Daily Telegraph Questor says sell anybody with a view on this company?


Forth takes shelter in port

As trading statements go, Forth Ports has had better. Scotland's largest port operator yesterday revealed that last year's performance was merely in line with 2003, which sent the shares down 22p to 13.23 in a rising market.

That translates to 6.7pc fall in port profits in the first half and a 3pc increase in the second. Even Arbuthnot, one of the stock's biggest fans, described the statement as a warning, albeit of the "best kind". The broker said the problems were driven by disruptions to North Sea oil production, therefore temporary and outside management's control.

While it is correct to point out that Forth Ports has little influence about the amount of cargo that passes through its ports, Arbuthnot makes a curious distinction. There is no such thing as "good" and "bad" revenue and no matter how you spin it, yesterday's trading statement was unimpressive, even though it was off a high base.

The company's shares did well last year, rising 35pc to trade on 18 times forecast earnings with a dividend yield of 3pc.

One reason was the property portfolio. As well as operating Leith, Grangemouth and Tilbury, the company is developing 170 acres around Leith for housing and shops. Approval from the city of Edinburgh is expected within six months.

This and other land holdings have prompted some analysts to give the company a break-up value as high as 20 per share. But property development is a complicated business and it could take a decade to realise this value.

The other possibility is a takeover bid, but there is no certainty one will come, let alone be successful. Yesterday also happened to be its second trading setback in six months.

Forth Ports is a popular stock in some quarters, but the good news is well known. Sell.