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Better days on the ocean wave

Investment Column

Tom Stevenson
Tuesday 23 May 1995 23:02 BST
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Building floating gin-palaces for the world's rich and famous has been a thankless task for the past four years or so. But half-year pre-tax profits from Fairline Boats, up 46 per cent to pounds 512,000, suggests the worst of the slump is over.

Sam Newington, chairman, said he had hoped for an even better rise and Fairline is certainly a way off the 48 per cent return on capital it achieved in the good old days of the late 1980s. But the high rollers are at least starting to spend again on autopilots, bow-thrusters and all the other must-haves down in Port Grimaud.

Arguably of greater interest to investors, however, is the increasingly likely prospect that Mr Newington, unable to persuade any of his children to take over the business, will cave in to Graham Beck, the South African investor who bought 29.9 per cent of the company a year ago to add to his ownership of Marine Projects, Fairline's main UK rival.

With net assets of about pounds 12m, compared with Fairline's market value of pounds 14m at yesterday's 405p, up 5p, the shares would appear to have little downside.

With the benefit of sterling's devaluation making Fairline's boats seem ever cheaper for the company's largely German customers, the shares, albeit tightly held, look good value.

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