28 April – possible offer

Shares in the traffic information group Trafficmaster have soared this morning on news that the company is in discussions which may lead to a bid for the group.  To see the announcement in full see the company website www.trafficmaster.co.uk.   As is often the case in these situations, however, there is no guarantee that any bid will be forthcoming.  The shares have now moved up strongly from our 36p recommendation price last September, but they still do not look expensive.  Pre-tax profits for 2010 are forecast to be £7.0m for earnings per share of 4.6p and we believe that if a bid is to be successful, it will probably need to be pitched above 50p per share.  Holders should AWAIT DEVELOPMENTS.