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Company overview Direct Line Group is a retail general insurer with leading market positions in the United Kingdom, a strong presence in the direct motor channel in Italy and Germany and a focused position in UK Small to Medium sized company commercial insurance. The Group operates under highly recognised brands such as Direct Line and Churchill and is comprised of five primary segments: motor, home, rescue and other personal lines, commercial and international.

Sportingbet (SBT) is in an unusual situation. It has recently agreed to a (20%) improved offer for its business by William Hill and GVC which values it at £530 million. The three parties were granted an extension to the bid deadline, which is now 13th November, in order to finalise and agree the terms of the bid. Despite this being a seemingly "done deal", some analysts are projecting that this may spur a counterbid proposal before the deadline and that Sportingbet remains "in play".

By contrast, 888 Holdings (888) reported a performance from Spain which outperformed expectations, having previously launched an ambitious marketing campaign in the newly regulated Spanish market. Its Q3 update also pointed to the success of its increasingly popular poker games, along with a disciplined approach to costs and an analytics-driven marketing spend resulted in the firm stating that the full year results should be "significantly ahead of current market expectations". 888 also increased customer numbers by 24% and the results prompted a number of analyst upgrades. The company also recently reintroduced a dividend payment. As such, and despite a 222% rise in the share price over the last year (DigitalLook 30.10.12)

Ladbrokes (LAD) also reported Q3 results in mid-October and the update was fairly robust. Whilst it stated disappointing betting numbers on the Olympics and several cancelled horseracing meetings, a strong showing from its UK retail betting shops improved the overall picture. In particular, the in-store betting machines saw an 11.5% rise in takings. This is good insurance for the company, while it is currently looking to ramp up its digital and online offerings - where the Chief Executive said that "It's half-time in the match at the moment". However, with overseas earnings visibility looking cloudy (especially in Spain) and after a good run,

William Hill (WMH) pleased investors in mid-October with its third quarter (Q3) update. Operating profit was up 26% (+17% in the year to date), helped along by strong online business. The company noted the US business opening was encouraging (William Hill was granted a Nevada Gaming Commission licence in June after the acquisition of three Nevada businesses) and that the Olympics had captured the imagination of the consumer, although this did not necessarily translate into higher physical footflow. Strategically the company is seeking to purchase the 29% it does not currently own in its online joint venture with Playtech (PTEC), whilst at the same time being in a bid (with GVC Holdings (GVC)) for Sportingbet.........

Sutton Harbour has reduced its debt load from £21m to £16m, but its bosses want to cut that burden further before resuming dividend payments. Still, the real value is in the company's property portfolio. Redeveloping the Millbay marina, which has a valuation potential of £6m, and realising profit from the old airport could add £16m to shareholders' funds, making that big discount to net assets even bigger.

When the port was developed into a marina by installing a lock, the fish market was relocated and has developed into the number two fish market in England. Last year it handled 5,400 tonnes of fish, double the amount landed in 2009. Sutton Harbour generates revenue from the facilities that it provides, which includes its own auction house, and it takes a percentage of the value of fish landed. The group also has a property portfolio of buildings around the harbour, where void rates are less than 10 per cent, and two car parks with 426 spaces. Indeed, the total estate portfolio is valued at about £50m. That feeds through to net assets for shareholders of £42m, which compares with a £29m market value of the equity. Even the airline venture has a silver lining. True, after 2010-11's £9m loss, it lost another £1.6m in the latest year. But Sutton Harbour still owns a 142-year lease on the 113 acres of land. Assuming this is redeveloped into the usual mix of housing, commercial buildings and shops, the company benefits from 25 per cent of the development profits, which could be as much as £10m.

Sutton Harbour in Plymouth has a long and chequered history and was once owned by the London & South Western Railway. The railway is long gone (although some of the tracks are still there) and since 1989 the harbour - now with a lock gate - has been owned by Sutton Harbour Holdings (SUH), and the dock has been transformed into a 573-berth boating marina. But it hasn't been plain sailing. In 2000 Sutton Harbour bought the lease on Plymouth City Airport and set up its own regional airline. This flopped and was shut in 2011; meanwhile, Sutton was left nursing a large loss. However, that's water under the bridge and, with a new chief executive at the helm, the company is concentrating on its core business, which includes redeveloping the dockside area, expanding the marina and operating a fish market. The real value has yet to be realised, which is why the share price languishes so far below book value of 43p per share. But there is plenty of development potential and earlier this year a deal was secured to develop a new marina at nearby Millbay. This will cost around £4m, but the funds have been secured though a share placing that raised £5.7m earlier this year, and work is expected to start on the 171-berth facility in time for use next summer. The existing marina in Sutton Harbour is performing well, with occupancy rates of around 90 per cent. This is about right because it is useful to have some availability for passing trade and special events. Moreover, mooring fees are around half the level charged at Southampton.

Perhaps the Birmingham market is particularly weak, or perhaps Mucklow's portfolio is of patchier quality than the index. Either way, such figures are hard to reconcile with the 22 per cent year-to-date rise in Mucklow's share price. Nor is there any sign that investors' appetite towards regional property is improving. Banks continue to reduce their exposure to property - by £2bn in the third quarter alone, according to the Bank of England - and the equity-rich prefer London. Because it is little affected by the banking cycle, the market for rented space tends to be less volatile than the market for properties. The Midlands industrial sector is no exception, and Mucklow's vacancy rate of 6.5 per cent is at its lowest for five years. But its rents have nonetheless been falling, from an average of £5.10 per sq ft last June to £4.95 per sq ft this year. With purchasing managers' surveys suggesting UK production is contracting, flat rents are the best that can be hoped for in the current financial year. So why are Mucklow's shares trading at such a premium? The main reason is the company's outstanding record. It has not cut its dividend since flotation in 1962, and emerged from the latest financial crisis with its balance sheet unscathed. Its strength was not so much thanks to foresight ("We do not anticipate any significant correction in the value of our modern investment portfolio," wrote Mr Mucklow in September 2007) as to a highly conservative approach to debt - in September 2007 its net debt was just 7 per cent of shareholders' funds. That meant it did not need to raise capital or sell assets at the bottom, as the big real-estate investment trusts did. Instead Mr Mucklow used the crash to buy property and increase the rent roll. Even as market rental levels fell during the year to 30 June, Mucklow's rent roll increased by 10 per cent, allowing it to up the dividend.

If you're a shareholder in A&J Mucklow (MKLW), it's time to take profits. The Midlands-based industrial landlord is a fine operator, but the level to which its shares have soared is hard to justify. Investors can sell the shares at 355p each - a fifth higher than their adjusted net asset value (NAV) of 297p at the end of June. That premium might be understandable if NAV were rapidly increasing, so that the share price was anticipating the future value. But Mucklow's book value is falling, dragged down by a weak regional property market. The company's adjusted NAV of 318p in June 2011 turned out to be a mini-peak; since then industrial property values have fallen, sometimes sharply. Mucklow's portfolio was marked down by 5.6 per cent or £15.1m over the most recent financial year, wiping out its rental income. Chairman Rupert Mucklow blames this decline on surveyors' estimates backed by few transactions. Meanwhile, Mucklow is financially secure - with a loan-to-value ratio of just 27 per cent - so it won't need to realise paper losses. But just because deals are rare does not render their values invalid. Besides, Mucklow's 5.6 per cent fall in capital values over the year looks too steep to ignore. According to index provider IPD, industrial capital values outside England's south east fell by an average of 3.6 per cent during the year to 30 June. IPD does not have a separate index for Birmingham, where Mucklow operates, but the weakest figure it clocked was a 5.4 per cent fall in Manchester.

Goldman Sachs has issued a 'neutral' recommendation on miner Polymetal International, despite increasing its twelve-month price target to 1300p, from 1160p. Goldman analysts state that forthcoming improvements in free cash flow and dividends have been well flagged by the company and are largely reflected in the share price. They add: "The stock now trades at a 2013 estimate price earnings ratio of 9.5 times and price to net asset value of 2.3 times (around a 50% premium to Central Eastern Europe Middle East and Africa gold peers). Our price target implies 17% upside potential, not sufficient for a more positive stance, thus we remain neutral on the stock."

Goldman Sachs has reiterated a 'buy' recommendation on Croda International, reducing its price target to 3150p from 3340p. This still provides over 45% upside on its current price of approximately 2160p. Following slightly disappointing third quarter results from the specialty chemicals company, Goldman analysts have lowered their earnings per share (EPS) forecasts for 2012-14 by 4% with nearly half of the reduction being a result of foreign exchange movements. However, they believe "Croda is exposed to some of the strongest structural growth themes (e.g consumer care) within the sector". As a consequence they state: "We would view any weakness as an opportunity to buy a 2020 Vision Leader at a depressed valuation. Croda trades at 8.6 times 2014 estimates of EV/EBITDA [enterprise value/earnings before interest, tax, depreciation and amortisation] verses a historical average of 9.5 times, despite stronger returns relative to history." Goldman Sachs' twelve-month price target moves to 3150p (from 3340p) and is based on 11.5 times 2014 estimates of EV/EBITDA.

A busy week of corporate news is in prospect, and for Primark owner and food producer AB Foods (ABF), the recent push higher for the share price through 1400p reflected the positive sentiment in the market even though ABF is trading at 52 week highs. The surging share price has shrugged off the slight reduction in FY profits estimates due to issues in the Ingredients area of the business. Certainly most observers are focussed on the bigger picture, as AB Foods is very much viewed as a diversified entity riding through the financial crisis.

At the time of the last Tate & Lyle (TATE) trading update at the end of September, the prediction that first half earnings would be in line seemed to leave the markets somewhat underwhelmed by predictions of an in line performance. Since then, sentiment and broker opinion has tipped sharply in favour of the group, as reflected by the steep uptrend for the share price during October. Credit Suisse upgraded the shares from neutral to outperform, and hiked the price target to 750p from 700p, while Jefferies rated the shares a compelling buy with an 800p target up from 690p. It will be interesting to see whether Tate & Lyle can live up to such great expectations

Ahead of Marks & Spencer (MKS) interims, it is difficult to tell whether the excitement will be generated by a good profits performance, or whether the rumoured takeover deal waiting in the wings actually materialises. With so many false dawns from bid rumours among supermarkets and fashion retailers, a focus on the present state of the fundamentals is no doubt the best strategy. The July first-quarter trading update came in below expectations, with UK same-store sales down 2.8%, while a 7% fall in clothing sales took its toll and triggered a change of strategy. The question now is whether with a P/E under 11 and yielding 4.5%, M&S shares have fully factored in the reality of the difficulties in the High Street, or are they merely primed for takeover?

Islington-based publisher Quarto said subdued trading continued in the third quarter, with some improvement in September. Revenue for the nine months to September 30 fell to $127.2m from $130.7m the year before. Pre-tax profit for the same period declined to $5.5m from £6m previously. The group said its trading performance in the nine months and 12 months to September 30th continues to be in line with expectations. "Following the response to our products at the Frankfurt Book Fair in October, we noted that licensees and distributors around the world are largely adjusting to a world in which online retailing and digital books have challenged long-entrenched business models," Quarto said. 2012 digital sales rose to 1.7% of total revenues at $2.225m compared to $1.455m in 2011. "In all English-language markets, traditional bookstore revenues are under pressure," it noted.

Acquisition vehicle Marwyn Management Partners has acquired the German bus operations of both the Bonifer Group and Kraus-Reisen for €1.1m. Marwyn will also assume €4.0m of net finance lease obligations as part of the acquisition. Together, the two acquired businesses own 34 buses running contracted local bus services in the region of Frankfurt, Germany. The businesses generated revenue of around €5.1m in 2011.

Specialist non-life insurance investor Randall & Quilter Investment Holdings has completed the acquisition of Capstan Insurance, a Guernsey domiciled captive insurer, from the owners Roger and Elizabeth Bullivant. Capstan was acquired by Randall & Quilter at a discount to the Guernsey firm's net asset value, which is currently estimated at around £5.4m

Financial services group Walker Crips is to sell its corporate finance subsidiary Keith, Bayley, Rogers & Co (KBR) to BWV investments. The purchase price is £75,000 over the value of KBR's assets as at the end of October; these are expected by the Walker Crips directors to be in the region of £270,000.

Pharmaceutical company Hutchison China MediTech (Chi-MEd) has announced that through its majority-owned research and development company it has initiated the first-in-human phase 1 clinical trial of its Theliatinib (HMPL-309) product. The firm said the main aim of the study is to evaluate its safety and tolerability in patients with advanced solid tumours and to determine its maximum tolerated dose. The trial is the fourth oncology compound from the internal discovery programmes the R&D company to enter into clinical development in China. Theliatinib is an orally active product which targets the wild type epidermal growth factor receptor (EGFR) or resistant EGFR tumours. Phase 1 will also evaluate its preliminary efficacy against non-small cell lung cancer (NSCLC), determine the way the body responds to Theliatinib under single dose and repeat doses and explore the relationship between the Theliatinib's activity and certain biomarkers. "In pre-clinical studies, Theliatinib demonstrated strong anti-tumour activity against EGFR wild type tumours at doses that are expected to be well tolerated," the company said. "These studies also exhibited good tissue distribution and stronger anti-tumour activity in EGFR wild type and EGFR resistant tumours, compared with first generation small molecule EGFR inhibitors. If these attributes are also demonstrated in clinical studies, we believe that Theliatinib could become an important therapy in this area."