Winners and Losers: Telecoms was the name of the game

IT'S RARE INDEED for a Footsie constituent to emerge as the best performing share of the year. Step forward Colt Telecom, which has comfortably out-dialled the rest of the stock market with an astonishing 500 per cent advance.

Normally it is an obscure, tertiary share which claims top spot. Last year it was Shield Diagnostic with a 410 per cent gain.

But in some respects, Colt runs true to form. It may enjoy a pounds 5.5bn capitalisation yet it is still a fledgling, blue-sky operation which is a long way from achieving anything quite so crude as a profit.

Still telecoms was the name of the investment game in 1998, and Colt's remarkable progress - it arrived at the equivalent of 67p nearly two years ago - is a dramatic example of the way telephony shares are currently adored on both sides of the Atlantic.

Colt's progress in the year was achieved despite its loss hitting a new high - pounds 32.5m.

Indeed losses are expected to increase. The consensus forecast for this year is pounds 60m and the investment house BT Alex.Brown sees the deficit widening to pounds 85m in the year 2000. But, unless the market has got its wires completely crossed, Colt, which joined Footsie during the year, should, be a sure- fire money-spinner, say those who should know. It will do this either by retaining its independence or, more likely, being taken over at a fancy price.

Energis, another fledgling telecom group which in the eyes of some analysts would be an ideal merger partner for the bigger Colt, captured second place, up 422 per cent, in a year when Footsie scored a 15 per cent advance.

It has had an even shorter market life than Colt, having been hived off from National Grid a year ago. And, like its bigger rival, it too has yet to scent the merest suggestion of making money, losing pounds 62m in the year to March. But analysts believe its profits charge may occur rather more quickly than Colt's with, perhaps, a modest return in the year 2000.

Other telecoms buzzed. Orange, with a 164 per cent gain, and Telewest Communications, 150 per cent, just failed to get into the year's top 10. Even such a power as BT, on past form far too big ever to hit the winners table, joined the telephony party, with a near 90 per cent surge.

Gresham Computing, a software group with an erratic record, slipped into the top 10 at number three. But some longtime shareholders have yet to get their money back. In one of the earlier market computer surges the shares, on takeover and trading hopes, nudged 200p.

Just to prove there is life in some of the battered and bruised engineers, Cammell Laird, once a famed Merseyside shipbuilder, captured fourth place.

Fibernet, with a national communications network, is another blue sky share; so is Phytopharm, seeking to produce drugs from plants.

Independent Energy, still below its best level, is benefiting from the freeing up of the domestic electricity and gas markets and has announced its first profit.

The bottom 10 represents yet another collection of sad, fallen hopes. Cortecs is a drugs group which, like so many of the breed, was over-hyped with the shares topping 400p in 1996. It's been all downhill since then although there have been some encouraging progress reports.

Cadoro is the Capolito Roma upmarket retailer which is struggling to make its merger with what was once Owen & Robinson work.

Ronson is also an upmarket group which has experienced a long, hard stock market winter. Once a brewer, it was drawn into luxury products and immediately ran into trouble. Victor Kiam, the man who liked a certain product so much, etc, etc, is now running the show and helping bankroll the group. The shares first arrived in the mid-1980s at 60p.

Stentor appears among the losers, demonstrating that even when winners abound from a particular industry there are bound to be casualties. It is an Irish telecom share which, after flying high, came crashing down to earth as cash failed to match ambitions.

Telespec, making advance telecom equipment, is another bucking an industry trend. It warned results would be disappointing. Once again it is a case of hopes being dashed. In 1995 the group seemed to be capable of carrying all before it with the shares hitting 1,045p.

And just outside the bottom 10 is a once proud name, Albert Fisher. The food group is showing signs of getting its act together but the market has yet to be convinced that the company, 73p five years ago, has put all its bad old ways behind it. The shares limp along at 5.5p.