Alesco Corporation Limited

We haven't pulled any punches in past reviews in highlighting the excessive valuation of industrial conglomerate Alesco. Our main concerns revolve around the company paying what we think will turn out to be high prices for some fairly ordinary assets, raising plenty of debt and equity along the way. And the frenetic pace of acquisitions didn't slow during the year to 31 May 2006, with the company making three acquisitions for $85m. Turning to the results, revenue from continuing operations rose 5% to $601m, while net profit before significant items, of which there are always a number, rose 13% to $42m. Weakness in the Building & Renovations operations was offset by strength from Scientific & Medical and Construction & Mining. The highlight was the 24% increase in the final dividend to 31 cents fully franked (ex date 11 Aug). The share price is up 15% since issue 181/Aug 05 (Sell—$7.92) and we're less interested than ever. AVOID.