BP is still plagued by high costs in the oil refining business

BP is still plagued by high costs in the oil refining business. And its chemicals business is, as you would expect, suffering from weak demand because of the sluggish global economy and from higher costs.The “war premium” that sent oil prices soaring ensures another bumper year on the bottom line, but this is already coming out of the price and the medium-term outlook for oil is no longer as good.When we last wrote on the sector six months ago, we reckoned BP’s premium to Shell was now unjustified. It still prevails today, by just about every measure of the share price, and it is still our view that it must come down. Because falling oil prices are likely to cool demand for the sector, it is more likely that BP shares will fall. Sell.Ukbetting worth a flutter in an expanding marketUkbetting is a rapidly growing online sports betting business that owns famous names including Sportinglife and TeamTalk, an online sports content site. Its most recent deal is an agreement with CryptoLogic, a software supplier, which will help ukbetting add poker and casino gaming to its portfolio by the summer.The latest full-year figures, reported yesterday, showed the impact of the deal-making. Pre-tax losses totalled £8.8m, hit by heavy reorganisation charges and redundancy costs as the group cut its workforce from 245 to 150 after the acquisitions.More encouraging is the top line growth, with gaming turnover up by 56 per cent to £42.9m and advertising revenue up from £100,000 to £1.2m.

The idea is for the sites to use their content and the strength of brands such as Sporting Life to attract customers which can then be channelled towards betting. This saves money on advertising.The plan is to move towards higher margin football betting rather than horseracing, which still makes up 60 per cent of betting revenue. Other new opportunities include racing commentaries on premium phone lines.Analysts are forecasting the group will be profitable at the pre-tax level next year. The shares, at 24.5p, are worth a punt.SkyePharma promises further significant growthSkyePharma has been a depressing investment for those who have held the shares for a number of years, plagued with delays to product launches and seemingly unable to break into profit despite many promises Until yesterday. The difference? An anti-depressant called Paxil CR.SkyePharma’s skill is in drug delivery technology, coming up with clever new formulations for drugs to improve the way they affect the human body.

Paxil CR is a controlled-release version of the giant-selling anti-depressant (known here as Seroxat), launched in the US a year ago.It is one of a number of new products which the group has got on the market, all with significant growth potential. Royalties from these products should add up and the company felt confident to promise that the 2002 profit of £1.3m won’t be a one-off. There will be “further significant growth in profitability in 2003″ and an improvement in turnover from £70m to about £100m.Despite the excitement over Paxil CR, though, and talk yesterday of its pre-cancer skin treatments and meningitis drug, most of the coming year’s numbers are still dependent on milestones from existing collaborations with Big Pharma and new partnerships This is lower-quality business, difficult to predict. But SkyePharma has moved a significant step closer to building an impressive specialty pharmaceuticals company.The shares, which fell 3p to 45.75p after surging before the results, are due a pause.

But this time, sustainable profitability doesn’t seem pie in the Skye Speculative buy.. Instead of one chief executive to restore the fortunes of the beleaguered telecoms group, there are to be two, with Kevin Loosemore as chief operating officer alongside Francesco Caio, who fills the first among equals slot as the chief executive Unfortunately this is not quite two for the price of one. Mr Caio pockets a golden hello worth a potential £750,000 for merely turning up at the office with a cheery ciao bello. Both new recruits come with gold-plated remuneration packages, but then no one’s pretending that returning C&W to former glories is going to be easy.