If the creativity in our products is there and our delivery is there, we have no need to worry.”SG Securities believes that, assuming no gains on disposals, headline profits will come in at pounds 1bn for 1999/2000, a shade down on this year, giving a prospective price/earnings ratio of 17, a discount to Lloyds TSB but a premium to Barclays.There is little doubt Bank of Scotland deserves to trade on a higher rating than any UK bank apart from Lloyds TSB For the moment, however, the price is up with events.. SIR DENYS HENDERSON, chairman of Rank, told the troubled company’s shareholders at the annual meeting yesterday that a combination of a lack of blockbuster films screened at its Odeon cinemas, the rise in gaming duty in the 1998 budget, and the increase in rental payments after the group’s sale-and-leaseback programme accounted for a slowdown in profits in the first quarter of the current year. Turnover was similar to last year’s, with shortfalls in the holidays and leisure divisions offset by growth in other businesses, particularly in Deluxe, the film and video processing and distribution division.
Operating profits were in line with expectations, but lower than last year’s first-quarter figure of pounds 21m, Sir Denys said.Fortunately for shareholders, the first quarter is traditionally Rank’s weakest period, largely because the holiday division – which accounted for 20 per cent of last year’s profits – is at a seasonally low ebb. Profits have been reduced still further by the need to refurbish and convert some of the Butlins holiday camps.However, the outlook remains satisfactory, Sir Denys said. Bookings at the refurbished Butlins are running 10 per cent ahead of last year, with the new Sony US film processing contract boosting Deluxe, which generated 30 per cent of last year’s profit.New merchandise lifted profits at Hard Rock, while the cinemas have high hopes of a surge in business when a new run of films beginning with the new Star Wars epic comes to screens in June.But the group’s pounds 50m-a-year interest bill remains a burden, and analysts are in no hurry to alter current forecasts of around pounds 247m and earnings of 23p this year, rising to pounds 265m and 23.3p next year – a far cry from the pounds 376m in 1994. The shares have rallied from their low of 186p in February, helped by vague takeover talk, but they dipped 16.5p to 262p yesterday.. DFS FURNITURE, the furnishings retailer, suggested yesterday that consumer confidence may be returning to the hard hit sector, but said the improving economic outlook had yet to translate into higher sales.

Reporting a 35 per cent slump in first-half profits to pounds 12m, DFS said it had lowered prices to tempt in more shoppers. However, the markdown had a damaging effect on the value of like-for-like sales, which were down by 7.4 per cent in the period.
Underlying sales are still down by a similar amount in current trading, although Sir Graham Kirkham, the chairman, believes that lower interest rates might soon start to feed through to higher sales of sofas and other “big ticket” goods. “The people on the shop floor are reporting a better feeling. We think there is a bit more confidence out there,” he said.DFS moved to a more aggressive pricing policy a year ago while also reducing its reliance on interest-free credit.

All this hit margins, which fell from 9.8 per cent to 8 per cent in the 12-month period.DFS has also attempted to counter its image as a retailer of slightly frumpy, more traditional sofas. It has recruited new, younger buyers and the stores are stocking more modern, simpler designs. “We probably did get a bit too traditional,” Sir Graham conceded.The company will change some its television advertising to reflect the change. The irritating campaign using Jilly Foot and Tom Adams will be modified, and the pair will appear less often.DFS shares have had a grim time. Despite rising 7p to 261p yesterday, they are way off their 1996 peak of 651.5p. But with 53 large stores the group has 13 per cent of the furnishings market, and a strong balance sheet with pounds 12m cash excluding the pounds 38m value-added tax refund currently being reviewed by the European courts.On Investec Henderson Crosthwaite’s full-year profit forecast of pounds 24.5m the shares trade on a below-sector forward multiple of 16. Given that the cycle may be on the turn, this looks reasonable value..

CANNADINE… ON RED TAPE

‘US professors are rewarded with promotions that give them more time to teach and write and protect them from the distractions of administration. In the Britain it is the exact reverse, and getting worse’
… ON RESEARCH’It’s a good deal harder to be imaginative and productive if you live in a world where you are endlessly on committees and being told that your funding is being cut’Last night Professor David Cannadine, one of Britain’s star historians, used the opportunity of his inaugural lecture as the new director of the Institute of Historical Studies in London to drop a bomb on the British higher education establishment. His belief that universities in the United Kingdom are so poorly funded and so hedged about with bureaucracy that they can no longer compete with top-notch American universities will upset the complacent and may even give a government minister a moment’s pause for thought.Anyone who believes British universities are still the best in the world is labouring under a nostalgic delusion, says Cannadine, who knows what he’s talking about; he’s spent 10 years at Columbia University in New York. At his new job he is grappling with the awesome task of gingering up one of Britain’s underfunded higher education institutions.He has set himself the ambitious target of raising pounds 20m to turn the institute into a dynamic place of international renown. Only a man whose confidence had been boosted by a long stay in the New World would have the gall for such an undertaking.Once upon a time the great universities in the world were the likes of Heidelberg, the Sorbonne, Oxford and Cambridge; now the great universities are Harvard, Yale, Princeton and other big American names, Cannadine maintains He is not alone in this assessment.

The former German Chancellor Helmut Kohl didn’t choose a European university for his two sons; he sent them across the Atlantic to Harvard and MIT. British universities, however, are not the worst in the world. Compared with many other universities in western Europe, they are in pretty good shape. In Britain, student numbers are smaller, staff-student ratios better and degree courses more rigorous than on the Continent. Our funding is more stable and secure, and British academics are not hired and fired at the behest of the state.But compared with America, the richest British universities are chronically underfunded and under-endowed.