Primary Recommendation

Flying Brands - Strong niche in database marketing

April 2002

Investing in shares may lose you all or some of your money. Past performance is no indication of future performance. Some of the shares recommended here may be small company shares, which can be relatively illiquid and hard to trade and this makes such shares more risky than other investments.

Flying Brands is a niche mail order and database marketing business,which has built up the hugely successful Flying Flowers and Gardening Direct brands. Flying Brands enjoys many of the attributes that TMI cherishes, such as high operating margins, strong returns on capital and good levels of free cashflow. But we've had to sit on the sidelines in recent years and not recommend theshares while its management battled to extricate the company fromsome troublesome acquisitions. But with the last problem business sold during 2000, Flying Brands managed to return to its best form last year with a 26% increase in earnings per share growth. However, this is not a management who rest on their laure ...

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With small companies there is an above average degree of risk compared to buying blue chips. Please be aware that we have not assessed the suitability of any of these investments for you. The newsletter simply states a personal view and diarises the editor’s investment decisions. Please speak to your stockbroker or other qualified individual to ascertain whether any of these companies mentioned would form useful additions to your own portfolios. Past performance is no indication of future success.

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