Northgate Share News (NTG)

Investors were underwhelmed by Royal Dutch Shell's strategy presentation by its new chief, Ben van Beurden, and the shares duly fell. Some investors wanted firm cost-cutting targets and a far bolder approach to asset disposals. Instead, they got a promise to tackle underperformance in drilling and a halt to exploration in Alaska, although van Beurden did bite the bullet on poor investments in US shale oil. No change in the $15bn target for asset disposals was forthcoming. The company is famously conservative. This is evidenced by the re-categorisation of the group into 150 new units, each with its own individual return on average capital employed performance hurdles for bonuses. Nevertheless, in the long-term such orthodoxy is an asset.In any case, in the final analysis shareholders are watching returns on cash flow and capital. On the positive side of things, the company does seem to be reigning in its investment and expansion drive of the last 15 years. Furthermore, the company has good assets and the appropriate long-term horizon. Its dividend has never been cut since the Second World War, underpinning the shares, writes Patrick Hosking in The Times' Tempus column. New site openings at Van hire group Northgate are exceeding management expectations, which should benefit the company as the economy picks up. However, Spain, its other major market, is progressing slower than expected. At 16.5 times this year's profits and a 1.7% dividend yield the shares are not cheap. Simply put, the company looks fully valued. Nonetheless, following a favourable arrangement with its banks the company's annual interest bill should decline to £13m from £37m. The company may also be appealing for those investors searching for a UK-listed outfit to use as a punt on the Spanish economy, "which has been looking intriguingly less sickly in recent months", Tempus says. Please note: Digital Look provides a round-up of news, tips and information that is impacting share prices and the market. Digital Look cannot take any responsibility for information provided by third parties. This is for your general information only as not intended to be relied upon by users in making an investment decision or any other decision. Please obtain a copy of the relevant publication and carry out your own research before considering acting on any of this information.AB