ExEC Investment Club

Minutes of the meeting held at The Griffin, Plumtree. 8 April 2001

Present:

Julian Kern

Terry Emmony

Phil Jones

Steve Spence

Apologies:

Roy Brown

Peter Sweeney

Julie Grundy

Cynthia Brooke

Ann Nurse

Mike Arkless

Di Lane

Rod Wood

Ron Pierce

Paul Holden

Andrew Smillie

Debbie McDonnell

1) Terry has sent the current state of the portfolio to everyone on email.

We now are showing a slight loss of 1.8%, which is still 10% better than the FTSE100.

2) We considered selling only one of the shares we held, that of DFS which at 6/4/01 was at 437.5p per share, representing a £52 gain of 13%.

As there were insufficient members at the meeting to represent a quorate of members, we are recommending to the club that we sell DFS and recognise this gain as soon as possible. I need you to tell me immediately if you agree that we sell DFS.

3) With the club not having invested in recent months we have £2,000 available to invest this month (£2,450 with the DFS proceeds).

We discussed a number of possibilities, all of which we feel have merits, but with dealing fees we are recommending 5 of the 7 companies. Again,I need to know by Wednesday 11th April your preferences for which companies to invest in.

In order of recommended preference the companies are:

Avon Rubber - currently at 133p having been effected by the slump in North America (though a British company). It's 12 month low is 133p, its high is 250p, very good dividend yield at 18.3 and a P/E of 10.3. The Balance sheet value of the company is worth more that the share price, and there have been no bad news in any announcements. To date we have no investments in Automobiles & parts - the sector which Avon Rubber is listed in.

We recommend investing £500.

Energis - was tipped as a good investment a month ago at 510p in Investors Chronicle by SG Securities, Morgan Stanley Dean Witter and Credit Suisse First Boston investment banks. Expecting an announcement in the next 2 weeks of a deal with BT to offer DSL connection products. It has thephysical lines via the electricity pylons to operate telecoms services rather than other companies who rely on BT. Tipped at 510p, it has since fallen to 261p purely because of sentiment in the Telecoms sector, 12 month high of 676p, a low of 249p.

We recommend investing £500.

Thus - We recognise that this one will be controversial, but read on for the reasons.

We are currently sitting on 152 shares whose breakeven price is 601p.

Many analysts are saying telecoms prices have fallen too far, and while they might fall further, the realistic price is higher than the current level.

If we buy more shares at little cost we can reduce our breakeven price significantly, and assuming the shares have bottomed out (2 weeks ago UBS Warburg had a target price of 64p) any increase in share price will generate a profit on the new shares and reduce the loss we are sitting on, and realistically we don't know how long (if ever) we have to wait for the price to reach 601p again.

If we purchase 300 shares at the current price of 43p, it will cost a mere £150, and it will reduce the breakeven share price to 235p, which is still some way of, but begins to make selling Thus at some stage a possibility.

We recommend investing £150.

Advance Visual Communications Plc - a small company quoted on the AIM sector of the market was recommended in the Daily Telegraph a couple of months ago when the price was 6.5p, it has since fallen to 3.8p. High for the year 11.25p, low 3.8p.

As such a small company this is a risky purchase but the cheapness of the share means we can buy a lot of them and any minor increase will have a significant profit effect.

Read more about the company at www.advance-group.co.uk

We recommend investing £300.

Carlton Communications - Acquisitive media company, leader in its field, has good fundamentals as a company. We don't have much in media, only EMAP.  Current share price 376p, low for the 12 months 347p, high of 875p, yield 4.4

We recommend investing £1,000.

Other possibilities, which we think could be worth considering, but were 6th and 7th in terms of priority (and could be ones to go for in May) -

Christian Salvesen - currently 119.5p, low for year 117p, high 187p yield 5.3. rumoured to be up for sale before the end of 2001, at a price of more than 200p. Any information from Ron or Paul would be useful. If we were to invest we would go for £500.

Tesco - Market leader, just announced profits of £1bn. Has been recommended as a good share for months, and has been recommended again today. Solid market place. Currently high price though at 262p, high for the year 286p, low of 199.5p, but still recommended for growth. If we were to invest we would go for £500.

Please respond as soon as possible, but before Wednesday so we can invest this week.

4) Terry asked whether we would like to have a website for the club, where more information could be posted. The annual cost would be £25. We thought it was a good idea. Any comments, please respond

Next meeting 12.30 at The Griffin on Sunday 6th May.