One to Watch

Connaught334.9p +9.1pScotsman says HOLD

SHARES in building maintenance firm Connaught fell between October and March, the downturn accelerated by December's announcement of a near 7m charge on restructuring costs, which was quite unexpected. This may well have hastened the departure of the then chief executive in January, to be replaced by the founder of the company, Mark Tincknell.

Since then, things have begun to improve. In late April, Connaught announced profits had risen by nearly one fifth, with a comparable improvement in revenue, although the company indicated turnover may fall, as less profitable contracts are not renewed. That said, this company is confident that the quality of its loan book will improve appreciably over a couple of years.

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Firms such as Connaught have been unsettled, perhaps on fears of swingeing cuts in public spending. Their worries may be overstated. Private-sector outsourcing is well placed to deliver efficiencies. The group's rather chequered record has been partially reversed by the recent robust recovery and could be worth monitoring.

• 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 company for your portfolio.


1,070p +12p

Broker says ADD

EVOLUTION expects drinks giant Diageo to reach its 1,200p target price within the next six months. The broker said: "Although Pernod Ricard's better geographic growth footprint and direct ownership of cognac assets means it remains our preferred medium-term pick, we believe the short-term attractions of Diageo are greater."

Fuller, Smith & Turner

541p +11p

Broker says ADD

AHEAD of Fuller, Smith & Turner's final results tomorrow, Numis carries an "add" rating and target price of 615p. Numis said: "We believe the combination of a peerless track record and robust trading conditions point towards forecasts being beaten and possible further upgrades."

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