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NEC shares: City says buy
Page 7
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• Institutional investors will be queueing up for a piece of NFC if employee-owners decide to sell. City analysts believe the NFC shares will open at just over 22, depending on the market, and say that investors are keen to buy: The view is that what we have in NFC is the UK's largest haulage company, extremely well run, with a good track record and good prospects," says Mark McVicar, transport analyst at County NatWest.
"We think the business will keep growing, particularly through restructuring. Where NFC is expanding, it is playing to its strengths, such as BRS and Allied Van Lines," he says.
"It is a superb asset because it rests on contract hire rather than rental. NFC has sorted out Lynx and got it back into profit. The waste management business runs itself and Fashionflow is doing well with the Marks and Spencer deal.
Stephen Clapham, transport analyst at Stockbroker Hoare Govett, emphasises that a volatile market and the unique nature of the NFC flotation make it extremely hard to make firm predictions. About 42,000 employees and their relations, ex-employees and pensioners, own 83% of NFC, and the terms of the flotation reward their loyalty by giving employee shares double voting rights to block any corporate takeover bid.
This safety net, and the fact that employees' shares have increased 74-fold in value since the buyout seven years ago, mean that few shares will initially be available to the big investors, says Kleinwort Grieveson industry analyst Peter Bergius.