success, appealing to time-pressed, cooking-shy mums and investors alike.

But then someone turned up the competition among the supermarket chains, which responded by ordering suppliers such as Geest to cut their prices. What's more, raw material costs started rising, just when suppliers had no one to pass them on to. Wm Morrison's takeover of Safeway further spoilt Geest's party, as yesterday's interim figures show. Pre-tax profits for the six months to 3 July fell 16 per cent to £13.3m.

Geest's solution is to cut costs, jobs, and where necessary, change tack, as yesterday's acquisition of a business that supplies hospital food shows. Yet even new revenue streams such as that from making Heinz-branded ready meals for independent convenience stores will do little to counter the squeeze from the supermarkets. At 532p, avoid the shares.

Cox is steering itself towards a better future

Cox Insurance, the UK's largest motorcycle insurer, is doing its best to put a bad few months behind it. After surprising the City by deciding to pull out of a deal to buy its smaller rival, Highway Insurance, in May, the group then found itself embroiled in rumours that its reserves were insufficient during the same week it was ousting its chief executive for not having the right skills. Over the past six months alone, its shares have fallen by about a quarter.

As it announced interim results yesterday, it delivered what it hopes will be the last of the bad news - £10m of write-downs as it closed down its in-house finance, broker guaranteeing and IT software divisions. And for those who can look beyond the short term, there do appear to be much better times ahead.

With rates holding up much better than expected, and its new chief executive, Andrew Fisher, having already shown that he intends to get the business back on track as soon as possible, there is much to be positive about. Furthermore, the group's decision to pay an interim dividend would appear to blow out any rumours of reserve problems.

With the stock, at 68p, trading at near two-year lows, buy now.