City File: Toy store plays to win

THIS year's many bad new issues have driven out the few good ones. The woes of such as MDIS and Aerostructures Hamble have held back the price of such undoubted successes as Hamleys. Shares in the toy store finished the week 164p, 21p below their flotation price although last week's half- year profits were up 46 per cent to pounds 858,000, giving a prospective p/e of 10. There is still room for expansion, and the Regent Street store should benefit from the opening of nearby shops by Warner Brothers and Disney. Fill your stocking in plenty of time for Christmas.

DESPITE its role in the Aerostructures Hamble fiasco, Smith New Court intends to plough ahead with raising up to pounds 35m for Biocompatible, maker of materials for contact lenses and other products.

Impact day is scheduled for the end of the month and advisers to the company are confident it will go ahead as planned. 'What happened with Aerostructures is certainly unfortunate in view of this float, but there is sufficient interest in the company to press ahead as planned,' a spokeswoman said.

SHARES in Waverley Mining zoomed 19p to 111p - nearly double the price at which we recommended the shares back in May - after the firm was given the go-ahead to buy British Coal's Scottish mines. But the shares still have a long way to go. Waverley's gold interests in Australia and Alaska are probably worth its present market value of less than pounds 25m.

So the coal businesses are in for nothing. Yet Waverley has already made a success of an earlier purchase, Monktonhall, and should be able to take British Coal's open-cast sites and the modern Longannet deep mine on board with only a minimal rights issue. Canny investors are already talking of a pounds 2- pounds 3 share price in the near future.

HIGHLAND Distilleries, makers of Famous Grouse, have held rock-steady on the market during the turbulence of the past few months, despite a string of disappointing results from distillers of rival whiskies. But Highland made its name on the home market, and exports are booming now that they are handled worldwide by Remy Martin's powerful marketing machine. As a bonus Highland has an important stake in Remy itself in the form of eventually convertible bonds. Michelle Proud, NatWest Securities' highly regarded drinks guru, reckons that tomorrow's profits figures will show a 13 per cent increase in pre-tax profits, accompanied by a 10 per cent rise in the dividend. Stick with them.

PLANTATION & General Investments, the former Chillington Corporation, has a hidden asset. It may be about to sell a 1,000-hectare property in Indonesia for around pounds 6m. This compares more than favourably with the group's pounds 17m stock market value.

PGI is run by the one-time whizz-kid Konrad Legg, whose eye for a deal has given him shareholder approval to float the Zimbabwean offshoot on the local stock exchange.

And the benefits of surging commodity prices are in for very little. PGI has tea and coffee estates in Malawi, Indonesia and Brazil, and profits are heading for pounds 2m this year, against only pounds 217,000 in 1993. The interim dividend was increased by a third, and a similar boost for the final would take the total to 2p against 1.5p. That would give a yield of 4 per cent at the current price of 53p, which would take off if the property deal were clinched. Even without it, the shares offer solid value.

BARELY a flicker in the share price has greeted the deal Stirling Group announced last week. The Marks & Spencer women's clothing supplier is paying pounds 2.3m for the Cut & Sew operation of Beales Hunter, a mini-conglomerate.

It was not immediately obvious that the point of this deal is to take Stirling into menswear, for Cut & Sew means men's underwear and polo shirts - all knitted, like much of Stirling's existing output.

The deal will add little to Stirling's profit for the year to March, which the Earnings Guide expects to improve from an pounds 800,000 loss to a pounds 6.1m profit, taking an average of analysts' forecasts.

However, itdoes put another pounds 10m on the group's pounds 80m turnover, so it could be worth a good pounds 300,000 to the 1995-6 profit. At 60p, the shares carry a useful 4 per cent yield and deserve to be higher.