One to watch

Lees Foods, based in Coatbridge, is the parent company of Lees of Scotland and the Waverley Bakery. Lees makes tea cakes, the eponymous "snowball" and the macaroon bar under both its own name and house brands of major retailers such as Tesco and Morrison. Waverley Bakery makes ice-cream cones and wafers.

Lees joined Aim in June 2005, since when the shares have had a rather rocky ride. More recently, the market has begun to warm to the company's restructured board following a rise in profits.

The new management team is now exploring new product avenues, both through innovation and by acquisition. The company's production processes are a model of efficiency, enhanced by an active policy of capital investment.

The wet summer has made life difficult for Waverley Bakery, problems exacerbated by the recent spike in wheat prices but the company has an impressive penetration of its domestic market.

Lees is a small company, with a market capitalisation of less than 5m, so obviously equity liquidity is tight but now managed by an energetic and young team could be a stock worth studying further over afternoon tea.

• The value of your investment could fall and you may get back less than you invested. You should take professional advice if you have any doubt about the suitability of this stock for your portfolio.

Lees Foods

201p +6p

Scotsman says BUY

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