Bottom Line: Limits for BOC

APPARENTLY grim news yesterday from those harbingers of gloom, BOC, was heralded by a 5 per cent share price rise. But tales of hefty cost-cutting with an identifiable pay-off were precisely what the market wanted to hear.

The medium-term outlook for the group is far from rosy. Continental Europe and Japan are laid low by recession while the US and UK have only just come unsteadily off the drip-feed. BOC has also been hit by the US patent expiry of its anaesthetic, Forane.

There are problems of management succession, too. Pat Rich, until a month ago chairman and chief executive, is to retire in April. With Pat Dyer, chief executive, also in his sixties, BOC has left it a bit late to groom its next top team. The shares, at 699p, offer an above-average yield of about 4.4 per cent but limited potential.