29 JULY 1972, Page 29

Account gamble

Animal foods

John Bull

There is a much quoted market dictum "never sell on a strike."

Unless we are heading directly for a strike of national proportions I think investors would do well not to ignore this advice. Certainly, as depressed as the market outlook is at present, I feel there is little cause for any panic measures.

The added advantage of making a shortterm speculation now is that on any settlement all prices will benefit.

And I hope that we will see such buoyant conditions developing over the next two weeks. This gives me encouragement to punt on J. Bibby, whose interim figures are due on August 8.

At the annual meeting in April the chairman, Mr J. B. Bibby, predicted that most divisions would show increased profits in 1972, though he did point out that the exceptionally favourable conditions for seed crushing in the early part of the year had deteriorated sharply. This side, therefore, will contribute less, but the shortfall will be more than made up by other activities.

The current results should mark a further recovery after Bibby's rather abysmal record. The group was hit badly by the fowl pest epidemic in 1970 and price cutting in animal foods has been severe.

However, now that new management has been brought in with most of these problems out of the way, Bibby looks much better placed. Indeed the losses were stopped in the first half of 1971 and in the second half of last year pre-tax profits of £1.5 million were made.

A breakdown of the group's activities Shows that food products were the major contributor and it should now be helped by the coming on stream of a new oil refinery. Overseas profits are high, with the main interest here being Cip-Zoo, the largest egg producer in Italy. This had made substantial losses but is now well in the black. Livestock activities rank next and benefits should be felt from the growing Popularity of cheaper protein foods such as pork and turkey. The paper division which concentrates on specialised lines of Packaging paper is a very successful enterprise while the grocery activities are increasing their share of the market.

I would expect profits in the first half of the current year to show a substantial improvement over last and that results for the year will be in the region of £2.5 million. On this basis at 148p the shares are selling at just under ten times earnings. With the obvious trading attractions and strong asset backing of 150p per share I expect , that the market will sit up when the results are announced.