“What do they think has happened, the old fools,
To make them like this? Do they somehow suppose
It’s more grown-up when your mouth hangs open and drools,
And you keep on pissing yourself, and can’t remember
Who called this morning? Or that, if they only chose,
They could alter things back to when they danced all night,
Or went to their wedding, or sloped arms some September?
Or do they fancy there’s really been no change,
And they’ve always behaved as if they were crippled or tight,
Or sat through days of thin continuous dreaming
Watching the light move? If they don’t (and they can’t), it’s strange;
Why aren’t they screaming?

At death you break up: the bits that were you
Start speeding away from each other for ever
With no one to see. It’s only oblivion, true:
We had it before, but then it was going to end,
And was all the time merging with a unique endeavour
To bring to bloom the million-petalled flower
Of being here. Next time you can’t pretend
There’ll be anything else. And these are the first signs:
Not knowing how, not hearing who, the power
Of choosing gone. Their looks show that they’re for it:
Ash hair, toad hands, prune face dried into lines –
How can they ignore it?”

Philip Larkin – poet – 1922-1985

I was minding my own business in the dentist’s waiting room yesterday. I looked up from reading this week’s edition of the ‘Speccy’ to see a bloke sitting at the other end of the room, whom I thought I recognised and I did – Roy Hodgson – no less a person than the England football manager. We engaged in conversation for about 25 minutes, exchanging views and ideas on any number of subjects other than England’s team or its chances in Brazil. Utterly delightful company; charming and engaging and highly intelligent whilst remaining worldly! He’s the sort of bloke you wish every success in the world to, begrudging him absolutely nothing!

I was sad to hear that Johnny Murtagh has ridden his last group winner. What a fabulous jockey with 3 ‘Derbys’ and five Gold Cups and nothing to prove. I am sure he will be every bit as successful as a trainer. His charm will take him along way down the road. Like every racing supporter, I still want to know why he fell out with Coolmore, having had such a great relationship with John Oxx and the ‘Aga’ and with the likes of William Haggas and James Fanshawe. He was a terrific icon for racing!

UK equities are struggling to break the December 1999 ‘high’ of 6930, but if the US economy is ahead of the curve and we shall only find out when the snow has melted, it does not seem unreasonable the FTSE 100 should be through 7000 by the end of the year. The wave of euphoria that surrounds the IPO market is certainly very frothy. However yesterday McColl’s the newsagents got off to a rather inauspicious start to its life in public ownership. Shares were issued at 191p and they close 5% below the Plimsoll line.

This morning JP Morgan, Jeffries and Numis brought to the sacrificial altar of public ownership. The shares were issues at the top end of the range at 285p, valuing the company at £1.1 billion. Within 20 minutes 2 million shares had been traded at the share price shot up to 400p. The shares briefly touched 410p before settling at 400p – up 40% on the day! This kind of movement takes us back to the halcyon days of the boom in 1998/9. I hope this is not the case! However when you see the price paid by Facebook for WhatsApp ($19 billion), it becomes food for thought! One can only hope that’s advisors undervalued this company. Investors would be wary of too much froth in view of the number of companies waiting in the wings to take their bow. With Pets At Home, House of Fraser, Poundland, ISS, Tomkins and B&R all chomping at the bit for a public quote plus all these banking stocks and a slew of small and medium sized companies, one just hopes that can justify this very frothy share price. Share trading does not go unconditional until Monday 3rd March 2014. Notwithstanding that near 20 million shares have changed hands and it is only just after 10.20am.

There are so many market luminaries, analysts and commentators out there: that I will leave you today to their tender loving care, to advise on and talk about markets. I want to talk about ITV. It has been a huge success story. I will leave the analytical research to our excellent Alex de Groot who has flagged the company up for about 2 years and congratulations to him!

ITV posted results today with profits before tax up by 27% to £581 million on a 9% increase in turnover to £2.38 billion. 5 years ago this company was going nowhere. Greg Dyke flirted with the idea of buying it in conjunction with Apax Partners if my memory serves me right. The idea was binned. In fairness to Lord Charles Allen he did a great job dealing with ITV’S licences and in terms of artistic and programme improvement Michael Grade was no slouch. However the partnership of Adam Crozier CEO and Archie Norman has triggered a renaissance few would have countenanced. In February 2010 BSKYB was forced to sell 10.4% of its holding at 48.5p for £196 million, incurring an outlay loss of £350m. Sky has kept its 7.5% and has seen the share price rally to circa 200p. The results triggered a ‘travel and arrived’ sell off – down 5% to 195p. Even though the results may show a little vulnerability today – this corporate story is a huge success. Producing decent programmes that people want to watch on the back of an economy is improving thus attracting advertising is an attractive potent!

I also smell M&A in the air, despite current valuation of ITV at £8.2 billion – Vodafone and BT – both cash cows – both need to expand their horizons with telecom margins narrowing. Media must be the place to go! We shall see or is my diseased ridden mind just working over-time?

Companies posting results tomorrow and Friday.

These are David Buik’s personal views

Twitter – @truemagic68

David Buik

Market Commentator

D +44 (0)20 7886 2775
Panmure Gordon & Co
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