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Friday tips round-up: Capital&Counties, Direct Line, Betfair

Covent Garden market operator Capital&Counties had an excellent year in 2012 as it successfully attracted more up-market retail outlets to the premises of that development. Hence the 7.2 increase in Covent Garden´s value to 540m pounds and 15 per cent jump in the value of the property portfolio, to no less than 1.5bn pounds. Now however the firm must deliver on its ambitious plans for its Earls Court and Olympia projects. The company has made significant progress on both but has still to reach a deal with Transport for London (TfL), not to mention the Section 106 agreement on community obligations, The Times´s Tempus points out. Until these questions are resolved it remains unclear how the economics truly stack up. Hold, says Tempus.

Insurer Direct Line still faces an overhang of shares given state-aid funded RBS´s capital needs. Furthermore, the lender still has a 65% stake which it must sell next year. However, the insurer still offers a high yield to which one must add management´s strategy of focusing on ‘disciplined underwriting that prioritises maintaining margin over volume’. As well, its executive team has signalled that it is looking to invest in higher yielding assets, to which one must add the firm´s leading market position in motor insurance and progress in the German and Italian markets. Even so, the shares are now a hold Questor say

New Betfair Chief Exceutive Breon Corcoran has his work cut out for him as he tries to reverse the over ambitious initiatives of previous management. Thus, the betting exchange operator´s trading update is expected to highlight the difficulties inherent to streamlining the organisation, with between 400 and 500 jobs expected to go. Nevertheless, he is still expected to invest in Betfair’s exchange and its new fixed-odds sportsbook. In any case, Tempus believes that Mr. Corcoran is ‘doing the right things, his turnaround strategy is not for short-termists.’ To be had in account as well, the firm will soon face greater competition from Ladbrokers, hence the now even greater need to adapt.

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