Midas: EU rule changes good for Worthington
It is only April and already much of the country has been enjoying exceptionally fine weather. Goodness knows what the summer will bring, but one thing is certain - the demand for air conditioning has never been greater.
One company well placed to benefit is Worthington Nicholls, which installs and maintains air conditioning and ventilation products.
It was founded by Peter Worthington in the early Seventies and he remains chairman. His son, Mark, joined the business as an apprentice straight from school and became chief executive in 2003.
The company floated last summer with a view to growing rapidly, both organically and through acquisition.
The air conditioning sector is highly fragmented and most operators are small, regional, family-owned businesses. In many cases, these companies were founded several decades ago and their owners are keen to sell and retire.
Worthington Nicholls is a ready buyer. The group wants to be the leader in its field in the UK and on the Continent and is already making good headway. Revenues for the year to September are forecast at about £36m and Mark Worthington is aiming to almost quadruple that in the next two years, hoping to produce revenues of nearly £130 million by 2009.
His ambition seems eminently achievable. New EU regulations dictate that most air conditioning units in the UK must be replaced with more environmentally friendly systems by the end of 2014. Independent estimates indicate that £7bn of replacement equipment will be needed and much of the work will take place over the next four or five years.
Health and safety legislation governing the maintenance of units has also become much tougher. Companies used to be able to run systems until they stopped working. Now they will have to make sure they are regularly maintained by qualified engineers.
Worthington Nicholls is a major force in the hotel and retail sectors and has contracts with companies such as Inter-Continental Hotels and Iceland, the frozen food store group.
The company is keen to expand into the office sector and is exploring several possible acquisitions. Overseas expansion is also under consideration and the group recently won a contract from InterContinental covering Europe, the Middle East and Africa.
Though the company is run as a professional listed business, it retains some of the more personal elements of private ownership. The Worthington family still owns a sizeable chunk of the company, key staff were given stock when the business floated and every employee has share options, so they are all extremely motivated.
Midas verdict: When Worthington Nicholls joined the market the shares were priced at 50p. Today they are 184½p, so they have already come a long way. But the management is highly ambitious and the air conditioning industry has huge growth potential. Buy.
Hold tight for a gain in Spain
Shareholders in ScottishPower must decide this week how to receive payment for their shares after the company's £11.6bn takeover by Spanish utility Iberdrola.
Under the offer, investors will receive 400p in cash and 0.1646 new Iberdrola shares for each ScottishPower share they own.
ScottishPower has 400,000 small shareholders and like larger investors they can take only cash or shares and cash. There is also the option of an IOU loan note for part of the cash consideration, which may have tax advantages for some.
The main question is whether investors should hang on to Spanish-listed shares or sell. Holding shares in a foreign firm may not be to everyone's taste and small investors may end up with just a few, so they should perhaps use the free dealing available for six months.
But holding them could prove shrewd. Iberdrola owns conventional and nuclear power plants. It is also the world's largest operator of wind farms.
The shares have performed strongly in recent years and the outlook is good. ScottishPower is heavily involved in renewable energy production, too, so the combination of the Spanish and British companies, orchestrated by outgoing chief executive Philip Bowman, should produce a much stronger European energy player.
The renewable energy aspect is attractive as well, given the growing desire to reduce traditional energy consumption.
Midas verdict: Some investors may be reluctant to own foreign shares, but those who hold on to their stock should see reasonable growth.
Most watched Money videos
- How to invest for income and growth: SAINTS' James Dow
- Mini Cooper SE: The British icon gets an all-electric makeover
- BMW meets Swarovski and releases BMW i7 Crystal Headlights Iconic Glow
- Mail Online takes a tour of Gatwick's modern EV charging station
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- Land Rover unveil newest all-electric Range Rover SUV
- Skoda reveals Skoda Epiq as part of an all-electric car portfolio
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- Mercedes has finally unveiled its new electric G-Class
- Mini celebrates the release of brand new all-electric car Mini Aceman
- Blue Whale fund manager on the best of the Magnificent 7
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Don't ditch name and shame plan - it has the City running...
- Ford boss says it may restrict petrol models in the UK to...
- Avon Protection handed £38m gas mask contract by MoD
- Bank of England holds rates at 5.25% AGAIN - what it...
- Millions kept in the dark over City watchdog's mystery...
- TSB to close one in six branches: More than 6,000 shut by...
- ITV hit by Hollywood strikes as it pins hopes on Euros...
- Hedge fund tycoon's £34m silver salvage claim sunk at the...
- Spring property bounce is a damp squib - Rics estate...
- Snoop Dogg cannabis firm to ditch London after losing 97%...
- Oil industry engineer Wood Group rejects £1.4bn Dubai...
- BAE Systems tools-up for growth as Britain plots defence...
- MARKET REPORT: IAG leads Footsie higher as airline shares...
- Mortgage rates are climbing again - should we be worried?...
- Controversial Brewdog founder James Watt steps downs
- We do need to resolve inequality admits £8m-a-year...
- Drivers abandon Direct Line after insurance premium hikes
- Watches of Switzerland buys Italy's Roberto Coin Inc for...